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September 04, 2007

Richard Murphy Proclaims

This is simply amazing:

I believe that governments elected in this way have a right to collect tax. More than that, they have a duty to do so to ensure that communal goals (and we’ll disagree, fairly, on what they are) can be fulfilled. In the process of doing so it has five objectives. These are to:

  • Provide public funds;
  • Redistribute income to reduce poverty and inequality;
  • ‘Reprice’ goods and services to ensure that all social costs of production and consumption are reflected in the market price;
  • Strengthen and protect channels of political representation;
  • Provide a tool for the management of an economy, usually in combination with government borrowing.

All these goals are, in my opinion, desirable. They create stable communities. That has to be of benefit. This system also corrects the very obvious failing s of the market system. That system could not ever provide a socially optimal outcome in any society in reality because so many of the pre-conditions of it doing so do not exist. Those that do not exist include:

  • Perfect knowledge of the future;
  • Perfect knowledge of all products and services available in the market now, and their prices;

Right. So the absence of perfect knowledge of the future and of the present is the justification for a small group of human beings, those without said perfect knowledge, (and who gained their positions by their ability at kissing babies) to plan things for us?

September 4, 2007 in Economics | Permalink


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Tracked on Sep 8, 2007 12:02:51 PM


Tim, don't torture yourself (and your readers) like this, just file him under "Prem Sikka" and have done with it.

Posted by: Mark Wadsworth | Sep 4, 2007 1:38:52 PM

I thought you were in favour of Pigovian taxation? Is it going to be voluntary?

Posted by: Matthew | Sep 4, 2007 1:59:05 PM

Hah! You think it's the politicians who do the PLANNING?

The word 'brewery' comes to mind.

If they could plan, we wouldn't need civil servants, who at least know where the brewery IS.

Posted by: The Aunt | Sep 4, 2007 6:16:11 PM

"I thought you were in favour of Pigovian taxation? Is it going to be voluntary?"

Of course not, Matthew. It'll be compulsory - people will just be able to choose their own amount because, as Tim keeps telling us, they'll know how much to pay better than those silly 'planners'.

Tim adds: Tsk, Jim. We all agree that there are externalities. The question is, how to deal with them? By, however imperfectly, estimating their cost and insisting that people pay for them, thus bringing them into the market remit or....attempting a non-market solution, one imposed by people who have even less information than said market.

Boy, it's a toughie, that one, a real toughie.

Posted by: Jim | Sep 4, 2007 8:02:18 PM

Thank you for confirming I wasn't imagining things when I read it.

As I triggered his post, I've responded here: http://gendal.blogspot.com/2007/09/tax-revisited.html

Posted by: Richard G Brown | Sep 4, 2007 9:30:51 PM

Tim, I know you wish to believe otherwise, but Pigovian taxation is asserting that the government knows more than the market, for the reason in this case that there are no markets in the things that are being polluted. Adding a Pigovian tax doesn't make those markets appear.

Tim adds: It inclides that pollution in the markets. That's what Pigou taxation is all about.

Posted by: Matthew | Sep 5, 2007 3:52:23 PM