In response to "What we are for" by George Monbiot

George Monbiot has an article in the UK Guardian - "What we are for".

There are a number of articles written by George Monbiot that I have enjoyed and many of his points that I have agreed with. This article has several that I side with:

1) Protest against taxation

2) Scrapping of military spending projects

3) Gathering together and objecting with a strong voice against government

However, I disagree with a number of his assumptions and am slightly disturbed by some points he presents as facts.

My biggest concern lies in his assertion that it is economically sensible for the government to swell the public service by creating jobs. This is one of the lynch pins of his article and  I consider he is being slightly disingenuous in presenting this as fact.

He references a Richard Murphy article ("The only way to cut government debt is to increase government spending") that is initially quoted by UNISON and which I have a number of problems with Murphy's reasoning:

1) Murphy assumes that all benefits are justified. If you increase the benefits (as pushed for by large corporations such as UNISON (1.375 million members)) then Murphy's equations and arguments fall apart.

2) In his paragraph on extrapolation and statistics Murphy is saying that he is interpreting and effectively guessing that his figures are correct.

3) Murphy states unequivocally that he is promoting a Keynesian philosophy and that the government can spend it's way out of the this problem. The article was written in July 2009 so history has already made some comment on the effects of the bailouts. He concludes the article with the assertion that spending worked in the 30s so we should trust him that it will work now.

4) In his third last paragraph Murphy basically negates his own argument by stating that private sector demand will eventually pick up.

As stated, I consider that Monbiot is being disingenuous.

The next worrying suggestion of significance is the oh so reasonable sounding "Robin Hood" tax. While he marks this as highly progressive it is likely to follow the path of all well intentioned taxes and be another arrow through the arse cheeks of the middle class's scarlet tights.

By his very own admission Monbiot has pointed out that "tax avoidance and evasion are the preserve of the very rich: only millionaires and corporations can afford the specialist advice required to disguise their earnings". In other words the same people who avoid tax now are the same people who will avoid tax in the future and leave the burden of the financial transactions tax to the poor and middle class. As offensive as it sounds, the employees of tax collecting agencies are just not smart enough to outwit the vast majority of "tax avoiders".

Unfortunately the same argument applies to the referenced suggestion by Greg Philo of Glasgow University. His proposition will rescue the people's money from the evil rich that have "stashed [it] away" (saved it for future use?). The well intentioned cap of £1million pounds and the reasonable sounding 20% are exactly the sort of "unmoveable limits" that governments traditionally move and re-limit. 

Unsurprisingly history shows that the burden is gradually shifted to the poor and middle class as time drifts by and memories of good intentions grow dim.

Monbiot's reference to the National Insurance illustrates this point. The National Insurance was initially set up for illness and unemployment. It then later grew to include retirement pensions and other benefits. It then became further entrenched when payroll tax was introduced. While it is meant to be hypothecated (a specific tax for a specific expenditure) the government has ensured that there are self-serving loopholes for it's own rules. A large proportion of the fund is invested in government securities which means that the money raised by National Insurance is available for general government spending. The latest figures show that this is approximately 17% of total government receipts.

And Monbiot and his sources want to give more taxation and more employees to this government machine? Yep, that'll stop the little guy from being shafted.

I have some other minor comments in Monbiot's article:

1) Who is this royal "we" that he keeps referring to? And by inference who is the "them"?

2) It's worrying that there doesn't seem to be any  concise aims being put forward by "the great rally". It risks being seen as a bunch of complainers or worse still, leaving itself open to hijacking by special interest groups/individuals. His point on the measurability of progress is critical. Also the observation that people lose hope without a programme is well made.

3) To combat tax avoidance he suggests putting on more staff at HM Revenue and Customs. What he doesn't address is: How many staff?; How are the staff going to be paid for?; How is an increased level of bureaucracy going change things when the current level is ineffectual and can't even be managed correctly?

4) The minimum wage should be raised by CPI plus 5%? Here's an idea, let's make the minimum wage $1000 an hour and very soon everyone will be millionaires thus eliminating poverty.

5) The money saved by scrapping military projects should be spent on public housing. Saved money that is spent is not saved money.

6) The money saved by scrapping military hardware should be spent on "offshore renewables". Where does he think the natural resources are going to come from for these renewables?(Financial Sense article on Rare Earth Metals)

Basically Monbiot is suggesting that the way to stop finance inequalities and abuse by the government is to make the government bigger and add more taxes. It's the fault of "the rich" and they must be made to pay. As with most articles revolving around this financial pariah the level of what is "very rich" is not addressed. I often suspect that it is the level to which the writer assumes he/she will not attain and therefore concludes that this is too much.