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The seemingly endless yearning for World Government

Whether the issues are terrorism, AGW, contagious diseases, the movies of Charlie Sheen (that was a joke), today’s advocates of Big Government often look to the Transnational solution. Let’s have one government! No more hiding places for bad people!

As readers might recall, I have written a few times about tax havens and the importance of the freedom of people to migrate not just their physical selves, but their money. Now, depending on your point of view, tax havens are either refuges of scoundrels who refuse to pay whatever levels of tax are imposed on them by their fellows, or, in a more classical liberal vein, places for people who want to avoid double-taxation and where people can exercise their proper freedom to acquire, transmit and enjoy their private property as they see fit. This is not, I hasten to add, always a black-and-white issue. Some tax havens have been bolt-holes for crooks. And if you believe that even the smallest of governments need to tax to pay for basic services, then people who try to not pay anything for services they use by using offshore banking deserve a degree of censure. Governments could do a lot to put some of the shadier havens out of business by just reducing their own taxes, of course.

It is clear, in my view however, that the current campaign against tax havens as waged by groups such as the Tax Justice Network goes way beyond this sort of legitimate concern about criminal moneys. These guys want world government. Tax competition – which is another way of saying that countries should be free to set different taxes – is something they detest.

And now the Tax Justice Network argues that the Organisation for Economic Co-operation and Development, which is basically a club of rich nations (staff there pay no tax, by the way), is ineffective, because the tax treaties signed by various countries using OECD standards don’t allow revenue departments to automatically seize information from other countries in a hunt for tax “cheats”. Oh no, the OECD is a toothless tiger, and what is needed is a fiercer animal: the United Nations! Yes, the same UN that, let’s not forget, did a splendid job in the Balkans during the 1990s, and which has prevented many a massacre in Africa, and which, as we know, was so fierce in its imposition of arms controls and sanctions vs the government of the late, unlamented Saddam Hussein of Iraq.

Forgive my sarcasm, but if there is anything more deluded than the oppressive idea of putting tax policy in the hands of an unaccountable body with such members as Russia and Iran, never mind good old Britain and the US, it is the idea that such a body could possibly be relied upon to deal fairly, impartially and thoroughly with the always-sensitive issue of tax.

Meanwhile, other people, such as Wendy McElroy, are waking up to my recent concerns about US foreign over-reach on the issue of tax.

9 comments to The seemingly endless yearning for World Government

  • As Princess Leia once said ” The more you tighten your grip, Tarkin, the more star systems will slip through your fingers”.

    As HMRC and the IRS ratchet up the technical tax stakes using such tools as Tax Information Exchange Agreements to try and get the snitch on people trying to escape the depredations of the taxman, they become ever more fascist in their methods.

    There is a reasonable comparison with the final days of the Roman empire – at what point will we think that it is preferable to hold our wealth in precious metals and bury it in jars in the earth away from the forced extractions of the tax collector?

    Not too long now I suspect, the current round of fiat currencies appears to be coming to an end in the same way as the previous generations always have and always will. When you have a currency, whose value only exists because of ‘confidence’ and that confidence slips away, then those holding currencies, treasury bills, gilts or whatever other form of government connivance are left with worthless pieces of paper.

    I don’t know how much longer the Euro, Pound, Dollar and Yen will hold up what remaining value they have, but I suspect not long. I expect to see a collapse of the Euro by 2014 and probably the US dollar by 2018.

    It’s just a matter of confidence and when that is gone, why on earth would anyone exchange goods or labour for bits of worthless paper unless they had to.

    Of course, governments are very good at ‘…but you have to…’,

  • JG: could you please elaborate on your time-line estimations?

  • 'Nuke' Gray

    If people have trouble holding europe together, as it seems they do, then I don’t think we’re in real danger of a stronger central government for the planet!

  • Actually Alisa, I think the survival estimates of the Euro might have just gotten even shorter, if the Greek PM is serious about holding a referendum early next year on the EU bailout.

    My current assumption is that the Eurozone countries will keep going through short-term stop gap solutions, with the European Financial Stability Facility increasing in size and scope until we reach the current limit of €2 trillion through financial wizardry.

    However, the longer the problem roles on the worse it gets and the EFSF will never be able to keep up. Equally, the other international institutions will attempt to support, but they are struggling with the same problems. It’s hard for a bunch of mostly bankrupt economies to bail out each other.

    The reason why I say that around 2014 the Euro will collapse is that I believe that this will be precipitated by the next German General Election which will take place during September / October 2013. It is likely that Frau Merkel and her CDU / CSU / FDP coalition will be swept from power.

    Any incoming government will probably have campaigned on the basis of no more bailouts as this is what poll after poll have said the German people want. It would be very difficult for any party or coalition who have campaigned on this point to completely change their direction once in power. Although they may provide some support, these will be face saving measures only.

    At some point during 2013/2014, Italy should be in the position of having a primary budget surplus. This would mean that they would be able to default on their past debt without needing to secure additional funding just to keep the government running (unlike the Greeks who would have to cut their government by an initial 20% as an immediate measure to balance the budget after a default).

    I am not saying this WILL happen and be the trigger for the final collapse of the Euro, but it is a likely scenario given past behaviour of the coutries concerned.

    For the US, the problems of their deficit are structural and the both the congress and senate are both so politically deadlocked that no effective measures can be undertaken to substantially raise taxes or cut spending in any meaningful way. This means that the US National Debt will continue to balloon out of control. At some point, I believe that their will be a buyers strike, probably led by PIMCO, when they will cease buying newly issued debt – at this point the US Federal Reserve will have to issue trillions of dollars to cover the shortfall, leading to massive price inflation and eventually hyper-inflation as foreign treasuries dump the US Dollar as a reserve currency. This I reckon will take until about 2018 and only afterwards will real reform take place.

    I’ve already got my beach hut sorted in Malaysia so that I can watch the fallout on TV rather than out of my front window. It’s going to make the London Riots look like a picnic.

  • Rob

    “No more hiding placesfor bad people”

    Except in the World Government, of course.

    The more unaccountable government is, the more corrupt and tyranical it becomes. Presumably this is why the Left likes it.

  • Richard Thomas

    “World Government”. If that’s not a reason to push for space exploration, I don’t know what is.

    WRT Europe, the thing with believing that a course of action is unsustainable is that you have to believe that there comes a time when they can’t string it out any more. As much as none of us really want to see the collapse (though I’m sure there’s one or two amongst us who are more than ready), it’s going to happen. The sooner, not necessarily better, but surely less damaging.

  • If we had one restaurant chain, what would the food be like, not matter how “good” the employees or chefs?

  • Thanks, JG. Actually I asked the question in the first place because my gut feeling is that all this should happen much sooner, but that’s no more than a mere gut feeling.

    Now, more questions (:-)): why will Italy have a surplus? And why as long as 2018 for the USD total collapse?

  • Paul Marks

    The collectivists learn nothing (nothing good that is) – if endless regulations, fiat money, credit bubble finance and out of control Welfare States fail at national (Greece) or State (California) level they will just kick everything up to regional level – demanding that the Federal government (in the United States) and the E.U. (in this region of the world) bailout government – NOT UNDERSTANDING THAT THE FEDERAL LEVEL GOERNMENTS ARE ALSO DE FACTO BANKRUPT.

    And if (actually when) the Feds not pay the bills any more? The collectivists simply demand World Government.

    After all that is what “giving the IMF more resouces”, “cracking down on tax havens” and Basel I, II, and III are all about.

    World government spending, world taxation, world regulations.

    And it will, of course, fail also.

    However, I despair of reaching the left by rational argument.

    People who think (and they do so think) that the United States is “lightly regulated” (how many millions of pages of regs is “lightly”) and has a “small government” (as if they are unable to see the vast Federal, State and local spending) are beyond rational argument – indeed they are outside rationality itself.