We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

“Despite Brexit”

From Forbes magazine’s website:

Wells Fargo and Apple both made substantial moves within London since the Brexit vote. Wells Fargo spent $400 million to buy a new European headquarters in London’s financial district. Apple announced plans to open a new London campus in 2021 that covers nearly 500,000 square feet of space. Facebook is also in the market for 700,000 square feet to accommodate 9,000 employees.

The whole article is worth a read. And it reminded me that there are now dozens of stories, tracked by the likes of Guido Fawkes,  going on about how This or That splendid thing has taken place “despite Brexit”. The joke here, of course, is that the Remain-leaning folks who write for the likes of the Financial Times and others have a hardwired assumption that Brexit is bad, will damage the UK economy, and that anything that appears to be positive is therefore in some sort of defiance of said presumption, to be dismissed, or cast aside. (This is not all one way, of course, there can be over-inflation of optimism about what the UK departure will mean, but my impression is that the volume of “despite Brexit” stories and the bias they reveal is much greater than the other sort.)

The point is soon being reached when an entire volume of news stories could be gathered into one place and the title of the book could be called “Despite Brexit”. Maybe those folk at Guido Fawkes or the Spectator, etc might bring out one in time for next year’s Christmas. I suspect the book will run to several hundred pages. (OK, I demand copyright on the idea, now!)

Discussion point: the Brexit deal

Brexit: ‘Breakthrough’ deal paves way for future trade talks

In the spirit of 1066 And All That, is this a Good Thing or a Bad Thing?

N.B. Do not attempt to answer more than one question at a time. (An exception may be made for the Irish Question.)

Mongolia, the EU’s blacklisted tax haven

It has been quite a grim century for Mongolia, many decades under the Soviet yoke after the ‘Mad Baron’ von Ungern-Sternberg managed to take over in the chaos after WW1, and write his own grim chapter, and still its capital is called ‘Red Hero’, but despite that name, Mongolia has got itself into the EU’s bad books, not by human rights abuses, but by a lack of them as a tax haven.

To determine whether a country is a “non-cooperative jurisdiction” the EU index measures the transparency of its tax regime, tax rates and whether the tax system encourages multinationals to unfairly shift profits to low tax regimes to avoid higher duties in other states. In particular these include tax systems that offer incentives such as 0% corporate tax to foreign companies.

The scoundrels, the shame of it, not taxing someone!

EU members have been left to decide what action to take against the offenders. Ministers ruled out imposing a withholding tax on transactions to tax havens as well as other financial sanctions.

OK, how about undercutting or matching them for starters? That would, actually, hurt them.

For some reason, the ‘charity’ Oxfam thinks it is entitled to chip in.

The UK-based charity Oxfam last week published its own list of 35 countries that it said should be blacklisted.

Are Oxfam’s shops taxed (or business-rated) in the same way as their commercial neighbours? Can they explain how sanctions (so useful against South Africa under Apartheid) improve the lot of the poor? Since sanctions harm, the corollary is that free trade doesn’t, and yet… But I digress.

Let’s hope that Mongolia shows the same defiance before its accusers as the Baron von Ungern-Sternberg did when facing a People’s Court, from ‘Setting the East Ablaze’ by Peter Hopkirk.

‘Showing no signs of fear at the fate awaiting him, the baron challenged the right of a ‘people’s court’ to try him. He told his Bolshevik accusers: ‘For a thousand years Ungerns have given other people orders. We have never taken orders from anyone. I refuse to accept the authority of the working class’.

Then they shot him.

The full blacklist is:

The 17 blacklisted territories are:
American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, The Marshall Islands,Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia, United Arab Emirates.

and conceding the point that taxes create poverty:

The EU made exceptions for countries faced with natural disasters such as hurricanes, and put the process temporarily on hold.

Samizdata quote of the day

The BBC, along with most of the Remain establishment, is presenting this as if it’s only the DUP which is standing in the way of an agreement between the EU and UK in advance of trade talks. In reality, I suspect a great many Tory MPs, more than a few old-school Labour MPs, and a large percentage of the British population would also object vehemently to Theresa May deciding for herself that Northern Ireland should remain under the jurisdiction of the EU at the behest of the Irish government and their masters in Brussels. Anyone who thinks this is a minor detail being blocked by a gaggle of DUP hardliners really doesn’t understand the issue at all. Or they do, but are spinning it differently for political gain.

Tim Newman

Samizdata quote of the day

However, even if £40bn were enough for the EU, many would ask why the UK should stump up anything at all. This is a political judgement that can perhaps only be made by the people in the room. In favour, £40bn (or more) might be a small price to pay in return for a ‘good deal’ with economic benefits potentially lasting many decades. Looked at this way, £40bn could be thought of a one-off payment equivalent to only a few billion each year (and much better value than HS2!). What’s more, since the ‘divorce bill’ is money that the UK would have to pay anyway if it had remained a member, it would be wrong to regard it as an additional cost of Brexit.

Against this, what would the British taxpayer be getting in return, especially if the default position is that the UK could walk away without paying a penny and ‘no deal’ would not be the disaster many fear? ‘Goodwill’ alone is surely not enough, and should in any event be shown by both sides.

At the very least it seems reasonable to expect the EU to agree to fast-track talks on a comprehensive free trade deal, including an explicit agreement on a time-limited transition period where trade remains as frictionless as possible. The UK could then make some of the money conditional on the success of these talks – perhaps anything more than the €30bn (£27bn) or so required to cover the period until the end of 2020 and something for pensions.

This might just about be acceptable to the British public too. But I don’t envy the job of those trying to sell it.

Julian Jessop

Terror at living outside the EU, ctd

Recent UK gross domestic forecast predictions, issued this week via the glum figure of UK finance minister Philip Hammond, have encouraged some of my friends who are EU Remainers to shout about how Brexit is damaging Britain, we are going to lose tens of thousands of jobs to the continent, or wherever, etc, etc. The rage is not dying, in fact. Some of the language (Brexit supporters are “retarded” being a recent one) is not becoming milder. We haven’t yet reached the acceptance phase after the initial shock and anger.

Apart from the devaluation of sterling after June last year, there hasn’t been all that much of a shift on the economics front. The underlying performance of the UK economy does not appear to have altered that much. Some American banks such as Goldman Sachs and JP Morgan talk of shifting some business to the continent to create subsidiaries in anticipation of any EU access shenanigans, as I would expect, but it hardly fits with a Biblical level of terror to justify some of the vehement language I see on forums such as Facebook.

Assume we must take seriously the risk of life outside the joyous embrace of the EU Single Market, this is worth considering, from Tory MP and former minister, Peter Lilley:

The Single Market is talked about as if it were some inner sanctum accessible to a privileged few. In fact, every country has access to the Single Market – with or without tariffs. The Single Market programme, which I implemented, involved harmonising product rules – sensible, since businesses can now make one product range for the European market, not 28. But that benefits American and Japanese exporters as much as German or British firms. Although often invoked as particularly benefiting UK service companies, in fact UK service exports to the EU have grown less rapidly since the Single Market reforms than any member state except Greece and Italy

He also responds to the point that apparently, by being outside the EU, the UK will now submit to EU rules without being able to influence them:

People assume Britain benefits from participating in setting these rules. But rules provide a framework within which all companies operate – not an advantage to any individual country. Britain set the rules of tennis but rarely wins Wimbledon! British exports to the EU have grown less rapidly since the Single Market than they did before 1993, less than our partners’ and much less than non-EU countries’ exports! Maybe that is partly because we suffer EU regulations on 100% of our companies (costing our economy billions of £s) whereas non-EU firms need only comply with EU regulations on activities carried out within the EU.

And on the “passporting” issue that comes up:

How important is the right to passport services to the EU? Passporting lets financial institutions operate throughout the EU via branches supervised by their home country regulator without seeking authorisation from local regulators. Having introduced the Single Market measures, I decided to make a speech extolling how they had removed barriers to trade, not least through passporting. Unfortunately, my officials could not find a single company doing business it previously could not do! Banks were almost invariably operating, not through branches, but via subsidiaries which still needed local authorisation and regulation. (Emphasis mine.)

And on the terror that outside the EU, the UK will be hurt, Mr Lilley looks at EU-regulated mutual funds and alternative investment funds regulation (private equity, real estate, private equity, etc):

Since then the UCITS, MiFID and AIFM directives have extended passporting rights to other financial service providers who do take advantage of it. However, most UCITS funds choose to operate via subsidiaries in Luxembourg and Dublin without causing an exodus of jobs from London. Also the AIFM directive provides for recognition of equivalent standards of regulation by non-EU providers which is intended to be granted to Hong Kong and Singapore, so could scarcely be refused to the UK post Brexit.

In other words, you don’t have to be in the EU to manage investments sold within its borders. And yet if you take some of the Remainer arguments at face value, you would think that the UK is to be cast into a dark, lonely place.

A final thought. One of my Remainer co-jousters talks of the folly of the UK “going it alone”, as he claimed we had done after 1945. That, however, not only ignores our membership of NATO but also the UK’s web of trade with not just the continent of Europe, but also the old Commonwealth nations and places such as Argentina, and of course the US. The UK was hardly living under a rock during the period before EEC membership began in 1973, and further, that membership involved slapping tariffs on many of those countries. As Mr Lilley says, it has taken ages for the EU to hammer out free trade deals with nations such as India, China, etc, and to improve on what we have with the US. (I have even seen some of my Remainer friends dismiss this range of countries as “minor”, or “colonial outposts”). So let me get this straight: the US, Canada, Australia, New Zealand, India, South Africa, parts of Latin America, the Pacific-Rim, etc, are “minor”, but the European Union is a powerhouse. Great, got it.

Have a good weekend everyone.

 

“One from ten leaves nought”

In writing this post I do not attempt to draw any particular moral, merely to share an episode of history I found out about by chance which has some incongruous parallels with the present day.

Quoting the Wikipedia article on the West Indies Federation:

Three member states were proposed as hosts for the capital city of the federation: Jamaica, Barbados and Trinidad and Tobago. Earlier in the federal negotiations the general opinion had been that the capital should be one of the smaller islands so that the capital would be in a neutral position to the larger territories and it would be able to inject some buoyancy into one of the (then) poorer economies.

The West Indies Federation had an unusually weak federal structure. For instance, its provinces were not contained in a single customs union. Thus, each province functioned as a separate economy, complete with tariffs, largely because the smaller provinces were afraid of being overwhelmed by the large islands’ economies. Also, complete freedom of movement within the Federation was not implemented, as the larger provinces were worried about mass migration from the smaller islands. In this sense, the current European Union can be said to have implemented a more unified economic space than the West Indian attempt.

Nor could the federal government take its component states to task. The initial federal budget was quite small, limiting the federal government’s ability to use its financial largesse as a carrot. It was dependent upon grants from the United Kingdom and from its member states. The provincial budgets of Jamaica and Trinidad and Tobago were both larger than the federal budget. This led to repeated requests for those states to provide greater financing to the federal government. These requests were not well received, as Jamaica and Trinidad and Tobago together already contributed 85 percent of the federal revenue, in roughly equal portions.

For many Jamaicans it appeared that the Federation would then just hamper their development and movement towards independence.

As a result, the Bustamante-led Jamaica Labour Party (the local component of the West Indian DLP) successfully forced Manley to hold a referendum in September 1961 on political secession from the Federation. It passed, with 54% of the vote, despite the opposition of Manley, the province’s Chief Minister at the time.

On January 14, 1962, the People’s National Movement (the Williams-led Trinidad component of the WIFLP) passed a resolution rejecting any further involvement with the Federation. Williams himself stated that “one from ten leaves nought”—in other words, without Jamaica, no Federation was possible. Trinidad and Tobago became independent on August 31, 1962.

Without Trinidad and Jamaica, the remaining “Little Eight” attempted to salvage some form of a West Indian Federation, this time centred on Barbados. However, these negotiations ultimately proved fruitless. Without its two largest states, the Federation was doomed to financial insolvency.

We are so happy in Taxlandia

Via Andy Silvester and Guido Fawkes, I have discovered the hottest new thing. From the people who gave you EURODAME, HELP! comes…

Taxlandia!

Does tax build YOUR future? Try it and see!

No, it is not a wind-up. Although from the time it takes to load, you might think it was powered by clockwork.

Later: I set the age level to 9-12 and gave it a trial commensurate with my attention span. Honestly, compared to Eurodame, it ain’t bad. They acknowledge the existence of the Laffer curve, how’s that? Peaks at 50%. Maybe the rampaging kaiju came after I got bored and left.

You say that like it’s a bad thing, Mr Barnier

The Times tells us that a moment of decision approaches. “EU nations will block Brexit deal if Britain ditches Brussels regulations, warns Michel Barnier”:

National parliaments or regional assemblies across the European Union will block a future trade deal if Britain tears up Brussels regulations on competition, food safety, social standards or environmental protection, Michel Barnier warned today.

The EU was alarmed a fortnight ago when Liam Fox, the secretary of state for trade, hinted that after Brexit Britain would ditch regulations on health and the environment to secure new trading deals with countries such as the United States.

In a stark warning to Conservatives and Brexit supporters, Mr Barnier, the European chief negotiator on Brexit, warned that Britain’s choice between Donald Trump’s vision of a deregulated laissez-faire economy

Are we talking about the same Donald Trump here? Swanky hotels, reality TV, funny hair, President of the United States of America? ‘Cos that guy’s a protectionist. Like you.

or the “European model” of social and environmental protection will determine the shape of a final Brexit deal.

“The UK has chosen to leave the EU. Does it want to stay close to the European model or does it want to gradually move away from it?” he said at the Centre for European Reform in Brussels.

Any preference?

Samizdata quote of the day

All the while, parallel negotiations have been ongoing between the EU and our more militant Remainers: Blair, Clegg, Clarke, Adonis, Corbyn and more have all been along for meetings with Barnier and Juncker. Calls for a second referendum from senior Remain politicians are now regular. It’s not rocket science to see what is afoot: a co-ordinated effort to offer Britain the most punitive terms imaginable, with which the British will then be presented in a second referendum – crawl back to the EU or face a financially ruinous bill to trade.

Calls to ‘rule out no deal’ must be understood in this context – it is simply begging the EU to give us the worst possible deal, and everyone knows it. The EU’s apparent concessions in October are simply theatre to keep Theresa May in place – they have no desire to reach a reasonable deal.

We cannot continue walking into this trap. Instead, we propose the Government starts immediate preparations for reverting to standard global trade, the basis on which both the US and China trade with the EU, and create a ‘WTO transition fund’ with the money the EU is demanding: likely to be around £60 billion or more. Britain does, after all, do more trade with the rest of the world than it does with the EU under the cherished Single Market.

Brendan Chilton

The punchline

The New European thinks its cartoons are a selling point:

I disagree that Stanley Donwood’s cartoons are “fantastic”. The drawings are a tolerably executed pastiche of the style of 1950s cartoons, but there is no clever visual imagery; they merely depict one human being hitting another. Or try to depict it: in the first cartoon the chick’s arm looks too limp to have just knocked that big guy off his feet, but fear not, there is a flash to show that impact did indeed occur. In the second one the word SLAP performs the same function. If you like seeing pictures of your political opponents being hit and sworn at, you will like this!

As for the words, the “punchlines” are nothing but verbal supplements to the punches. Did I say “punchlines” in the plural? There is only one between the two of them. In “PUT THAT ON THE SIDE OF A BUS, FUCKWIT!”, the point is that upon the word “THAT” the woman returns the man’s Leave slogan back to him by hitting him, and in “HOW’S THIS FOR ‘WILL OF THE PEOPLE’ YOU EUROPHOBIC FUCK!”, the point is that upon the word “THIS” the woman returns the man’s Leave slogan back to him by hitting him. While the visual formula of a pretty young woman knocking seven bells out of a fat old man can be repeated ad infinitum, quite soon one is going to run out of Leave slogans and demonstrative pronouns.

Overall, I am not impressed. Nor am I that much bothered. I am confident that the readers of the New European will confine their beatings of Leavers to the realm of imagination; they have plenty of practice in living in a fantasy world after all.

To be honest, the claim made by Nigel Farage to Breitbart London that the cartoons are “glorifying violence against those who voted for Brexit” is a stretch. Both the initial hard-hitting cartoons and his pulling no punches in his objection to them are best seen as just part of the good old knockabout fun of politics. But, as the saying goes, those who live by the sword die by the sword. As it says in the Breitbart article, the New European has been having the vapours about stuff like “the direct correlation between political messaging and violence” since its foundation. In this very issue it has yet another piece saying that real world harm is done by images, in this case denouncing “the complicit culture of Lad’s mags”. It is entertaining to see it being slapped down for the very same offence.

Samizdata quote of the day

Not paying corporation tax is an advantage to those who don’t pay it as against those who do. Which is what we’ve been saying about corporate and capital taxation all along. If you tax corporations then there will be less investment in them in your economy. This makes everyone poorer – the deadweight costs are high. This is indeed exactly the same reasoning which leads us to insisting, as a result of optimal tax theory, that we shouldn’t be taxing the corporations at all.

Which is interesting, even amusing, don’t you think? The EU’s justification for why they just must tax companies is the very reason basic theory says we shouldn’t be taxing corporations at all.

Tim Worstall