As Brown poses as FDR, look ahead to a very new capitalism

Mark Gay

Very disappointed at the Spectator's cover story by Charles Leadbeater.

As a lookahead to a new kind of state-assisted capitalism it is the topic of the moment but this article is couched in media speak and diplo-jargon. The kind of rot that can get us into deep doo doo since neither side knows what the hell the other is talking about )).

Herbert Thornton

Banks & ingenious people in the financial sector have turned straightforward, ordinary moneylending and credit into labyrinth of financial arrangements so complex that they no longer embody reality. George Brown has done the same with public finances.

Consequently parts of this unsound structure have collapsed, and we still do not know how much will remain standing.

The people involved have created not security and stability, but the illusion of it - at enormous profit to themselves. They are essentially Spivs.

They certainly need to be controlled - but not by regulations concocted by the Spivs & especially not by George Brown.

TDK

Mark Gay has got it exactly right.

The job of journalists is to tell us what we don't know. To dig deeper; to challenge the powers that be.

Brown's rescue was done without a vote in parliament and he is now is hailed as a new FDR. A double irony for this lazy journalist. Every crisis is a time when the state tries to grab more power for itself. Some questions about this might be thought appropriate rather than a PR puff piece.

Perhaps Brown is more like FDR than he thinks. There is a body of opinion that FDRs policy extended the US depression and made it deeper.

James

Shockingly bad article.

Yes the bankers share a part of the blame but so too do politicians eager to reap the votes that come from an artificial consumer boom. You don't have to restrict that to one particular party; go back ten years or even twenty as you prefer.

And these politicians are the people this writer is happy to see manage a sector that they failed to manage before.

JohnAnt

"to deliver better public services at much lower cost through radical innovation..."
In Britain? Good luck with that one.

David Short

Is this guy in a competition for getting the most cliches in an article?

If so, he has won.

'wild eyed revolutionaries, jewel in the crown, central issues, conventional wisdom, gathered pace, looming recession....'

And that's just the first page.

If the new, gormless Spectator is going to lead on Tory economic policy, then please get someone who can write sensibly to ask why Osborne and Cameron have suddenly become advocates of state economic planning.

Kay Tie

"Shockingly bad article."

Well, what do you expect from someone funded by NESTA, a Government quango to channel public money to lost causes?

Dane Clouston

We should indeed be searching for a new kind of capitalism, but readers commenting so far are not in the vanguard, which is a pity.

What we need is certainly not from the far left, but is Liberal "popular capitalism" - with the wider spread of privately owned wealth, through the judicious redistribution of gifted and inherited wealth in each new generation.

How? Tax all giving and bequeathing of capital at a flat 10 % without exemptions, to record what is given or left, with a reformed IHT (currently at a scandalously exemption-riddled 40%). Call it Capital Donor Tax - or some similar name. Objection? - Donor Tax is double taxation of after tax income? Objection overruled! - So is VAT!

Introduce a new tax on lifetime receipts of gifted and inherited capital, from which the Capital Donor Tax would be deductible. Call it Unearned Capital Receipts Tax - or some similar name. Let it start at 10% and be progressive after that. Most people would have no more to pay, since the 10% would already have been paid by donors or bequeathers.

Use the flat rate and progressive rate proceeds to give all British-born British citizens a broadly self-financed British Universal Inheritance at 25 of at least 10 % of average wealth. Average wealth of every adult and child in the UK was £85,000 at the end of 2002, when FTSE was about 4000. Say a BUI of £10,000, itself subject to the Unearned Capital Receipts Tax.

Objection? Unearned Capital Receipts Tax is a tax on after tax income? Objection overruled! - Not in the hands of recipients, it isn't! They do nothing to create, earn, save or make these unearned receipts. Why should those who receive gifted and inherited fortunes not pay some tax on lifetime receipts so that others, in the poor streets of Glasgow, Liverpool and London, close by streets of vast wealth, can inherit something rather than nothing during their lifetimes?

British Universal Inheritance is an Asset Welfare State measure that would help to increase enterpreneurial activity, home ownership and opportunity for all. It would help reduce alienation, crime and policing costs, financial and social exclusion, poverty and the need for and cost of the Income Welfare State. It would increase a sense of progressive national identity and community - much needed in times to come. It is already the party policy of the EU-sceptic Liberal Party (not the EU-fanatic LibDems). See www.liberal.org.uk and www.universal-inheritance.org .

Which major party will take up British Universal Inheritance first? Referendum-denying DimLibs or New Labour and Gordon Brown, who messed up "Opportunity for All" and the Fabian Society's "A Capital Idea"? Or Compassionate EU-sceptic Conservatives, for the "Opportunity Society"?

Disreali and 19th Century Conservatives used modest steps towards universal suffrage to help gain power. 21st Century should be doing the same with universal inheritance. In a capitalist democracy all should have not only a vote at 18 but also a basic minimum inheritance at 25.

Dane Clouston

We should indeed be searching for a new kind of capitalism.

What we need is not from the far left, but Liberal "popular capitalism" - with the wider spread of privately owned wealth, through the redistribution of gifted and inherited wealth in each new generation.

How? Tax all giving and bequeathing of capital at a flat 10 % without exemptions, to record what is given or left, with a reformed IHT (currently at a scandalously exemption-riddled 40%). Call it Capital Donor Tax - or some similar name. Objection? - Donor Tax is double taxation of after tax income? Objection overruled! - So is VAT!

Introduce a new tax on lifetime receipts of gifted and inherited capital, from which the Capital Donor Tax would be deductible. Call it Unearned Capital Receipts Tax - or some similar name. Let it start at 10% and be progressive after that. Most people would have no more to pay, since the 10% would already have been paid by donors or bequeathers.

Use the flat rate and progressive rate proceeds to give all British-born British citizens a broadly self-financed British Universal Inheritance at 25 of at least 10 % of average wealth. Average wealth of every adult and child in the UK was £85,000 at the end of 2002, when FTSE was about 4000. Say a BUI of £10,000, itself subject to the Unearned Capital Receipts Tax.

Objection? Unearned Capital Receipts Tax is a tax on after tax income? Objection overruled! - Not in the hands of recipients, it isn't! They do nothing to create, earn, save or make these unearned receipts. Why should those who receive gifted and inherited fortunes not pay some tax on lifetime receipts so that others, in the poor streets of Glasgow, Liverpool and London, close by streets of vast wealth, can inherit something rather than nothing during their lifetimes?

British Universal Inheritance is an Asset Welfare State measure that would help to increase enterpreneurial activity, home ownership and opportunity for all. It would help reduce alienation, crime and policing costs, financial and social exclusion, poverty and the need for and cost of the Income Welfare State. It would increase a sense of progressive national identity and community - much needed in times to come. It is already the party policy of the EU-sceptic Liberal Party (not the EU-fanatic LibDems). See www.liberal.org.uk and www.universal-inheritance.org .

Which major party will take up British Universal Inheritance first? Referendum-denying DimLibs or New Labour and Gordon Brown, who messed up "Opportunity for All" and the Fabian Society's "A Capital Idea"? Or Compassionate EU-sceptic Conservatives, for the "Opportunity Society"?

Disreali and 19th Century Conservatives used modest steps towards universal suffrage to help gain power. 21st Century should be using a modest degree of universal inheritance to do the same. In a capitalist democracy all should have not only a vote at 18 but a basic minimum inheritance at 25.

Rhoda Klapp

I don't know what is addest. Whether it's that somebody thinks in this way, or that he can write it down like this and expect anyone to read it, or that a medium pruporting to be a national magazine for intelligent readers can publish the damned thing.

Here's my article on the same subject:
"After the fuss has died down things will go on much the same as before. Greedy people will find their way round regulations, and politicians will mess things up while claiming to make them better."

Or does the Speckedtato pay by the word?

David Short

I agree with rhoda. The new Spectator is such rubbish. Some of us stick with it hoping that it will go back to the old ways, before Brillo edited it using a puppet and before the Barclays owned it.

Charles Shackerley-Bennett

Very disappointed in this article. Trite, lots of psychobabble, and little real insight. Obviously caught up in the current hysteria. The source of the global economic problem is the massive extension of credit to unreliable borrowers by the US government. Once this is digested it will be business as usual; this may take several years. Not surprisingly the problem was created by irresponsible government action (namely the US) exacerbated by irresponsible govt spending in the US and the UK (and elsewhere). Let us not forget where the problem originated. We expect these governments to then solve the problem! We can only pray.

DT Colorado

Sounds like the same collectivist agenda with moderation, but still the same. The current difficulties only serve as an opportunity to charge the walls yet again. Nothing else is new but the language.

Edward Lud

Um, what free market is Charles Leadbeater referring to?

As far as I am aware there hasn't been a free market in this or any other G8 country in decades, if ever.

His criticism is more properly of a market regulated to a degree at which this crisis could emerge.

He may wish for more regulation. For the sake of argument, but only for the sake of argument, I would concede that had we had tighter regulation the crisis would never have happened.

But it is quite incorrect to blame free markets for what has occurred.

Jonathan

"A recession will be a boon for the web’s pro-am, do-it-yourself ethic."

Ho ho ho - let the boffins duke it out on that one!

"The hungry and cold unemployed masses aren’t going to continue giving away their intellectual labor on the Internet in the speculative hope that they might get some "back end" revenue."

Sam

The most interesting point in this piece is the fact that we are facing a global economic crisis at a time when the world has become more connected than ever. But what does this really mean? The less connected a place is, the more shielded it is? Charlie did not give clear answers, perhaps he is waiting to see.

Not all countries are suffering from the global crisis though and certainly not in the same degree. Many developing countries have experienced a sudden flux of capital from its diaspora overseas seeking more sheltered, less connected, bank havens in their home countries.

ray

A nice read, Charles. Thanks for sharing.

I haven't had time to digest all the comments, but i think a lot of them come from an ignorant view of how capitilism will evolve. Mention social and capital in the same sentence puts peoples backs up. The important distinction you need to highlight is that this type of capitalism will be on decentralized democratic institutions (that sounds better already doesn't it) -- as opposed to command and control -- which is associated with socialism and communism.

One other important point you need to make is how politics will be changed in a networked world and how capitalism will change because of this. Direct democracy.

my $0.02