Not many people read dictionaries, especially, a dictionary of money-talk that will be out of date by the time it gets to print, but I was always a bit weird. One of the few and therefore scarce O’grades I got was in the ‘dismal science’ of economics. I got a B grade. Put that in your pipe and smoke it. I know you’re secretly impressed. I was surprised. I’ll tell you my secret: if it wasn’t supply; it was demand. I could even pontificate about elasticity: elasticity is when something is not inelastic. I was good on the laws of diminishing return. It was always a farmer’s field and planting crops and well, you’ve watched The Waltons, you know what happens next. John Boy comes out with a piece of folksy wisdom and in a good year he gets a new hat. Economics is about telling stories. Recently I personally experienced the law of diminishing returns. At one level I attempted to sell the same story –Lily Poole – to the same people again and again. Chances of that happen diminish with each frantic effort. The people that buy have already bought. One of the problems of classical economics is it assumes – among other things – that the seller will have perfect knowledge of the market. I look across and in the next field Lavadis and Ewan are also selling the same product, but they are having three and four times the success rate I’m having. I don’t know how that happened. I have imperfect knowledge. But I want to move into their field and bring down their margins of success while boosting mine. Most folk do. In the pub I conducted a quick survey of who had perfect knowledge. I got two ‘Yes’ votes. Three ‘No’ votes and two ‘Fuck off’ votes. ‘Fuck off’ ties with ‘Yes’ and that’s how economics works.
Lets look at ‘paradis fiscaux’ before looking at the mucky letter ‘r’. You’re probably thinking ‘Jo le taxi’ and Vanessa Paradis. That’s how I didn’t get an A-grade in that O’ level all those years ago. Paradix fiscaux is just a fancy way of saying to poor people, fuck off, we’re not paying taxes. We live in Paradis-fiscaux land and if Vanessa lives there all the better for us.
Our beloved Prime Minister Margaret Thatcher put it quite plainly. ‘Nations depend for their health, economically, culturally and psychologically upon the achievements of a comparatively small number of talented and determined people.’
The Wealth of Nations will trickle down to those who don’t really deserve it, but there are a number of economic tools to help them adjust. ‘Reducing payroll – sacking people’. ‘Redundancy –sacking people’. ‘Reform –sacking people’ and making those that stay more productive, which generally means working longer hours for less money and foregoing luxuries such as being sick, wanting a holiday or worrying about pension plans. ‘Rent’ is an interesting word. It’s unproductive, yet it drives the money and housing market. ‘It is an attempt to take a bigger piece of the existing pie rather than make the pie bigger’. The Shards and glass-fronted tower blocks of Central London are the flagships of rent-seeking behaviour, and banks like RBS are the privateers that sail on a sea of finance. The UK taxpayer, of course, owns ‘82% of RBS, and at the time of writing is sitting on a loss of £15 billion’. The Government couldn’t let such banks sink and I dare not speak its name, has nationalised the big four banks.
A comparatively small number of talented and determined people have smashed the global economy, which since 2008 has resulted in world-wide depression, and this governments answer has been more or the same, more of the four ‘r’s. Let’s look at risk. Perhaps we better not. Sometimes it’s better not knowing. The rich get rich. The poor get poorer. That’s one constant. Perhaps it’s best to end with an old joke ‘Well, that works in practice, but let’s go and see if it works in theory.’