Thursday, April 24, 2008

Is tax costless when used to fund collective projects?

Isn’t this a great thought:
“If we value such collective goods as scientific research, space travel, public art, and fine architecture, then we should tax to fund them, whatever the economic cost. The consequent reduction of our material consumption will have little psychic cost”.

I am just joking, but I don’t think Gregory Clark was joking when he left readers with this thought at the end of his book, “A Farewell to Alms” (p 377).

In some respects I think Clark’s book is an excellent piece of work. It is highly readable and the main ideas in it – about the possible influence of differential rates of population growth of rich and poor on the spread of bourgeois cultural values in England prior to the industrial revolution – seem to be based on extensive research.

How does the author manage to end his book by claiming that taxation is costless when used to fund collective projects? He sees this as an implication of the observation that average happiness levels in high income countries do not rise much with increases in per capita incomes. He seems to think that this means that governments can tax away future increases in average income levels without making people any less happy.

I am not sure about anyone else, but the mere thought of a government attempting to do this makes me feel grumpy. At present I feel reasonably satisfied with life as a whole, not least because I live in a country where there are reasonable prospects that average living standards will continue to improve. I will become a very grumpy old man, however, if the government takes Gregory Clark seriously and decides that my children and their children should forego improvements in their living standards in order to fund more scientific research, space travel, public art and fine architecture. I suspect that a lot of other people will also become grumpy if this happens.

Don’t get me wrong. I don’t have anything against any of the projects that Gregory Clark wants to fund. If he uses the proceeds of his book sales to fund such things, I think we should all be grateful to him. I might be prepared to buy a lottery ticket to help fund some of these things myself, but when I want to give any money to charity I prefer to give it to an organisation like Opportunity International. This organisation lends funds to needy people who are prepared to help themselves build better lives.


Da said...

We should do like the Romans and have streets named after themselves. Then both parties will be happy :) Risk only what is yours to lose. Progress will slow, but progress will also be safe.

Winton Bates said...

Nice idea, Da.