Corporate Taxation

If Google, Apple, Amazon and other multinational corporations can operate in the UK declaring all corporate profits in low-tax Luxembourg, then all companies that operate in the UK should operate out of a Luxembourg headquarters. They have been set a precedent, which if not legislated against fairly could cause a revolution of sorts, businesses becoming independent of the legislatures in which they operate. It effectively ends the concept of the corporation being a citizen of a nation.

To allow existing laws with all their loopholes to exist, the Government is allowing much capital dilution in the economy (inflation) but the unfair tax laws make repatriation of this capital unlikely and that allows the Government to hoodwink the population with “low inflation”.

Imagine, if all the tax-protected capital was to flood back into the UK at once, the inflation would be ridiculous. But by keeping UK interest rates low, by allowing this offshore sequestering of capital in tax havens, the Government uses QE without risking inflation showing up in the economy.

The Chancellor, the Government and the opposition are all guilty of short-term thinking. As they deflate the value of the currency by QE, they watch boatloads of tax protected funds being parked in offshore banks. So the money supply does not actually grow, but new investment is stimulated as those without can get loans. But the trick is on the general population as those who need such funding are paying larger margins than they should to borrow when the base rate is 0.5%.

Quite apart from these mechanisms of funding the destruction of existing retail businesses by competing with globalised companies means endemic unemployment. That alongside the enslavement of students by the charging of exorbitant fees to get a foot in the door of a career in an uncertain road, and you are witnessing the continuation of one of the most dangerous trends mankind has conceived. Economic racism.

Italian Left Lurch

Twenty five percent of the vote in Italy went to a party that want an exit from the EU and a return of the Lira. The Monetary Madness continues apace. When a country could inflate away its debts and then revalue again after it had cleared its path back to being an attractive place to spread into some of ones’ investment risks. As part of a common currency they can not con each other in this way – they have to borrow to cover the shortfalls that stem from corruption in the political class. Italy has rejected austerity but the 25% is not a protest vote. It is a game changer. It is a kick in the face of the EU. It may be fatal.

However, if the PIGS were to leave the EU, they could form their own trading bloc – one hopes they call it SPIG rather than PIGS or GIPS or the less pronounceable IGPS – they would then be able to inflate their way out of their primary problem, together.  And then they could then rejoin the EU as a block and create economic treaty zones, consider an example set of economic zones:

  • Central EU (Germany, France, Belgium, Luxembourg),
  • South EU (SPIG),
  • Eastern EU (on or adjoining the Eastern border),
  • Northern EU (Scandinavia, Denmark, Holland, UK)

Each part of the EU has an exchange rate balancer, so if they want to devalue, they can by negotiating revaluation elsewhere.  The four zones have floating exchange rate mechanisms with each other relative to capital value.  So any shift of liquidity between the zones has its economic effect.

Monetary conditions are created by a mechanism like the trading of bonds (not cash) between the Super Governments – here are a group of talented long range analysts can set the degree of valuation (this model may in effect be five currencies), the democratically preferred flavour of financial control and regulation levels that at least disallow fantastic risks with people’s pensions that maybe once paid off but now wear away at value.  Perhaps Super Governments have no other function.

Each bloc contributes to a common currency pool and sells bonds to it to maintain an economic state of relativity.  However something like that may or may not work it should be understood that the awareness of very different political system is required.

Europe without a central federal body probably leads to too many demands for regulation being imposed in the wrong markets as well as the more significant, in body count at least, the absence of regulations that would have prevented disasters evaporating vast tracts of wealth in an instant.  Such an ephemeral quality wealth can turn out to be. Protecting it irrationally may backfire.

The central purpose is to introduce long range capital increases where they are needed. The absence of any Government led stimulus or infrastructure corrections that long range planning needs to consider in its calculation of growth.  You can squeeze an orange once, but a healthy tree means more future oranges and you better have the infrastructure to squeeze them.    

“a far less great Britain struggling with a mere percentage of its economy left yet more people to employ and an inability of the state to collect fair taxes”

The apparent Tory creed of demanding tax fairness, while protecting the tax avoiders who support them, will seem shallow as the record shows a far less great Britain struggling with a mere percentage of its economy left yet more people to employ and an inability of the state to collect fair taxes means it stubbornly refuses to finance progress. Italy may serve to push the EU into progress and reform the lumbering beast.

The Republican End Game

The Republican “end game” would be everything owned by big corporations not necessarily aligned with nations as entities but freely enriching shareholders from anywhere avoiding tax as their earnings are processed where there are no taxes.

If these mega corporations are able to employ everyone for a pittance then we are buying into a return to slavery.

Is this essentially the same model that makes China appear successful? Enslavement of the majority for the benefit of the few. The problem with the Republican End Game is the loss of what America is – the most rewarding economy for invention. As these corporations become less answerable to Government, they become more able to break the covenant of fairness. The Murdoch empire is a case in point. A corporation which supported a culture of law breaking that believed it could do this with impunity, which it did for twenty years before a single case sharpened public revulsion with the practice. That is what democracy does, it pitches the majority against the business interest and belief of an individual who learns that the end justifies the means time and again.

Democracy allows for peaceful revolution. An absence of democratic principles as in the case of Libya demands more severe responses. The essential problem here is a duality where both sides are destructive to each other. A unified system that causes progress according to long term principles appears have delivered stable growth in China for the last 3 decades by enforcing cheap exports to the world while the West has been experimenting with Freedman’s economics, gambling as though it were an addict. When cronyism and corruption abide, and capital exists only for its own maintenance, there are economic distortions that will result in disasters.

The West can rescue itself by very progressive and specific Government spending on the correct programmes. Education for all, being the most important. Obama decided to invest in rescuing mortgages and jobs but with poor returns. The Republicans want to reduce taxes and spending and leave America a first world city state in a third world country.

See also: Huffington Post

Competalism

Communism is dead! Capitalism is killing itself, rapidly. We need a better system: maybe Competalism*?

The Agora of the Competalists is documented from 250BC:

The Competialists were freedmen and slaves of Italian descent who took their name from the annual Roman festival of the Lares Compitales, the gods of the crossroads. The agora that bears their name was built in the 2nd century BC, and the offertory box decorated with snakes dates to c. 150 BC. The Stoa of Philip was dedicated to Apollo by Philip V of Macedon c. 210 BC.

Citation/References: Bruneau, P. and Ducat, J. Guide de Delos (Paris: Ecole Francais d’Athenes, 1965).

Manifesto

  1. The Competalist believes that all economic actions benefit by competing with others, without the destruction of ideas but the fostering of ideas in discussion and examinations of truth or utility.
  2. It is true that competence is derived from training and education.  When two similar forces compete, there is clearly going to be a winner and a loser – the loser being the one that wins less or does not survive the battle of wits.
  3. Competition is the crossroads of success and competence building.
  4. A failure of competence is not a sign of weakness, indeed the preservation of truth does not imply that other less successful truths may have value in a complex world or at a future date.  It means that another force, has been able to adapt to the present circumstances and those that trained them in this competence should now be able to train the loser.
  5. Weakness is giving up, not contributing, doing less to survive than is done for you.  Those who made this their practise shall be considered to be criminal or negligent or both.  They shall bear greater pressure on taxation.
  6. The state is the collective might of captial.  Those with more must invest it to make those in whom they rely upon for competence more able to pay their own way.
  7. Slavery is a crime.
*Competalism was first identified on Twitter from http://twitter.com/#!/nicotatz

Sustained Economy for Housing

Economic sustainability does not require endless growth of humanity. Should we continue to accept that greed as prime motivator of capitalistic instincts is actually “civilising”?

Locking up the rich and famous into gated virtual worlds makes a lot of sense. If they can not win the hearts and minds of the unrewarded/uncivilised – then the wealthy can at least hide from them.

The reason housing estates became ghettos is the lack of any economic rationale to improve them. The 21st century mega tower must be self contained as that provides an internal economy. Add solar panels and we are seeing a model of energy sustainability.

Upward expansion is also limited but the ability to control environmental impact with an economic impetus to maintain it makes a whole lot of sense. A housing estate that could maintain its own medical facility, other common facilities, common security and agreed rules is a small village.

If we stop growing, towering communities becomes a logical way to withdraw our footprint on nature.

The Energy of Progress

Al Gore may be right that ultimately it is up to every individual to believe that change is possible, in order that politically we choose leaders who advance progress in priority to growth. On the 07/07/2007 we all swung away from unrestrained capitalism as the only panacea necessary to allow us to thrive in harmony most successfully.

It is really only the political consideration that matters, for, ultimately we may care how many plastic bags make poisonous pits out of landfills but that does not stop the factory down the road from making the local river murky and lifeless.

It has only been political change that has allowed us to control our impact upon the environment. And for America this provides an alternative impetus for progress. What is progress? It is invention, finding a better way to do it. And these days cleaner and environmentally friendly is going to become something as important and enforceable as any other law.

US Industry is growing at 1% per annum. It is already a substantial contributor to global warming because it requires so much energy. If we draw the energy from burning coal, as seems “politically realistic” it will be with advantages in air filtration and clean burning technologies that do not emit excessive CO2 or other gases that poison the environment.

Understanding the problem is hard enough for the scientific community so one can not expect political change unless the addiction to growth is not curbed. Political change needs to encompass stronger motivations for choosing to advance the case for free power generation using large batteries of wind farms.

Taking the energy from the air seems logical as a counter measure to climate change. Scientific analysis of this effect may well prove important if the religion of growth is continued. Our climate is like the Earth’s circulatory system. We got to learn to stop screwing with it to get our energy.

Free passive energy can obtained with solar cells. If every rooftop in America was covered with power generating solar cells, power would be free.

If the environmental cost was assessed and taxed to every business in the world, we could make progress to ensure our safety.

It is political for the same reason that it would be very hard to stop someone competing in a race, for example, after they had prepared for it. You would have to have a very good reason.

The most convincing commercial argument to prevent climate change is that there is rather a lot of money to be made.