Newspeak – for emotional populists

Some people seem to get extremely upset when faced with some rather pedestrian ideas. And no wonder, because they are speaking a different language, literally!

Here is how I understand some of the expressions being used (after referencing the dictionary), compared with how emotional populists actually interpret their meaning…
(Entries are in alphabetical order)

Term/Expression What I understand: What emotional populists understand:
“I disagree”
I don’t think that’s entirely correct. You oppose everything I stand for. Maybe you even hate my very being.
Wanting to centralise power and control in government. Anyone who dares to take a strong position/statement on controversial issues.
Advocating free trade and private ownership of the means of production (capital); so that they who work hard and takes risks will be the one to reap the rewards.

Opposite of Socialism.

Greedy rich people who want to get rid of rules that protect society, so that they do not have to contribute to society.
Being unconcerned with the ideologies pertaining to the political left or right, and only concerned with producing results. Pragmatism. A compromise between the goals of Conservatives and the Labour party.
Imposed equality of outcome. State ownership of all capital. Socialism taken to its logical conclusion. Evil dictators. Or idealistic good lefties corrupted by power.
People who want to retain tradition, either out of habit/comfort, or out of caution of the danger of changing society too quickly, or even out of recognition the strengths and benefits of inherited wisdom. Backward bigots/greedy Tories/Republican gun freaks.
The downsides of carrying out a decision, whether in monetary payment, in expended effort, in amount of time taken, or in lost opportunity.
The opposite of benefit.
How much money do we have to pay? Life isn’t all about money, you know.
Crony capitalism
The antithesis of free market capitalism, aka Kleptocracy: The abuse of government influence to gain wealth, such as state-sponsored monopolies. The bigger the government, the greater the abuse and wealth gained – a particular vulnerability of socialism. The inevitable consequence of capitalism.
Democratic / Democratised Socialism
Exactly the same as socialism – because the state control does not become benign and efficient just because it was democratically supported. The idea that socialism can be rendered benign by virtue of its popular support.
Distinguishing between different things. Hate against those who are different.
Being different, or having different backgrounds. Anyone that is not white, heterosexual, or male
Someone who has migrated out of the country. An “outward migrant”. Is that a misspelling of “immigrant”?
Giving everyone equal rights, and equal treatment. Ensuring everyone has the same outcome in life.
A term describing people or organisations who have gained widespread recognition and long-term endurance – such as a big multinational business, or an entrenched political party. Anyone with substantial wealth. Usually conspiring to oppress the poor.
European Union
An ambitious project of political power play, seeking to consolidate control of European nation states into a massive global superpower (that rivals the USA, Russia, and China), to achieve through politics what the instigators of WW2 failed to achieve through military might. Trading with Europeans, travelling in Europe, and European countries. Anti-war.
Someone who lives outside the country they were born in. Short for ‘Ex-patriate’, meaning “outside the land of the father”. Rich white people from the west who move to poorer countries, who benefit from the glamour of being a foreigner and increased spending power due to advantageous exchange rate.
Exchange rate
How much a currency is valued compared to a different currency. A figure that is caused by the interaction of supply and demand, with no direct meaning in absolute terms. A measure of personal wealth relative to foreign wealth; ipso facto – the direct representation of a nation’s wealth.
The taking of an ideological principle to its extreme conclusion without moderation. E.g. totalitarian communists, anarchists, or religious fundamentalists. Extremely bad people with a penchant for aggressive behaviour. Usually right-wingers. Fascism manifested in violence.
Far left
Totalitarian communists. Idealists.
Far right
Libertarian capitalists. Totalitarians/Nazis/Fascists. The epitome of evil.
Authoritarian nationalists. Anyone who disagrees with a liberal.
Free speech
The right to say anything you want, no matter how controversial, for the sake of facilitating public debate, challenging social mores, and protecting individual freedoms. The right to slander people based on limited understanding of their views, to say only socially acceptable things, and the legal obligation to stop people saying or writing things that hurt your feelings.
Free trade
Trade that arises naturally when buyers and sellers make decisions free from government intervention, as opposed to trade that is distorted by policies such as subsidies (eg green energy), purchasing mandates (eg motor insurance), protectionist import bans/tariffs/quotas (eg common external tariff), unbalanced taxation (eg sugar tax).
Not opposed to appropriate trading standards and regulation.
Trade that completely disregards quality or safety standards.
Evil Capitalism at work.
Gross Domestic Product – essentially how much monetary value is being added by a country’s economic activity, whether by business, consumers, or government. An indicator of economic activity, which correlates with a nation’s economic health. The cumulative wealth of a nation.
Going on strike
Industrial action of last resort, the last course when conventional negotiation fails, designed to hit the profits of the employer by killing productivity. Political action designed to raise awareness to the plight of the ‘working class’, by hurting the middle class public who rely on public transport to earn a living, and whose jobs are not protected by trade unions.
Health tourism
The deliberate travel to a country to make use of, and pay for, the superior health service available in that country. The deliberate travel to a country to abuse its state-funded health provision.
Someone who has migrated into the country. Literally an “inward migrant”. Someone who is poor and undoubtedly skilled and hard-working, who thus deserves a resident visa because this country wouldn’t survive if there are no hard-working immigrants.
Putting money into an endeavour to give it capital for growth and building up productivity, in the hope of redeeming the investment at a material profit or otherwise gain in value. Spending money on government provision of services, regardless of whether or not the funds are available, and with no regard for economic sustainability or return on investment.
Advocating increasing the reach of government, centralisation of control, and state control of industry.
Liberal attitude to social values/traditions.
Ideas by people who care about improving the country. Everyone else is either narrow-minded, backward, or selfish.
Left of centre
A lean toward government provision of services at the cost of higher taxes. The idea that the government should pay for everything that I think the public needs, and to always intervene to prevent people from making poor choices.

Basically the same as socialism.

Being unfettered by social mores and traditions. Good people.
Desiring to protect individual liberties over state control. Right-wingers pretending to be good.
Someone who moves from one place to settle in another place. Refugee.
The opposite of extremism – someone who might hold to a particular ideology or principle, but is willing temper to those principles against other concerns, or to accept pragmatic concessions. Someone who used to be militant about their beliefs, but is now not so violent about it, albeit not necessarily any less invective at it.

“I find your opinions completely reprehensible, but I’m willing to tolerate them.”

The concept of prioritising the country’s needs over that of foreign interests. Racism and fascism.
The excessive application of rules and regulations, in such a way as to be counter-productive, because implementing it harms society more than it benefits society. Right-wingers dog-whistling in favour of complete deregulation for the sake of profits.
Clearly these people don’t care about peoples’ well-being.
President / Prime Minister
The head of government, elected to represent the desires of the people in setting policy and driving legislation. Supreme ruler, without which a nation and its citizens will fall into disorder and chaos.
Appealing to the desires of the populace, regardless of ideological principles or political loyalties. Appealing to right-wing bigots.
People who want to change society to what they THINK would be better. People who want to change society to what they are absolutely CERTAIN would be better.
Prejudice based on a person’s skin colour, race, or ethnicity.

Somewhat related to xenophobia (the prejudiced dislike of a person based on their nationality).

Any signs of negativity toward a person with a darker skin tone.

Giving foreigners a lower priority when it comes to national interests.

Criticism of Islam (other religions don’t count).

Someone seeking refuge in another country due to persecution they face in their own country. Someone seeking to move from a poor country to a rich country.
Advocating reducing the reach of government, devolution of control to the most localised level possible, and private control of industry, as typified by the free market.

Conservative attitude to social values/traditions.

Selfish ideas, by people who only care about themselves. Populists. Anyone who doesn’t agree with the Left.
Right of centre
A lean toward lower taxes and less government intervention. People who still believe that the government should intervene to prevent bad choices, but who do not mind some form of capitalism.

In other words, socialists with a desire for lower taxes.

Advocating state ownership and control over capital and the means of production, so that government bureaucracy rather than private enterprise controls and monopolises the industry. This means that nobody involved in industry is motivated by a reward, whilst the public purse takes the risk.

Opposite of Capitalism.

People who care about protecting human rights, in particular being generous toward the poor and vulnerable.
The right of a country to determine its own legislation and policy without being subject to foreign control or interference. The right for a country’s politicians to make decisions for the plebeian electorate.
Political activists who resort to force of violence, targeting civilians indiscriminately, in order to gain widespread media and political attention for their cause. Anyone who resorts to deadly violence regardless of justification or cause (such as disgruntled employees). Definition of violence may include threat of violence or verbal aggression.
The acceptance of differences, whether in background or opinions. The normalisation of liberal values, where differences of opinion are not acceptable or tolerated.
Trade union
Industrial collective designed to be a balance of power against unscrupulous employers. Political activists who are protectors of the poor and vulnerable.
The deliberate application of harmful physical force on another creature or human being. Any action that can cause physical or emotional pain, such as signs of anger, threat of aggression, or verbal abuse.
World Trade Organisation (WTO)
An international organisation set up to facilitate global trade and ensure fair practices through internationally-agreed regulation. A set of rules representing the worst-case scenario imaginable for international trade, which would destroy the United Kingdom’s economy.

Lastly, a few personal bugbears not related to politics…

Term/Expression What I understand: What emotional populists understand:
Someone who engineers/designs solutions as a professional discipline. Technician/ mechanic/ grease monkey.
Someone who works on fixing and maintaining technical or mechanical equipment. Someone with good technique.
Anyone from the continent of Asia (including Chinese, Koreans, Mongolians, Siberians, Japanese, Filipinos, Arabs, Israelis, Indians, Turks…etc) Anyone Muslim or brown-skinned, such as Indians and Pakistanis.

Donald Trump vs David Cameron

So I recently came across a video, a publicity stunt by Donald Trump in his role as President of the United States of America. He allowed press cameras access to record a meeting that he chaired on the subject of the DACA immigration policy (Deferred Action for Childhood Arrivals). In this meeting were attendees from both the Senate and the House of Representatives, including members of both the Democratic and the Republican party.

Putting the subject of discussion aside, the event reminded me of a similar publicity stunt pulled off by David Cameron in 2015. He allowed press cameras into a cabinet meeting, with headlines declaring “Inside Downing Street Cabinet Meeting”, British politicos were tantalised by the prospect of witnessing an actual discussion taking place within the United Kingdom government’s Cabinet.

What struck me most about Cameron’s “meeting” was that it was really nothing more than a publicity stunt. He took advantage of the press’s curiosity to give a speech that was directed more at the public than to the cabinet. Nobody else said anything. There was no evidence of David Cameron chairing any discussion. Not even the speech contained anything of substance – it contained nothing but airy-fairy platitudes full of good intent but nothing to do with how they are going to be achieved, or what actions the government can/should/could take. And at the end of his pathetically short speech, he got rid of the cameras, presumably so that they could get actually “get on with business”. We never got to witness an actual cabinet discussion. They might have been drinking champagne for the next hour after the cameras left, for all we know.

In comparison, Trump was brief and business-like with his introductory speech: he thanked everyone and introduced the subject of discussion within 30 seconds. He explained what the three goals of the discussion was, and opened the discussion by highlighting some of the known issues. The discussion kicks off at 6 minutes, starting with a Democrat Senator. Discussion then proceeds to go back and forth between different attendees, from Democrat to Republican and back again. Trump is both in control of the meeting as well as actively participating in the discussion.

This should not have surprised me. After all, Trump was an accomplished businessman long before he became a start of an over-dramatised reality television programme.

In comparison to Trump, Cameron’s attempts at publicity just showed that he was all about publicity rather than substance. I had always thought that Cameron was shallow, but to have so much less substance than Trump, was certainly eye-opening.

Granted, the entire hour might have been carefully scripted and set up for show. There’s no doubt that the speeches were carefully thought through and probably even scripted beforehand by every participant, but the fact is: members from opposing sides of the political debate participated in the discussion. There was none of the mud-flinging that we see in public politics, even in the shameful publicised debates in Westminster, which more resembles monkeys battling it out than it does civilised debate.

I did not like Trump, and I still do not like Trump. But it does look like he is doing a decent job in his position of office so far. What do you think? Watch the two videos below and let me know your thoughts.

David Cameron chairs meeting (2 mins):


Donald Trump chairs meeting (54 mins):


Perceptions of the left-right political spectrum

Hate arises because we project our prejudices instead of actually trying to understand others.

The left-right political division: most of the hate and division arises because we fail to understand others the way they understand themselves. Many of us are guilty of projecting our prejudices on those we disagree with.

How the Left identifies itself

Everyone who identify themselves as belonging to the liberal Left cares for the poor and downtrodden. It sees itself as embodying progressive and liberal values. It sees the government as a tool to better society. Many also have an agenda to address societal issues at the global level, rather than at a local level. Left-wingers tend to identify the inequality caused by capitalism as an evil outcome that needs to be addressed, by curbing the greed of the wealthy, and by providing a generous welfare system for the poorest in society.

Liberal Left-wingers are willing to discard societal traditions because they believe that traditions are cultural baggage that  hinder progress. They believe in liberalising cultural norms and dispelling cultural taboos that result in segregation and discrimination. They believe that everyone should be given equal treatment, and some even believe that the affirmative action should be taken to rectify past oppression.

In summary: Left-wingers are progressive when it comes to social values, and interventionist when it comes to the role of the state.

How the Left sees the Right

Therefore, this is how many on the Left interprets the Right: as being in opposition to every ideal the Left stands for. Many Left-wingers think that Right-wingers are authoritarian, regressive, and selfish.  They see the Right as only being interested in personal wealth rather than societal well-being. They think that conservatives only manipulate the government for personal interest, as opposed to societal interest. Many even interpret the nationalistic agenda of some conservatives as indication of the backward selfishness endemic to the Right.

How the Right actually identifies itself

However, Left-wingers very rarely ask: How do Right-wingers identify themselves?

Conservative Right-wingers believe society has come this far because of the traditional values which have guided them in the past. Thus they believe in making incremental changes rather than revolutionary changes, to minimise the unintended consequences arising from implementing societal changes too rapidly. They also believe in small government because they value the liberty of individual choice, over more interventionist forms of government because of the danger of oppression. Thus many conservatives believe in voluntary charity rather than state-enforced charity.

Capitalist Right-wingers believe in freedom of choice for economic reasons. They see free-market capitalism as the best way to incentivise innovation, entrepreneurial spirit, and wealth generation. They believe that the real socio-economic problem is actual poverty rather than inequality, and that wealth creation will improve the life of even the poorest of society. Many believe that the poor should be given incentive to improve their lives, even if it results in short-term pain.

In summary: Right-wingers are conservative when it comes to social values, and libertarian when it comes to the role of the state.

How the Right sees the Left

Right-wingers believe in small government. The converse, they believe, is that Left-wingers believe in big government. Most right-wingers oppose what they perceive to be the Left’s attempt to encroach upon individual liberties, such as the freedom of conscience, the freedom of religion, the freedom of speech, the freedom of choice… They believe that left-wingers want to use the force of the state to impose their ways on society.

Comparing the Left and the Right

Both the Left and the Right believe in the role of government. Both the Left and the Right desire the best for society. The differences are disagreement over how this can be achieved. Here are some of the similarities and differences…

 1) Both the Left and the Right believe in compassion and helping people.

The Left believes in helping the poor directly, whilst the Right believes in incentivising them to achieve this themselves. The Left believes that the government should intervene wherever people are in danger of making poor choices, whilst the Right believes that individuals are best placed to make their own decisions. The Right believes that generous welfare provides an economic incentive toward poverty and unemployment, whilst the Left believe that generous welfare is necessary to prevent poverty.

 2) Both the Left and the Right believe in fairness.

The Right believes in equal rights and starting points, whilst the Left believes that inequality of outcome is usually a result of inequality of opportunity. The Left believes that a fair taxation system means heavier taxation on the rich, whilst the Right believes that fair taxation means taxing everyone the same rate.

3) Both the Left and the Right believe in prosperity.

The Left believes that unfettered market forces have potential to do great harm, whilst the Right believes that market forces are more efficient than centralised decision-making. The Right believes that the profit motive incentivises operators to improve efficiency, whilst the Left believes that profit margins reduce efficiency. The Left believe that the rich attain their wealth by exploiting the labour of the poor, whilst the Right believes that wealth is not a finite resource and that it is created every time productivity improves via human innovation.

 4) Both the Left and the Right believe in the value of liberty and oppose authoritarian oppression.

The Right believes that increasing government power reduces individual liberty and increases the scope and danger of government oppression, whilst the Left believes that gaining power and representation in government is the best way to oppose government oppression. The Left believes that the state has a duty to actively promote liberal ideals, whilst the Right believes that government intervention on social issues is illiberal and oppressive.

 5) Both the Left and the Right care about the environment.

The Left believes that the environment needs active protection and that proactive government policy is required to drive through progress on improving environmental protections, whilst the Right believes that the environment is very resilient and that human intervention on a massive scale has the potential to cause even more environmental damage than it purports to solve. The Right believes that progress of technological innovation naturally leads to improved environmental standards, whilst the Left believes that market-driven progress is not only too slow, it often goes in the wrong direction to increase environmental damage.

 6) Both the Left and the Right believe in human rights.

The Right believes that rights are acknowledged by the government, to recognise individuals’ rights to self-determination, whilst the Left believes that rights are given by the government, to sanction actions and statuses. In practice, this means that the Left wants their standards of human rights to be enforced by the government, whilst the Right does not want the government to stop individuals acting according to their conscience.

 7) Both the Left and the Right oppose monopolies.

The Left believes that capitalism inevitably leads to monopolies and that government intervention is required to either break-up the monopoly or nationalise the industry to prevent the abuse of that monopoly. The Right believes that monopolies can only survive by relying on government support (whether political or financial), because abusive monopolies is unable to survive competition from the free market.

 8) Both the Left and the Right believe in peace and national security.

Some believe that strengthening a nation’s internal security and border checks are the best way of improving national security. Others believe that interventions in foreign conflict are necessary to quell the violence that would otherwise spread to other countries. There is disagreement over which position is Left-wing and which position is Right-wing. (For example, here is a left-wing article arguing against left-wingers who are opposed to foreign intervention: https://leftfootforward.org/2013/06/why-the-arguments-against-intervention-in-syria-are-wrong/)

In conclusion

Much of our disagreement and division arises from our refusal to see what the other side actually has to say for themselves, what motivates them, and the reasoning behind their beliefs. But the Left does not want to steal from the rich. And the Right does not want to oppress the poor.

Neither the Right or the Left are evil. There are selfish career politicians and self-interested players on either side, just as there are well-intentioned but misinformed activists on both sides, but neither movement is intrinsically evil.

How do I identify myself?

I do not identify closely with either the Left or the Right. But I am willing to use a few labels to describe my beliefs. These labels describe my position, not my motivation. I explain why I hold to these positions below…

I am progressive: I am not concerned about preserving traditions or conservation of cultural values. I believe traditions should be discarded if they prove to be a hindrance to social improvement, but should otherwise be retained in order to avoid unintended consequences. I believe cultural values have a role to play in holding society together, but understand that not all cultural values are equally beneficial, and that some may in fact be harmful.

I am a capitalist: Because the profit motive incentivises innovation and rewards success, and because every instance of socialism has demonstrably failed by destroying the economy whilst to doing little to improve the circumstances of the poor. I believe the free market is the far from perfect, but it is still the best way of fostering economic development and prosperity.

I am libertarian: I want individuals to take more responsibility for their own actions, so that they can take credit for their successes and learn from their failures, rather than disparage themselves for their successes and blame others for their failures. I would prefer to educate people so that they can make up their own mind, even if it is evidently a bad decision, rather than force a decision upon them.

I am a pragmatist: I have no ideological commitments to any of the above labels. I care only about producing results. I will change my position on any of the above labels if they can be demonstrated to be inferior to its alternative. In short, I am a centrist.

The foolishness of Keynesian stimulus

Does increasing public spending end up increasing the tax intake?

The economics of Keynesian stimulus:

  1. Spend more money on public services than tax intake
  2. People earn more money and spend more money
  3. More money earnt and spent means more tax intake

Result: win-win… right?

Theory vs practice

Assuming everyone is taxed at 40%, let’s see how this plays out…

Under balanced budget conditions:

  1. For every £1 earned by taxpayers, 40% is taxed = 40p
  2. Tax money is spent on public sector employees
  3. Public sector employees earn 40p for every taxpayer’s £1
  4. This 40p is in turn taxed at 40% = 16p
  5. This 16p is recirculated back into the public sector

Using Keynesian stimulus:

  1. For every £1 earned by taxpayers, 40% is taxed = 40p
  2. Through borrowing/printing money, the amount of money available to be spent on public sector is increased by 50%
  3. Public sector employees earn 60p for every £1 of taxpayer’s earning
  4. This 60p is in turn taxed at 40% = 24p
  5. This 24p is recirculated back into public sector


Observation 1: Even with very heavy overspending, the recirculated 24p tax intake is still much less than the 40p initially taxed.

Inference 1: Tax intake from recirculated from public sector spending will always be less than the public spending, which means that private sector tax is required to make up for the shortfall.

Observation 2: Heavy borrowing does not create more tax income than is initially taxed – every 20p of borrowed spending results in only 8p increase in income tax.

Inference 2: Keynesian stimulus will never increase tax intake sufficient to pay back the amount borrowed, much less cover the borrowing costs.

Bottom line

Under Keynesian economics, you borrow money to pay public sector workers more. Your workers are then taxed, and this goes back into tax. But taxation is always a proportion of income. So you will always pay the public sector more than you tax them. Which means that even under Keynesian stimulus, you need private sector economic growth in order to increase the amount of money available to spend on public services.

Shouldn’t the rich contribute more?

Richest 1% pay 29% income tax. How much more can we expect the rich to contribute?

Shouldn’t the rich contribute more?

How much the rich contribute

Rich people already contribute more. How much more? Here are some rough statistics of how much tax is contributed according to income bands (from 2012, United Kingdom)…


Some take away points:

  • Top 1% contribute more than a quarter of all income tax
  • Top 10% contribute more than half of all income tax
  • Bottom 50% contribute only a tenth of all income tax

I have met many active Socialists who maintain that the rich should be taxed even more. To this I ask the question: What are the consequences of doing so?

What happens when you tax the rich more

The thing to remember is, rich people are mobile. They have the resources to up-and-leave if the conditions do not suit them. When rich people leave, the phenomenon is called capital flight. They will take their income with them, so the UK completely loses their income tax contributions. They will take their existing wealth with them, so they don’t spend in the UK economy. They will take their businesses with them, so the UK loses jobs. They will take their resourcefulness with them, so the UK loses their social contributions. The effect of capital flight is not only less tax for the treasury, but also lost social opportunity, lost jobs, and less investment in the economy.

Socialists can and do argue that increasing tax on the rich will not drive ALL rich people away. That is true – it is always a matter of degree. When you tax the rich a little more, maybe some of the rich will flee, but not all. But the more you tax the rich, the more rich people will flee the country.

In economics, there is a concept called “diminishing returns”. It describes how doubling the effort does not double the output. For every 1% increase in tax, the increase in tax intake is less than the previous 1% increase in tax. Increasing the highest level tax rate from 45% to 50% produces less increase in tax intake than increasing the tax rate from 40% to 45%. This is because the higher the tax rate, the harder business and individuals will work to try to avoid or even evade tax, so it will be much harder to convert the numerical increase in tax rates into an actual increase in tax returns. Thus the higher you try to raise the highest level tax rates, the more it will cost to implement it.

At some point, increasing the tax rate on the richest will result in less increase in tax intake than the losses caused by capital flight. How much more tax can you extract from the rich, before you start losing more than you gain? Given that the richest 1% already contribute almost three times as much as the poorest 50% of the population, how do you know you’re not already losing tax intake from increasing tax rates?

Flat tax vs rich tax – which is fairer?

Imagine the extreme end of taxation fairness: that everybody is taxed at a 20%, regardless of income levels. Even with such a flat tax, the rich will still contribute significantly more than the poor. After all, 20% of £20k (£4,000) is a lot less than 20% of £150k (£30,000). Not only can we all agree that such a system incentivises people to try to earn more, it is arguable that this system is the fairest of all: if you earn five times more than the average person, you pay five times as much tax.

Now imagine the extreme end of socialism: Nobody earning under £40k is taxed, but any earnings over £40k is taxed completely, so that nobody earns over £40k. It’s not hard to understand that very few indeed would bother trying to increase their income or their productivity beyond the £40k that their hard work can generate. So if someone had an earning potential of £500 a day, they’d have very little reason to work more than 16 weeks a year, if all the earnings on any of that additional work would be taken away. So it’s not too hard to see that taxing the earnings of the rich to the highest possible level actually results in an incredibly low intake of tax from high earners.

Obviously, most socialists would want something in between the above two extremes, a compromise between putting the bigger tax burden on the rich and incentivising people to earn more. Where this point is, is the matter of dispute.

Perhaps, instead of increasing the tax on the rich, we should take the poorest out of income tax altogether? After all, according to the 2012 data, if we stop taxing the poorest 47% of taxpayers, you only lose 9% of all income tax.


Exhausting the ‘far-right’ label

I am genuinely sick and tired of being called far-right. ‘Right-wing’ does not mean “everything that a leftie disagrees with”.

I am genuinely sick and tired of being called far-right.

I disagree with David Cameron, but I also disagree with a lot of lefties and left-wing policies, but that does not make me far-right.

Just because David Cameron has done a lot of stupid and unpopular decisions, does not make his position hard-right.

Just because you’re a leftie, does not mean all your beliefs and policies are left-wing. ‘Right-wing’ does not mean “everything that a leftie disagrees with”. There might well be some ideas you actually endorse, but which are right-wing in principle; and there might be some policies you absolutely detest, but actually have its origins in left-wing ideology.

Some lefties have argued that the left-right spectrum depends on the context you operate in; in the context of the UK, right-wing is defined by the Conservative party, and left-wing is defined by the Labour party. If that is the case, then you cannot accuse David Cameron of being hard-right, so the terms hard-right or far-right becomes meaningless. And if you want to define terms this way, then you better abandon the association of far-right with Nazi ideology. The National Socialists were nationalist first and foremost, which manifested itself through socialist policies and cronyism. The British Conservative party is neither nationalist nor socialist. The only parties which are nationalist are economically centrist (UKIP) or left-wing (SNP, BNP). Every party claims to oppose cronyism and nepotism, but every party is subject to, and some even indulge in, these vulnerabilities.

Myself, I have no interest in nationalism, and I despise cronyism. I am neither right-wing, nor am I left-wing. I am pragmatist, and will go with whatever ideas and policies most capable of delivering results. In traditional parlance this used to mean that I am a centrist. However, such an expression is no longer helpful – this is because in modern British political parlance, ‘centrism’ is actually closer to populism, which usually means right-wing social attitudes (traditionalism) and left-wing economic attitudes (statism).

I joined UKIP because they were willing to disregard political ideology and political-correct terminology. They were willing to confront the hard truths and take a stand on politically sensitive issues, because they were prepared to stand up for the citizens of their country. This has resulted in them making controversial statements attracting support from hard-line or otherwise ‘colourful’ characters, but this is not an accurate representation of the party.

Every time you refer to me right-wing/hard-right/far-right, you tell me you are politically ignorant, and so I cannot take you seriously. Please educate yourself before you cast such judgement.

If there is anything you disagree with, please raise it with me directly, instead of calling me names behind my back or making passive-aggressive snipes. I have a strong interest in science, economics, and philosophy, and will be willing to pursue discussion in any direction, on almost any subject.

How Brexit would benefit the UK’s finance sector

Being free from EU regulations would benefit the finance industry of the UK.

Ever since the results of the United Kingdom’s referendum on EU membership was finalised, much has been made (particularly in the City) of the impact on the UK’s financial sector. Indeed, I myself held a similar opinion: Regulatory Passporting: The killer argument against Brexit

Much of the UK’s success in the finance sector comes from trade within the EU (including the UK). As I (and others) wrote before, these passporting rights allows financial firms to access the entire Single Market with minimal regulatory checks. Outside of the EU and without passporting rights, financial firms wishing to trade within the single market would be subject to many more bureacratic hurdles. These would subject financial institutions to costs that would significantly impact their competitive edge.

On top of this, we have the upcoming enforcement deadline of the EU’s MiFID ii directive. This new directive enforces regulation on the finance industry on a vastly greater scope. Eventually, MiFID ii will be superseded by MiFID iii, legislation that is almost certainly guaranteed to be even greater in scope.

Some of the biggest financial institutions are already moving their base of operations from London to Frankfurt, Paris, or Brussels. This activity seems to provide evidence in support of the idea that Brexit would hit the UK’s finance sector.

However, I think a few questions that would greatly refute this theory have gone unanswered :
1) what is the nature of the City of London’s finance sector?
2) what is the cause and driver of MiFID, and how effective is it?
3) how will the City be affected by the upcoming iterations of MiFID?

London: Europe’s finance centre
The City of London is the home to the greatest financial sector in Europe. The London Stock Exchange itself is by far the largest stock exchange in all of Europe, with a market capitalisation of over £6 trillion. It is almost twice the size of the next largest stock exchange in Europe: Euronext, which itself has a significant base in London too. Another enormous exchange is the London Metal Exchange, the world’s largest market in options and futures contracts on metals, with over £10 trillion worth of contracts being exchanged every year. There are many other major financial marketplaces based in London include Lloyd’s of London insurance market, the Baltic Exchange, Tradeweb, and The Intercontinental Exchange (which owns the world’s largest stock exchange, NYSE).

What does this mean with regards to the loss of passporting rights? Yes, trade with Europe would be affected. But trade works both ways. The European finance sector who wish to trade on London marketplaces would also be hindered by this loss. An important factor is that exchanges cannot relocate – they are the market. Thus traders who wish to trade on a marketplace need to be where the exchange is. Just as London traders who wish to trade on European exchanges have to go to Europe, so do traders who wish to trade in London marketplaces need to come to London from all over Europe. Yes, some financial institutions in London will take action to set up branches in Europe to take advantage of passporting rights, but at the same time, financial institutions throughout all of Europe would move to set up offices in London to trade in London’s markets. This is simply an administrative exercise. The key difference is the sheer size of London’s finance sector. The gains in incoming businesses setting up branches will likely offset the losses in businesses moving branches into Europe.

MiFID, MiFID ii, MiFID iii – origins and efficacy
MiFID stands for Markets in Finance Instruments Directive. The first iteration (2004) superseded the Investment Services Directive (1993), itself the EU’s early attempts at regulating the finance sector. MiFID was supposed to ameliorate risks within the industry. MiFID was developed by a committee in consultation with industry players, who of course implicitly lobbied the system to favour their institutions, before passing through the legislative houses the participants of whom acted in their own political interests regardless of expertise. This government-led regulatory process is in contrast with industry standards and practices, which are jointly developed by experienced industry players independent of government interests, to benefit the industry without being encumbered by legislative processes.

The shortcomings of MiFID came to light in the wake of the 2008 financial crunch. In a rather phlegmatic knee-jerk response, the EU enacted MiFID ii in 2010, which for practical and politically expedient reasons would not apply until 2014, and then not be enforced until 2017. In comparison to its predecessor, MiFID ii vastly increased in legislative volume, scope, coverage, and detail. In the meantime, individual governments started cracking down on ‘bad’ players in the finance sector in their own knee-jerk political response to public reaction.

However, MiFID ii and all the government action in the same line was effectively scapegoating. MiFID ii sought to crack down on market abuse and enforce market harmonisation so that individual markets would not have an unfair competitive edge. But the 2008 crunch was not caused by market ‘disharmony’ or market abuse. It was a very clear case of overleveraging the mortgage market. Basically, in order to gain the competitive edge, banks lent out more and more mortgages to those less and less able to afford it, building up a financial bubble in property prices. The 2008 crash was a consequence of this bubble bursting, rebalancing the market to relative normalcy. No amount of market harmonisation or prevention of market abuse would have prevented such a crisis.

Seeing as players in the finance industry were the ones hardest hit by the 2008 crisis, it naturally followed that they would be the ones most vested in preventing such a crisis happening again. So the industry learnt its lessons, enacted their own checks, and the industry carried on evolving,
whilst government regulators were busy attempting to enforce the complicated details of the EU directive. After all, markets and technologies are not stagnant, and will develop quickly in any developed economy, especially in an industry so awash with money as the finance industry. Mechanisms within MiFID ii designed to reduce risk and fight market abuse were already rapidly becoming obsolete. Thus not only was MiFID ii outdated and ineffectual at its aims, it represented an ever-increasing bureaucratic burden on the finance industry that unnecessarily hindered growth without benefiting the industry.

To top it off, in an effort to chase its own tail and cover up the many problems created by MiFID ii, the EU is in the process of considering legislating for MiFID iii. In addition to increasing the bureaucratic burden, every iteration of legislative directive costs money for governments AND financial institutions to enact and enforce.

MiFID and the UK’s finance sector
In light of the doubtful benefits of MiFID (and its successive iterations), and given the great costs associated with enacting it, it is quickly becoming evident that not only does the finance industry not need MiFID; the EU’s involvement in regulating the industry is actually damaging the finance sector rather than protecting it. Outside the EU, the UK’s finance sector will no longer be subject to any further EU legislative meddling. The industry will be free to learn from its own mistakes and develop its processes and technologies to competitively flourish free from unnecessary bureaucratic burden. In contrast, financial industries within the EU will be further hindered by subsequent iterations of MiFID and its successors. This will actually make the EU less competitive in the finance sector, whilst the London carries on competing amongst the biggest international players the world over.