Date:14/05/2005 URL: http://www.thehindubusinessline.com/2005/05/14/stories/2005051400070800.htm
Tall tax, food police, a bizarre bridge and a robber wanting your past or future

D. Murali

YOU PROBABLY know of John Galt in Ayn Rand's Atlas Shrugged. Here is a different JG in Ken Schoolland's story, The Adventures of Jonathan Gullible: A Free Market Odyssey. The `commentary edition' of the book from Academic Foundation (www.academicfoundation.com) opens with Jonathan's `guiding principles' such as `you own your life' and `success and failure are both the necessary incentives to learn and to grow'. Thereafter begins the `bizarre tale' after our hero is washed ashore an island.

His first lesson there is that "the purpose of work is to have full and secure employment — not new products". Ken explains in the chapter commentary: "One of the myths about productivity is that labour saving machinery, computers, and robots, cause unemployment and poverty... Jobs that are lost are seen, but those that are created by the new inventions are not yet seen." If interested, take a look at Racing to the Bottom: How Antiquated Public Policy Is Destroying the Best Jobs in Telecommunications, by Jeffrey H. Keefe, released on May 12 by the Economic Policy Institute (www.epinet.org).

Resuming Jonathan's travails, a `Commons Tragedy' follows, where he sees that `fish belong to everyone'. Despite common ownership "no one benefits because each person has the desire to grab as much as he or she can before others do." Resources get depleted before they mature, but that is only the first part of the tragedy. "The second part of the tragedy is that no one feels responsible for the consequences." Ken points out that making pollution and environmental protection a matter of state regulation imposes huge unnecessary costs on the taxpayer. "This could be avoided through greater respect for private ownership and personal responsibility," he suggests.

We have heard of culture cops. But Ken brings in the `Food Police' to arrest a farmer for growing too much food! Shocking, but true, that in some countries you can be penalised for selling food at too low a price. "The reason people are poor is not because some farmers produce too much," says Ken. "High production lowers prices and benefits everyone including the poor." Out goes incentive for the efficient, and in come the subsidies. Worse, in the US, farmers get paid "to destroy crops such as sugar beets, prunes, and cranberries."

Jonathan stumbles on to a strange bridge, with a tough entrance and easy exit; symbolising wasteful import restrictions and the consequent non-competitive exports. Ken draws inspiration from Frederic Bastiat's essay on candle makers who wanted to ban the light and heat from the sun. "Please pass a law requiring the covering of all windows, skylights, holes and cracks," they had appealed!

Next is the `Tall Tax' that levels the field for people of different heights, so Jonathan sees a tall man walking on his knees. "The Council of Lords decided that tall people have too many advantages," he explains to JG. "Tall people are always favoured in hiring, promotion, sports, entertainment, politics, and even marriage." Jonathan is curious, "You'll walk on your knees just for a tax break?" And the tall man replies, "Sure! Our whole lives are shaped to fit the tax code. There are some who have even started to crawl."

On a park bench, JG sees three men covering their eyes, ears and mouths — practising for a new series of tax proposals! I guess we will also adapt gradually to FBT and BCTT. Don't forget that "there was a time, in the history of Europe, when there was a tax on windows." So? "To avoid this tax people boarded up their windows or walled them up completely."

Eminent domain is Latin for `superior owner' explains another chapter where you meet an old lady who watches her house being demolished by the authorities because her `best laid plans' didn't fit theirs. "If you do not have control over your property, then it cannot really be yours even though you built it or paid for it. You are but a `renter' or a `borrower' from the real master — the higher authority," Ken says. "Countries with the most restrictions experience the least economic growth."

The chapter on `making money' has catchy quotes. Such as: "The only way to get money out of politics is to get politics out of money-making" (Richard Salsman). "Conferences on inflation are customarily attended by the politicians who cause it and the economists who showed them how" (Richard Needham). Ken specifies what all the state can ensure with control of money: "The growth of the number of government departments, rewards to favoured groups and companies, and payoffs to tinker with elections."

That legal alternative to hard work is politics, is a jibe from another chapter where Ken explains how politicians collude with voters to pass laws to add costs on the heads of employers. The strategy wins votes in the short term, but drives employers out of the country, in the long term. A question that our netas may find dangerous stares from a chapter titled `Power Sale': "Would industry really collapse without the `guidance' of a Minister of Sport, another Minister for Art and Culture, still others for Science and Technology, Agriculture, Forestry, Minerals and so on?" No marks for guessing the answer. The word `free' conjures up images of happiness, but Ken declares that the more `free' services you have, the lower would the eventual economic level. "What if the state undertook to make something free that we now generally accept as open to individual choice — let us say film going," he writes. "Would we continue to be allowed our own choices, or would the choices be restricted to the preferences of the majority or of a ruling party?" Libraries are a subtle form of thought control, he points out.

The story takes an abrupt turn into a shaded alley; suddenly Jonathan feels an arm at his throat and the cold metal of a pistol stuck between his ribs. Robber snarls, "Give me your past or your future!" meaning money or life. She explains: "Until the day you die, the tax collector will take your money, the product of your past, and he'll use it to control everything about your future as well. Ha! He'll throw away more of your earnings in a year than all of us freelance robbers will take from you in a lifetime!"

Sounds logical? With an emptied pocket, our man meets a fortune-teller who calls herself an economist, in "the world's oldest profession". She lets Jonathan in on a little secret. "Clients come whenever they need to feel secure about the future. Whether the forecast is bright or gloomy — especially when it's gloomy — it makes people feel better when they can cling to someone else's prediction." How accurate are her predictions? Jonathan wants to know. She looks at him carefully in the eye and says, "To be perfectly truthful, you might get a better prediction with the flip of a coin."

If you want to toss a coin to decide whether to read Ken, let me suggest you pick up a one-sided coin; for, this is a great family read for the weekend.

Economics@TheHindu.co.in

© Copyright 2000 - 2005 The Hindu Business Line