Monday, November 01, 2010

Liberal Sensibilities

Charles Murray ("The Bell Curve") is one of my ideological heroes. He has a recent article - in process of conversion into a book - which examines the social isolation of much of the American liberal elite. We're talking here of the high-IQ offspring of professional parents who inevitably end up at Harvard, Yale, Stanford and then effortlessly morph into the lawyers, academics and lawmakers who define American policy. Murray observes that the world-view of what he calls the "New Elite" has little in common with ordinary Americans. Of course, the members of this elite are to-a-person right-on Democrats.

There has been the smallest move in the British 'quality press' to admit that the American 'Tea Party' movement is not the bunch of right-wing crazies of "New Elite" mythology. Shorn of the decorative wrapping of Sarah Palin and her clones, what we actually see is an inchoate, emotional cry of anguish lamenting the loss of the classic liberal values of low taxation and an enabling small state in favour of the present high-cost interventionist big one. It doesn't help that in the States such views are often expressed through the distorting lens of native religiosity, which confuses us foreigners. What the Tea Partiers need is an intellectually well-founded script and who better than David Cameron's Big Society team to provide one.

Here's a question. Do (or should) cuts affect everyone, rich and poor, equally? So much time has been wasted on this idiotic paradigm, it's remarkable.

In simple language, what Governments do is redistribution: they take from people who have money and give it to people who don't. In many cases this is a desirable outcome due to positive externalities (roads, defence) while in other cases it creates perverse incentives for poorer people. Naturally cuts will mean that poorer people get less money transferred to them ... but that money came from the richer people in the first place. So in general cuts will inevitably affect poorer people more than richer people, how could it be different? Of course, once you start to raise taxes (paid by richer people) all such bets are off ...

It's a familiar point (probably to do with kin selection) that countries which are ethnically homogeneous are far more prepared to tolerate welfare transfer payments (such as socialised medicine and housing) than countries which are not. This by itself may account for American exceptionalism in this area Tea-Party-wise.

Some European competition directive has required the competent retail banking arm of the Royal Bank of Scotland to divest its English branches to Santander, which has a very different reputation. We have a meeting with HSBC tomorrow to move our account.