[One of] a few of the advances that powered this extraordinary century
I remember once passing a stall manned by socialists and surrounded by a small huddle of voters. I had a few seconds, but only a few seconds, to express my distaste before getting back to paid work. I listened for a few moments and then I intervened and suggested that the voters present should look up one simple concept on Wikipedia: the Laffer Curve.
I was quite cocky I suppose, and the socialists told me so, fair enough.
The curve is a practical impediment to anyone whose ideas require higher taxes, but it also poses an interesting moral problem. The maxim “from each according to his ability to each according to his need” is equivalent to 100% taxation and the Laffer curve informs us that nobody will produce anything at that rate. I often wonder if socialists think through their ideas* to the end and think about what occurs at 100% rates. If no-one wants to work, how do you force them. Ayn Rand – who lived under Russian socialism – gave a clue in the form of Dagny Taggart’s part III epiphany that the population would be forced, by fear of starvation into producing just enough that when the looters take their share, they are not left with nothing. The result would inevitably be dire poverty and violent thuggish dictatorship. I am told, by another Russian, that tax rates were more like 95% so I guess the Russian’s never found out what this is really like, but the Laffer Curve seems to predict it. At that stall I was hoping, perhaps vainly, that an average voter might see that.
So, it is with a little excitement that I can tell readers that Arthur Laffer will be speaking about Britain and its relation to the Laffer Curve at an IEA event on the 27th June. Full details over at the IEA.