[LINK] Re: OFF TOPIC Re: the rich and corporate parasites

Chris Maltby chris@sw.oz.au
Wed, 26 Feb 2003 14:28:36 +1100


>> On Wed, Feb 26, 2003 at 08:00:38AM +1100, Deus Ex Machina wrote:
>>> (as if its not a tautology) the irish case clearly shows that business
>>> is the driving force behind the economy.  Ireland halved its tax rates
>>> more or less and more or less doubled its tax income.
 
> Chris Maltby [chris@sw.oz.au] wrote:
>> The Irish case is a classic example of not including externalities.
>> The extra revenue came from companies relocating their incorporation
>> to Ireland to take advantage of the lower tax rates. Some of that
>> turned into increased economic activity, but some of it was just
>> tax avoidance in another jurisdiction...

On Wed, Feb 26, 2003 at 12:22:48PM +1100, Deus Ex Machina wrote:
> "blaming" the irish economic miracle on foreign investment is only
> part of the picture see

> http://www.csls.ca/ipm3/fortin-un-e.pdf

"Miracle" eh? I'm just saying that you can't ignore externalities
when you consider any economic system. In the Irish case, the avoidance
of taxes elsewhere in the world was a benefit to the Irish economy and
to those of its citizens who found employment. But who can say what the
effect of the reduction in tax receipts was on the economies and citizens
in the countries from which the tax refugees came? Are they any less
worthy of consideration?

>> In another version of the story it's called "the tragedy of the commons".

> it cant be understressed that unemployment went from 16% to under 5%, I
> dont see how that is a tragedy, further by investing in higher education
> ireland has/is creating an infinite resource of intelectual capital.

The "tragedy" referred to is the decline of overall wealth of people
together to be replaced by an increase in wealth for a few of them.
In other words, it's very unwise to consider economic "benefits" in
isolation of the costs imposed elsewhere in the system, be those
to government revenue, to personal wellbeing or to the environment.
I doubt if the intellectual capital resource is truly "infinite"...

For example, the US economy has been in decline since the 1960s if you
factor in the decline in the capital value of the natural systems it
has exploited to make "economic" gains (or the cost of restoring those
systems to their original state). People as a whole have lost out while
a few have profitted hugely. Good for them, but it can't be sustained.

> Contrast with australia with HECS and its mentality of being a farm
> and a quarry. Our government is too busy proping up a ill functioning
> health care system and subsidising private health insurance to worry
> about creating free education.

No issue with the farm/quarry concern, or with the private health
subsidy. But you are trading off the wrong thing on the health/education
front...