Wealth taxes are on the agenda again, a subject always guaranteed to bring out the absolute worst in political debate, with ideological positions taken usually as a cover for atavistic emotions of envy or greed rather than reason: socialists pretend that you can just keep upping taxes on the wealthy ad infinitum with no effect on incentives, whereas equally moronic hard libertarians insist that cutting taxes always leads to higher tax revenues. Both sides insist on seeing only one side of Arthur Laffer’s famous curve.
That is a great pity because a sensible debate on the subject is desperately needed. It seems that thanks to the ever increasing automation of our new Bladerunner Age, the economic spoils will continue to be skewed very sharply towards the intellectually highly capable, whereas at the bottom a great many decent people will struggle no matter how hard they try. In time, a larger and larger proportion of society may find themselves dragged into lives with very limited prospects, fuelling deep resentment towards a far less numerous but highly mobile elite. The great danger is that this will lead to an ever greater clamour for redistribution, which the richer elements in society will refuse to countenance, instead upping sticks and taking their talents elsewhere, impoverishing us all.
The answer lies in social conservatism rather than economics: the amount the very successful are prepared to pay – either philanthropically or via taxation – to those less fortunate is essentially a litmus test for social cohesion: in a globalised world where businesses and financial resources can be relocated at the click of a mouse, a sense of moral obligation becomes far more important than government policy in deciding the practical limits of redistribution. Scandinavian societies such as Sweden, for example, have historically managed to combine almost communist levels of redistribution and welfarism with economic success because their societies were culturally homogenous with a strong sense of mutual obligation.
Conversely, the UK’s current liberal settlement is culturally the very worst place from which to meet society’s emerging challenges: our tax base is dangerously reliant on a very few ultra-high earners who find London a congenial – but seldom indispensible – place to base their businesses: part of a global elite, they rarely have any filial loyalty to Britain – a far away country of which they know little. At the bottom end of society, mass immigration has not only driven down wages for the poor but led to a catastrophic fall in social cohesion, already badly drained by long-term trends towards social atomisation and the progressive loss of our national identity. Consequently, our capacity for shared sacrifice at both ends of society is much diminished.
The extent to which society should be engaged in redistribution is not the subject of this blog, but whether it can be successful. Redistribution relies very greatly on shared cultural understandings of rights and responsibilities. It is, in short, impossible to combine social liberalism with socialist redistribution, a point the Labour Party with its daft plans to scrap ‘Non-Dom’ status refuses to learn. Future economic progress and social justice relies on rebuilding a shared cultural space – by necessity, the Bladerunner age must be socially conservative.