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Category: Public policy

Was Adam Smith a socialist? #2 – the issue of inheritance tax

Following on from my post here, let’s examine the claim that according to Adam Smith, “inheritance laws SHOULD partition fortunes”.

Before saying anything else, let me note that it is good that at least some people think that Adam Smith’s writings are useful. The fact that socialists cite Adam Smith in THEIR favour is a sign that they are at least somewhat willing to learn something new.

For these same people should know by now that the liberals do NOT have a Bible (unlike the socialists with their Communist Manifesto). Adam Smith is NOT considered the final word in economics (else why would there be a need for thousands of books on economics after Smith?). Smith is considered one of the early thinkers.

And as with all early thinkers in any aspect of human knowledge, the early thinkers made a LOT of mistakes. Adam Smith’s work is replete with mistakes. The bigger mistakes of Adam Smith (labour theory of value, for instance) were used by “economists” like Marx to create a mammoth edifice of mistakes.

But Adam Smith is important to the liberal because he was right on MOST things. That’s saying a lot for someone who lived 250 years ago. Now, if only these socialists would actually read and understand Smith, they would be well on their way to understanding FURTHER advances in economics and finally they might actually become educated. Which would be a wonderful thing.

Now back to this claim about Smith and the inheritance tax.

ADAM SMITH DID NOT SAY THAT A SOCIETY **SHOULD** HAVE INHERITANCE TAX

This is what he actually wrote:

The death of a father, to such of his children as live in the same house with him, is seldom attended with any increase, and frequently with a considerable diminution of revenue, by the loss of his industry, of his office, or of some life-rent estate of which he may have been in possession.

That tax would be cruel and oppressive which aggravated their loss by taking from them any part of his succession. It may, however, sometimes be otherwise with those children who, in the language of the Roman law, are said to be emancipated; in that of the Scotch law, to be forisfamiliated; that is, who have received their portion, have got families of their own, and are supported by funds separate and independent of those of their father. Whatever part of his succession might come to such children would be a real addition to their fortune, and might therefore, perhaps, without more inconveniency than what attends all duties of this kind, be liable to some tax.

Now, Smith was a very primitive thinker on matters of public finance. Liberalism is, in any event, not so much about public finance as it is about productivity.

Smith has been challenged on a number of issues with regard to his views on taxation. I broadly support his insights even into public finance, but clearly he missed out a critical consideration while discussing the inheritance tax, above.

He missed out the fundamental issue of double taxation – that this inheritance has ALREADY been taxed for provision of public goods. He also missed out the even more fundamental principle of the continuity of human families and the power of DNA.

Regardless, even if we assume that his analysis was ill-informed, we can see that nowhere is he REQUIRING the imposition of inheritance tax. All he is saying is that in the case where children are grown up adults in their own right, the state might, PERHAPS, impose SOME inheritance tax.

A very tentative exploration of the matter.

I deduce that it would be inappropriate to take this error of Smith’s analysis to lump him along with socialist fanatics like Marx and Piketty.

But once again – to the socialists reading this post – do ACTUALLY try to read Smith. Once you’ve done that you’ll be ready for much more, and finally, one day, you might even be ready to understand the economy.

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Why the Aborgines remained backward for 40,000 years: their failure to organise a government

Last Friday I took a break in regional Victoria. I stayed overnight in Traralgon. I took a longish walk around the small town to see its various old buildings.

On the morning of Saturday 10 December I went for a walk in the Tarra-Bulga National Park.

During the walk I spoke – all alone in the wilderness – to you; to Indians.

These thoughts summarise the importance of government to civilisation and why government is so very difficult to organise properly. Only those societies which have managed to organise government properly can prosper. The rest will remain as subsistence economies where life is brutish and short.

The Abrogines could never organise a road. While inventing the wheel is easy, building a road is VERY hard.

Btw, I’ve now bought a small selfie stick for $7 and will experiment with it in the coming weeks. will probably get a little better video.

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What exactly did Modi say regarding state funding of elections?

On 15 November 2016, Modi convened an all party meeting prior to the commencement of Parliament. In this meeting he asked the parties start discussions re: state funding of elections.

Speaking about simultaneous polls, he said, “A crucial problem is how to make political funding transparent. How to implement state funding of elections. Let all political parties debate it and come to a conclusion. Let’s remove the question mark which exists against those in public life.

“Polls happen separately. Let there be one election, simultaneous elections,” he said, seeking a consensus on the issue. [Source]

OTHER REPORTS

He also suggested that parties discuss in Parliament, state funding of elections” (Source)

“he said the on the eve of the ongoing winter session of Parliament that he was open to the idea of state funding of elections in the country.” (Source)

Prime Minister Narendra Modi has suggested state funding of polls to improve transparency in public life and combat corruption, he made this remarks while chairing an all party meeting at Parliament House yesterday evening ahead of the winter session of Parliament beginning today. (Source)

 

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The delusions of the USA’s “national intelligence council” regarding India

Someone shared on Whatsapp:

“The likely emergence of China and India as new global powers – similar to the rise of Germany in the 19th century and America in the 20th century – will transform the geopolitical landscape, with impacts potentially as dramatic as those of the previous two centuries.”
— 2005 report of the US National Intelligence Council on ‘Mapping the Global Future’

MY RESPONSE:

In 2005 people thought that India will actually reform its governance. Since then everyone has understood that India is a lost cause. It is only because of that belated realisation, perhaps (just like Indians will taken another 5 years to realise how wrong they are in supporting any of the existing socialist parties/ leaders) that people like the Horasis think tank – who had ignored my public work in this area over the past decade – are beginning to ask what it will take to fix India.

India cannot possibly come close to China with its current governance system. The incentives are all wrong.

The day Indians understand what I’ve been saying for the past 20 years, India will transform into a genuine super power.

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