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Appreciating Facts

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Last night on Prime Time Brendan Burgess, from Ask About Money, stated that high-income earners in Ireland pay more tax than high earners in other countries.

‘We have a very low direct tax economy in this country for the lower and the middle paid and very high taxes for the upper paid.  And that’s something people don’t appreciate.  And they need to appreciate that.’

Let’s do some appreciation.  Are we a ‘very low’ direct tax economy?  Direct, or personal, taxes include income taxes, social insurance (PRSI) and other taxes on income such as Ireland’s Universal Social Charge or Germany’s surtax.

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We are low-tax, well below a lot of other countries.  But we are not that far behind the EU-15 weighted average, not that far behind ‘high-tax’ Sweden and ahead of another ‘high-tax’ economy, France.  So I don’t know that I would call it ‘very low’ but we certainly should be doing better.

But what about that ‘very high taxes for the upper paid’?  We don’t have ‘effective’ tax rates for different income groups to compare (that is, the tax rate when all reliefs and deductions are taken into account).  We only have ‘headline’ tax rates – which only include basic reliefs like personal tax credits.  But the following headline tax rates come from the OECD Benefit and Wages database.  The highest level of income for Ireland in the database is €119,000 (a couple, both working) so I’ll use that to compare with the same level of income in other countries.

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Headline tax rates on Irish high-earners are well below most other countries.  If they were living in Germany they’d be paying €11,000 more in income taxes and social insurance.

There is caveat in this.  In Ireland, taxpayers get relief on pension contributions, mortgage interest, health insurance and a rake of business investments.  Do taxpayers have access to the same level of reliefs and allowances?  More?  Less?  We don’t have easily accessible comparable data.  (Also, the tax rate for Italy in the above chart is for €107,000 – the highest level of income in the OECD database).

However, when looking at headline rate, Irish high-earners are not over-taxed in comparative terms.

And there are some further explanations needed (the type of explanations that rarely get a hearing on current affairs programmes).  Take the example of Sweden.  The chart above shows Swedish headline rates lower than Ireland.  In the first total direct taxation chart, Sweden is only slightly above Ireland.  Some might find this surprising since we all think of Sweden as high-taxed.

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The September Socialist Voice Out Now

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The September Socialist Voice is now available online 

List of articles in this issue

Illusions of recovery

In early September the minister for public expenditure, Brendan Howlin, claimed that the Government’s economic strategy was so successful that “we’re not going back to boom and bust.” But he is not the first social democrat, and no doubt will not be the last, to make that grandiose claim.

Slump and boom are inherent in the capitalist system, and recurrent crises cannot be prevented within capitalism but only by defeating capitalism itself.

Capitalism is prone to sequences of slump and boom, coupled with wild financial speculation and property and asset bubbles. It simply cannot exist otherwise.

Guests of the nation

Being a theoretical journal with an unambiguous world view, Socialist Voice places less emphasis on the type of investigative journalism that features prominently in more commercially inclined publications. Nevertheless there is a role for this method of news-gathering and especially when an intriguing rumour is begging for authentication.

Suffer Little Children

The United States is one of three countries that have failed to ratify the UN Convention on the Rights of the Child. In this it finds itself in the august company of Somalia and South Sudan. Somalia, however, has committed itself to ratifying, and South Sudan’s parliament has passed a bill to do so.

To be fair, it has to be said that the United States played an active role in the drafting of the bill, and has actually signed, though not ratified, it. Among the reasons given is the fear of a backlash from the religious right, who see the bill as an assault on their rights.

The Republican Congress eighty years on: A relevant or redundant concept?

Like any organisation, the Republican Congress was a product of its time and place; therefore we need to understand it on its own terms and in the historical conditions of the time.

Ireland eighty years later is a different place from the Ireland of the 1920s and 30s. The world is different, and the balance of forces has shifted.

We need to consider such factors as the deep economic crisis of the system at the time, which had a huge impact on Ireland. Unemployment in the South stood at more than a quarter of a million; there was mass emigration, widespread poverty, and evictions from farms and homes.

A stark class divide

A recent report from the Higher Education Authority reveals a stark class divide in Dublin when it comes to access to higher education. The report confirms what all socialists already knew: that teenagers from the leafy middle-class suburbs are far more likely to go on to third-level education than those from less privileged areas of the city.

Lance Armstrong should keep his jerseys

In July, RTE featured a documentary on Paul Kimmage, the sports journalist. He was portrayed as the journalist who exposed Lance Armstrong as a cheat, and was one of the main journalists who campaigned about the use of drugs in professional cycling.

There is no doubt that Kimmage is a unique journalist, and in fact he is one of the small number of people—never mind journalists—who actually completed a Tour de France when he was a professional cyclist. He could have completed a second Tour but withdrew. This still seems to be a source of regret to him.

Political statement

National Executive Committee, Communist Party of Ireland

The National Executive Committee of the Communist Party of Ireland expresses its solidarity with workers now engaged in industrial struggles to defend their livelihood.

Iarnród Éireann workers are struggling to prevent a cut in wages arising out of Government policy, which is to to run down the rail service, and public transport in general, in the interests of privately owned companies, to shift the burden of running public transport onto the workers and travelling public, and to remove the state from any meaningful social responsibility for providing a comprehensive public transport service.

Whoop it up for freedom!

René González, the first of the Cuban Five to be released, was due to speak at meetings in Liverpool and London to mark the sixteenth anniversary of their arrest.

Who really owns us?

It was announced last month that the value of Government bonds at the end of last May was €113.216 billion—120 per cent of the value of the country’s annual economic output. 53 per cent of these bonds are held by foreign individuals and institutions.

Along with Portugal, Ireland is one of the EU’s most indebted countries, and it has recently taken to share-switching to stave off an inability to pay its creditors. Short-term bonds due to be cashed in in 2016 are swapped for ten-year bonds, and so the evil day is postponed.

O’Flaherty Summer School a huge success

Féile na bhFlaitheartach, 2014—the Liam and Tom O’Flaherty Society’s August summer school—was a fantastic weekend, richly rewarding for all who made it to Árainn.

The school opened with a talk by Theo Dorgan on the horrific industrial slaughter that was the First World War, making the point that if it were not for the literary records of the brutality and horrors of this war in books such as Liam O’Flaherty’s Return of the Brute later generations could be more easily duped by politicians and the the media into believing there was something heroic in it.

On Tom Gilmartin

Frank Connolly, Tom Gilmartin: The Man Who Brought Down a Taoiseach and Exposed the Corruption and Greed at the Heart of Irish Politics (Dublin: Gill and Macmillan, 2014); ISBN 978-0-7171-6047-1; €16.99 / £14.99.

Níl siad imithe uainn fós, bíodh a fhios agat—polaiteoirí, baincéirí, lucht forbartha, agus infheisteoirí cama, ná na fórsaí taobh thiar díobh. Ná níl scéal Bhinse Flood/Mahon thart go fóill, mar a mheabhraigh cúis George Redmond sa Chúirt Uachtarach dúinn i mí Iúil.

Bratacha Bána

Gabriel Rosenstock

The pigs are back!

Tomás Mac Síomóin, Is Stacey Pregnant? Notes from the Irish Dystopia (Nuascéalta, 2014; ISBN 978-1-4992-1354-6; $10.75). Available from Amazon, Connolly Books, and general booksellers.

Anybody familiar with Orwell’s Animal Farm will be amused by Tomás Mac Síomóin’s rebirth of the pig as the “Smilin’ Porky” in his newly published novel Is Stacey Pregnant?—although the amusement will not last long as this novel gradually unfolds its horror!

The first expressionist play in Irish

Expressionism is an art form that developed fully in Germany in the years before the First World War (in painting, poetry and drama) and after the war in German cinema. It arose from a sense of existential fear and a world going out of control.

Its themes are very often psychological struggle, insanity, and unfathomable forces controlling people’s lives. Mainstream bourgeois aesthetics of outward objectivity are rejected in favour of the aesthetics of ugliness as the way these artists perceived their reality in the build-up for war and following it, right through the 1920s.

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The Rising Tide – LookLeft 19 in Shops Now

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LookLeft 19 is in Easons stores and hundreds of selected newsagents across the island now. Still only €2 this issue includes former Worker’s Party President Séan Garland’s assessment of the career of Eamon Gilmore, an exclusive article by Greek economist, Yanis Varoufakis, on the failure of European Social Democracy, an interview with new Socialist Party TD Ruth Coppinger, an examination of the growing militancy among trade union members in Ireland and John Cooney on Scottish Independence and much, much more…

Contents include:

CLASS AND THE CATHOLIC CHURCH

The links between Irish corporate and clerical elites, Richard McAlevey investigates.

RACISM, NORTH AND SOUTH

Brian McDermott and Kevin Squires discuss the rise of racism on both sides of the Border.

THE OIREACHTAS’ NEWEST SOCIALIST

Kevin Squires meets Ruth Coppinger to discuss her aims in the Dáil.

CAN RENT CONTROLS WORK?

Osal Kelly discusses how to put a lid on a the bubbling housing market.

WHAT IS TTIP?

Dara McHugh and Padraig Mannion discuss the threat to democracy from the secretive trade deal.

RISING TIDE OF EXPECTATIONS Workers are seeking a new militancy in the trade union movement, Francis Donohoe explores.

THE FORUM Seán Garland bids an unfond farewell to Eamon Gilmore. Also featuring John Cooney, Anna Quigley, Cian O’Callaghan, Marie Moran and Gavin Mendel-Gleason.

WHAT NEXT FOR EUROPE?

Yanis Varoufakis and Terry McDonough discuss the fall of European social democracy and look at how the Left can rise instead.

RADICAL PROTESTANTS

Conall Parr looks at the legacy of radical Protestants in Northern Ireland politics

GLAM ROCK AND ANARCHY

Dara McHugh talks music, politics and petty theft with pioneering Dublin folk band Lynched.

NO NAZIS AT MALMÖ

Neil Dunne discusses the reactions of Malmö FC to the stabbing of a fan by neo-nazis.

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Phil Hogan, the Embodiment of the Crony Capitalist Links Between Business and Politics in Ireland

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Criticism of the government’s nomination of Phil Hogan as Ireland’s EU Commissioner has tended to focus on his lobbying, in 2012, to prevent a Traveller family accessing social housing.  On this basis, independent MEP Nessa Childers has reasonably described the nomination as a “step backwards for equality”. The other main strand of criticism concerns his signing off on bloated consultancy payments for the establishment of Irish Water, an issue that Sinn Fein in particular is highlighting.  Again, the criticism is legitimate and important, as is the fact that he spent the summer appointing former Fine Gael and Labour councillors to state boards and that he quashed inquiries into planning irregularities (including in his own fiefdom of Carlow) when he took office as Minister for the Environment.

But the problem with Hogan goes well beyond anti-Traveller racism, the wasting of public money, the dishing out of sinecures to political cronies, and taking a relaxed approach to dodgy planning. Most Irish politicians engage in all of the above. Hogan’s real importance lies in his being a prime exemplar of the noxious nexus between political and corporate power in Ireland.

The Moriarty Tribunal in 2011 concluded that former Minister Michael Lowry had “an insidious and pervasive influence” over the awarding of a mobile phone licence to Denis O’Brien’s East Digifone consortium.  In fact, the tribunal described Lowry’s conduct as “profoundly corrupt to a degree that was nothing short of breath-taking”.  Lowry was an honoured guest at Hogan’s 50th birthday party in July 2010, and only days after the publication of the Moriarty report Hogan had an official meeting with Lowry – allegedly to discuss unrelated matters.  But then this should not be so surprising, Hogan has form here.  As Jody Corcoran has reported, “Hogan was personally engaged in the extraction of at least two significant sums of money from O’Brien, or his companies or associates, for Fine Gael at or around the time of the granting of the licence”.  Coincidentally, Siteserv – an O’Brien-owned company that had substantial debts it owed to now state-owned Anglo Irish Bank (i.e., you and me) written off – has won some of the contracts to install water meters in Ireland, water charges of course being another of Hogan’s legacies to us.

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The Loneliness of a Low-Tax, Low-Wage Economy

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The new Global Competitiveness Report is out. This is produced by the World Economic Forum (the crowd that occupies Davos once a year). It purports to rank countries by their business competitiveness. Ireland was ranked 25 in 2014. Last year we were ranked 28. Our competitiveness has improved. Yawn.

The rankings are based on a number of indicators – infrastructure, taxation, business efficiency, labour market, ease of doing business, etc. The rankings are compiled based upon a survey of 13,000 ‘business leaders’ throughout the world. So it is subjective – opinions formed by the executives of multi-nationals and large companies. You can only imagine what they might think. They’d probably give gold stars to countries that have hardly any tax, any wage, and require workers to bow every time the owner’s son drives by.

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But actually, no. These captains of industry and finance actually like (or don’t dislike) high-tax, high-spend, high-regulated economies – everything that we have been told is bad for our economic health. Here’s how our peer group – small open economies in the EU-15 – rank in competitiveness.

All the other small open economies are ranked higher than Ireland. Two of the countries are ranked in the top 10 in the world – Finland and Sweden. Let’s go through some of the economic sins as written down in the orthodox bible and see how the different countries fare (taxation data is taken from Eurostat’s Taxation Trends).

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Ideology and the Corporation Tax Debate

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As the Scottish independence referendum approaches, most polls and observers suggest that the Yes campaign will just fall short but at the same time secure of greater devolution to Holyrood. Against this backdrop, Northern Ireland Finance Minister Simon Hamilton has given the strongest indication yet that the Tory-led government is prepared to hand Stormont the power to reduce corporation tax for the region. The relative absence of a debate around this issue in the Assembly is a reflection of the consensus between all five Executive parties’ on cutting the tax. Only the Green Party has voiced opposition to a reduction in the headline rate, while the local media has proved unable or unwilling to facilitate a serious discussion about its merits and demerits.

It is not surprising that the UUP and DUP are giving this proposal their uncritical support. The former is a local embodiment of Toryism with a tendency for highly conservative social views. The latter gives representation to an aspiring middle and petit bourgeoisie and with every new scandal that transpires the stench of shysterism emanating from the party grows stronger. Both purport to represent large sections of the Protestant working class, yet have enthusiastically welcomed the prospect of introducing welfare reforms that will remove up to £750m annually from the local economy. Not only will these cuts hit Northern Ireland harder than other regions of the UK, but disadvantaged areas are on course to suffer the biggest loss per adult of working age. The two Unionist parties are concerned that Stormont may lose approximately £100m this year in fines for its failure to introduce welfare reforms, but are prepared to countenance the much more devastating cut that anything close to full implementation of the Welfare Reform Bill will bring about. This says something about the ideological position of mainstream Unionism and its contempt for the working class.

The increasingly polarised nature of the welfare reform debate is an apt demonstration of how Sinn Féin’s electoral success presents an opportunity and a problem for the party. By adopting an austerity-critical approach in the South, it has managed to capitalise on working-class disenchantment with a toothless Labour Party and emerge, along with socialists and independents in the Dáil, as the most vocal opponents of Fine Gael’s class war. At the same time, there is pressure on the northern Executive to introduce Tory cuts in the manner of a regional council. It is widely believed that, with the support of senior figures such as Alex Maskey and Eoin Ó Broin, Gerry Adams intervened to ensure that his colleagues in the North reversed an earlier decision to endorse parts of the Welfare Reform Bill. Various media reports suggest that this is the reason for Leo Green’s acrimonious departure from Stormont, where he held the position of key Sinn Féin strategist.

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Open Season on Workers (Again)

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The Sunday Business Post ran four stories last weekend- including a front-page banner headline – attacking not only public sector workers’ living standards, but workers in public enterprise as well.

Semi-States Enjoy Pay Increases During the Recession

Sitting Pretty in the Semi-States

Public Sector:  the Insider Story

The Special Protections of the Semi-States

The Sunday Business Post is determined to outdo the Sunday Independent in public sector worker bashing.

And the most interesting thing about these articles is that they are based on a survey and a reading of wage numbers that are not only completely wrong – but make the most basic statistical mistakes.  This is poor analysis, masquerading as informed commentary.  Let’s look at some of the claims and see where they went off the rails (unfortunately the SBP is behind a paywall).

The SBP Survey on Public Enterprise Wages

The SBP did a survey.  It purported to show the average wage in a number of public enterprises for 2009 and 2013.  From this they deduced whether the average wage rose or fell.  Here’s what their survey found.

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From Alpha 2 Omega Podcast #53: What’s Next? Part II

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This week we have part two of our discussion with Professor Peter Hudis, of Oakton Community College, about his book ‘Marx’s Concept of the Alternative to Capitalism’. The first part can be found here.

In this week’s show we talk about the Soviet experiment and the alienation of labour, the role of the state in a post-capitalist society, the Spanish revolution and the anarchist understanding of revolution, and the co-operative model as an alternative.

You can get the Professors book here.

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After the Gaza Massacre and After the Marches, What Do We Do?

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The ceasefire between Hamas and Israel looks like holding up. It is a cause for celebration that the mass killing has stopped; the destruction of entire neighbourhoods is over for the moment in Gaza. It is hard to celebrate though when the siege still goes on, the occupation of Palestine with all its associated violence continues apace, and those who perpetrated the Gaza massacre have not been brought to justice. In the current bleak post-massacre crisis which Gaza faces, the work of solidarity organisations are needed now more than ever. The question is what form this solidarity will take.

On Saturday August 9th, between eight and ten thousand of us marched the all too familiar two miles to the Israeli embassy. It was the largest demonstration of Palestine solidarity on this island – a truly national demo with banners, placards and people from all the 32 counties, it was a joy to know so many other people cared and to be marching alongside these people. And now we know this, that so many people in this country are willing to make the effort and stand and march in solidarity with Palestine, what do we do next?

The simple answer I want to give is that we don’t go back to the embassy, instead we engage in boycott actions around the country, bringing the energy from the demonstrations back home and making it meaningful.

Why not march again? Marches mobilise us and they energise us – but if all they mobilise us to do is simply to mobilise yet again, then we are making the march about ourselves and how good we feel chanting pro-Palestine slogans and being in solidarity with each other. That’s not good enough.

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Two London Exhibitions: Two Ways of Seeing

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Two Ways of Seeing: Review of Exhibitions by Kazimir Malevich and Dennis Hopper

Tate Modern is currently home (until 26 October) to a major Malevich retrospective, the likes of which has not been seen in Britain before, while at the Royal Academy there is an exhibition of over 400 photographs taken by Dennis Hopper and on show in Britain for the first time. Malevich and Hopper are both regarded as radical figures who challenged convention but their differences outweigh any perceived similarities. This is not down to painting and photography being different art forms but to the uncrossable gulf between someone who revolutionised the nature of art and someone who happened to be around at a time of social change and captured aspects of it with a camera.

Malevich experienced the October Revolution and then enacted it artistically, dramatically tearing down the old canvas and inaugurating a new way of representing reality. But like most such sweeping summaries, it occludes the history that leads up to a significant moment, washing it over with a rhetorical flourish that rinses out a meaningful understanding. What distinguishes the Tate retrospective is its resolve to show Malevich developing as an artist in a particular place, Russia, and at particular times, from pre-revolutionary tsarism through to Stalinism.

Born in 1879 into a Polish family in Kiev, Malevich travelled to Moscow as a young man, discovered impressionism, saw the work of Van Gogh, Gauguin and Matisse and began to develop his own style of painting while still feeling he had to speak the language of the western avant-garde. This shows in his Self-Portrait of 1908-10 which takes from Gauguin a compositional ploy which positions the image in front of a painting – a just discernible scene of bathers in this case – while presenting himself as dapper and urbane. Room Two of the exhibition shows him as an artist drawn to Russian themes and styles, painting rural workers using simple forms and expressive colours to portray their hard-working, honest lifestyles.  The Scyther of 1911-12 reveals the influence of modernism without sacrificing allegiance to a Russian cultural identity. The figure is barefoot, as poor peasants would have been, set against a warm red background signifying the rye harvest;  the farmer’s form and mass is far from traditional representational art but the word for the colour red in the Russian language also denotes something beautiful (hence, Red Square) and this is also part of the painting’s iconography.

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Dismal Job Numbers Expose Government Spin

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Question: why has employment growth collapsed in the first half of the year after recent claims by the Government that 60,000 jobs per year were being created?

The answer lies in statistical misunderstanding, Government spin and the failure of many commentators to read the numbers correctly. For the fact is that the 60,000 job-creation number was never real and the recovery in the labour market is sluggish at best. This post may get a bit involved but stay with me – for this is as much a story about how the recovery is being contrived as it is about bald numbers.

Last year, employment growth suddenly took off. In 2012 employment actually fell by 11,000 – and this was after a loss of nearly 300,000 since the start of the crisis. However, in 2013 everything changed. Employment grew on a full-year basis by 43,000 (this is consistent with claims by the Government who were using quarter-to-quarter figures).

This was quite a turnaround. The Government claimed their policies were working. For many commentators this was proof that recovery had returned. But there were a couple of problems.

  • First, this employment growth took place while the economy remained in a domestic demand recession. Given that employment is sensitive to domestic demand, this didn’t make sense.
  • Second, the usual pattern of an economy coming out of a recession is that employment growth lags. This is because if there increases in business output, the first beneficiaries are those already in employment; they get an increase in hours which had previously been cut.
  • Third, the actual job numbers were throwing up some strange happenings. Self-employment (own-account workers) grew by over 10 percent and made up over half of the total employment growth. At one stage, self-employment was growing by nearly four times the rate of growth during the boom. This didn’t make sense – not with domestic demand stagnation. Agriculture employment showed a similar pattern.

These concerns were dismissed. Government policies were working and critics were just nit-picking. However, the CSO published warnings throughout all last year – warning people against interpreting growth trends. Why? Because they were re-aligning their sample base with the recent Census (don’t forget, the Quarterly National Household Survey is not a comprehensive head-count, just a sample; like a poll). This happens after every Census.

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Deng Xiaoping – The World’s Greatest Economist

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This article was originally posted on John’s blog, Key Trends in Globalisation on the 23rd of August.
August 22, 2014 is the 110th anniversary of the birth of Deng Xiaoping. Numerous achievements would ensure Deng Xiaoping a major position in China’s history – his role in shaping the People’s Republic of China, his steadfastness during persecution in the Cultural Revolution, his extraordinarily balanced attitude even after return to power towards the development and recent history of China, his all-round role after 1978 in leading the country. But one ensures him a position among a tiny handful of people at the peak not only of Chinese but of world history. This was China’s extraordinary economic achievement after reforms began in 1978, and the decisive role this played not only in the improvement of the living standards of Chinese people but the country’s national rejuvenation. So great was the impact of this that it may objectively be said to have altered the situation not only of China but of the world.

China’s economic performance after the beginning of its 1978 reforms simply exceeded the experience of any other country in human history. To give only a partial list:

  • China achieved the most rapid growth in a major economy in world history.
  • China experienced the fastest growth of living standards of any major economy.
  • China lifted 620 million people out of internationally defined poverty.
  • Measured in internationally comparable prices, adjusted for inflation, the greatest increase in economic output in a single year in any country outside China was the U.S. in 1999, when it added US$567 billion, whereas in 2010 China added US$1,126 billion – twice as much.
  • During the beginning of China’s rapid growth, 22 percent of the world’s population was within its borders – seven times that of United States at the beginning of its own fast economic development.

Wholly implausibly, it is sometimes argued that this success was merely due to “pragmatism” and achieved without overall economic theories, concepts, or a leadership really understanding the subject (particularly with no knowledge of U.S. academic economics!). If true, then the study of economics should immediately be abandoned – if the greatest economic success in world history can be achieved without any understanding of the subject, then it is evidently of no practical value whatever.

In reality this argument is entirely specious. Deng Xiaoping’s approach to economic policy was certainly highly practical regarding application – the famous “it doesn’t matter if a cat is black or white provided it catches mice.” But it was extremely theoretical regarding foundations – as shown clearly in such works as In Everything We Do We Must Proceed from the Realities of the Primary Stage of Socialism, We Are Undertaking An Entirely New Endeavour, and Adhere to the Principle to Each According to his Work. Deng Xiaoping’s outstanding practical success was guided by a clearly defined theoretical underpinning, which can be understood particularly clearly in its historical context and in comparison with Western and other economists.

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Perverse Economics and Water Charges

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If you’re into perverse economics, then you’re going to love the debate in the run-up to the budget. Already we have Minister Simon Harris calling for income tax cuts (didn’t the Taoiseach tell Ministers last year to shut-up during pre-budget discussions?). Of course, there is almost no discussion regarding affordable childcare, reducing education costs or introducing universal pre-primary education, providing affordable pay-related pensions to all workers, reducing health costs, reversing the high levels of deprivation and poverty, etc. Almost no discussion at all about how we can improve our living standards.

But of real interest to fans of the perverse is that while Ministers and interest groups line up to demand tax cuts, the Government will be introducing an extremely regressive ‘tax’ on almost all households – and there is no discussion about how this can be avoided. I am referring to the water charge.

While there has been considerable discussion about the costs to the average household (measuring showers, baths, brushing teeth), there has been little reference to the distributional impact of the charges; that is, the impact on different income groups. Let’s see if we can start to fill this gap.

Of course, we don’t have a history of water charges to measure so let’s look at waste collection charges. User charges, like sales taxes (VAT, excise) are generally regressive – they impact more on low/average groups. This is in the nature of the tax as lower income groups consume, whether goods or water or waste, more of their income than high income groups. The CSO Household Budget Survey provides information on waste collection charges from 2009/10.

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There are two things worth noting about the above chart.

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