Every business start up is a risk. A calculated one, but a risk all the same. Without risk there would be no businesses in this country. The whole economy would be run by the public sector, where risk has always been a dirty word. The left don't understand how business works, mainly because most of them have never had the balls to start one. How many Labour MPs, for example, have run their own business? I rest my case. I've been involved in a several business start ups over the last twenty years. All have involved risk. If any of them had gone wrong investors stood to lose money. Risk is only ever bad when someone invests more money than they can afford to lose. It then moves from risk to betting. And that's what happened in the banking sector.
Andrew Sparrow tried to insinuate that the 2005 Tory manifesto promoted unnecessary risk in the City, when it did nothing of the sort. It actually said...
The best guarantee of future prosperity is a dynamic economy. The growth of China, India and other Asian economies poses a direct challenge to our future competitiveness. New technology and the speed of global capital flows punish the inflexible and the sluggish. We need to reward risk-taking and innovation so that Britain becomes the best place in the world to start and to grow a business.If Labour and LibDem MPs couldn't sign up to that, we are in even bigger trouble than I thought. And if Conservatives have an issue with that last sentence then we might as well all give up and go and live in the People's Republic of North Korea.
It may shock Andrew Sparrow and his Guardianista friends to know that I hope the 2010 manifesto says exactly the same thing as the 2005 one did. Are you thinking what I'm thinking?
13 comments:
Usually the Tory promise to "reward risk taking" either means lower inheritance taxes (which actually reward the idle) or lower income tax on the well off, which many of them obtain anyway via offshore accounts, or both.
In fact there is little factual evidence from around the world that these methods work in stimulating the entrepreneur.
The key factor appears to be the availability of cheap finance and the willingness of some to speculate with it. This is the primary driver of silicon valley and has also accounted for the last economic boom, which was principally driven by cheap Japanese money.
Now that is unravelling, the last thing we need is lower taxes. The public sector is now the only source of finance in the economy and will remain so until banks have recapitalised.
Tax havens further encourage the process of isolating capital to a tiny minority of super-rich, most of whom inherited it rather than worked for it. Their contribution to world economic progress and entrepreneurship is close to zero, yet typically their personal preoccupation with lower and lower taxes is the main driver of Tory policies. These policies have also run New Labour during the last decade.
All are bankrupt, both politically and morally. A Green New Deal and a fundamental restructuring of the global economy are now needed, not pathetic antiquated pandering to the monied thinly disguised as pro-business policies.
You can't blame them for trying to rake up the past to attempt to insinuate that Cameron is politically related to Howard. However, this is a weak attempt.
Whoever the idiot was that did the 'we know what you're thinking' slogan should be pensioned off with a bottle of whisky a day and free Tesco deliveries, never to be seen in public again.
COT - shame Fred the Shred is giving his lump sum back - should have given it to MacMillan nurses or the RSPB but...
There are loads of places that show how low tax creates a more dynamic and productive environment. For example the tax havens that have low tax because they have small governments and punch well above their weight. You can just look at the GDP and measures of well being that shows people, all people, in these places far outpace the conventional developed countries. And the worst thing is that it was these conventional developed countries that have inflicted hardship on other countries who weren't promoting a debt fuelled orgy. In fact this tax haven hating mob looks to me as nothing but the same old socialist prejudice toward savers.
'Green New Deal' is nothing more than old fashioned big state socialism probably to cover the totalitarian tendencies of the modern green fascists.
Dick the Prick said... “Whoever the idiot was that did the 'we know what you're thinking' slogan...”
Chortle. I recall designing and handing out bumper stickers with the slogan roughly: “If I ever start thinking what he’s thinking - please kill me.”
Guardianistas live in a strange alien world, they prove it daily with their scribblings.
Very well said, Iain.
DespairingLiberal, lower income taxes and a smaller, less intrusive state does generate wealth and stimulates business. The last thing we need to do is try and maintain or grow State spending and borrowing.
The State, by definition and systemically, is incapable of making sound investment decisions because many reasons but fundamentally it is not their money.
I bet you think jobs are "created" in things like "Green New Deal"s, and that it is a good thing, don't you?
As far as the Libertarian Party is concerned, it is our intention to make the whole of the UK a "tax haven", with the abolition of Income Tax and very low corporation taxes to encourage companies to register and book their profits here.
"DespairingLiberal" - typical politics of envy, conflating a few "aristos" with tens of thousands of small businessmen.
You need incentives to take the risk of starting a business, doubly so in a society that essentially tips the scales against you before you start - high levels of tax; being treated like a criminal by HMRC and co; the banks negating the effect of limited liability by insisting that any borrowings the company makes are guaranteed by the directors' houses; reams of intrusive and absurd legislation; the enforced pleasure of working part-time for the government, without pay...
Keeping tax levels reasonable thus allowing the entrepreneur actually to see some benefit from his/her work plus being able to have something to pass on to the next generation seems part of that incentive.
As for "rewarding the idle" - for every "trust fund millionaire" there are thousands of ordinary Joes who've worked their tits off in order to have something to pass on. Offshore accounts aren't the easiest things to run when you have the eagle eye of HMRC on you.
Who cares about tax havens and the super-rich? They're an irrelevance - it's the millions of small businesses that matter, they provide a large percentage of total employment for a start off, but obsessing about a few billionaires who "don't pay enough tax" ends up with legislation that misses them completely and screws the "little men".
The last thing we need is more "Green New Deal" wibble. Massive handicaps being put upon business based upon very specious theories is not the way to encourage a recovery.
Despairing Liberal - this is just sweeping assertion with no evidence at all to back it up. In fact, even in these days of fluid capital, the investment rate of an economy in prrivate ventures is strongly linked to the savings rate of individuals - more money saved is more to be invested in new ventures. One of the reasons so many great ideas are incubated in the United States is that so many people have money to invest there.
I'll tell you what risk is.... it's having to go to hospital in Staffordshire.
I wonder if the socialists in the USA have noticed?
As a non-Tory largely LibDem voter, I am quite happy with the words and would be comfortable voting for them alone. I would like to see what actions they would induce should the Conservatives be elected. The words are nothing without that.
I like to keep tabs on the stuff the guardian posts as it's always interesting to read an alternative point of view. However I've noticed in the last week, they've started to go off the rails a little: All risk-taking is bad. Is it time to think about communism? Green shoots of recovery. etc etc
DespairingLiberal, inheriting your parents' estate only rewards the idle if your parents die when you're 18.
There are two different types of rewarding risk-taking.
One is that supported in that quote from the Tories where people get rewarded for taking risks which pay off successfully.
The other is the one practised (if not openly supported) by the current government where people get rewarded for taking risks which edn up wrecking banks and the whole economy.
They approved the bonuses and pensions, either tacitly or because they were to thick to forsee them in the bail-out.
It is important to discuss "risk" from left, right and center; it is, however, more important to finally get the lending market per se going again. Banks CAN NOT lend due to their "balance sheet crunch" not because they dislike risk. The opposite, they will soon find out that they will have to take very risky paths in order to revive their lost business model, their sources of income - otherwise it will be good-bye to the palaces, most bulls and any boni, whatsoever.
This is not to say banks need our sympathy, but we need them functioning - for now! Thereafter it will be a different story...
Carpe diem!
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