28 April 2012

Selective laying bare

State-funded pensions will cost £5 trillion, today's Daily Mail informs us.

Laid bare for first time, £180,000 burden facing every British family
(headline, 28 April 2012)

But why is this being ‘laid bare’ for the first time, one wonders, and not any of the other burdens facing the British taxpayer? Such as, for example, the cost of social workers to take babies away from their families and shuffle them around from one foster family to another? The cost of paying foster families ‘child maintenance’ for having kidnapped children living with them? The cost of providing free ‘education’ for every child born to immigrant parents and other categories of parents?

The object, one supposes, is to justify new forms of taxation; the population of people of pensionable age, being one with average IQ above that for the population as a whole, is the ideal target to be blamed for the ever-rising costs of ‘social services’, and to be made to pay as much as possible in the way of extra tax. Presumably pensioners, especially those who are not public employees (doctors, teachers, social workers, etc) are to be as impoverished as possible by the time they die. Otherwise they may leave houses and other assets to their offspring, who are also likely to have above-average IQs. Heredity may be unmentionable in polite society (David Willetts), but there is some sensitivity to the fact that high-IQ parents may have high-IQ offspring. Even before they die, high-IQ parents may give positive assistance to their high-IQ offspring, if their financial resources, in the way of both income and capital, exceed their most basic needs.

If my father had had a normal pension at the end of his teaching career, he would have been able to give me financial support at a level which, in view of my lack of an academic salary or of income support, would have been appreciable and have at least slightly eased the pressures of constriction which were oppressing my attempts to remedy my position as an outcast. This was the position into which I had been thrown at the end of the ruined ‘education’, although it was universally assumed that I had turned my back on a university career voluntarily. ‘Oh, I thought you got what you wanted,’ my aunt gasped half a century later, having apparently assumed that whatever I found to do in exile must have been something that I wanted to do so much that I would prefer doing it in destitution and degradation, rather than having a high-flying university career.

The question of ethics with regard to pension policy is one of the issues on which critical analyses could be being published by Oxford Forum if it were provided with adequate funding to do so.

27 April 2012

Should banks be forced to take on more risk?

Extract from an article by the Daily Mail's Alex Brummer:

Roughly one-sixth of construction output consists of putting up new homes. In the final quarter of last year housing starts were just 20,400 which is half the level of five years ago. Yet commercial housebuilders like Redrow and Persimmon are doing very nicely. How can this be the case? Having cleaned up their balance sheets after the Great Recession, most homebuilders are concentrating on upmarket homes in the South-East that are affordable only to the most affluent. The government’s scheme intended to help people get on the housing ladder, by offering up to 10 per cent in deposit assistance, is not working because the mortgage lenders refuse to offer loans at the appropriate cheaper rates to these people.

... the government could do more to get construction moving. The special liquidity scheme did support mortgage lending, in the wake of the first part of the recession, and the Bank of England may well have been too enthusiastic in pulling back the punch bowl. It was influenced by the fact that the banks felt prosperous enough to pay huge bonuses to executives and the feeling was that taxpayers should not be subsidising such immoral action. (Daily Mail, 26 April 2012)

As usual, it is supposed that the destructive consequences of socialism can be remedied by yet more socialism. Yet more transfer of resources from populations with above-average IQs to populations with a lower average IQ.

There was a time when banks lent money on commercial principles, i.e. only to those who already had some capital assets and who were the sort of people unlikely to default on repaying loans, whatever hardships they might have to undergo in the process. Thus the bank would continue to profit, and not lose, from the arrangement.

But now, of course, it is considered that banks, and taxpayers, should be forced to set their money at risk by lending it to those least likely to repay it, so long as such people express socially-approved intentions.

Even if such people are provided by the government with the money necessary to pay the deposit on a house, the banks still regard them as a bad risk, and refuse to lend them money at artificially low rates, in order to preserve themselves and their shareholders from further losses. This, in the modern ideology, is immoral. What are banks for but to transfer money from populations with higher average IQs to populations with lower average IQs?

26 April 2012

No sympathy for the victims of socialism

This is something I drafted a long time ago but did not send because of lack of staff, money, and everything else that makes life tolerable.

copy of a letter to a senior academic

As the oppressive state closes in, there are protesters against capitalism camped outside St Paul’s, and a good deal of sympathy with them is expressed in many quarters.

I hope I shall be able to fit in writing something in praise of capitalism, since it has actually been the only positive factor in my life, and those who wish to abolish capitalism are wishing to destroy the chances of people who are in any way like me.

When I was thrown out at the end of the ruined education I bought the Financial Times and thought all day about how many sixpences I was adding to my capital (by not spending from my daily spending allowance) and how much capital I would need for the very smallest residential college with dining hall facility and ancillary staff.

But, slow and painful though it was, the accumulating coins did me far more good in the long run than the efforts I made to get a postgraduate degree with the grant from Trinity College, Cambridge. At the end of it the way into any university career channel was still blocked, and no financial support was available from any quarter until the King money, which enabled me to do introductory surveys in various areas which I had identified as having potentialities for research while I was doing the BLitt.

But again, this left me empty-handed. When the King money ended, our books still had to be published at our own expense, being blocked by those regarded as experts, to whom prestigious publishers referred them. So I still had no academic salary and no income from books.

Once you have been exiled from society, you should not suppose that it will be possible to return to a normal position in life by doing the same sort of research, and publishing the same sort of books, that you might have done as a socially accepted academic. Throwing money at the problem will not help, as I found. If you use your own money to publish a book, and even if you get it published under a respectable imprint, it will not change your position. You are still known to be a statusless outcast.

Publishing with your own money is ‘vanity publishing’, with which several people have taunted me, and no one has shown the slightest willingness to consider that a book might be a demonstration of one’s grievous misplacement, since if you can produce a book at all in such circumstances, surely it might be regarded as an indication that you could be producing far more if reinstated in a normal career providing salary, status and a hotel environment. This appeared not even to be considered when I was told that my book was still the ‘most referenced’ book in the field of ‘research’ in universities which had arisen since its publication.

The research which we had done with the King money withered on the vine, so far as we were concerned, while providing opportunities for overseas salaried academics, who made no progress that I would myself have regarded as significant.

I would, of course, have been quite willing to do research as pointless as theirs, so long as I was provided with equivalent salary, status and ancillary conditions. I could have undertaken to do only what other people might have thought of doing, but I would certainly have done it more efficiently.

The house in the Banbury Road continued to increase in value over the decades, and we continued to acquire experience of investment so far as our very small capital permitted.

So you can see that it is only capitalism that has ever done me any good, and my attempts to ‘prove my worth’ to senior academics by doing work to a high standard in bad conditions have done me no good at all.

25 April 2012

Shifting the bell curve

David Cameron has suggested that the NHS and the education system should ‘close the gap’ between rich and poor.

Recently a grandfather of 29 was in the news. The low-IQ population seems to have a shorter generation length, i.e. seems to reproduce faster than the high-IQ (‘educated’) population. If at the same time it produces more offspring, say twice as many, as the high-IQs, it takes a surprisingly short time for the relative proportions in the population to change radically.

For at least 70 years now the more functional have been increasingly discouraged from producing children (a recent Daily Mail contains a warning to career women that leaving it too late to start families may damage the offspring). At the same time, the least functional have been encouraged, by ‘benefits’ and other measures, to reproduce early and prolifically.

There follows a very rough and simple calculation which shows how the bottom 25% of the population in terms of IQ could become the bottom 75%. There has been ample time since 1945 for a macroscopic shift in the balance of the population to take place and it may well have done so, which might account for the reports of ever-declining standards in primary schools. Bad though the schools no doubt are, this may be the inevitable result of the IQ level of the intake, and not of behavioural deficiencies on the part of either parents or teachers.

Suppose we start with a population of 20 with IQs below 90 (“Bs”), and a population of 60 with IQs above 90 (“As”).

Let us assume that at an average age of 30 the As add two offspring per pair, so after 30 years there are 60 + (30 x 2) = 120 As, and after 60 years 60 + 60 + (30 x 2) minus the original 60 who (let us assume) die at age 60, i.e. still 120.

Let us further assume that at a lower average age of 20 the Bs add 4 offspring per pair, so after 20 years there are 20 + (10 x 4) = 60 Bs, after 40 years 20 + 40 + (20 x 4) = 140, and after 60 years 20 + 40 + 80 + (40 x 4) – 20 = 280.

So now we have 120 As to 280 Bs, so that the ratio has changed from 75:25 to 30:70.

Graphics by Andrew Legge

David Willetts describes the belief in heredity as something that ‘cannot be mentioned in polite society’ (The Pinch, p. 198). Academics who refer to the possibility of hereditary factors are liable to lose their jobs pretty quickly. It is implausible to suppose that there are not hereditary factors affecting individual differences, however much academia likes to believe otherwise, and it is certainly unscientific not to entertain possibilities.

The rationalised intention of closing the gap between ‘rich’ and ‘poor’ (correlated with above-average IQ and below-average IQ) has in all probability only succeeded in creating a bottomless pit into which resources can be poured.

Providing the ‘poor’ with additional resources may simply create an even bigger population of the ‘poor’, while at the same time placing increasing pressure on the ‘rich’, by taxation, to postpone and limit their families.

Has measured average IQ declined since 1945? Perhaps it has not, but this may simply show that IQ tests, as used, do not give a realistic picture of trends over time. The people who devise and apply the tests which are used are usually salaried academics with a vested interest in a certain outcome. When my colleague Christine Fulcher was working for her psychology degree from the Open University, she gathered that the intelligence tests which are used are always being modified to make them ‘fairer’ or more ‘appropriate’ to modern conditions.

Nick Clegg (Daily Mail, 5 February 2011) asserts that the ‘middle class’ will not notice the effects of extra taxation on their ‘lifestyle’. Maybe not; it will be quantitative rather than qualitative in most cases, but it will add that much extra delay to their paying back university debts, saving enough money to start buying houses, start families, send children to non-state schools, etc. Hence adding a bit of acceleration to the shift in the bell curve of IQ. Some of those working here now were at times salaried as university lecturers and in other professional capacities, and some in the future might be again. Taxation has diminished, and would again diminish, their ability to build up capital towards setting up our fledgling organisation as a properly funded and productive academic institution.

The relevant departments of my unfunded independent university are effectively censored and suppressed. They have been prevented for decades from publishing analyses of the complex issues involved, while misleading and tendentious representations of them have continued to flood out from socially recognised sources. I hereby apply, for financial support on a scale at least adequate for one active and fully financed university research department, to all universities, and to corporations or individuals who consider themselves to be in a position to give support to socially recognised academic establishments.

[first posted 7 February 2011]

18 April 2012

The Great Pensions Swindle

I have a book entitled The Great Pensions Swindle* which, 40 years ago, made some useful points about the likely unreliability of state pensions. The following, however, is unrealistic:

The breaking point is not postponable indefinitely. The resistance to periodic increases in ‘social insurance’ contributions will begin all the sooner when the ‘contributors’ realise they are paying not insurance contributions but an income tax. (p.128)

In fact, no significant realisation arose that “National Insurance” contributions were just a form of income tax, which increased the Government’s current spending money. Otherwise the book anticipates very much what has happened. What happens when a future generation decides it prefers to spend its money on what is fashionable at the time (overseas ‘aid’, social workers, ‘universities’, etc.) rather than providing a former generation with the pension it thought it was paying for? The pensions are 'too expensive'; they are suddenly means-tested, and paid at ever later ages.

Not least, let it be clearly understood that ‘right’ (to the pension) and ‘contract’ are two more good words that have been made misnomers. A ‘right’ to a pension that a man acquires by saving for it is unambiguous. The ‘right’ a man has to an income when he can no longer work is of a different kind. The word has been re-defined to mean a moral right or claim on society. But transfers of income from one age-group, or class, or generation, to another represent decisions by one group, or class, or generation, to help another in time of need. No group, or class, or generation has a ‘right’ in any absolute sense. ...

In civilised parlance ‘contract’ means a voluntary agreement between two parties each of whom thinks it will gain. There is no such voluntary agreement between the generations on pensions. Indeed, there can hardly be one since future generations cannot be consulted; and if they could they would hardly agree since the terms are loaded against them. (pp.129-130)
* * *

Retrospective legislation has become increasingly frequent, and by now no one seems to remember that there was ever anything against it. It used to be said that the individual had a right to know what was legally open to him (in taxation, etc.) so that he could plan his affairs to secure the best outcome in view of his own interests and priorities, as he conceived them to be.

The recent changes in the ages at which state pensions become payable is really an egregious example of retrospective legislation, and directly affects people in as bad a position as we are. If a company which offered pension schemes were suddenly to announce that all its pensions were to be paid two years later, those who had been paying into the schemes might well wish to sue it for breach of contract. When the government does the same thing, no legal redress is available. This has happened recently and seems likely to happen more, so that my junior colleagues’ pensions recede as one approaches them. The age at which one of them will start receiving her pension was first shifted from 60 to 62, and then again to 64. Another’s pension was shifted from 65 to 67, and seems likely to be further delayed to the age of 68.

Thus the state has already deprived us, who are trying to build up towards an adequate academic institutional environment, of seven years’ pension money, i.e. £35K at today’s pension rate.

I have previously pointed out how means-testing of pensions retrospectively reduces the benefit received in return for contributions paid. This means nearly two thousand pounds per person per year. The proposed tax of £20K towards the cost of state ‘nursing care’, whether such care is received or not, was first proposed as a tax on estates on death, but is now suggested as a capital levy to be paid by every pensioner on reaching retirement age. If that were made retrospective, so that it applied to myself as well as to my colleagues, that would represent an additional confiscation of £80K.

There are several other examples of abandonment of principles, and I should be able to write about them at length, because they are actually very serious, although no one else appears to recognise this. If Oxford Forum were provided with adequate funding, we could be writing and publishing analyses on this issue which are currently being ignored in favour of the usual pro-collectivist arguments.

* Arthur Seldon, The Great Pensions Swindle, Tom Stacey Books, London, 1970.

[First published 11th September, 2010]

12 April 2012

Hatred of directors and hatred of ability

It is objected that directors and shareholders of water firms continue to receive substantial ‘rewards’ in salaries and dividends, although the companies are failing to provide consumers with an efficient water supply.

It may be that it is simply impossible to run such a company efficiently in a country so far gone in socialism as Britain now is. It may be that it is necessary to pay directors at a commercially realistic rate in order to attract persons of high ability (which is likely to include high IQ as well as realism) in order to prevent an even worse failure in providing a reliable supply of water to customers.

In my view a company should be free to decide for itself how best to allocate its resources. I also support the idea that a company should be run for the benefit of shareholders. If it is not run for the benefit of shareholders, why should they contribute and place at risk their capital in becoming a shareholder? They may well think, as I do, that they would do better to find other ways of using their capital to increase their independence of the hostile society in which they live.

It is complained that the money spent in rewarding directors and shareholders could have been spent on repairing the fragile pipe system.

The Mail can also reveal that an astonishing £500 million was paid to the water companies’ mainly foreign shareholders for the six months to September 2011 – when drought was already blighting the East of England. Critics say this money could have been better spent fixing Britain’s fragile pipe network. (Daily Mail, 5th April 2012)

So some of the company’s resources are being applied to rewarding a population with above-average IQs, whereas the ideology dictates that resources should only be transferred from higher-IQ populations to those with a lower average IQ.

If directors’ salaries are cut, there will be less money in the hands of individuals who might decide to support other high-IQ individuals, who might then be able to do, for example, research not supported by socially recognised universities, or who might then criticise tendentious research published by them. That is to say, there would be even further reduction of the population of people who might think of coming to work for, or to support morally or financially, my suppressed independent university.

I was forced to start working towards setting this up by the ruin of my state-funded ‘education’. There was, of course, no sympathy with my terrible position as an outcast academic. There is no suggestion that the damage done to the lives of high-IQ outcasts should be repaired, and they are not acceptable objects of charitable support. They may, like me, be unable to ‘earn a living’ by regaining access to a university career at a senior level. Therefore the object has been fulfilled of reducing the access to financial resources of a high-IQ population.

If the water companies were run by the government, it is certainly not likely that more money would be spent on infrastructure; instead the money not spent on salaries or dividends would be absorbed into the collectivist ‘welfare’ system, thus, for example, providing extra support for the population of doctors, teachers and social workers. These, and especially the latter, are very likely to have IQs far below those of company directors.

A cynic might suggest that privatisation of the water companies was arranged partly to create a publicly obvious diversion of resources to a population with above-average IQs, at a level which would be regarded as egregious. This could then be attacked, functioning as a kind of showpiece scapegoat.

The overall net effect would thus be to reduce the resources in private rather than public hands. That is to say, reducing still further the freedom of individual citizens in Britain. (Not yet to absolute zero, though that could come if capitalism were abolished altogether, as is now from time to time advocated.)

02 April 2012

A tax guide favouring collectivism

Mention the world ‘tax’ to most people and their first – and often only – reaction is to ask for ways they can cut their tax bill. But once you ask those self same people if they want cuts in education, the national health service, road building or local street cleaning and their response is almost invariably ‘no’. (Tax Handbook 2011/12, published by Which?)

It seems disingenuous, to say the least, to bracket such things as ‘education’ and the NHS with such things as road building and road cleaning. I would wholeheartedly advocate the abolition of state-funded and compulsory ‘education’, but I admit that I would like some usable roads around where I live, although I am not sure that a better arrangement for paying for them could not be found than by paying tax to dubious and unprincipled collectivist bodies such as national and local government.

But it is true that, since roads enable the displacement of persons and objects across areas that are larger in size than any one individual’s territory, there is justification for devising some collectivist system for maintaining them, rather than having each piece of road paid for by the owners of the land along each side of it. However, if the payments for maintaining it are paid into a collectivist entity which is also responsible for maintaining other collectivist activities, there will immediately arise the problem of blurring the exact allocation of a specific portion of the taxes paid in, as has happened so notoriously with pensions.

In the case of collectivist oppressions such as medicine and education, people are being provided (at least nominally) with something that is specific to the needs of the individual, so the arguments in favour of collectivist road provision do not apply.

What an individual will in practice receive under the headings of ‘medicine’ and ‘education’ is what other people wish to impose upon him. This is no substitute at all for what he might wish to pay for on his own account, and the effect of taxation is merely to diminish his ability to do so.