Wednesday 27 May 2009

The Grand Unified Theory of Pork

Lola and I inadvertently made some progress on this elusive theory in the comments on an earlier thread on proportional representation:

He kicked off with the standard objection to PR, that having coalitions with smaller parties leads to more pork barrel spending - the example given is the DUP who were infamously a thorn in the side of Sir John Major's Tory government and who did not, repeat not demand any special favours in return for supporting the very unpopular 42-day detention bill pushed through by the current Labour government.

I countered that if the standard argument using the DUP were valid, then logic says that in the USA, with a two-party, first-past-the-post electoral system there would be very little pork, which is quite clearly not true, as evidenced by the 480 pages and $150 billion's worth of pork that was tacked on the George W Bush's bank bail-out bill, that was originally supposed to cost $700 billion.

Hmm.

Lola cut the Gordian knot by mentioning Belgium, which also has a huge amount of redistribution and which is basically two quite distinct regions welded together into one country. Which makes me think that we can narrow down 'pork' in the widest sense into a few distinct categories:

1. Vertical distribution by income - i.e. higher and average earners pay for welfare and universal benefits (NHS, State education) 'enjoyed' by lower and average earners; but by the same token, lower earners subsidise the tax breaks for pensions and so on on 'enjoyed' by higher earners.

2. Pensions tax-breaks are the prototype for 'righteous' pork whereby an industry (windmills, smoking withdrawal products, asbestos removal etc) justifies its subsidies by referring to some wider public benefit - if the pensions industry can get away with The Big Lie that 'we have to encourage people to save' (social engineering at its worst) then it is but a small step to saying 'we have to encourage people to go green' or 'we have to encourage people to stop smoking' or 'we should pay to keep our children's schools asbestos-free' (despite white asbestos behind a layer of plaster and a few coats of paint is totally harmless and best left alone).

3. Industry-specific subsidies (which overlap with regional subsidies) - if you were an MP in an area with manufacturing, you'd call for subsidies for manufacturing; if you were an MP in a rural area, you'd call for more agricultural land subsidies; if you were an MP in central or west London, you'd call for tax-breaks for film-making and so on.

4. Regional subsidies (which in turn overlap with 'nationalist' subsidies), i.e. if you were a Scottish MP you'd oppose higher taxes on whisky; if you were a Welsh MP you'd call for less regulation of sheep farming or subsidies for mountain climbing; and if you were a Northern Irish MP you'd basically hold the UK government to ransom and point out that unless the rouble keeps rolling, The Troubles will start again (one of Tony Blair's great insights - the price of 'peace' in Northern Ireland is, er, a very high price in £-s-d).

5. Nationalist subsidies (which overlaps with the West Lothian Question), Scottish MPs of whatever party will always demand more cash for Scotland and so on.

6. The crassest subsidy of all - that of home-ownership, whereby the average earner pays vast amounts of tax merely to prop up the value of 'his main asset', and then has to pay more tax to cover the deadweight costs of the tax (i.e. welfare for those made unemployed by the taxes on production; or Housing Benefit for people who can't afford the resulting high rents, which only serves to push rents up even higher) - is not usually mentioned in polite company, but there are huge figures involved.

7. Then there are all the extra layers for every extra layer of government or bureaucracy, like Regional Assemblies, the EU (or in the case of the USA, State and Federal government).

Now ask yourself, how can we tweak the electoral system to reduce pork?

Like most great theories, this'll never be perfect, but having full devolution for England would be a good start (that gets rid of nationalist subsidies), as would getting the UK out of the EU.

Although the idea of having one MP per constituency has its appeal, the drawback is that they will dump any sort of basic principles if they sniff an electoral advantage from having regional/industry specific subsidies to benefit their own voters, so this must be borne in mind when considering the idea of national party lists (it's also a bad idea, but for different reasons) - at least a truly national party could concentrate on the interest of the nation as a whole (i.e. a national party would have no qualms in approving a Heathrow expansion - the gains outweigh the losses in economic terms and the winners far outweigh the losers in numerical terms).

Vertical redistribution (in either direction) is a question of education - surely it makes more sense to net off the upward and downward flows as far as possible, so that there is a bare minimum of redistribution in one direction only?

'Righteous' subsidies are also a question of basic economics - if it is accepted that smoking and using petrol are Bad Things (done simultanously they can be disastrous) then let's just tax them rather than subsidising whatever is perceived to be the opposite thereof, and cut taxes elsewhere.

Finally, the cartel of the home-owners' party (that's LibLabCon) can only be nibbled at if there were a party who could capture the votes of the significant minority of young people, tenants, entrepreneurs, higher earners, people looking to trade-up or who'd like their children to be able to buy a house etc. who would always vote to shift taxation from incomes and production to land ownership. Given where we're starting from, such a party only has a chance under proportional representation. The party would face a staunch opposition of older home-owners with lower incomes, landlords and pensioners (to whom some of their voters would desert later on...), but such is life.

13 comments:

Anomaly UK said...

The outlier status of the USA (2-party system, lots of pork) is easily explained by the primary system. The US simply doesn't have parties in the sense we know them, as the main power of a party is to pick candidates, but American parties don't have that power.

Lola said...

Before commenting may I just apologise to the World for Belgium. I acknowledge and accept that Belgium is all my fault. Well the fault of England after we did for Boney. But even then the English always achieve some good. In Belgium's case there are two major benefits. Beer and Spa-Francorchamps. I have drunk a fair bit of the former and raced at the latter. Both are sublime.

Lola said...

I don't agree that a true tax reform party that sought to tax land would face opposition from lower income older home owners or all pensioners. Landlords would be gutted - good. LIOHO and P's would quickly learn that it was to the advantage of their children and seek to organise their affairs to compensate and preserve wealth. LIOHO, or even HIOHO, are pretty clued up on how wealth works and is created. Liberating their progeny from the feudal thrall of the confiscatory and entrapping current tax system would be well appreceiated very quickly.

Mind you the labour unions would be distraught. Good, again.

Mark Wadsworth said...

AMcG, that supports my theory that where parties are divided along national or regional lines, there are more calls for pork, i.e. a congressman for North Dakota is primarily a congressman for North Dakota, and not primarily a Republican or a Democrat.

The same with the DUP - does anybody know or care whether they are Bog Irish or Mick Irish? Nope. They are Irish and they are out for what they can get for Northern Ireland (and if that favours their own part of the religious divide, that's yet another type of pork).

Mark Wadsworth said...

L, Belgium also does lovely chips and mayonnaise.

Lola said...

...and moules avec frites.

Stan said...

A McGuinn nails it regarding the USA. Although they have a party system, representatives are not required to follow the party line on any issue - they actually work for their constituents.

Hence the horse trading - if a Democrat congressman decides that voting for a Democrat initiative will have an adverse effect on his constituents he won't support it.

Consequently, the Democrat machine will work to reach a compromise to keep him happy. They'll even work with Republicans to get their vote! Totally different.

The fact is that you can not liken our electoral and democratic system to any other because it is different. Different constitution, different regulation, different parties, different everything.

If you try importing different bits from different nations you'll end up with one hell of a mess.

Letters From A Tory said...

Leaving about the issue about Belgium's lovely chips, I don't have any problem with a local MP selling their soul over subsidies because their opponents and the voters can hold them to account.

Much as I loathe these subsidies, it's not like one party gains an advantage over the others.

Mark Wadsworth said...

S, indeed, each country is unique, but that's no reason to try and identify the worst bits each different system has (and what you are left over with must be the least-bad).

LFAT, sure, there's no net advantage to 'the parties' (taken collectively), but this spending arms race is an overall net cost to all voters/the economy (taken collectively) and that's A Bad Thing.

Curious said...

Mark Wordsworth

May I ask a slightly off topic question?

What is UKIPs position/policies/thoughts on Land Value Tax?

Mark Wadsworth said...

C, I'm still working on that.

Curious said...

Good luck.

If UKIP adopted Land Value Tax, I might join.

AntiCitizenOne said...

MW, UKIP 2nd?

http://politicalbetting.com/index.php/archives/2009/05/28/is-voter-certainty-ukips-secret-weapon/