Who has been claiming that high taxes on the rich are unpopular? All the arguments against I’ve seen have been on economic grounds.

I dunno, I think a super tax on GPs and town hall executives wouldn’t do too much harm.

“Wonder what Labour MP Tom Harris, always happy to stick up for the rights of the extremely high earners, would say.”

He’ll probably just lie about what you said, Sunny, and then try and pretend he didn’t, and then desperately try and convince himself he’s sitting on the correct side of the House when everyone can see that he’s not.

Richard at #2 (apologies, but there’s a joke about rhyming slang in there) quite.

“Other people” paying higher taxes has always been popular.

That “higher taxes on me” is unpopular can be seen by the fact that (at least, the last time I got the numbers from the Treasury, a couple of years back) in one year only five people did in fact voluntarily pay more taxes than were legally due by making a donation to the Treasury. And four of those were dead.

Tim, Tim, Tim,

Surely even the King of the Pedants can spot that, erm, there’s a big difference between being in favour of the legally-levied rate increasing when applied by the state to all, and individually volunteering to pay more than the legally due amount.

After all, you know what a Sorites paradox is, don’t you?

“there’s a big difference between being in favour of the legally-levied rate increasing when applied by the state to all,”

Sure, but the proposal is not being applied to all, is it, Only to those “rich bastards”.

To all would mean, umm, all, wouldn’t it? The nation’s in peril thus all 60 million of us should chip in.

I was referring to when you wrote:

“That “higher taxes on me” is unpopular can be seen by the fact that (at least, the last time I got the numbers from the Treasury, a couple of years back) in one year only five people did in fact voluntarily pay more taxes than were legally due by making a donation to the Treasury. And four of those were dead.”

and pointing out that this is a disingenous argument because it presumes to show that because few people pay more than the currently legally due amount, it therefore follows that people are not in favour of higher taxes for themselves.

Now, you may well be right that people are not in favour of higher taxes for themselves. But this is not proved by the fact very few pay more than the legally due amount; the explanation for this could be because of a rational self-interest calculation based on Sorites-style considerations about the futility of individually paying more against the backdrop of knowing that no others will do likewise. For example.

I wasn’t drawing attention to your “other people pay tax” versus “I should pay more tax” distinction.

Surely, you of all people can spot what I was up to, no? I’m only trying to learn from the master, after all…

And the “rich bastards” will pull out all the stops to avoid paying it and therefore (probably) end up actually paying less. There will be many who were happy(ish) to pay 40%, but for whom the 50% will act as the incentive to look into schemes which they felt a little iffy about before, on the “enough is enough” principle.

But the 50% was never about the revenue; it was always about gesture politics.
Brown’s speciality.

More interestingly, the ABC1s support the ‘high tax on £150,000′ more than the C2DEs, although I wouldn’t like to draw conclusions about exactly what the public want going on the question.

The question gave 7 options plus a “don’t know” for measures the Conservatives should take to bring down borrowing, and asked people to tick two or three. Notably not included in the options are ‘reduce wasteful spending’ and ‘negotitate with the EU to get our rebate back’.

So out of the choice of 7 options, raising the income tax on people earning more than £150,000 a year came out the most popular. I accept that. But that is not the same as 69% of voters thinking the party should do it. It’s a worrying trend among newspapers of taking polls to say what they want them to say, rather than what they do say.

In order to say what %age of voters support the policy, the question should be “If a Conservative government has to take tough measures to reduce government borrowing, would you support raising the top rate of tax for high earners? Yes/No/Don’t Know”

The problem for the Left is that people think income inequality is high, too high, but don’t necessarily support government efforts at redistribution: the JRF has looked at this over the years:

http://www.jrf.org.uk/publications/public-attitudes-economic-inequality

So: income inequality needs to come down, but I don’t trust the government to make decisions about it. There must be other ways, then – but you only believe in these if you are liberal (i.e. not really like Liberal conspiracy). Breaking down monopolies, barriers to entry in labour markets, improving educational outcomes, all that.

Sunny, doesn’t the quote include a fallacy? It might be the case that more tax on the 50p band does NOT raise enough money to pay off government debt:

http://www.guardian.co.uk/uk/2009/apr/24/budget-tax-wealthy-debt-spending

In which case the correct question to put to the polled would be “Do you want to increase taxes on those earning abov 150k, even if it doesn’t raise any money, might actually cost money, but might satisfy your sense of justice?”

That would be more interesting to ask – give people a real dilemma, rather than a “do you want two good things (debt reduction and rich-bashing? Oh, go on, tell us, it will be really interesting. “

tax the rich eh?
Sounds good to me

This business of 50% income tax on incomes over £150k/year not being enough to bring govt debt under control is simultaneously probably true and profoundly misleading.

In UK in 2003 the most wealthy 1% owned 21% of the marketable wealth of the country – about £800bn. The most wealthy 10%, 53% – about £2 trillion. And presumably this is declared income only. A good peer into that 1%’s affairs might reveal even greater wealth piled up in secrecy jurisdictions.

There can’t be any economic efficiency in this. If you want to look to tax to sort out the government debt and you want the economy to perform more efficiently, this is probably a good place to start.

“In UK in 2003 the most wealthy 1% owned 21% of the marketable wealth of the country – about £800bn. The most wealthy 10%, 53% – about £2 trillion. And presumably this is declared income only. A good peer into that 1%’s affairs might reveal even greater wealth piled up in secrecy jurisdictions.”

Income and wealth are very different things. We don’t in fact have a wealth tax in the UK. We have taxes on some transfers of wealth (inheritance tax for example, some gift taxes) and we have taxes on returns to wealth, but not a tax on wealth held.

It’s possible to argue that we ought to of course, but we do have to distinguish between income and wealth first.

It seems not to be widely appreciated that at least up to the onset of the financial crisis in 2007, the burden of taxation in Britain – meaning: total tax revenues as a percentage of national GDP – was lower than in most European countries: the most notable exception was Germany. Try this OECD source:
http://lysander.sourceoecd.org/pdf/factbook2009/302009011e-10-04-01.pdf

“It’s possible to argue that we ought to of course, but we do have to distinguish between income and wealth first.”

It was my intention to do precisely that. An introductory sentence was probably missing to make this clearer. In this country wealth taxes are so far off the agenda they effectively don’t exist. A case in point: issue not addressed by this poll, this post, or comments on it thus far.

But the inequality of distribution of wealth is a major source of real economy underperformance, environmental degradation and misallocation of investment resources by today’s “free” market, as well as being, shall we say, a tad unfair.

The French apparently have something called a “solidarity tax”. I don’t know much about it but I like the sound of it. It’s the kind of thing that our New Labour leaders will have spent our money in the last few days at G20 quietly derailing, along with all other attempts to bring in Tobin taxes, tax harmonisation, country-specific reporting, close down the secrecy jurisdictions and so on. Makes you proud don’t it.

Warning: grotesque self-publication about to happen.

Wealth/property taxes are not all off the agenda. We made that point prominently in:

http://www.centreforum.org/assets/pubs/a-balancing-act.pdf

and the call is backed by the Guardian (Ashley Seager, I believe, is very alert to the potential usefulness of property taxes). This editorial (yesterday), mentions it:

http://www.guardian.co.uk/commentisfree/2009/sep/07/public-finance-tax-debt

An earlier editorial of theirs
http://www.guardian.co.uk/commentisfree/2009/jul/13/editorial-tax-rises-recession#

touches on the topic, saying:

“Houses are taxed too little compared to other assets, which is one reason why they grew so expensive; by bringing the gains realised on selling pricey family homes within the tax net or by recasting council tax, a determined government could not only raise money but also do away with this distortion.”

Strategist, don’t lump all these ideas together under “things that p1ss off the City”. Some are useful and help reduce instability (property/wealth taxes); some pointlessly throw sand in wheels without achieving that aim (Tobin taxes); some are straightforwardly good for justice (going after Liechtenstein). And on the latter, the New Labour government is getting a good record

http://ftalphaville.ft.com/blog/2009/08/11/66311/uk-in-tax-deal-on-liechtenstein-accounts/

“Houses are taxed too little compared to other assets,”

Well, that’s a little odd there. For the UK gets more of its total tax take (11.9% ) from taxing property than does any other OECD country.

http://www.nationmaster.com/graph/tax_com_of_tax_pro_tax-taxation-components-of-property-tax

I agree that there’s no CGT on primary residence etc but the country which taxes property the most being the country that doesn’t tax property enough is a tough one to swallow.

Tim, I’ve seen that figure bandied about a lot and since it fails to agree with stats I’ve seen from, say, the OECD, I’d need it disaggregated a bit before accepting it as the honest truth.

Given that council tax is the major property tax we have in this country, and it raises about £25bn (5%), I’m not really convinced we are so heavily taxed there.

“There is currently no ad valorem tax on residential property. Two former systems were dropped because of their extreme unpopularity. “:

http://en.wikipedia.org/wiki/Property_taxes#United_Kingdom

So, more details please. As far as I can see, we don’t really tax wealth/property very much in this country. Maybe the website made a typo? perhaps they meant 1.1%?

In fact, perhaps you could go to table C6 and tell me which of these is property tax?

http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapterc_463.pdf

You need to find £50bn or so to justify that strange NationMaster statistic

Well, nationmaster at least claims that it is based on OECD revenue statistics.

“Given that council tax is the major property tax we have in this country, and it raises about £25bn (5%),”

And Uniform Business Rates raise another £25 billion. So we’re at 10% already.

We might quibble over whether these are the same as the property taxes in other countries and so on but I don’t regard it as either unlikely or unreasonable to say that the 11.9% figure is correct.

I think you’ve found two things that are very different from the conception of wealth/property taxes that was initially introduced by Strategist. Neither council taxes (capped once a house is worth just £300k or so) nor business rates (which have little relationship to business value) have much relationship with the massive wealth inequalities that initiated this thread.

They are costs of doing business but do nothing to tap wealth inequalities. Put it this way: have £10m in assets in this country, and neither of those sources of tax income touch you.

I think figure 1.1 from this IFS document gives a fairer description of the extent to which wealth is taxed around the G7. Answer: not a lot.

http://www.ifs.org.uk/mirrleesreview/reports/wealth_transfers.pdf

Slightly weird way of doing it but here at the OECD.

http://stats.oecd.org/Index.aspx

From right hand menu “Public Sector” then “Taxation” then “Revenue stats”.

Then menu at top of table “Tax 1/75″ click there and it’ll give you tax from a specific sector as a percentage of total tax revenue. You need to uncheck the box for total revenue to get useful numbers.

They most certainly are saying that the UK gets more in property tax than any other OECD country (as a portion of total tax take of course).

Now, it’s of course possible to argue that the OECD are full of shit and don’t know what they’re doing….but that rather opens a can of worms in which we all get to say that about all sorts of things the OECD is saying on this and that subject.

(Ah, looking more closely, seems that Korea is beating us so we’re number 2, not 1).

Actually, this is a fascinating set of numbers. Corporate taxes are higher (as always, as a percentage of total tax take) in the UK than the OECD Europe average, the EU 15 average and than Denmark, Sweden or Finland, those social democratic paradii.

And our (and we know that social security contributions are regressive) are lower than the EU 15 average, and Sweden….

In recurrent taxes on immovable property we’re number 2 behind the US….only a very few countries have recurrent taxes on net wealth, we’re one of the many with none. We’re number 5 in estate, inheritance and gift taxes (higher than Denmark, Sweden and Finland again)

We’re lower in VAT collections (remember! VAT is a regressive tax!) than the EU average, Sweden, Finland, Denmark….

We’re also *above* average in the amount that we collect from individual incomes…and yes, that is the one progressive part of our tax systm.

Seriously, thanks for getting me to look that up. Fascinating stuff. We seem to have a more progressive (or perhaps less regressive) tax system than the social democratic paradises of the Nordics (Norway is a huge outlier because of the oil taxes paid by Statoil).

I’ll have fun for years throwing those numbers around. And don’t forget, they’re all listed as being a percentage of total tax take. So we’re not arguing about the total level of tax, just where what tax there is comes from.

@18 Thanks for the link, Giles, I’ve had a very quick read.

Yes, by failing to read yesterday’s Guardian, I have missed that this issue is now on the agenda. Well done.

Three points. Why do you prefer a flat rate surcharge on the council tax, rather than a fully progressive increase in the number of bands up to the most expensive properties of all? More importantly, any thinking on why keep council tax at all instead of going for something that picks up land value directly – specifically, location value (a natural and community-created value)? Does it just fall into the too radical category?

On Tobin tax, this is a different thread probably, but let’s just say that your claim is disputed.

Finally. It is very risky indeed to congratulate New Labour on its record on closing down the tax avoidance industry. My guess is that the British Govt will behind the scenes be pulling out all the stops to destroy attempts by the French and Germans to get a sane policy on this. My guess is that anything that anything that New Labour advocates will have been pre-approved by the City’s representatives in Whitehall as something cosmetic, ineffective, unworkable, leaving plenty of room for their arbitrage business to go on as usual. What’s good for the City is good for Britain. This is a deeply ingrained ideology, but it is a lie.

Thanks for that fascinating disaggregation, Tim. I’m glad you’ve found the exercise useful.

But I still don’t think the basic point that Strategist raises has been answered.

The fact that we manage to raise 5% of our revenues through Council tax, which accounts for half of our property tax, say, and which remains so incredibly regressive (tax a 400k property the same absolute amount as a £4m property), just shows that we are able to get high in the OECD property tax tables while taking far more (as a proportion of either wealth, or income), from the poor under this category, than the rich.

So “we do a lot of things that are called Property tax – we don’t need to do more here” falls down for me. Replacing council tax with something that is actually proportional to property or land or wealth value, and you might go no further up the OECD table, and still introduce a system that is less regressive and more likely to deal with instability.

So (before going out to the gym), my basic point remains: we have large wealth inequalities, and our current tax structure does little to address them. That we have a high place in the OECD property tax table just shows you that our current system of property tax is not very much proportional to individual levels of property ownership – it is wide rather than deep.

Agree with you about VAT. That will go up too.

Strategist, thanks for the reply. Can only reply briefly: yes, could have done more on council tax suggestion. Hope to pick up ideas at LD conference – am chairing an ALTER event which may help me. I appreciate my views on Tobin tax are a bit extreme for this site.

I don’t have a problem with arbitrage profits – they can’t whip the money out of nowhere. It is leverage that bothers me . Sorry, more self publication:

http://www.guardian.co.uk/commentisfree/2009/aug/28/transaction-tax-fsa-turner

Giles, I was addressing specifically your claim, lifted from The Guardian, that property is lightly taxed. It simply ain’t.

(Gratiutous self refrence: I’ve been banging on about this so much for so long that other people now put the link to Nationmaster into the comments at CiF when writers claim that property is lightly taxed in the UK).

Now, having disposed of the idea that we don’t tax property enough….I’m entirely happy with the idea that we should tax differently. I’m all aboard the LVT train (although I manage to avoid some of the more Georgist nonsense that accompanies it). I’d also drop in my pet point about instability here: it’s not housing prices that vary from boom to bust, it’s the right to build a house on a piece of land: the planning permission bit. Change (ie damn near abolish) the planning system as is and you get rid of that…..and of course an LVT would help as well.

As to wealth taxes, well, I just don’t give a damn, sorry, but I don’t. Inequality per se just isn’t one of those things I worry about.

@26 “Sorry, more self publication”. Au contraire, thanks for the link, and for entering into debate – which is probably for another day, instead of keeping you from the gym and me from my chores.

I think my central challenge to your CiF piece is to the following sentence:

“As the Guardian noted in 2001, speculators are “an exceptionally useful lot, working day-in, day-out, risking their own wealth to supply a thing called liquidity … Without liquidity, markets dry up, prices become volatile and goods become difficult to shift”.

Speculators may have some role at the margin but it is insane – and exceptionally destructive to honest economic activity – when they make up 90% or more of the market.

The claim that letting speculators rule the roost is a brilliant idea really needs to be made to those who lose their businesses due to speculation-driven price spikes & crashes and crucially, to those periodically going hungry across the world every night due to speculation and hoarding in food staples.

“inequality per se just isn’t one of those things I worry about”

weird …. what if empirically it turned out to be the case that inequality had worrisome consequences (lower growth, more social strife), wouldn’t that be worth worrying about? I don’t see how you can have convinced yourself this is not the case. I don’t see how this possibility is any less worrisome than, say, the possibility that a bloated left-wing europhile government might have worrisome consequences, which is something you do worry about. You might say that you’d worry about lower growth and more social strife, not inequality per se, but then wouldn’t you say that you worry about statist governments per se?

Or is it a division of labour – do you leave worrying about inequality to others?

(Giles, hope to see more of you here)

“Speculators may have some role at the margin but it is insane – and exceptionally destructive to honest economic activity – when they make up 90% or more of the market.”

Speculation is almost always larger than the primary market. In fact, in some ways, it needs to be. The futures market for wheat is hugely larger than the entire global grain crop. It also transfers risk from farmers to speculators and if you going to try and transfer and disperse risk you need to be going from a smaller pool of money to a larger one, otherwise you just ain’t dispersed it, have you?

Secondary trading on the stock market is very much larger than primary issue. FX is vastly greater than the trade flows which is helps finance….

Indeed, Robert Shiller’s argument about what allowed the housing boom to get out of control was exactly that there wasn’t a large enough speculative market in which people could go short.

@25, “Tim…I still don’t think the basic point that Strategist raises has been answered.”

I was going to answer that Tim cannot address this point because the stats on wealth inequality are so outrageous that the rich and the crazed little market ideologues that run along after them can only respond by blanking the issue, pretending it doesn’t exist and hoping that thereby nobody else will notice it.

@27 Then Tim responds with “I just don’t give a damn, sorry, but I don’t. Inequality per se just isn’t one of those things I worry about.”

@30 Yes the problem is not so much that casino capitalism has failed catastrophically, it’s that it’s never properly been tried.

“what if empirically it turned out ” but that would be worrying about inequality’s effect, not inequality itself.

That’s what the per se is meant to indicate. Many think that, in and of itself, inequality is something that must be addressed, solved, reduced. I don’t….although I’m always willing to listen to reasons as to why I should, like, as you say possible consequences of it: all people named Tim will wake up with a micro-penis the day after post tax post benefit Gini in the UK hits .50 would get my attention.

But “inequality exists, we must do something” doesn’t convince me. It concerns me about as much as the fact that the Duke of Sutherland owns 280,000 acres of ghastly Scottish moorland. So what?

Speculators do not just have “some role at the margin” they are absolutely central to the role financial markets play in the economy – speculators (partially) determine the prices that in turn (partially) determine asset allocation decisions across the economy. (This is achieved variously by determining the cost of capital across individual firms, pricing the equity of the firms themselves, by setting the incentives for early-state investors who exit in secondary markets, and by allocating capital in primary markets). Remember, a fund manager that does lots of research into “fundamentals” is still a speculator.

“So what?”

That’s not exactly how the Founding Fathers saw it, but what did they know?

Tim,

OK. I thought that’s what the per se was doing, but as I went on to say, don’t you worry about some other things “per se” that also only really have consequential grounds for doing so? anyway, I understand your position.

@34 OK let’s just say, a good servant, but a bad master. My basic point still stands – defend the recent unregulated speculation in (say) food staples. It became the naked extortion of the hungry by the rich. It wasn’t me that said that a very great deal of the activity of the City benefits no-one but the City.

Tim, glad we agree on speculation at least.

But don’t be so complacent as to think you have “proved” that we tax property enough. All you have proved is how misleading aggregate macro-statistics can be – so thanks for that. You have very ably shown that a cross-country comparison of the sum total of property tax tells people precisely nothing about whether the country’s tax system is doing a brilliant or terrible job of taxing large wealth concentrations. But if you think they are not a problem in the first case, I can understand your consequent lack of curiosity about the further intra-country details.

Remember what this thread/post was about: the division of taxation within a society. You can achieve “enough” property taxation by taking £2000 from every property-owning household, flat, – which is close to what council tax* will achieve if the bands never shift.

You would still have a system which is lousy for addressing inequality (if you care about it . . . ) and bad for dealing with asset-based instability. So your OECD comparisons prove very little, or nothing. Buried within those OECD stats might be some countries that have a far more progressive way of hitting their property-tax levels.

Another failing of the OECD methodology is the choice of denominator. Different economies may have very different wealth-GDP ratios. Dividing through by property wealth (as the IFS figure does) gets a very different proportion.

When you get a figure that makes your views too obviously right, it’s time to get suspicious.

Now, I really need to get on with quantitative easing . . .

*(in fact, check out table 14 here http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=10336 for more on that)

Luis, just spotted that: many thanks, this and Liberal Vision are the most interesting places on the web for me.

You don’t normally get such a civil exchange of violently opposed views around!

Why is anyone surprised by this, that uber socialist Margaret Thatcher (directly) taxed the rich more heavily than nu labour ever have.

More broadly, it’s a myth that “right wingers” don’t think the rich should pay much tax. The debate (on LC at least) seems to revolve around; who “the rich” are, with definitions ranging fromanyone who has a tax paying job to a hedge fund manager; and how they should be taxed (on income, wealth or consumption).

Wasn’t it Peter Mandelson who said “We’re very happy to see people getting filthy rich” (and implicitly therefore very happy for the working/middle classes to bear the tax burden of statism)

The debate (on LC at least) seems to revolve around; who “the rich” are, with definitions ranging fromanyone who has a tax paying job to a hedge fund manager; and how they should be taxed (on income, wealth or consumption).

seems reasonable to me, afterall, someone needs to pay it (obv) and the decision needs to be reached as to who to tax more

“But don’t be so complacent as to think you have “proved” that we tax property enough. ”

If I did say that then I didn’t mean to….and I’m reasonably certain I didn’t actually say that anyway.

What I did say and mean is that we don’t tax property lightly, which is The Guardian’s allegation.

“My basic point still stands – defend the recent unregulated speculation in (say) food staples.”

I’ll defend that no problems.

One of the things that speculation does is move prices around in time. It futures and options markets that make the news of a bad harvest in the future move prices now: at which case of course people curb consumption because prices have risen in anticipation of a bad harvest and thus the real food shortages are less bad because we’ve all be consuming less over time rather than carrying on and then finding we have none at all.

But in this specific instance it wasn’t a bad harvest that caused the likely future shortage. It was the insane insistience of idiot politicians that we should all drive our cars on ethanol derived from corn and wheat. We could see that demand would thus be higher than supply at current prices and speculators thus drove up current prices for future harvest. The higher price in the future was brought back to the present.

This set off bread riots and even tortilla riots in Mexico. This made idiot fucking politicians rethink their idea of taking the bread out of the mouths of the poor so that they could drive their limos to the next “let’s solve climate change meeting”.

Me, I think the role of speculation and speculators in this was absolutely glorious, a complete and total vindication of the system. Vote stealing weasel felchers fuck up big time and enact a policy that if left unaltered could starve millions if not tens of millions. The futures markets reacted and by bringing prices forward in time made the politicians realise how crazed and lunatic they were being. Riots in the streets helped to concentrate their minds.

Don’t you think that’s a marvellous system? When the body politic errs we’ve got a system that points out to them the error of their ways?

Twat Munro, you overlook the fact that Mandleson fucking IS right-wing, as are “celebrate huge salaries” Hutton and “encourage the risk takers” Brown, so you can’t quote them as somehow disproving what people here say.

I define people as rich if they earn more than £40,000 a year. Yes, the right-wing trolls here think that’s a normal salary but it isn’t, it puts someone in the top 10%.

@42 Nice try, but what a load of bollocks.

I’m no defender of agrofuels (the “insane insistence of idiot politicians that we should all drive our cars on ethanol derived from corn and wheat” was in fact a product of the corrupt nexus between the American big agriculture lobby and the politicians it buys – do you really think Dubya brought in a program in order to mitigate climate change?), but:

(a) the trigger for the price spike in fact was related to actual harvests as well as expectations of agrofuel demand, so your basic premise is incorrect

(b) the speculation began to feed off itself, ending up with a situation where rich private speculators were effectively hoarding a scarce commodity that people couldn’t live without – this is not a social service, it is extortion.

Even if we accept your premises, which I don’t, your comment should in fact read:

“Vote stealing weasel felchers fuck up big time and enact a policy that if left unaltered could starve millions if not tens of millions. The futures markets reacted and by bringing prices forward in time made the millions if not tens of millions start starving today.”

I realise that under your religion the blind greed of the speculators was guided by the invisible hand to do this alleged social service, but it is quite funny that you draw a veil over the profits made during this episode, and what became of those profits.

Finally. “Don’t you think that’s a marvellous system? When the body politic errs we’ve got a system that points out to them the error of their ways?”

Yes, I absolutely agree. Tortilla riots are an essential means of getting a message through.

“Tortilla riots are an essential means of getting a message through.”

Quite, apparently they are. Friends of the Earth was all in favour of agro-fuels until the riots and then they started to be against them.

Something, somewhere, has to indicate when public policy has been hijacked by idiocy. So why not markets doing so?

And who cares about whether profit is made (btw, futures are a zero sum game so whatever was made by one speculator was lost by another) as long as the system ends up with a good or better result than would be achieved without the actions which led to the profits?

John Kay takes a distressingly anti-speculator view of FX trading today:

http://www.ft.com/cms/s/0/c941f226-9ca5-11de-ab58-00144feabdc0.html

“On Thursday at noon the Bank of England’s monetary policy committee will announce its decision on base rates. Suppose I think the rate will stay the same, and the market expects it will rise. At 11am I make a trade that reflects my judgment. I am right, the market is wrong, and I make a profit – perhaps a large one . . . The social rationale of financial markets is that they discover information and create liquidity. But the benefit to society of more informed guesses of what the MPC will announce in an hour’s time is small. The benefit of creating liquidity at 11am, when the decision is uncertain, rather than at noon, when it is known, is also small.”

In my previous life I had to spend some time combating people like that: ‘scumbags’ in the phrase – and it was a royal PITA – a waste of my highly productive time. But my experience at IG suggests is was perhaps 1% of the trading – JK somewhat overstates how much of “banking” is this cat and mouse.