How to get through the eye of the needle
Yesterday, on Learning from Dogs, Paul Handover published his thoughts on the 6-minute video of a presentation by a remarkably altruistic venture Capitalist, Nick Hanauer, which you can now view here (below). However, firstly, here are some words of introduction to provide necessary context:
Paul has published his thoughts under the title Inequality, a rich man speaks and, in doing so, has provided an excellent summary of Hanauer’s spectacularly-successful business career (e.g. being one of the first to invest in a new fledgling Internet-based sales idea called Amazon in 1995).
The core of Hanauer’s message is this: Venture Capitalists do not create jobs. Jobs are created in response to demand for a product; and demand for a product (i.e. sales) requires people to have a disposable income. That being the case (and ignoring for a moment that all growth in sales is perpetuated by the manufactured discontent peddled by advertisers), Hanauer argues that lowering taxes on the rich does not promote job creation; it perpetuates and exacerbates social inequality.
History is on Hanauer’s side so, I hope you will watch the brief video and see what you think but, for the record, my thoughts are appended below it.
Mr Hanauer needs to have a quiet word with George Osborne and David Cameron in the UK; because one of the few things that the Liberal Democrats are not challenging the Conservative-led coalition government on is their well-publicised and enacted policy of lowering Corporation Tax to the lowest level of any country in Europe – if not the World. They have also lowered personal tax on the wealthy – on advice from those trying to collect the taxes who say so much money is spent on tax avoidance that it is not economic to try and collect it all… Next stop for the UK may be Greece – where so little tax is collected from anybody that it is only good for cheap summer holidays, fine-sounding literature and philosophy, and ancient monuments.
Mr Hanauer’s appeal for the wealthy to shoulder more of the tax burden (not less) is welcome evidence of altruism sadly absent from the pronouncements and behaviours exhibited by most of the super-rich. It is somewhat reminiscent of the refreshing demand of the owner of a peat-extraction business calling for carbon to be taxed or even banned… in order to encourage demand for – and investment in – alternatives.
With people like Mr. Hanauer around, there may yet be hope for humanity to avert the catastrophe awaiting us all if we choose to ignore science, history and economics.