How to create mass prosperity – book by JP Floru

 

    Mr Floru sent me a copy of his book for review. His study of  the USA, UK, Chile, Hong Kong, Germany, New Zealand and Singapore demonstrates how free enterprise policies generate more wealth and prosperity for all.

      He favours reducing the proportion of the state in the whole as the economy grows. He believes in slimming oversized states by prrivatisation and deregulation. He feels the private sector needs to be given enough freedom and space to grow, innovate, create jobs.

        His case studies over time and ranging widely geographically show  how a dynamic free enterprise sector to an economy can transform living standards and lifestyles for the better. He agrees that we should always take care of the poor, and make sure competition and  the rule of law allows the wealth and income  to spread widely for the benefit of all.

        Lower tax rates, stable and democratic government, and a climate which favours risk taking and peaceful commerce are important elements for success. So too are free trade and the need to stand up to vested interests. Whilst China has done well growing from great poverty through state sponsored capitalism, Mr Floru thinks they will need to pursue liberty more extensively to catch US living standards sometime.

        It is an interesting book with some good case studies. I wonder if the Chancellor will  pick up any good points from the success of other countries willing to unleash free enterprise to generate prosperity? The USSR, Cuba and other communist states illustrated just how bad state planning proved for both living standards and individual liberty. The great experiment between 1945 and 1990 in Europe showed the planned system in the East was far worse than the mixed system in the West. The Asuian success stories show the power of free enterprise to lift people out of poverty.

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62 Comments

  1. Single Acts
    Posted March 8, 2013 at 6:08 am | Permalink

    Speaking of things that are bad for liberty, if a theoretical member of the government knew of the alleged criminal wrong doings of another theoretical member of the government, wouldn’t he be obliged to report them to the police?

    If it emerged the allegations were proven in court to be true and prima facie evidence emerged during the trial that the first theoretical MP knew of this and he hadn’t reported to the police, could he remain in government? theoretically speaking.

    (etc etc -ed)
    Would such theoretical conduct by the hypothetical MP further damage the standing of MP’s in the public eye?

    Reply I do not wish to go into any actual example of failure to report a crime, as I do not have any facts about such a case myself and these become the topic of proper investigation and judicial process.

    • lifelogic
      Posted March 8, 2013 at 10:10 am | Permalink

      Further damage the standing of MP’s in the public eye?

      Is that possible given all the ratting on promises, the expenses, the many dubious “consultancies” Chris Huhne, David Laws and all the rest?

  2. Nina Andreeva
    Posted March 8, 2013 at 6:31 am | Permalink

    Absolutely no chance from Osborne ! Unfortunately for those of us who work, pay our taxes and obey the law watching his upcoming budget speech will be just like watching a junky being given another cupful of methodone i.e. more money printing, currency trashing, cost of living adjustments for the benefits class etc.

    I am sad to say that I cannot see a Lee Kwan Yew in the Commons. Someone who knows Mr Floru’s ideas are correct and has the strength to enforce the necessary discipline on the British to change their ways for their own good. Following on from this, Adam Posen of the BoE’s MPC has an excellent article in the FTs archive (it was published around two weeks ago) saying that until we get some serious supply side structural reforms the coalition govt has essentially put us on a three year road to nowhere.

    • lifelogic
      Posted March 8, 2013 at 8:42 am | Permalink

      Indeed three wasted years, it is now probably too late and the Libdems will resist anything sensible anyway. Whatever Cameron/Osborne does investors will see the prospect of Milliband the state sector union place man in two years time – undoing any little progress that has been made and wrecking the economy further.

      Still Cameron only has himself to blame for throwing the election away with the anti Tory big state, pro EU, fake green agenda. Thatcher effectively won four elections (one with her man Major, before people found out what he really was). The lefty and pro EU figures Heath, Major and Cameron were all complete electoral and economic disasters. When will the party finally learn from history.

      • John Doran
        Posted March 9, 2013 at 12:53 pm | Permalink

        Cameron thinks he’s on a crusade to “save the planet” thus this country comes third.

        Here’s a glimpse of a very hopeful future:

        (unchecked ref removed ed)

        Allan Savory has learned how to green the desert & reverse climate change by using grazing cattle.

        And he’s proved it over 5 continents & 15 million hectares.

        Simply marvelous, & a smack in the face for the Global Warmist eco-marxists, & the Others-ed) at the EU.

    • Single Acts
      Posted March 8, 2013 at 9:01 am | Permalink

      I honestly think most of ‘em know the reality, but they can’t or won’t deliver it for various reasons. I think it was Noam Chomsky who said that speaking truth to power was over-rated because chances are, power already knows the truth but is busy ignoring it.

      • lifelogic
        Posted March 8, 2013 at 10:11 am | Permalink

        Indeed.

      • lifelogic
        Posted March 8, 2013 at 10:14 am | Permalink

        Then again when you listen to many at the top of say government or the NHS (Gus O’Donnell, Baron O’Donnell for example) they clearly have not got a clue about the appalling mess at the coal face of the organisations over which they preside.

        Either that or they are very good liars.

        • Atlas
          Posted March 8, 2013 at 1:47 pm | Permalink

          I think experience is telling us that it is “Both”.

      • lifelogic
        Posted March 8, 2013 at 5:49 pm | Permalink

        Ignoring it or covering it up.

        Still Cameron has admitted he have no magic money tree, so some progress is being made.

    • oldtimer
      Posted March 8, 2013 at 9:08 am | Permalink

      Mr Posen sounds far too optimistic. The UK economy is not on a road to nowhere. It is on a road to third world status and a world of rationing.

      We are already in the world of rationing so far as energy is concerned, currently by price but soon, no doubt, by supply. The first is undoubtedly deliberate; I suspect the second is also. It is the DECC version of shock and awe. Meat consumption is next, as evidenced by yesterdays media onslaught on the hazards of eating processed meat (note they only spoke in terms of relative risk, not of absolute risk). One commentator said we should only be eating grass fed meat which, he freely acknowleded, costs more and would reduce consumption. When that objective is accomplished attention will turn to the evils of grass fed cattle (methane – already the subject of a Cabinet Office paper during the Blair government). Another example of rationing by price is the airport tax. There is a school of thought that the world is populated by too many people and that it must be reduced. The Royal Society has just elected one such person, Paul Ehrlich, as a Fellow of the Royal Society. He believes in population reduction and control. The government says it relies on scientific advice to inform its policies.

      It seems to me that Cameron belongs to this school of thought. He was in favour of the proposed Copenhagen Treaty. He remains an advocate of more world government. As PM he has presided over many decisions which serve to constrain the efficient operation of the economy (notably through targeting a mix of taxes and subsidies). There will be no change so long as he remains PM.

      • Nina Andreeva
        Posted March 8, 2013 at 11:03 am | Permalink

        OT if you want to avoid prostrate cancer (which is the essence of yesterdays stories) stay away from processed meat that contains sodium nitrate. Its very hard to find such stuff but (some-ed) sausages do not have it

        • Nina Andreeva
          Posted March 8, 2013 at 12:28 pm | Permalink

          Whats wrong with mentioning a well known super market chain, they do have a royal warrant you know?

          Reply : I am not seekign to advertise one shop over another here, and have not checked out the product you claim is good for you.

      • Man of Kent
        Posted March 8, 2013 at 1:54 pm | Permalink

        The Royal Society is a huge disappointment in that it follows ‘post normal science’ -the primacy of political opinion over facts.

        Is anyone aware of a procedure to remove the ‘Royal’ bit of the title ?

        Perhaps the Duke of Edinburgh could be persuaded to head up an initiative.?
        Prince Charles can look after what’s left.

        • John Maynard
          Posted March 8, 2013 at 6:39 pm | Permalink

          As an encore, perhaps they could revoke the royal charter of the ridiculous RSPCA, long since captured by the (people of questionable views -ed).

          Reply: NO reasons given as to why the RSPCA deserves this treatment, and not a line I want to pursue.

      • Graham C
        Posted March 8, 2013 at 1:54 pm | Permalink

        I feel I have to agree with your comment

      • zorro
        Posted March 8, 2013 at 9:59 pm | Permalink

        Sustainable development…….Agenda 21………

        zorro

  3. lifelogic
    Posted March 8, 2013 at 7:10 am | Permalink

    Cameron, judges by his actual actions, is more or a Cuba/ EUUSSR person. His endless tax increases (yet less actual tax revenue), his desire fix insurance costs and bank bonuses by government dictat, his failure even to give some vision of ever moving to a smaller state sector, his increase of the deficit and the debt, his forcing of absurd energy and safety certificates on the every one, his failure to sell the banks or get them to lend (other than to governments), his expensive energy policy bases on a discredited religion – all these indicate someone rather deluded in his sense of direction.

    At least he seem to have discovered, yesterday, that there is no magic government money tree. Perhaps he is coming slowly round, but even if he does the Libdems with strangle anything sensible.

    We have a perfect example of success in Hong Kong even done under UK rules. Tax rates of a maximum of Individuals are taxed at progressive rates on their net chargeable income (income after deductions and allowances) starting at 2% and ending at 17%; or at a standard rate of 15% on net income (i.e. income after deductions), whichever is lower. There is no capital gains tax, no dividend tax and no inheritance tax, no VAT in Hong Kong. Compared to Cameron’s 45%, +NI 23% + 28% CGT, 20% VAT 40% IHT.

    So if you invest £1M in Hong Kong and get a 10% return for 20 years, then die you leave £5.11M to your children, but in the UK just £1.75M (actually a small real loss after 3% inflation). Why on earth invest in the UK when the government tax 66% and wastes it?

  4. Andyvan
    Posted March 8, 2013 at 7:48 am | Permalink

    Mr Floru sounds like he has a grasp on reality. Sadly there are very few politicians that share those views. In large part I think that is because most are career politicians and owe any business experience to political or family influence. Many are directors of private firms but very few have had to cope with the real grind of setting up a business, coping with the mass of regulation and being fleeced by the state on a daily basis, often ending up with less money for themselves that the bloke that sweeps the floor. A life of privilege and unearned advantage blinds MP’s and bureaucrats and we all suffer for it in the end.

  5. Nick
    Posted March 8, 2013 at 8:19 am | Permalink

    Does he have anything to say about hiding the pensions debts off the books?

    The debts that are going up at 736 bn a year (between 2005 and 2010 according to the ONS. )

    That’s on top of the deficit.

  6. roger Farmer
    Posted March 8, 2013 at 8:28 am | Permalink

    Sounds like a real Conservative. I wonder where our lot went on their road to metro elitist socialism.

    • lifelogic
      Posted March 8, 2013 at 1:39 pm | Permalink

      They keep going off the road with Heath, Major and Cameron, even with Mrs Thatcher to a fair degree. The BBC, the civil servants, the EU are all pushing them completely the wrong way.

  7. Peter Davies
    Posted March 8, 2013 at 8:31 am | Permalink

    Well you have the voice and influence, why not use the case studies in this book to put to the 650 MPs or ask them all to read it?

    Capitalism isn’t perfect and it has a double edged sword if not managed properly but the over management and red tape we are seeing now from the likes of the EU will only serve to move it away to more competitive parts of the world – the Ford Transit factory being one example

    • lifelogic
      Posted March 8, 2013 at 10:58 am | Permalink

      HSBC and Rolls Royce Aero to follow soon surely if they have much sense.

      • Bazman
        Posted March 8, 2013 at 9:15 pm | Permalink

        They don’t pay much tax here anyway despite playing on their British credentials and HSBC has been prosecuted for money laundering in the USA too. We might be well shut of them by seeing who is daft enough to subsidise them to this extent. By the way lifelogic. We don’t respond to threats do we?

        • Edward2
          Posted March 9, 2013 at 12:45 pm | Permalink

          So you say Baz, lets kick out of the UK two of the biggest employers this country has.
          For example Roll Royce Aerospace employ huge numbers and keep many small companies busy, who in turn employ thousand more.
          Great idea.

  8. lifelogic
    Posted March 8, 2013 at 9:01 am | Permalink

    Those in control in the UK and EU are simply not interested in “mass prosperity” more in “personal and state sector prosperity” though taxing and leaching the masses in to submission.

    • Bazman
      Posted March 8, 2013 at 9:16 pm | Permalink

      Or leaching the masses by profiteering?

  9. Electro-Kevin
    Posted March 8, 2013 at 9:23 am | Permalink

    All that is needed for mass prosperity is peace, easy taxes and the tolerable administration of justice.

    No book required.

    Labour (in collusion with all parties) brought us: social instability(mass immigration), complex tax codes, and a police state (political correctness – the Tories later brought us the arrest of journalists without charge)

    Where oh where are we going ? To the gulags I expect !

    H/T Adam Smith via blogger Idle

    • Denis Cooper
      Posted March 8, 2013 at 5:50 pm | Permalink

      Here’s another one from Adam Smith:

      “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

      I’m reminded of that every time EU leaders meet together.

  10. Richard1
    Posted March 8, 2013 at 9:35 am | Permalink

    Sounds sensible stuff. We will never create prosperity in the UK with the level of state spending, taxation and borrowing we now have. Unfortunately the commenteriat, esp the BBC, and much of Parliament is dominated be people who always want the Government to ‘do something’ (ie spend taxpayers’ money) and use weasel words such as ‘fairness’ to justify prosperity-destroying interventions. Leftists are of course in denial of the sort of facts which this author refers to, which is why there is any debate at all.

    • lifelogic
      Posted March 8, 2013 at 11:06 am | Permalink

      Indeed the lefty, big state, pro EU, arty, fake green science BBC is so much of the problem. They set the absurd anti wealth, anti business, anti ( unscrupulous as they always would say) landlords, big state, anti science, magic money tree economics and ever more regulation.

      These set the tone to the whole nation. What did they do about it appointed Lord Patten, Tony Hall and James Purnell for goodness sake!

  11. Mike Stallard
    Posted March 8, 2013 at 10:02 am | Permalink

    “unleash free enterprise to generate prosperity”
    This is like a red rag to the Liberal Elite.
    Put the Tory Right in charge! They will just snaffle all the goodies and downtread the Poor!

    Here is a mad idea:
    Let the State stop pretending it actually cares about the “vulnerable” when it quite obviously does not. What the State cares for is the State. (Remember the covering up of the recent hospital scandal where thousands of people actually starved to death in filthy wards?) What Politicians quite often care about is re election (Mr Osborne for example is in charge of that).
    And the State is ridiculously expensive. That is why the State Debt is rocketing.

    The people to deal with poverty, crisis management, family problems and starvation, even hospitals (as in USA), are the Churches.
    We are motivated. We care about people first. We believe in the common sense of the Good Samaritan. We are also led on by intangibles. At our best, we are fantastic.
    OK we have some bad bits. Like the Irish nuns and their “fallen women”.
    Where we live, the Churches are in the forefront of this Christian work. Nobody else, for all the “easy speeches that comfort cruel men”, touches us.

    And cutting back the State would solve the debt/deficit challenge at a stroke.

    • uanime5
      Posted March 8, 2013 at 6:15 pm | Permalink

      The people to deal with poverty, crisis management, family problems and starvation, even hospitals (as in USA), are the Churches.

      Given how badly this has failed in the USA it would be a disaster if the UK implemented these plans. These options are only cheaper because they provider poorer care to fewer people.

  12. Glenn Vaughan
    Posted March 8, 2013 at 10:08 am | Permalink

    I hope copies of Mr Floru’s book finds their way to 10 and 11 Downing Street and also to the House of Commons library.

    Better still, find him a safe seat (preferably somewhere in Oxfordshire) in the hope that he will lead us out of this current mess.

  13. Neil Craig
    Posted March 8, 2013 at 11:48 am | Permalink

    The statistical survey Habits of Highly Effective Countries linked here with quotes http://a-place-to-stand.blogspot.co.uk/2006/12/habits-of-highly-effective-countries.html came to the same conclusion as did Adam Smith a couple of centuries ago

    “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice” – Adam Smith

    The one historic exception to this is that during the 1930s the USSR achieved 10% annual growth. The reason for this is that Lenin decreed “the electrification of the whole country” as the jey obhective and in that period electic capacity grew 23% a year.

    This demonstrates Pournelee’s dictum that
    Economic Freedom + Cheap Energy = Fast Growth

    I could wish that the Conservative party actually believed in and was willing to promote either of these policies. Fortunately UKIP is.

    These facts are so clearly true and experience proves it, that I am convinced that any party that stands up for them & isn’t censored by our state broadcaster, will convince the vast majority of electors and that any party that convinces the large majority of electors that they alone can and will allow growth will win.

    • uanime5
      Posted March 8, 2013 at 6:20 pm | Permalink

      Surprise that you’re praising “Habits of Highly Effective Countries” when it says things like this:

      P9 “When published data for all countries has been analyzed the correlation between higher taxes & lower growth (which exists in OECD countries) is not found”

      PP 54 & 55 – Countries with high taxation levels are not automatically going to have lower growth rates than those with high taxation. This comes as a surprise to free marketists and somewhat less so to me, who at one stage was a great supporter of the state capitalism which really did produce high growth in the early days of the USSR.

      So high taxes don’t cause low growth.

      • David Price
        Posted March 9, 2013 at 7:33 pm | Permalink

        You are trying to distort the plain meaning of the full text.

        A more correct context comes from examining the entire paragraph on page 9;

        When published data for all countries has been analysed, the correlation between higher taxes and lower growth that exists when considering only countries with more sophisticated data, such as OECD countries, is not found. On the other hand, interventionists are mistaken in their assumption that increased government spending, especially deficit spending, coincides with job creation and higher growth. (There is evidence that ‘public works’ and other methods of ‘stimulation’ can increase short-term growth but that they do so at the expense of long-term growth, creating economic distortion because of the temporary diversion of resources.)

        IE a correlation does exist between high taxes and lower growth in OECD countries which certainly includes the UK. Also, increased government spending does not result in job creation or higher growth.

    • uanime5
      Posted March 8, 2013 at 6:24 pm | Permalink

      Also here’s another Adam Smith quote that those who praise the free market regularly ignore:

      What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.

      The Wealth Of Nations, Book I Chapter VIII, p.96, para. 36.

      • Edward2
        Posted March 9, 2013 at 12:14 pm | Permalink

        Indeed Uni this is why Europe and USA are mixed economies.
        Its what people have continually voted in favour of, for decades.
        There isn’t a free market economy I can think of, perhaps you can name one.
        So the debate isn’t about the extremes of total State control versus total free markets but about what size the State should be and what it should concentrate on trying to achieve.
        Then we need to decide on the rates of taxation and its effectiveness in creating the necessary revenues without the continual need for high levels of deficit and debt.
        High taxation can cause poverty.

      • Richard1
        Posted March 9, 2013 at 5:18 pm | Permalink

        Indeed not. That’s why socialism got overthrown in Eastern Europe and has been abandoned in China. Under socialism most people are poor and miserable. Capitalism is not perfect – and all developed societies are in any event mixed economies – but it produces an awful lot better outcomes than socialism.

  14. JimF
    Posted March 8, 2013 at 12:47 pm | Permalink

    In new news Adam Posen has apparently thrown in the towel with his idea that QE = prosperity. Somebody told him what we already know- the secret that supply side reforms are needed en masse to bring about any change in our sclerotic economy.

  15. acorn
    Posted March 8, 2013 at 1:05 pm | Permalink

    I see Osbo has not increased his understanding of modern economics while I have been on the other side of the pond. I see he lost 26-1 on bankster bonuses. Anyway Mr Floru’s book is interesting in the cases he left out of the book; the ones where MMT can tell you why they are unlikely to become “heavens on earth”.

    Likewise, the political stalemate in the U.S. economy means government spending has remained high, and the U.S. economy has flourished, a bit, because of it. If you think our politicians are bad, you should witness the bought and paid for thickos in the U.S. congress; unbelievable! Why the fifty States don’t secede from the beltway Union, is a mystery to me.

    In case you didn’t know it already, I am advised that the UK economy will be in “stagflation” until the next election and then for a bit after; assuming the next lot are not deficit hawks. We apparently need; (a) to find a “political entrepreneur” to head up the UK plc; (b) we need to stay in the EU; (c) adopt the Euro currency and; (d) learn how to make things again instead of being the banking dirty tricks department for big US banks.
    Having, finally, realised that I had come from an insignificant country that was near Germany, the United Airlines flight attendant lady confirmed it when she said; as we came into Heathrow, “Do you need a landing card or do you have an EUROPEAN passport! I nearly pulled her into my lie-flat seat to give her a history lesson.

    • Mike Stallard
      Posted March 8, 2013 at 4:41 pm | Permalink

      The USA seems to me to be rather onto a loser. But then, it often looks like that and then surprisingly recovers. I do not really like the (social situation-ed) myself: there seems to be an awful lot of anger, an awful lot of entitlement and an awful lot of armed violence.

  16. Bert Young
    Posted March 8, 2013 at 2:15 pm | Permalink

    An extremely sensible and old friend of mine has just sent me a copy of a draft letter to the Daily Telegraph :
    ” Where are the major Tory figures , past or present , who are capable of advising Mr Cameron that if he were to offer his resignation now he would go down in history with fame as the man who (a) not only had the wisdom , initiative and ability to forge an unexpected and essential coalition when most needed , but (b) also offered to resign promptly just in time to give a suitable successor enough scope to set the direction to secure a resounding victory in 2015 ? ”
    He continues with advice on what a successor would need to be clear and emphatic about in a manifesto :
    ” (1) Recognise the first duty of government as defence and armed forces ;
    (2) control the number and quality of immigrant , taking advantage of island status
    (3) cut the cost of welfare to the originally – intended vital “safety-net” needs ;
    (4) give the people a choice on EU membership and resist erosion of sovereign rights ;
    (5) support natural family units via tax , and recognise suggestions of sodomy as evil ;
    (6) recognise the duty of public education to encourage ability to excel at all levels ;
    (7) avoid over-management and cut out excessive bureaucracy at all levels “.

  17. Antisthenes
    Posted March 8, 2013 at 2:15 pm | Permalink

    Hardly a new message we on the right have been saying as much for a very long time now. It is too late the left have so manipulated and messed things up that weaning the general public off dependency on the state at the level it currently is is beyond the capabilities of even the most determined right wing political leader. The scale of dependency through wholesale wealth distribution requires large state, heavy regulation and authoritarianism and that the majority want and/or are prepared to accept as the price for the entitlement and privileges modern day government offers them. Of course eventually like other centrally controlled nations the whole thing will collapse but to most that does not concern them and will only do so when collapse happens to their generation which is looking more and more likely to be this one.

  18. margaret brandreth-j
    Posted March 8, 2013 at 2:18 pm | Permalink

    Again John I will make an observation based on national behaviour and historical context. Nations behave in acoordance with their history, their ethics and perceptions which have grown , but changed very little from generation to generation. I am all in favour of free enterprise and an atmosphere which is conducive to creation and expansion , however it is what the public allow enterprise to do. There has to be buyers in all of this and what may have been appropriate to China 1945 onwards , would simply not be allowed in this Country.

    • Mike Stallard
      Posted March 8, 2013 at 4:44 pm | Permalink

      In the ancient world, slavery was common. As it grew, ordinary workmen were forced out of business and, in desperation, they too became slaves. This left the very, very rich and slaves with nothing much in the middle. Add in a shedload of taxation…..

      Instead of looking inside Great Britain, look at it from a world perspective. See?

  19. Posted March 8, 2013 at 2:51 pm | Permalink

    The Federation of Small Businesses has been telling successive Governments to do just this for decades yet recently “Tarzan” Hezza was on BBC Radio 4 having the gall to say that no-one came forward from businesses to say what was needed.
    Case of in one ear and straight out of the other with apparently nothing in between to absorb the message! ‘Twas ever thus. They may hear the message – they just don’t act on it!!!

  20. Dennis
    Posted March 8, 2013 at 2:58 pm | Permalink

    ‘How To Create Mass Prosperity’ quickly followed my mass poverty and degradation.

    Obviously the writer does not know the first piece of economic information which should be given to the first class at the primary level – that is the answer to ‘what is the fundamental source of economic wealth/growth?’ Has anyone here ever heard any politician/economist ever mention this?

    Knowing this answer will open the eyes of what continued growth will engender.

  21. Barbara
    Posted March 8, 2013 at 3:08 pm | Permalink

    I note the encouragement for growth and freedom for busineses, all positive stuff. Where we come to the poor and the will to take care of them I have serious doubts. Its been my reality to see, if not controls in place, poverty wages and long hours. OK if you’re the prospering business, but not for the worker. I’m all for busineses expanding and being successful, but not at the expense of workers rights and fairness. Greed as a bad habit of surfacing and bad practices appear, we must realise that is why they employ Eastern Europeans as they pay them less that the legal minimum wage. It happens and should be stopped.
    Getting people off benefits is hard when there are no jobs to go to, no prospects for the future look slim, and if you cut benefits to the level of nearly starvation any country is asking for trouble. What we should be considaring who claims benefits? Foreigners claim after a short while working here, but those who are born here are taking the load on their shoulders too. Not all benefit claimants have ‘never worked’ many have been unfortunate to lose their jobs; and don’t know who’s next in this volitile world. Benefits should be made available to British Citizens only or those who have worked here for a minimum of five years only. It should also include access to health and education systems. Unless we are prepared to face up to people abusing our systems and doing something about it we won’t get anywhere,.

  22. Rods
    Posted March 8, 2013 at 4:51 pm | Permalink

    I have ordered a copy of the book as it looks interesting and thank you for bringing the book to our attention.

    When will we see a Conservative Government start to implementing real cuts in public spending (ie. not just to cover the ever increasing interest burden?) followed by tax cuts and supply side reforms? Under David Cameron and George Osborne so far we have had the reverse with tax rises and rising Government spending, just not quite as fast as under Labour and ever increasing business regulation and tax complexity. Some by EU Diktat like contract staff who work for over 12 weeks having the same rights as permanent staff. The result less contract work and labour market flexibility. Realistically, the answer is never as these laws are made by an unelected dictatorship called the EU.

    There will be no meaningful changes for the better under the current Government, so as they and the BOE talk the pound down all we have got to look forward to is more stagflation, stagflation and stagflation with the continued falling of real wages!

  23. uanime5
    Posted March 8, 2013 at 5:09 pm | Permalink

    Let’s examine the countries listed by GDP per capita, along with the top 5 countries (IMF figures):

    1 Luxembourg $115,809
    2 Qatar $98,144
    3 Norway $97,607
    4 Switzerland $83,073
    5 Australia $66,371

    12 Singapore $49,271
    14 United States $48,328
    18 Germany $44,111
    22 United Kingdom $38,811
    25 New Zealand $35,973
    26 Hong Kong $34,259
    46 Chile $14,403

    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita

    While not including any of the top 10 countries with the highest GDP per capita in his research isn’t fatal for Mr Floru’s analysis it does indicate that there may be other ways for a country to be successful.

    Also just because privatisation works in some industries doesn’t mean that privatising every industry will automatically be as successful and beneficial for society. Some industries are naturally uncompetitive due to their high entry barriers, so privatisation will always result in to higher costs.

    In other news the OBR has rebuked Cameron and stated that austerity will cause short term reductions in growth.
    http://www.telegraph.co.uk/news/politics/9918107/Cameron-rebuked-over-austerity-claims.html

    • oldtimer
      Posted March 9, 2013 at 9:21 am | Permalink

      Yes it helps to have an economy that rests on, or is significantly boosted by access to natural resources – such as Qatar, Norway and Australia in your top five. HK and Singapore are notable examples of city state type economies that depend on the wit and energy of their inhabitants not on the possession of energy or mineral resources. His other examples (NZ excepted) are larger, more diversified economies than offered by Luxembourg or Switzerland. As such they seem reasonable choices to make.

  24. Jon
    Posted March 8, 2013 at 7:37 pm | Permalink

    I like a hypothesis that seems to easily make sense which this seems to like the correlation with liberty and growth.

  25. Bazman
    Posted March 8, 2013 at 8:35 pm | Permalink

    Where in his book does it say we should run the economy entirely for the benefit of a financial elite and in this way the money will trickle down to the masses in the form of jobs as demand will be increased enough? It does not and if it does then the book is wrong. The financial elite will have to take some sort of hit in order for this to work, further impoverishing the poor and making the rest more desperate is a dead end. This idea is common on this site as comments as why British cannot do the jobs of the East Europeans is somehow puzzling showing a complete lack of understanding at the most basic level of the economy, immigration and the British lower classes. Toned down enough for you John? Such bigotry deserves abuse in my opinion, because if is not as if they do not understand is it? Shame on them.

    • Edward2
      Posted March 9, 2013 at 12:36 pm | Permalink

      If you want to make everyone more wealthy you need to have a plan.
      The method in Europe and the UK of higher State spending and higher taxes has not been very successful.
      His book makes the argument that a smaller sized State will result in lower taxes which will leave more money into the pockets of everyone.
      His book does not say “we should run the economy entirely for the benefit of a financial elite” nor that success will come from further impoverishing the poor, that is something you have imagined.
      Its strange that in the sixties and seventies when there was a rise in unemployment ora reduction in consumer spending, the Government used to reduce taxes and ease credit availability in the Budget, to stimulate demand.
      Now they seem to think more taxes to be spent by the State is the answer.
      With a current State size of approx 50% producing a huge spending stimulous why aren’t we all rich?

  26. David Langley
    Posted March 9, 2013 at 9:54 am | Permalink

    I read that our government does not understand the dynamic of the EU project and that all the remaining EU countries do. The prospect of remaining “outside” the project does not worry them unduly as they are now trained into thinking and acting as one. The major contributor countries to the project have long realised that they will be dragged down financially until there is a level playing field. This is due to the past corrupt accounting that allowed accession of countries having no comparable economic activity into the EU, and have previously survived in a low value agrarian economy.
    Our cash helps them to equalise but when the inward EU money stops so does there new found ability to

  27. David Langley
    Posted March 9, 2013 at 9:55 am | Permalink

    (Cont) spend and have a binge with the Euro.
    Cameron will never get it in a month of Sundays.

  28. John Doran
    Posted March 9, 2013 at 12:44 pm | Permalink

    This is where foreign aid should go.

  29. Ashley
    Posted March 9, 2013 at 4:22 pm | Permalink

    In this country we are taxed on earnings, consumption and savings. Worse still the tax rate rises in each instance with increased activity and in many cases we pay tax on tax. If you earn more your tax rate goes up and if you opt to purchase a more expensive home the rate of stamp duty goes up. All of this stifles economic activity as as Reagan used to say government is not the solution. It’s the problem.

  30. Duncan
    Posted March 9, 2013 at 6:33 pm | Permalink

    Asking politicians to assume Floru’s policies of free enterprise along with small government assumes that they (the politicians) have the interests of the country at heart. The lot we have don’t – they are more interested in power and feathering their own nests – and therefore are interested in quite the opposite.

    Beppe Grillo has found the answer – get rid of the lot of them and replace with a system that ensures politicians who will serve the interests of the nation rather than their own.

    Hail Beppe !

    ,

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  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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