October 31, 2016
Sir, Jonathan Ford is on a very right track with his “How subsidy culture keeps Britain’s green industry in the black” October 31.
Of course we all want more jobs, a better and more sustainable environment, more equality in the world (at least most of us), and many other good things. But, in order to afford helping that to happen, we must learn how to keep the profiteers of those causes and fights at bay.
That, we do much better by providing the right economic signals, than by having some few deciding on how to allot among some other few, our contributions to the cause.
For instance, instead of capital requirements for banks based on perceived risks, credit ratings, and that only help to increase inequalities, we would all be better if regulators used some based on job creation and environmental sustainability ratings. Some lower capital requirements when financing those social goods would allow them to earn higher expected risk adjusted returns on equity.
And we should also use specific taxes that send the right economic signals, without causing too much pain or generating direct distortions. For instance a huge carbon tax, which revenues are all poured back to the economy by means of a Universal Basic (variable) Income, would be a great help, for the environment, for the economy, and therefore for jobs.
Sir, the problem though is that there we have to go up against the re-distribution profiteers, and as you know they are very very strong, since most of them are so firmly entrenched as do-gooders’ in the public sector.