Why we should say "thank you" to those billionaires

The old ones are the golden ones:

“We conclude that only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers”

And there's no reason to suppose that social returns to technological advances have stopped happening since 2001 or that William Nordhaus's estimation of how those returns are shared has changed. Which means that, if that 2.2% return is right and Zuckerberg is worth $100 billion, then the total social value of Facebook is £4.5 trillion. Even if Facebook's value to society is only half that, it still demonstrates why we need billionaires - their wealth gives us a tiny glimpse of the value created by their innovations.

Taken down to a slightly less elevated level, this still applies - the social value created by entrepreneurs vastly exceeds the returns they get personally. Far from enviously eyeing up that wealth we should, as a society, be looking those billionaires in the eye and saying "thanks for helping make society so much better". The biggest lie in politics is that these billionaires - mere millionaires too - are somehow rich because others are poor. Mostly the opposite is true - billionaires got rich because their ideas and innovation made society - all of us - richer.

Instead of attacking the rich simply for being rich or businesses for delivering great value to consumers, maybe we should be a little more specific. There are some people and businesses who get rich from rent-seeking, from persuading politicians to grant exclusivity or protection, and from farming the largess of public sector grants. By all means have a go at this, at those cashing in on a housing shortage created by government planning rules, at those sitting in stately piles funded by cash from agricultural subsidies and those pulling in millions offering consultancy to the NHS. But most rich people are rich because what they've done benefited all of us in society and we should celebrate them.

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A property-owning democracy is a great thing - we need more of it, not less

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Although many people bemoan right-to-buy, suggesting that it was a terrible thing that the government allowed ordinary working people who'd been stuck in council housing to buy those houses at a discount. The truth, of course, is that this was perhaps the biggest transfer of wealth to the ordinary man in modern history. And for all that many of those homes were sold on to rent-to-buy businesses and, for a few, created a painful burden of debt and trouble, the overall effect was good - liberating people from dependency and spreading wealth to people who had none before. Indeed it angers me that the same 'progressive' folk who complain about wealth inequality also tell me that right-to-buy was wrong.

Today, in another time, we talk of there being some sort of housing crisis. The National Housing Federation (in a truly awful piece of cod-research) using soap opera characters to make a point, people at think-tanks proposing rent controls and writers suggesting that there is no chance of their children owning a home - low interest rates and high prices have driven the cost of home ownership beyond the reach of the ordinary. And these people are right about there being a problem but wrong in denying that the desire to own a property - a little patch of England that's ours - is not only good for the owners but good for society as a whole.

Over 90% of Hungarians own their own home compared to a little over 60% on the UK. Yet property prices in that land remain affordable - not just in our eyes but in the eyes of Hungarians. And the reason for this is quite simple - the Hungarian state has not spent years creating an artificial shortage of development land. In principle you can buy a plot of land and build a house on that plot. Just as was the case in the UK up to 1947 when the Labour Party (as it did with everything else) decided that it knew better and nationalised the right to develop. It's true that the various planning acts all presented a "presumption in favour of development" but it was a presumption not a right and government could and did remove that right on a whim.

Today less than 10% of the UK has houses built on it (and yes this includes the gardens of those houses) and we have approaching a third of our land set aside with special protections that make an absolute mockery of this "presumption in favour of development". Every small encroachment into that undeveloped land is resisted vigorously by local people - I know for I've been involved in several of these campaigns. Even a week ago the government was bouncing between the need to build more houses so as to meet demand and the political imperative of protecting those 'green fields'.

Even when proposals are made that would see sensitive and properly scaled development in places people want to live, we find the self-interest (wrapped up a charity in the form of the National Trust, CPRE and National Housing Federation) in opposition to providing people with homes. Except no - they want those homes to be somewhere else, new slums crammed onto ex-industrial land. These people are the modern day versions of Henry Potter - talking about a "thrifty working class" while denying them the chance to live in a decent home. They want a world where it's fine to rent - words usually expressed by people who aren't renting and have no intention of renting. Indeed, this word such important people want is one where housing is owned by corporations, associations and governments rather than ordinary working people.

Now here's a thing - how about we set our minds to thinking how we get back to the time when, as my sister describes:

...property prices even twenty years ago were high compared to those enjoyed by the post-war generation. My parents bought their first property when I was three. My mother didn't work, so the mortgage was granted on the basis of my father's income alone, and he paid all of it. A single male middle-income earner could afford the mortgage on a three-bedroom semi in the suburbs of London. 

It won't be easy - the desire to protect the wealth locked up in your and my house is very strong. But we can begin to think about opening up self-build and small development. We need a new generation of right-to-buy to prevent the residualisation of social housing. And we need to change the assumptions about housing as an investment.

But the most important thing is that we need to say again - and keep saying again and again until it really sinks in - that property ownership is a good thing, that we need more of it, that 'social housing' is a necessary evil not a desirable long-term solution to anything and that locking ownership into big government, big business and big associations destroys liberty and undermines a free society. Ownership is central to our civilisation, it is not an optional add-on that can be tweaked and adjusted by the whim of some patronising elite.

A property-owning democracy is a great thing indeed. Let's have more of it!

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Oxfam - knowingly misleading us about wealth and income

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I don't take the view that Oxfam's charitable purposes prevent them from raising concerns about poverty in the UK. Indeed, you can look at the charity's purposes here:

OXFAM'S OBJECTS ARE TO PREVENT AND RELIEVE POVERTY AND PROTECT THE VULNERABLE ANYWHERE IN THE WORLD.  OXFAM FURTHERS ITS OBJECTS THROUGH INTERLINKED ACTIVITIES OF HUMANITARIAN RELIEF, DEVELOPMENT WORK AND ADVOCACY AND CAMPAIGNING.

You may feel that the way in which the charity interprets these objects can be challenged - I'm guessing this lies behind Conor Burns' decision to report Oxfam to the Charity Commission yesterday. You may also feel that Oxfam, in the minds of the public at least, is there to respond to the humanitarian crises that blight humanity and to support programmes to lift the poor out of poverty. And that publishing adverts that are more-or-less indistinguishable from the current campaigns of the Labour Party is less than wise. You'll definitely feel that the ad hominem attacks on Conservatives by Oxfam are also unjustified even if those Conservatives are critical of the charity's work.

But none of this contravenes Oxfam's purpose. What we should be more concerned about - other than Oxfam's focus on rural environments and the immoral sustaining of poverty-creating subsistance farming - is the manner in which the charity uses a dissembling approach (some might say deliberately misleading) to promoting its point:

1% of Britons own the same amount of wealth as 54% of the population. RT if you think this is unacceptable
— Oxfam (@oxfamgb) June 9, 2014

Let's dissect this tweet. What Oxfam wants you to think is that the inequitable distribution of wealth links to the inequitable distribution of income and, therefore, to the creation of poverty.  Now it is undoubtedly the case that wealth is unevenly distributed but it is also the case that this has little or no connection to income. Indeed it is perfectly possible for a person to have a significant income but no wealth. By way of example consider a thirtysomething couple who have just bought a London flat for £250,000. To do this they've borrowed 90% of the money from a bank or building society and, in a lot of cases, the rest of the money from the bank of mum and dad. They'll have a car on a lease agreement, credit card debt and perhaps the remnants of some student loans. They have no wealth, they're part of that 54% in the Oxfam tweet. But they will have income - probably a household income significantly above the national average. They are not poor.

Oxfam want us to believe that the lack of wealth equates to poverty because it suits their argument. But it is completely false to suggest that we have food banks because half the population have little in the way of wealth. To be clear, if you've no debts and a fiver in your pocket you are wealthier than a large chunk of the population - best part of 2 million full-time students for a start.

What Oxfam's campaigns don't tell us is why we have food banks, how zero hours contracts came about, why prices have risen (if indeed they have) and what lies behind extortionate childcare costs. The charity don't mention that food banks are needed mostly because the administration of benefits is a shambles rather than because of benefit cuts. We aren't told that half the increase in the cost of energy results from cross-subsidy to support 'green' energy - most of this going to wealthier land- and home-owners. And we aren't told that the high tax on fuel results in additional costs for food, clothing and household goods.

Levels of poverty (and this is relative poverty not the absolute poverty that calls for food banks) are falling in the UK, perhaps not fast enough but falling nonetheless. But it doesn't suit Oxfam's message to explain how this is happening or to note that liberalising employment and reducing regulatory burden on the private sector is what will succeed in reducing poverty over the long haul. Instead, Oxfam prefer to misuse statistics - as we see above - to create an impression that poverty is a bigger problem. And Oxfam also want to perpetrate the myth that someone being rich - in wealth or income - is the reason for someone else being poor.

Oxfam know that world poverty has plummeted over the last couple of decades, falling faster than ever before. A billion people have been lifted out of absolute poverty. OK they're not yet up to our western standards of living but they're headed that way. And Oxfam also know the reason for this fall in poverty but choose to ignore it and promote the keeping of peasants on barely sustainable subsistence farms through subsidy. Oxfam know that it is free market capitalism that gets people out of poverty. But Oxfam tell the public something else - Oxfam lie to us.

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A comment about wealth...

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The ONS has published the latest figures on the UK's wealth. And this has resulted in a load of, mostly ill-informed, articles either celebrating the rise in numbers of millionaires or bemoaning the alleged increase in wealth inequality.

Here's once such:

On the other hand, the data suggest that wealth disparity across Britain is worsening. The richest 10pc of households now own 44pc of total household wealth – an increase since the current Government came to power in 2010. The top 10pc owns about five times as much as the poorest half of the population, who between them account for just 9pc of overall wealth. 

Bear in mind that we are talking here about wealth not income, which means that this observation really doesn't matter a jot. The question we need answering is how wealth will change over time not how it is distributed right now. Indeed, if we look at the least wealthy half of the population, this will include a huge chunk of the population living in houses with whacking great mortgages, young graduates in their first jobs with student debts to pay off and school leavers with no assets and £150 of credit card debt.

All of these people probably have negative wealth, but for a lot of them, this will change. Folk will pay off their mortgages turning the homes into wealth, student debts will get paid off and that youngster will join a pension scheme. So the issue isn't whether the top 10% own 44% of total household wealth but how many currently living without wealth will become wealthier simply by the process of continuing what they're doing right now.

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A housing observation worth remembering: expensive markets build little housing

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Especially for people who think planning isn't most of the problem.

Although the real world is a lot more complicated than that, a simple scatterplot makes the point: expensive markets build little housing. Every metro where the median price per foot is over $200 has added housing at an annual rate of no more than 10 new units per 1,000 existing units since 1990. Conversely, no metro that builds a lot of housing is expensive. 

So the divide widens - wealthy New Yorkers (or Londoners, for that matter) use their position to elect people who promise to build absolutely nothing anywhere near them.

The whole review - loaded with interesting stats (if you like housing and/or the US economy) is well worth a read!

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Quote of the day: on the distribution of wealth...

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From Tim:

If you've no debt and a £10 note then you, yes just you on your lonesome, has more wealth that the bottom 20% of British society in its entirety.

Worth remembering this for next time some left-wing numptie confuses wealth and income.

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In which Oxfam deceive and Huff Post (and the Guardian) publish without question.

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Here's the headline:

Income Inequality Soars With Five UK Families Wealthier Than Bottom 20%

We begin with a confusion between 'wealth' and 'income' (wealth is a stock and income is a flow). The author then digs her hole of ignorance (or maybe deception) a little deeper:

The UK's five richest families have more cash between them than the poorest 20% of the entire population, 12.6 million Britons, with new research showing the chasm between rich and poor is growing wider.

The truth is that Jessica Elgot, who wrote the article has simply lifted the lies straight from the Oxfam press release without thinking - churnalism at its worst. At the top of the 'rich list' here is the Duke of Westminster with £13 billion in assets. I'm prepared to bet that, while the Duke's not short of cash, that £13 billion is nearly all land and property - and Ms Elgot put in the word cash not Oxfam.

What it isn't is income, which makes the next line of the press release (and the articles) deceptive:

Oxfam's figures also show that over the past two decades the wealthiest 0.1 percent have seen their income grow nearly four times faster than the least well off 90 percent of the population. 

This may be true but it hasn't got anything to do with wealth, with those assets that the Duke owns. Oxfam (not for the first time) are suggesting that the imbalance in wealth equates directly to an imbalance in income when it doesn't.

Whatever the political differences over inequality, we really shouldn't be making the arguments in this sloppy (or deceptive) and ignorant (or misleading) way.

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Oxfam are wrong (again)

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Oxfam are wrong.

OK this isn't a surprise since we're talking about a large, wealthy, powerful organisation that dedicates itself to keeping poor people poor (although they don't quite put it that way).

Oxfam are wrong:

Working For the Few, published ahead of this week’s World Economic Forum in Davos, details the pernicious impact that widening inequality is having in both developed and developing countries, helping the richest undermine democratic processes and drive policies that promote their interests at the expense of everyone else. 

It all sounds good and caring. It reads like the good folk at Oxfam really do have the interests of "the world's poorest" at heart. The problem is that it's not inequality that's the problem, at least not in getting "the world's poorest" out of abject poverty.

I know this. And it's why Oxfam are wrong:

 

There you go Oxfam. While all those rich folk have been piling up the cash, billions of people who used to be really, really poor stopped being really really poor. OK, they're not as rich as us yet but far fewer of them - freed from the death sentence that is subsistence farming - are starving to death because they are too poor.

I know it's hard to admit. I know that Oxfam's world view doesn't allow for the idea that it's capitalism and free markets that get people out of poverty.

But it's true. We know it's true. Forty years of that awful 'neoliberalism' stuff shows us that it's true.

So, as I wrote last year when Oxfam published their "get into the papers ahead of Davos" report:

Sit back, put a smile on you face - punch the air with joy. You and me - capitalists both - have sat getting a little richer for thirteen years while a billion folk have escaped absolute poverty. All the international trade, all those businesses and those business folk filling the posh seats in aeroplanes flitting across the world - they've done that, they've lifted those people out of poverty.

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Quote of the day...

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On the "gulf" between rich and poor:

Actually Neill, never in human history has there been a smaller percentage of humanity living one failed harvest away from communal starvation. Is the divide between rich and poor actually increasing and more extreme than, say, in the eighteenth century? Or any time before then actually. In reality never has a larger percentage of humanity been, by any reasonable definition, middle class, than right now.

The fact large areas of poverty exists at all in our technologically advanced age is a dark miracle wrought largely by state imposed impediments to trade, insecurity of private property title and many other government policies of the sort Matt Damon (that tireless supporter of state education whose children are in private schools) strongly approves of.

Absolutely.

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A useful reminder of why we're so much better off than we used to be...

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It's those evil markets again:





With thanks to The Whited Sepulchre for the link.
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Well Bishops, if you're concerned about poverty, do something...

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...other than the trite - and frankly pathetic - option of writing a letter to the Sunday Telegraph.

The Bill will mean that for each of the next three years, most financial support for families will increase by no more than 1 per cent, regardless of how much prices rise.

This is a change that will have a deeply disproportionate impact on families with children, pushing 200,000 children into poverty. A third of all households will be affected by the Bill, but nearly nine out of 10 families with children will be hit. 

Now I appreciate that this letter has been put together by the organisation once know as the Church of England Central Society for Providing Homes for Waifs and Strays (and where I once worked). And that this charity, charged as it is with a mission of care for children, is bothered about the impact of government actions on those children.

However, if these 43 bishops really cared they would do something else. The bishops could give up part of their comfortable wages to the Children's Society, they could throw open the doors of their palaces to the poor and they could take food to these families who are struggling.

Having done this, the bishops could visit the rich and successful communicants in their diocese and urge acts of Christian charity upon them. They could write letters to be read out in parishes urging Anglicans to help look after these families.

But the bishops have done nothing of the sort. Instead, from their gilded pulpits they criticise, carp and wail. And then return to their fine homes and comfortable world. Maybe government should make a different decision, perhaps some few families will find it harder and the lobbying is justified. I've said before that caring is not something that can be sub-contracted to government - it has to be a personal act.

The bishop's letter would carry more weight is if started:

"Today, we have agreed to personally support families faced with poverty and we are asking others within the church to do likewise. Nevertheless, we would urge the government to amend the Benefits Uprating Bill so as to protect children..."

It didn't. So a pox on them.

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Five things to remember...

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From Counting Cats:

These are possibly the 5 best sentences you’ll ever read...

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Absolutely.  There is no money tree, there is no magic wand. We are richer by exchange and richer still when that exchange is free. Government is never the solution if you treasure liberty.

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Labour - the party for the wealthy

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Or so it seems.

Andy Burnham MP, Labour’s Shadow Health Secretary, said the Government had “fallen far short” of a fair solution to the care crisis. “A cap on care bills of £75,000 per person, or £150,000 per couple, will not protect the home and life savings of an average family,” Mr Burnham said. 

Read that carefully. What Burnham is saying is that the government should pay rather than have people spend those "life savings" or realise the capital value in their home. Labour is arguing for the wealthy to be allowed to keep their wealth rather than use it to provide care for themselves.

So who pays. Burnham doesn't mention this but it's the taxpayer - thousands of people on incomes below the "poverty line" that Labour folk keep harping on about will be coughing up cash so these people don't have to touch their life savings or sell their valuable house. Lots of low paid workers paying taxes so well-off elderly home-owners - or rather their children - can keep those "life savings" and have (the money from) that "family home".

Just as we saw over child benefit, we're seeing Labour championing middle-class welfare benefits that will be paid for by higher taxes on those hard-working families - those strivers - that the party is always gibbering on about.

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I'm not so sure Krugman is right here...

Not about the end of growth but about robots - mechanisation, if you will:

Smart machines may make higher GDP possible, but also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.

Now I know Paul Krugman is a science fiction fan, so in the interests of exploring his speculation maybe he should read the Culture series from Iain M Banks. In the meantime:

A study commissioned by the tech advocacy group TechNet found that the “app economy” — including Apple, Facebook, Google’s Android and other app platforms — was responsible, directly and indirectly, for 466,000 jobs.

That's half a million jobs we'd not even thought about five years ago. A real value-adding jobs too - jobs created entirely by new technology.

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So it isn't all inherited privilege then?

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In a really rather snide article describing various technology "moguls" as 'robber barons, a Guardian hack called Naughton has reminded us that the left's myth-making about wealth and success - that it remains trapped within a self-sustaining elite - is utter nonsense. Naughton (without intending so, I'm sure) destroys this fiction in just one paragraph:

What's striking about this is not just the staggering wealth that these people have managed to squeeze out of what are, after all, just binary digits (ones and zeros), but how recent are the origins of their good fortunes. Mark Zuckerberg, for example, went from zero to $17.5bn in less than eight years. Microsoft – the company that has propelled Gates, Ballmer and Allen into the Forbes pantheon – dates only from 1975. Oracle was founded in 1977. Bloomberg turned a $10m redundancy cheque from Salomon Brothers into his personal money-pump in 1982. Dell started making computers in his university dorm in 1984. Bezos launched Amazon with his own savings in 1995. Brin and Page turned their PhD research into a company called Google in 1998. And Zuckerberg launched Facebook in 2004.

All of those riches. All that success. All the jobs and taxes and investment and philanthropy (plus sadly Mike Bloomberg's ghastly nannying fussbucketry as Mayor of new York) was made possible by these men having ideas, taking risks and winning.

And right now a new generation of Gates', Dells and Zuckerbergs - a new bunch of entrepreneurs - are doing the same. In twenty years from now we'll be talking in the same terms about a load more men and women who have made billions having started with nothing.

The point about free enterprise is that this opportunity - the chance to be a billionaire - is open to everyone. For sure only a few make those millions but the opportunity to do so is there for us all. So next time you hear some left-wing, equality-monger gibbering on about gini co-efficients and whining about how it isn't fair that some folk inherit money while others don't, point them at the paragraph above.

It isn't all inherited privilege is it!
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Funding care - or how to lose friends quickly...

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From the Centre for Social Justice (so not to be sniffed at given its links to Iain Duncan Smith):

...we are consumed by a debate about how to protect the housing wealth of people who might need care in the future. Such a narrow focus about care funding ducks the crucial question: how do we build a competent and compassionate social care system fit for all, including the poorest?

Indeed, the entire aim appears to be avoiding having to tell nice middle-class folk like me that they'll have to sell mum's house when she goes into a home. Which of course means we won't inherit that money.

If we were not protected by the knowledge that taxpayers we've never met will cough up to provide us with care in our dotage then we would make provision ourselves. And be prepared to sell the house.

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The case for wealth...

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Over in the USA it seems that the case for wealth - and its benefits to us all - is being made:

Conard picked up a soda can and pointed to the way the can’s side bent inward at the top. “I worked with the company that makes the machine that tapers that can,” he told me. That little taper allows manufacturers to make the same size can with a tiny bit less aluminum. “It saves a fraction of a penny on every can,” he said. “There are a lot of soda cans in the world. That means the economy can produce more cans with the same amount of resources. It makes every American who buys a soda can a little bit richer because their paycheck buys more.” 

And the people create that consumer benefit should be allowed to make - and keep - their wealth.

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Who are the undeserving rich?

In today's Daily Telegraph, Peter Oborne returns to his well-rehearsed subject of the rich and the poor. Or more precisely the evils of those Mr Oborne defines as the "overclass":

Senior bankers, private equity moguls and hedge fund managers appear cut off from the rest of us. They often pay little or no tax, increasingly live in heavily guarded enclaves, and some have little or no real allegiance to Britain. The sources of their wealth are often mysterious, and appear unrelated to merit. These feral rich pose, in their way, every bit as much of a danger to society as the rioters who stole and pillaged London streets last August. 

Nothing new in this argument - it is a familiar traditionalist conservative viewpoint that sits with the idea of "one nation" and the concept of duty. Indeed, part of Mr Oborne's revulsion at the "feral rich" is their very internationalism, their independence:

Among both the very rich – the “overclass” – and the very poor – the “underclass” – the idea of responsibility, duty, patriotism and neighbourliness has been destroyed. 

The men who Mr Oborne demands are reined in have no desire for the state, we might almost observe that their wealth enables them to break free from the state. And Mr Oborne dislikes this. It cannot be allowed since it is tearing away at the fabric of society. And such sentiment echoes past views on the wealthy - or more particularly on the need to make a distinction between the rich we approve of and the rich we disapprove of:

...it is right that men and women who have made a fortune through ingenuity and hard work – such as writer JK Rowling and inventor Sir James Dyson, for example – should be allowed to retain their wealth. The question is how to create a set of rules which achieves that aim while penalising the greedy and rapacious.

You see here how Mr Oborne has framed the argument? Somewhere we require a means of making some sort of moral judgement between the deserving and undeserving rich. So smiling actresses, trendy musicians, slightly wacky inventors and tieless entrepreneurs might be allowed their riches but others - carefully ill-defined here - who are merely "greedy and rapacious" must have their riches seized for it is the proceeds of "bad" capitalism.

So who is included in Mr Oborne's parade of sinners? Is it just those whose sources of wealth "are often mysterious, and appear unrelated to merit"? And how in all this do we define whether riches are deserved - presumably the scrapping of the national lottery is an imperative in Mr Oborne's New Britain. What better definition of unmerited wealth is there than winning £40 million from a £1 stake?

We are grasping at straws - almost floundering - here. While we can appreciate why Mr Oborne is so cross about the "feral rich", he fails to answer the big question - who is undeserving of their riches? Now, it seems to me that the solution to Mr Oborne's problem isn't to indulge in some form of moral distinction but to recognise that the problem with capitalism lies not in the wonder of free markets but in their corruption by the choices of government.

The undeserving rich are those whose wealth derives from exploiting regulation and government rather than from creativity, enterprise and innovation. In alluding to crony capitalism, Mr Oborne hits the nail on the head - this is at the core of the problem. Many business sectors - aerospace, pharmaceuticals, transport, construction and, of course, finance - have worked hand-in-glove with government to create wealth for the owners of those businesses. Legislation and regulation is used to protect the interests of existing operations, to favour the state's interests over the innovator and to allow many businesses to become little more than rent-seekers dependent on the political class.

And the political class is likewise dependent on these rent-seeking businesses - for politics is a poorly paid business. You need only look at the immense wealth accumulated by Bill Clinton and Tony Blair so see how crony capitalism works for the political class.

I fear, however, that Mr Oborne's arguments will be taken as an incentive to regulate and control. To set rules - probably unenforceable rules - about the remuneration of company directors and the payment of bonuses. Speeches will be made announcing endless crack downs on "abuse" with a new collection of regulatory bodies set up to police this system. Each of these will have a board of well-padded felines and a chief executive earning half-a-million. Politicians will announce that something has been done!

And the rich will remain as they are today - free from the state. Not individually free from the moral imperative of duty or any responsibility for others but free from the state. For my part I see this as a growing up process - we should aim for a place where everyone is able to live like the financier Mr Oborne describes:

"The only time that I use the state,” one financier worth an estimated £500 million confided in me recently, “is when my driver drives on public roads from the City to my country estate."

Is this not a good thing? If we are wealthy enough to no longer to require the soft cushions of the welfare state surely that is something to be celebrated, not something worthy of condemnation?

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The solution to Mr Oborne's challenge is fewer rules, less government and more free markets. Somehow, I suspect we'll actually get more intervention, more regulation and less free markets.  And we'll be poorer for it (unless we have the right connections, of course!)

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