Letter to an old friend:

Dear Ronald

Many thanks for taking such time and trouble to set out your thoughts on your Millennium Trust, et al, and for sending the attachments for me to review. It must be close to 30 years since we have been in touch!

The items by Sir Kenneth Jupp seem to be his translations from Greek of Christ’s eight Beatitudes – not my field, really, and I am not qualified to comment. I have, however, looked through the Henry George item you attached – author unknown. I have always been a great admirer of HG since my days in the SES [School of Economic Science], and presumably you noticed my reference to George, and to site value taxation, in my latest essay in the “Economic Perspectives” series (E.P.19). If you missed it, it’s on my website now.

In my “middle period” of economic development my primary interest was Tax Reform, and my closest colleague at that time was the late, great John Allen, whose crystal clear mind was a beacon! Unfortunately for him, and for the material he was teaching, his style of presentation was deliberately challenging and left him vulnerable to attack by fools who lacked the insight to grasp his real message. It was fine if he and I were co-presenting because I have always been able to handle the mob, but when he was on his own it often ended in disarray, and even Chairman Leslie Blake couldn’t salvage much.

John and I were invited to write tax reform papers for the Republic of Ireland, which were well received and had a positive influence on its government’s thinking, and for the Government of Grenada in the Caribbean. We were successful in talking them out of introducing a UK-style VAT.

I also spoke at the annual Liberal Party Conference, to the acclaim of Jo Grimond, and his wife Laura. At that time most Liberal Party policies were aspirational rather than practical.

Later, our dear friend Reg Prentice, MP, invited me to make a presentation on Tax Reform to the House of Commons Backbench Finance Committee, which received a favourable press mention from Nigel Lawson, Thatcher’s then Chancellor.

The Hartford Award

That phase culminated in a proud moment: after receiving a “Distinguished Services Award (Author)” from the University of Hartford Business School in 1980, I was invited to the celebratory dinner, and was seated next to Hon. Al Ullman (Chairman of the House of Representatives Ways & Means Committee), who had been given an equivalent award for “Taxation Services” (an oxymoron, surely?), and he was about to introduce a federal Value Added Tax (VAT) in the USA. It was still at the Bill stage, and was titled “Tax Restructuring Bill (Value Added Tax)”.

After telling him, somewhat tactlessly, what I really thought of VAT after 10 years’ experience of it in the UK, he invited me to Washington to explain my views to his advisers. After spending a morning with his Ivy League Treasury Think-Tank, I managed to convince them (and him) that they should abandon the Bill.

I demonstrated that VAT is NOT a tax on added value, but a poorly disguised tax on turnover that simply pushes up prices regressively, impinging most harshly on those who can least afford the additional impost. At the end of our session he ripped up his copy of the Bill and tossed it into the bin in front of all of us, stating “I always knew there was something terrible about that tax.” To this day VAT has not resurfaced at the national level in the US Legislature.

Al and I enjoyed a fruitful subsequent correspondence in the course of which I pointed out that differential added value is another way of looking at differential productivity, and hence at economic rent, which is differential by its nature. Indeed, that’s what it means. Which takes us back to Henry George.

Al and I corresponded until he lost his Oregon seat in the House at the next election, and died in 1986, aged only 72.

John Allen and I also did a huge amount of work on added value as the best way to present a company’s results. I was invited by the SES Economics Faculty Heads, Lesley Blake and Peter Green, to rewrite the whole of the Economics Course from scratch, which I did with great relish, and the classes were packed. But because the new course reflected my own approach to the economics thinking, including the economics of Added Value as a subtle avenue towards arriving at the Georgian rent, I gather that it got the thumbs-down from on high. Leon MacLaren was heard to ask: “When will economics be taught again in this School?”!  Thereafter the attendance levels gradually dwindled.

Interestingly, years later, in a packed meeting at Waterperry House, in reply to a question from Nathan David on what had happened to “Nature of Society”, LM said “forget that book – it’s wrong!” End of story. [John Allen and I believed that he was referring to the way, on pages 47 to 49, the book effectively elides interest and profit as if they are the same thing, and makes no reference to Capital as a factor of production.]

my own economic affiliations have moved on

My own economics affiliations have moved on to what I think of as ‘phase 3′, which takes the study into far wider territory. Without abandoning my earlier economic beliefs and writings, I find that over the past four years or so I have grown far more aligned to Austrian economics, notably the teachings of von Mises, Hayek and Murray Rothbard (even Ayn Rand) and host of others – too many to name – a grouping that may generally be classified as “Libertarian”. [How I wish Ron Paul, or his son Rand Paul, were in the White House - rather than the economic buffoon who's there now!] Virtually everything I write, and post on my website, now fits directly or indirectly within this frame of reference – and I’m pleased to add that it has a growing following with like-minded thinkers in many countries.

My introduction to “Austrian thinking” was effected by Godfrey Bloom at the lunches he kindly hosted at his Club in St James’s. A few years ago Godfrey (when he and Nigel Farage were still close) invited me to set out a Tax Policy for UKIP – which I did, on the basis of a comprehensive flat-rate, low-rate tax that cannot inhibit economic growth. It was featured on the UKIP website for many years, but was taken down when UKIP lost the plot and was abandoned by Godfrey! The essence of the Austrian School’s teaching can be thought of as small government, low taxation, unilateral free trade and, above all, sound money.

I now carry on with my own writing, which I love as a process of learning and discovery, all of which is available on my website and can be lifted and disseminated freely by anyone who wants it.

On the philosophical side of life, Anita and I are regular members of Warren Kenton’s Kaballah groups. Warren has brought this ancient teaching into the present, and, from this, all may benefit. It is blessedly free of dogma and rigidity.

Many thanks, Ron, for the “nudge” that has got the old memory cells sparking again. When looking back at all this, it’s easy to overlook the fact that throughout this time I was running an Accountancy Tuition business with branches in London, Africa and the Far East; providing 25 years of litigation support as expert witness; and for 18 years acted as Audit Committee Chairman with Hyperion!

With very best wishes

Emile