26 January 2013

Robin Hood and our Tax System

Robin Hood, as we all know, stole from the rich to give to the poor, so it comes as no surprise to find that the modern day tax for which his name has been appropriated, doesn’t find favour with our current government. Nonetheless earlier this week you may have seen that a group of 11 European nations, including both France and Germany, agreed plans to introduce a Financial Transactions Tax – the so-called Robin Hood Tax. The tax would be a very small charge on all financial transactions such as foreign exchange, bond, share and derivative deals. Because the value of these transactions is so great – foreign exchange turnover is well over $4,000 billion a day (source BIS), around half of it traded in London – even a small percentage tax will raise billions of pounds for the governments which implement the tax. 

Here in the UK though the government refuses to implement the idea, despite the fact that London being the largest financial centre in Europe would mean that they stand to raise more than any other government; perhaps up to £20 billion a year. The tax would – according to our government – damage the competitive position of London in the global financial markets. It says it would only participate if the tax were to be levied globally, something which it well knows is not going to happen. But is London’s competitive status really so weak that a tax of 0.01% (£100 on a million pound deal), the likely rate on currency and derivative transactions, going to undermine it.

Meanwhile the Confederation of British Industry threatens that the tax would adverse impact on people saving through pensions and other investments, ignoring the fact that most pension funds do not engage in currency speculation or intensive use of derivatives. It would be “damaging for jobs and growth”, well perhaps for a few in the investment banks, but what ridiculous exaggeration.

This is just part of a pattern which sees companies – with their high level access to government allowing them to influence policy (see Guardian article) – setting an agenda which favours ever lower corporate taxes, not just here in the UK but across the world. Accountants PwC reported lastweek that tax payments by a group of 100 largest UK listed and headquartered companies fell by 18% last year despite their profits having gone up. This continues a trend in payments going back to 2005 which has seen the corporate tax take reducing. And this isn’t through tax dodging, which sees the likes of Starbucks and Amazon moving their profits around to low tax countries; it’s a result of government cuts in corporate tax rates; cuts which are set to see the corporation tax rate fall significantly further in the next couple of years. Competitive tax reductions may move a small number of jobs from one country to another, but have far more influence on raising profits than on economic growth. All this is supposed to boost our economy, but I don’t see much sign of that happening, do you?

The financial crisis was triggered by the reckless lending and speculation of our banks and the British and European economies are still struggling to come to terms with it. A transaction tax on the speculative activities of those same banks could both alleviate the burden of cuts which are being imposed on the poorest sections of society and potentially reduce the risk of a recurrence in the future. The only losers are the investment banks and their massively well rewarded employees. How sad that our government has chosen to side with them, rather than with the overwhelming majority of the people of Great Britain.

5 January 2013

Bees, Honey Cell Bases and Belligerence

by Peter Lanyon

Most people know that honeycombs are formed of hexagonal wax cells, and that this economic arrangement stores a maximum amount of honey in a given space, since the cells are tessellated – they fit together side by side, wasting no space between them. Some people are able to restrain themselves long enough from the delectable taste of honey to notice that the intact comb consists of two layers of cells, one above the other, with a wax wall closing one layer off from the other. If they wonder how the bees were able to fill the lower layer with honey, they may deduce that in the beehive the layers are built vertically, not horizontally as in the way the comb reaches the table. Indeed the hive is full of these two-sided vertical combs with the mouths of the cells facing sideways, with just enough room between each comb for the bees to tend every cell.

Thanks to television, we are familiar enough with this sort of thing to nod at it as just another example of nature’s ingenuity. And you may just nod again if I tell you that the cells do not face exactly sideways, but are tilted upwards a little so that the fresh, runny nectar is less likely to drip out. If I now ask you to suggest what the wax wall is like that forms the base of each cell and separates its contents from the cells in the other side of the comb, please bear with me.

The simplest arrangement would be a flat vertical wax sheet on which all the cells abut, but that is not at all what it is like in fact. Instead, the base of each cell is a shallow cone or dimple, formed of three congruent rhomboidal faces, that protrudes into the other layer, those faces being shared with three cells in the other layer. Unlike some modern expensive toys that do it all for you, this blog will leave you the fun of imagining that, but the diagrams below may help. The clue is that the separating wall zigzags shallowly as it passes the conical cell bases protruding alternately from each layer. It is by no means flat.

One might assume that it evolved that way because it is stronger, but the double layer of tessellated cells is pretty strong anyway. The answer - worked out by the famous Swiss mathematician Samuel Koenig at the request of the French naturalist RenĂ© Antoine Ferchault de RĂ©aumur in the early 1700s – is that such a structure holds the maximum amount of honey for the least quantity of wax, wax being an energy-intensive substance for bees to make. A flat wall would use more wax to hold the same honey.

You may say, not much more! Not enough more to matter, surely? But if I tell you that it is a species characteristic of honey bees, differentiating them from other related bees, then I think you’ll have to agree that it must be the product of evolution. You may still say - so what? To me it illustrates the extraordinary length of time that has been available for bees to subject to natural selection various types of wax comb design through the aeons, so that the genes for the more adapted cell bases could end up in today’s honey bees, and not those for flat bases instead. It’s not as though bees think, for their accumulated “brain” is about the size of a pin head, so it hasn’t happened with the speed that cultural evolution happens in us. It has taken … just as long as it takes. And it has cost all those less successful plans in the genes – maybe brilliant in other aspects – that have gone to the wall on the way, through being borne by just a few fewer bee colonies each generation until the genes and the plans were lost.

To modify Blaise Pascal: “Le silence eternel de ces temps infinis m’effraie!”  It may have taken some 10 million years.

Compare it with our own cultural evolution. Less than one thousandth of that time ago, we were still hunter-gatherers, for whom the response to any degree of overcrowding was to move away towards less threatened resources. Halve that time again, and we were just getting really good at slaughtering each other in the competition for land, having had the brilliant idea of agriculture. And now, that system has been such a successful cultural evolution in terms of population that we are running out of resources, out of land, and yet are still inventing better ways to slaughter each other ( – including recently such bogus excuses as the “responsibility to protect” to get over the sanctity of national boundaries).

What makes this even more potent is that any suggestion that we have taken a wrong direction is immediately quashed by another, parallel evolutionary quirk we have evolved – the overwhelming gender imbalance in humans that predisposes us inexorably to warfare and militarism. And there may be a third element in the fateful pattern - that capitalism seems on a par with masculinity in driving us into incessant conflict.

The bees may have had a thousand such blips – or evolutionary wrong directions – during their progress, when seemingly brilliant types of comb and shapes of cell have had to run their courses in order for the flaws in them to manifest themselves. And they have arrived at this present successful type, with a tri-rhomboidal base, and this is even now being tested by nature to see whether it is equal to the challenge - of mites, or of humans or of some of our spin-offs, such as pesticides and climate change, or simply of human interference in general with bees. 

In comparison, our combination of agriculture, warfare and aggressive gender imbalance may be just one little blip of thousands to come before we can say we are as soundly based as the honey bee – if we survive all the blips. And we won’t ever have been blown back into the stone age, for there is no backwards for evolution, only forwards – only it may not be our current idea of forwards at all. 

This is uncomfortable territory for us all. On Saturday, 16th February at 11 am. academic Cynthia Cockburn will be talking in the Curve at the Norwich Forum on “Towards a Different Common Sense”. Among the different senses she may tackle are those that concern militarism, gender and capitalism.  (The bits about hunter-gatherers and agriculture are at least partly my own; about bees very much the bees’ own.)