Tim Worstall and Dennis the Peasant are having it out with Richard Murphy on tax issues and economic theory in general. Good stuff if you want to see lively minds hammering away (albeit often crossly and at cross purposes) about Basic Principles.

Richard Murphy seems like a Man with a Mission. To get rid of what he calls ‘neo-liberal economics’:

One of the things that will be swept aside as a consequence of the current financial crisis is neo-liberal economics. Much of what is taught as economic theory will have to go with it. We will be better off for its demise.

Maybe he’s right and eg the feverish warblings of Naomi Klein will become a new orthodoxy.

In which case we’ll slump into stupid collectivism until an even greater slump hauls as back to our senses, sadder and poorer and maybe a teensy bit wiser.

But what caught my eye in this Murphy piece was the following sweeping claim:

… it is wholly unacceptable that at a time when banks are utterly dependent upon the state for the provision of their equity that they should show such contempt for the state by avoiding their obligation to pay tax.

Is not there a strong and nasty whiff of Liberal Fascism in that sentence?

An implicit idea that as and when the Munificent State deigns to help us, we should grovel in gratitude and turn out our pockets to repay our glorious benefactor?

Insofar as any company has a legal and moral obligation, it is to the people who have invested in it. If that category now includes the state, the state presumably made that investment to help the company stay afloat and make money for its shareholders (including the state).

If in turn that means using the usual rules of international financial dealings to minimise tax, quite right too.

In any case, what if that state investment in banks is incompetently done and starts to create even more ruin?

Or what if the state through its lumbering incompetence has created the whole mess in the first place? If a malevolent giant whacks you to your knees then offers you some coins to help you get back on your feet, should you be pleased and doff your cap in deep respect?

Or what if the state is using all that revenue sucked from the economy for idiotic propaganda? Should we all be placidly uncontemptuously grateful for that?

If ‘neo-liberal economics’ give way to this sort of incoherent collectivist menacing, we really are in a deep mess.