I was reading Magna Carta the other day (as you do). I was looking for references to tax. And when doing so I realised that embedded within it is the problem at the very heart of the constitutional debate in this country.
The following clauses comes from the British Library translation of Magna Carta.
* (12) No 'scutage' or 'aid' may be levied in our kingdom without its general consent, unless it is for the ransom of our person, to make our eldest son a knight, and (once) to marry our eldest daughter. For these purposes only a reasonable 'aid' may be levied. 'Aids' from the city of London are to be treated similarly.
+ (13) The city of London shall enjoy all its ancient liberties and free customs, both by land and by water. We also will and grant that all other cities, boroughs, towns, and ports shall enjoy all their liberties and free customs.
* (14) To obtain the general consent of the realm for the assessment of an 'aid' - except in the three cases specified above - or a 'scutage', we will cause the archbishops, bishops, abbots, earls, and greater barons to be summoned individually by letter. To those who hold lands directly of us we will cause a general summons to be issued, through the sheriffs and other officials, to come together on a fixed day (of which at least forty days notice shall be given) and at a fixed place. In all letters of summons, the cause of the summons will be stated. When a summons has been issued, the business appointed for the day shall go forward in accordance with the resolution of those present, even if not all those who were summoned have appeared.
A little translation is needed. First the symbols. As the British Library says:
Clauses marked (+) are still valid under the charter of 1225, but with a few minor amendments. Clauses marked (*) were omitted in all later reissues of the charter.
Then there's the matter of 'scutage' to deal with. Webster's dictionary calls it:
a tax levied on a vassal or a knight in lieu of military service
I think tax is the word we are looking for there.
Then there's aid, which Wikipedia helps out on:
The term originated in the late 11th century...... It was a payment made by the tenant or vassal to the lord on certain occasions, usually the knighting of the lord's eldest son and the marriage of his eldest daughter. Occasionally it was collected when the lord needed to pay a ransom after being captured. Sometimes a fourth occasion was added to the customary list: when the lord went on Crusade. Other times when aids might be demanded were when the lord himself was being taxed by his own superiors. At those times, the lord might try to pass the demand on to his own vassals.
So let's call that tax too.
Having now clearly understood that clauses 12 and 14 are about the right to tax, and that clause 12 requires taxation by general consent and that clause 14 defines how that consent will be given then note what clause 13 says - that the city of London shall enjoy its ancient privileges. Then note that this is the one clause still surviving. The rights of the City are still being heard over and above the rights of others. And the positioning is not, I suggest, chance, even when this was written. In effect the rights of the City come over and above the rights of others to be heard and to give consent. I am sure that clause 13 was positioned where it is precisely to give that message to all readers of Magna Carta.
Now of course you could argue that clauses 12 and 14 should have fallen by the wayside long ago, and I would agree. But what is really important is not that they have gone, to be replaced by far more appropriate bases for taxation and the granting of consent to be taxed, but that despite all that has changed in the meantime the City maintains its rights.
The independence referendum did in no small part come down to this issue at the end of the day. The financial services industry - all intimately linked to the City - said it would pull out of Scotland if it voted to leave the UK. And all the major political parties, bar the Greens and SNP, echoed their tune.
In 1215 the City was at the heart of the debate on the right to tax and consent. Whether that was right or wrong at the time is not an issue I am inclined to debate. What I know is that it is very wrong now and yet that the power remains intact, reinforced and unchallenged by most politicians and parties.
Until this changes there is no prospect for a fair constitutional settlement for this country.
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See my blog today, “Now For The London Referendum” and its link to the LSE article at its heart by Tim Oliver. Also, in history refer to the Hanseatic League, the old idea of the City State. These would have their own hinterlands, almost vassal districts in effect. Not least go to Youtube for Tony Hancock’s immortal plea “Did Magna Carta Die In Vain”. My previous blog “Meanwhile Back At The Ranch” agrees on the subject of a major constitutional crisis.
I’m unable to respond to this comments on your previous post:
http://www.taxresearch.org.uk/Blog/2014/09/17/i-deal-with-reality-possibility-and-what-is-desirable-and-free-markets-fit-into-none-of-those-categories/comment-page-1/#comment-700235
I’m not sure if you’ve deliberately closed comments, but in case it’s a technical error I hope you don’t mind me leaving my response here.
I don’t have a preferred definition of neoliberal – I’m happy to use it in they way you’ve defined it. But note that your definition is based on policy prescriptions. Whereas neoclassical economics is a method. This underlines the importance of treating them separately.
If you insist that the two are interchangeable, then the fact that you declare Hayek neoliberal also means that you think he is a neoclassical economist. But as I’ve told you (and as I thought you’d accepted) he didn’t subscribe to the set of assumptions you attributed to him.
Similarly if you accept that Krugman is a neoclassical economist, then by your criteria this makes him a neoliberal. But I don’t think you actually believe that.
As someone so fond of Venn Diagrams I’d have thought you’d understand all this by now! Neoliberal /= neoclassical. Hayek is Exhibit A. You are mistaking him for Milton Friedman, Gary Becker, and George Stigler.
So, to summarise. You wrote a post stating that free market economists rest their policy prescriptions on a set of assumptions that don’t actually exist. I pointed out that the free market economists you specified do not. In your most recent response you defend Krugman saying “at least he does not assume markets clear automatically and instantly”. You claimed previously that your error was a result of ignorance. The fact that you still repeat it suggests that it’s just a deliberate mistruth. The case for free markets does not rest on an assumption that markets clear automatically and instantly. It is dishonest (and I’d say damaging to your credibility on other matters) to pretend that it does.
Except that the case for free markets – the one heard day in and day out – does really on the assumptions I stated
It is dishonest to say otherwise because as a matter of fact that is the basis on which the almost universal case is made for them
And you cannot argue Austrian economics is universal
I see no further benefit in you reiterating your case but that is not why comments closed – they close on every blog after a fixed time period
That’s a pity because anyone following the discussion on the previous post will be oblivious to this. But fair enough.
It’s telling that immediately after saying “the one heard day in and day out” you qualify it by saying “almost universal”. It depends on what you mean by “almost”. If you want to argue that Austrian economics is relatively obscure, then fine. Maybe we can agree that the majority of free market economists are neoclassical ones. BUT HAYEK WASN’T ONE OF THEM!!
This whole exchange would be resolved if you said “I should have written Friedman instead of Hayek”. But if you continue to argue that *Hayekian* economists rely on neoclassical assumptions, I will continue to point out that you’re wrong.
I also find it funny that you want to simultaneously argue that we live in a neoliberal hegemony, that Hayek played a large role in assisting it, and yet the most “neoliberal” economists (i.e. Austrians) are relatively obscure. How does that work?
I am bored by this
You have made your point
Now go and find another pin head
how can it be , that after 800 years, it takes you ( an accountant ! ) to decode this and show how we are beholden to such archaic structures ! people need to know this more widely . great work .
I’d highly recommend reading Chapter 12 (Griffin: The City of London Corporation) of Nick Shaxson’s Treasure Islands, if you want more on the City and its reach, influence and manipulation of UK government and policy.
Thanks for this.
It is very useful material for the symposium event that StopTTIPuk is organising for Sat 25th Oct (10 am UNITE building Holborn)
The City’s role in policy-making, UK and beyond, including ‘trade’.
Contact via StopTTIP.net website
May we reproduce your text for background material for a conference pack?
Of course
I am bored by this
You have made your point
Indeed – but you haven’t yet acknowledged your error.
But it’s obvious that you won’t, because your aim is to mischaracterise the beliefs of people you disagree with and you are not willing to have a serious discussion about economic methodology. However many readers of this blog are, on the contrary, interested in accuracy and so I think it’s important to point out what you doing.
I appreciate you letting me have the final word. Thank you for hosting this conversation.
I have no mischaracterised
The view of the wider audience is that there is neoliberalism
How you get there is your own pedantry
The outcome is what worries us
aje – your exchange with Richard demonstrates an almost religious fervour in the way you defend “Saint” Hayek.
If I recollect correctly wasn’t it Hayek ‘s book that Margaret Thatcher carried around with her?
What’s this all about then:-
http://www.margaretthatcher.org/document/117179
I understnad that the “Chicago Boys” only were responsible for bringing “free market” ideas to mend sorry that’s wreck Chile’s economy.
Doesn’t it appear that Hayek obviously was minded to recommend certain ideas, holding Chile up as a fine example, that even Thatcher shrank from? I would love to see Hayek’s full advice to her – can you provide this?
http://www.larouchepub.com/eiw/public/1982/eirv09n39-19821012/eirv09n39-19821012_029-how_chicago_boys_wrecked_chile.pdf
http://www.larouchepub.com/eiw/public/1996/eirv23n07-19960209/eirv23n07-19960209_019-chile_was_wrecked_by_mont_peleri.pdf
http://www.heterodoxnews.com/htnf/htn75/Gatekeeper%20Economics_The%20Milton%20Friedman%20Extremerev.pdf
Perhaps Hayek later changed his mind when the facts changed? Hold on – wasn’t that Keynes that said something similar – the same Keynes that the Austrian School love to besmirch?
This is a pointless argument though, because no single School of Economics is able to provide all answers. I think the world would be a far better place if we “Let a Hundred Flowers Bloom”
http://www.theguardian.com/books/2014/may/29/economics-the-users-guide-ha-joon-chang-review
Now back to the topic of this post. The City of London has far too much power and this needs to be curbed at the earliest opportunity. It is nothing more than a giant financial “wrecking ball”.
@Theremustbeanotherway
I don’t understand why you think my fervour is in any way religious. Richard wrote a post claiming that people with a Hayekian bias unwittingly rely on an assumption of perfect competition. All I’ve been doing is point out that one of Hayek’s primary contributions to economics was arguing *against* those very assumptions. Richard also claimed that Austrian economists believe free markets work without government. And I pointed out that this was also a mischaracterisation. Indeed there’s plenty of examples where Hayek advocated government action. And on some of them I disagree with Hayek. He was a bit too socialist. 🙂
I’m not really “defending” Hayek – I’m pointing out the irony of someone getting confused about economic methodology in an article where they are claiming that free market economists are confused about economic methodology.
Regarding Chile, I’m not sure what your point is other than “Hayek defended Pinochet therefore he’s evil”. I don’t think that guilt by association is a mature argument. However I do think it’s an important topic, and recommend the following:
http://crookedtimber.org/2013/06/25/the-hayek-pinochet-connection-a-second-reply-to-my-critics/
http://www.libertylawsite.org/2013/06/28/corey-robin-on-hayek/
http://www.coordinationproblem.org/2013/06/liberalism-is-a-guiding-end-democracy-is-merely-a-means.html
I find it interesting that critics hold the likes of Friedman responsible for the actions of Chilean dictators, but not those in China or Yugoslavia. Why is that?
Finally, Ha Joon Chang makes the case for pluralism. I agree that different schools of thought make unique and important contributions to our understanding of the world. I’m not the one arguing that all economists are the same, united by the exact same methodology…
And Ha Joon Chang doesn’t buy Hayek’s myths, nor Friedman’s come to that
http://www.constructionenquirer.com/2014/09/22/british-land-sells-mayfair-flats-for-11-6m-each/
Reading Magna Carta in terms of what is relevant today shouldn’t take long as there are only 3 sections which have any applicability at all – see the article by David Green in the FT on this:
http://blogs.ft.com/david-allen-green/2014/06/16/the-myth-of-magna-carta/
Since the ¨employees¨ of said city are also senior politicians, I very much doubt that anything can be done.
In 2012, 2,714 British bankers were paid more than €1m (each). When the EU tried to limit the banks ability to pay huge salaries/bonus, the government of the UK headed for the European courts, and not to help the EU limit the banks payments.