Readers letters
Bill Hyde makes some good points in his letter ‘Market Demands’. When there appears to be inequality in a system, the normal human response is to try to level the playing field by introducing ‘Robin Hood’ style measures. While this looks like a good idea on the surface, I’m not convinced this has any great merit for the following reasons:
1.The proposed is a scaled up version of the welfare system, which isn’t working. Rather than empowering people to make what they want of their lives, it keeps them trapped in a state of disempowerment from which it is difficult to escape. Furthermore there is never enough you can do; the more you give to disempowered people, the more demanding they become.
2. Life works because people are acting selfishly, trying to do the best for themselves. Heavy levels of taxation will neither stop the rich from getting richer, nor the poor from getting poorer. We should take the example from the HNWI’s (high net worth individuals); and expect more for ourselves, (far more even than a £100k salary).
The idea of over-taxing rich people, even the word ‘Greed’, is based on the premise of shortage, that there is a finite pie available and that some people are taking more than their fair share of the pie. This is clearly not the case. In fact, the wealthy people are usually the individuals who are creating the pie in the first place. By investing money and energy in different projects, infrastructure and technologies, and supporting different markets, they create jobs, improve the lives of many and cause the economy of the planet to expand. Such individuals are to be encouraged, not hammered with high taxes, lest they take their business elsewhere.
The investment activities listed above require a discerning eye, an ability to assess risk and knowledge of processes (engineering or otherwise). These are skills which professional engineers have in abundance. In recent years the city (Lord Sugar even) is recognising more and more the value that engineers bring to the table, and applies their skills to great effect in roles of management consulting, insurance, private equity, VC, and investment banking, making some engineers ‘excessively wealthy’ compared to the norm. Should these individuals be over-taxed too for having found their way into a place of financial abundance?
Recessions happen because the cash flow dries up. The main reason that money doesn’t flow is because banks and investors are more wary of where to put it. It is easy to thrive on the back of a bullish market, and not so easy in a slump. But introduce engineers to the mix; people who understand what is really going on, and you facilitate money flow. Cue ‘Financial Engineers’.
Whinge all you want about the bankers, blame your lack of cash on them and what they have done to the economy, and hope that it picks up soon. Or make a decision that you are going to prosper regardless of the state of the economy or anyone else’s actions, and act accordingly. I would recommend the latter course of action. Fortunately I don’t get to decide for you, you do.
Andrew Goodman, Tooley Street, London Bridge
Next letter: Polarised debate