Wednesday, 4 April 2012


Everybody responds to incentives. It is a human trait.
The communist countries abolished incentives and saw production and living standards plummet and in many instances starvation occur.

In the USSR famine was caused in the nineteen thirties when peasants had their crops confiscated, so they reacted by slaughtering their livestock and failing to grow crops.
They had no incentive to produce if the fruits of their efforts were confiscated.
Result starvation.

In China under Mao peasants had their land confiscated and collective farms instituted.
Workers on these farms had their meagre rations whether they worked or not so there was no incentive to work hard.

Punitive measures were introduced for lack of production but did not work as there was an incentive to cheat. There was also an incentive by the party bosses to exaggerate crop yields to curry favour which resulted in the rulers of the country thinking all was well even while people were starving.

The communists believed that "community spirit" would produce the goods which is the ideal but this is not the way humanity works.

Helping your community only works when it is local and you yourself thus benefit. If there is no benefit for the individual however community minded they soon lose heart and cease working.

Eventually the Chinese realised the value of incentives and although nominally communist reinstated the incentive principle which has resulted in that country's rapid progress and prosperity.

Of course incentives do not always produce positive results.
Criminals are incentivised to commit their crimes because they pay. Punishments are weak and in the West crime does pay.

Immigrants are similarily incentivised to come to Britain where they can claim benefits for them selves (and their relatives) and by the realisation that whatever they do of a criminal nature they can use the Human Rights legislation to avoid deportation.

So what is the relevance of the above preamble to the situation in Britain?

Well for a start the governement does not think incentives apply to British people
There is little incentive for people to work and less for employers to take on new staff.

If you are in employment you are taxed to death and in many cases are better off not working.
The employment protection act prevents employers from dareing to take on new people in case they are sued for wrongful dismissal if the employee is found to be unsuitable, and beware if they take on an ehtnic minority where a dismissal can result in a wrongful dismissal with the added component of a racist charge.
And they wonder why blacks are more likely to be unemployed.

Businesses are taxed to the hilt.
National Insurance alone adds 25% to the wage costs, 12% employee contribution and 13 % employer.
Business rates are another cost. And they wonder why we can not compete abroad.
China's tax take is about 10% of GDP, but then China does not have the EU, foreign aid a large debt to finance round its neck. Ours is more than 40%.

It seems that British governments do not believe in incentives for the average small business or worker.


Bankers and people producing little of value in the City avoid paying taxes and indeed make much of their money by selling our assets off to foreign companies. Again it pays them to do so.
They are incentivised to do so.

Why cut the rate of income tax for those on over £150,000 as an incentive for the rich while adding a tax burden on those workers on a more modest pay packet?

Do incentives only work for the rich? It would seem so.

Incentives work for everybody and it is the government's job to legislate that the things the nation needs to prosper are incentivised.

But what has Osborne done in his budget?
Incentivised his rich friends but not the man in the street.

Reuced income tax for the top earners.
Reduced corporation tax. OK for big firms but small firms will solve the unemployment crisis.
Penalised pensioners who save. Not much incentive for people to save then.

Yes he did reduce income tax for the lowest paid as well as the rich but I believe he should instead have reduced massively national Insurance (which is in effect an income tax) for both employers and workers.

These measures, together with the scrapping of employment and Health and Safety legislatioin would free our people to produce and compete in the world as we must.

INCENTIVISE THE BRITISH PEOPLE, cut the bureaucratic and tax bonds which hold us back, and we will be able to compete with the best in the world.


But this government wont as they have an incentive to pander to their wealthy friends.


They dont represent us or the interests of our country so-


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