Transcription
Hello. So, I'm going to do something different this week and take one thing and talk about it as concisely as possible. And it is the perfect wealth tax, because there is a perfect wealth tax, a perfect one. And it's getting missed by everyone. And before I reveal this perfect wealth tax, that's right, just call me Johnny Cliffhanger. It's coming. Calm down.
But first, I have to separate the ideas of should there be a wealth tax from what is the perfect wealth tax? So, we have an inequality problem, and that's agreed by everyone now. Well, for a long time, actually, it was misdiagnosed. For decades, we've been told that the problem with an economy was lack of growth. So, we chased growth, right? And then we were told the problem was with productivity, so we chased productivity. For decades, productivity did grow, capital did grow, but the gains from that growth didn't circulate. They pooled. They pooled into assets. They pooled into housing. They pooled into shares, into capital ownership. An economist like Thomas Piketty showed that returns to capital have grown much faster than the rest of the economy. And these aren't fringe views at all. Like even the main monetary institutions of the world, like the OECD and the IMF. Yeah, the IMF, the International Monetary Fund, the OGs of monetary institutions, they all agree, which is awkward, isn't it? Because when your argument for 40 years has been, "No, listen, that wealth is just going to trickle down. I know it's been 40 years, but it's only 40 years. In the lifetime of the planet, that's barely nothing. So, just let Wait. Hold. I know you're hungry right now, but your children, if they survive, they'll get some of the money trickling down to them. So, that's nice, isn't it?"
And if the actual monetary rainmakers of the IMF are saying it, if they are saying, "Uh yeah, actually trickle-down economics doesn't work. Turns out really awkward. It turns out that what is actually it's not so much trickle-down as a swimming pool of economics. You know, where if they say there's a massive swimming pool where all the water is in Kensington and the swimming pool has a very exclusive membership policy that doesn't let you in. But as people leave dripping with water from their very nice swim, you can maybe take some of those drops and uh lick their feet if you like to uh quench your thirst. And uh no, I'm really sorry, you can't have any of that water. Uh in fact, if you do and try to try and take any of that water, uh we're going to leave and take our swimming pool to another country and that wouldn't be very good, would it? Because then you die of thirst. So, you know, you either leave us with the swimming pool or you die of thirst. What do you prefer? It's You can lick our shoes uh with the wet shoes or you can die of thirst. Uh no, your choice. Totally your choice. I'm just saying that's that's that's the way things are."
Far too many people across all types of economies are seeing their aspirations limited by the impact of technologies and the repercussions of excessive income inequality. The great status quo of globalization and neoliberal policies and international activity in the direction of big business is is being threatened by this high inequality. Because it's agreed that the biggest problem in modern economics isn't productivity. It's not laziness. It's too much capital, too much wealth pooling in the wrong places. And that's agreed now by everyone. Wow, everyone's agreed that. Oh, sorry. Everyone apart from, say, organizations funded by the rich like Henley & Partners who publish an annual report warning governments that millionaires are fleeing the country. And it's interesting, isn't it? Because Henley & Partners who are, and I want to be uh really clear about this, a company that sells visas to millionaires who want to flee the country. That's what they do. That's their business model. Their research is produced by a firm with apparently [laughter] one employee. And their methodology has been described as fabricated. And the numbers contradict official data. Yet their statistics get quoted in Parliament, the Financial Times, the Telegraph. And they're presented as neutral neutral economic analysis rather than what they actually are, which is a brochure, a very expensive brochure designed to make governments so frightened of losing rich people that they'll create more golden visa schemes, which, oh, coincidentally, Henley & Partners will then sell to the rich people. It is genuinely one of the most elegant conflicts of interest in modern public life.
So, I'm going to say it again. We're all agreed. The IMF, the OECD, stats stats stats stats stats stats stats stats stats. Great. Well, we're all agreed what we need to do about the wealth pooling, about the asset bubble. We need some kind of redistributive tax to fix our economy. Great. We're agreed. That's incredible, isn't it? We're all agreed. Fantastic. And this is the moment where everyone goes, well, yes, we are agreed, but um what type of wealth tax? Because there are many different types of wealth tax, you see. There's a land tax, uh there's an inheritance tax. And this is where we get stuck because the exact detail is scary. What But what if we make a mistake? If it's If it's 2.5 rather than 2.7, then that might mean all of the millionaires leave. Oh, sorry, those stats aren't real, are they? Sorry, but it it I it's it's very stressful, actually. We need proper detail.
Yes, you absolutely need proper detail, but to get bogged down in the exact detail this early in the process misses the fundamental way that the human brain, the human process works. Because we don't, as a species, know exactly what we're going to do before we end up doing it. We just start running and we correct as we go. And the best example of that is running or catching a ball. Cuz if somebody throws you a ball, you start running. You don't sit down and go, "Right. Wind speed. Right. What's the coefficient of the spin?" No. You run. And crucially, this is so key and you don't realize it, but when people run for a ball, you don't run in a straight line. You keep your eye on the ball and if you look from above the way people run, you run in a zigzag. Because humans don't run to catch a ball. They don't move in a straight line when they run to catch a ball. They zigzag. They self-correct in real time. They just correct as new information comes in. And that's how all human systems work. Income tax wasn't perfect on day one. I mean, it's still not in a lot of ways, but we constantly tweak it. Neither was any serious reform. They weren't designed into perfection. They were chased into shape. The real danger here is not getting a wealth tax wrong. The real danger is never agreeing that that's the direction we need to start moving in. Because while we argue about the arc, the capital keeps compounding. Assets keep inflating. Inequality keeps widening. So, what's happening is the uncertainty is being used as an excuse for paralysis. And you can see this really clearly in the trailer video I made about how the powerful just need to remain silent to benefit from it. Like, watch what happens the moment somebody says, "Maybe extreme wealth should be redistributed." The conversation it doesn't move forward. It collapses inward. Even left-wing economists say it doesn't work, but it'll cost it'll make everyone poorer, okay? Because of behavioral change, people leaving, loss of incentive, uh the cost of implementing it, it will make people poorer. Even left-wing economists say that.
Well, what about the unintended consequences? What if it scares investors? And what if the rich just leave? Notice something important about that. None of those questions challenge power. They challenge each other. Because when people without power argue amongst themselves, people with power they don't need to defend their position. When your enemies are making a mistake, don't interrupt them. They can just sit back silently and wait. And let the faithful fight among themselves. And this is where Traitors stops being a television show, right? And becomes an economic model. But The Traitors also shows something else. It shows what actually threatens power. Because when enough people see and say the same thing at the same time, when they agree on a direction, silence stops working as a strategy. [snorts] And information asymmetry it doesn't disappear overnight. But it's advantage collapses the moment the people act together. Because silence only works when people are divided. And that's why we need some kind of wealth tax as soon as possible. Just some kind, not perfect design, not endless debate, just direction. Because while we debate, billionaires are buying up housing, media companies, and political influence. While we argue about how it would work, they're using that wealth to make sure we keep arguing forever. Movement matters more than perfection. Because actually, you don't need confrontation to challenge the status quo. You just need agreement. So, don't let the traitors keep winning. And yes, when I say traitors here, I'm talking about billionaires. People or traitors to mankind. People who take 99% of the resources and call it earned success. I honestly, though I'd love to see a version of The Traitors where one contestant keeps 99% of the food and water. I really wonder how long that would last. I mean, just for the complaints. Though I know one thing for certain, the faithful wouldn't debate those rules. They'd change them in real time.
Well, there's another way to see it. We are presently in a car driving off a cliff, an inequality cliff that's getting wider and wider and wider and deeper and deeper and deeper. And we're arguing about whether we need to turn the wheel 10° to the right or 20° to the right to avoid the cliff. And you know what? Let's just start turning right. Let's just try to avoid the cliff because it's getting closer and closer. The perfect wealth tax is one that we do. Simple as. Because doing something right now is 100% more important than doing nothing. And that is the perfect wealth tax. And that's not a trick. End of.
So, when you're in a conversation and people are talking about nitpicking this tax, that tax, this idea, that idea, bring it back to hang on, it's the right thing to do though, a wealth tax, right? That is the right thing. Have the stats about the asset bubble. Have the stats about the IMF, the OECD. And say, right, that is the thing to do. Now, the exact we'll work it out as we go along, but are you agreed on that? And if you can get somebody to agree that a wealth tax, an asset bubble tax, however you want to phrase it, is the right direction. That's all you need somebody to agree on. You don't need them to build the policy there, right there, in real time for you. Because the perfect wealth tax is one that we all agree on. And what we all agree on is that we need a wealth tax.