Thursday 20 September 2007

Milk Them

So the supermarkets have been fixing the prices of dairy products? How astonishing!

We need a party which will require the supermarkets to fund investment in agriculture and small business (investment to be determined in close consultation with the National Farmers' Union and the Federation of Small Businesses) by means of a windfall tax. If necessary, this would be to be followed by a permanently higher flat rate of corporation tax.

In either case, there would be strict regulation to ensure that the costs were not passed on to suppliers, workers, consumers, communities or the environment.

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  2. The market in the production and distribution of food is utterly distorted.

    Instead of trying to patch up a completely distorted market, which will no doubt create a whole new set of unpredictable incentives and unwanted consequences, why don't we try to eliminate some of the original distortions?

    Here's a few, just off the top of my head:

    - Enforcement of an unfair system of land ownership based on historical injustice and continued only through enforcement at the cost of the taxpayer.

    - Massive agricultural subsidies (and subsidies just for owning land, in some kind of perverse reverse-Georgism!).

    - Creation of a free system of highways, which allow the use of haulage over long distances, giving a huge artificial economy of scale to large retailers.

    - No systems to make large retailers pay the full cost of their business including what they currently externalise onto their surrounding communities.

    - Employment and health and safety regulations, which small businesses are less able to cope with.

    - The limited liability laws, which insulate owners of capital from the negative consquences of their enterprises. Small business owners get no such protection (and neither should they).

    - A taxation system which favours large enterprises.

    - Regulation of unions, which prevents the organisation of labour, which would drive up costs for large retailers.

    That's just a few, there are a lot more. My point is that there is no point fiddling with the occasional egregious market distortion when not a grain of a corn in the whole world is bought or sold in anything approaching a truly free market.

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