Review: Richard Murphy, The Joy of Tax

This is an interesting, articulate book which criticises the United Kingdom's failing tax system and proposes a fairer system and - at the same time - defends the legitimacy and effectiveness of deficit financing. It gets better as it goes along: the final chapter is very good indeed in setting out a coherent progressive vision for UK tax policy. My doubts centre on some of the lacunae, the things Murphy does not write about. An enthusiast for government borrowing, treated as the painless creation of debt which can be put to good use, he nowhere mentions two things: debt servicing and Greece – the former is not mentioned at all and Greece gets just one mention for the size of its black economy (a quarter of total output).

Debt servicing matters for a number for reasons. It’s true that most governments still have remarkably little trouble selling bonds, even long-term ones, which promise a fixed return each year. They have been doing it for centuries. But problems can arise and they usually start in the second-hand market. Suppose a government issues a £100 bond promising 5% per year (that’s £5 to the bond owner once a year) plus face value back when the bond expires. Suppose it prices the bond at £100 and sells out. If the bond market thinks that 5% is generous and that the government is a dead cert to repay and that inflation is likely to be low, second-hand bonds may start to trade at higher than the original price. In contrast, if 5% seems mean or there are doubts about whether the government will repay or concerns about inflation eating away the repayment value then the second-hand price will fall. All of these things can create problems when the government issues its next lot of bonds. They may have to drop the price to £90 or £80 and still pay out £5 a year on the face value and still have to come up with £100 at the end even though they only got £80 or £90 to start with. It’s a further complication that if the bonds are traded internationally, it becomes relevant what foreigners think they can use £s for. If they think there is nothing the UK makes or does which they will want to spend their pounds on, then that will adversely affect their valuation of the bonds on offer. In the real world, some countries have currencies which are to all intents and purposes worthless outside their own boundaries because no one outside can think of anything they would want to do with that currency. It’s only if you start offering fantastic rates of interest that they may begin to look around to discover if maybe your economy actually produces something worth buying or buying more of.

There is also the small matter of how the government finds the money to pay the interest and repay the bonds. If it spends sensibly the money it gets from bond sales, then economic activity will increase and (in a well-run state) tax revenues will increase with it and there is no problem – money will come in to service the debt. In other words, bond money has been used to invest, to make things happen which otherwise wouldn't. This is the virtuous cycle which Murphy simply assumes. But if governments give away the money on electoral bribes ( “Everyone can now retire at 50!”) or if it has a corrupt or inefficient tax collection service ( = Greece), then no money will be generated to service the debt. In such circumstances, governments can try to sell new bonds to pay the debt on the old ones but sooner or later the market will realise that the government is now running a Ponzi scheme and will refuse to buy the bonds. At this point, the government can ‘fess up that it cannot service its debt and go into default. Or else, it has to cut back on important activities like the health service and schools and divert the money saved to paying interest on debt – at which point it loses popular support and in addition the ability to go on funding the retirement at 50 it has made everyone think was possible.

Somewhere in this interesting book such matters should have been addressed.

Review: Gerald Steinacher, Nazis on The Run

This review was first published on www.trevorpatemanblog.com 27June 2011. It has been posted,unchanged,here to link to the immediately preceding Blog about book publishing.

This is the most unsatisfactory academic work that I have read for a long time. I will explain why shortly.

At the end of World War Two, hundreds of thousands of people were on the move right across Europe. As Allied soldiers in vast numbers moved deeper into Italy and Germany, vast numbers of people moved in the opposite direction.

Who were they? There were civilians trying to get back to homes they had left, either as forced labourers or refugees. There were Jews who had survived the Holocaust, many or most of them traumatised, not trying to return home but instead looking to find a route out of Europe and - generally - a route to Palestine. There were those who, for many reasons, did not want to end up in Russian-occupied or Soviet-subservient areas, including not only those from eastern Germany and central Europe but also from the Balkans. There were "ordinary" criminals who had pursued regular criminal lives, thieving and profiteering, under the shelter of Nazi criminality. There were probably some ordinary German soldiers who had done nothing particularly wrong but who did not want to live in Germany any more. And there were SS and Nazi personnel, including war criminals, large and small.

Many of these very many people gravitated southwards, down into Austria, across the border into Italy and then, quite often, out of Europe altogether through the northern Italian ports: their destinations were Latin America, the Middle East, North America, Australia.

Steinacher is primarily interested in those who were wanted or who knew they should have been wanted by the Allies: the criminals and the war criminals, high-ranking and lowly, many of whom evaded justice and emigrated, mostly to Latin America and mostly to Argentina. But some of them just hid out in Italy and, in due course, made their way back to Austria or Germany with new identities.

Steinacher's book fails for a number of reasons.

First, it is less like a book and more like a notebook: lots of miscellaneous facts, disjointed, endlessly repetitive, the chronology erratic. I find it hard to believe that anyone at the English-language publisher, Oxford University Press, read the book before agreeing to publish it. Read it cover to cover, as I have done, and it is like reading the first draft of a Ph. D.

Second, though it points the finger at the civil authorities in South Tyrol, at the Vatican, at the International Red Cross and at the US intelligence services as aiders and abetters of criminal escapes, the finger wobbles. Steinacher gives us no precise idea as to the proportion of criminal elements among the many thousands of people on the move who sought help from these agencies. He simply fails to paint the larger picture, clearly and in detail. At the end of the book, you have no idea whether the criminal element was one in two or one in two thousand desperate people knocking at those doors (except that you can figure that the US intelligence services were in a different position - they knew who they were dealing with and they only wanted to deal with dodgy characters, especially after the anti-communist dynamic came to dominate after 1947).

Third, the book is largely useless to anyone of a straightforward lawyerly frame of mind. Steinacher constantly suggests answers, but rarely can one pin down a clear answer to these kind of question (let's use the Vatican as an example):

What civil or criminal offences , if any, did Vatican official X commit in rendering assistance to a fugitive of justice or as-yet uninculpated criminal, Y?

Was the whole Vatican orgnisation implicated in the activities of its individual officials, so that it should be regarded as a criminal organisation rather than just as an organisation which housed criminal officials?

To answer these questions, you have to work out if official X knew or had good reason to suspect that Y was being sought for crimes committed or was on the move because of such crimes, even if not yet inculpated. Steinacher simply doesn't work it out for most of his illustrative cases.

And you have to look at funding decisions and at euphemisms and "Confidential" markings in official correspondence.

True, there is the obstacle that the Vatican archives for this period are still closed to outsiders - the best evidence for the claim that they will incriminate, all the way up.

Some of the things Vatican officials did can be explained without imputing criminal intent. Many people had no documents and officials were willing to take your word for who you were and give you a document saying that you were who you said you were. This then allowed you to present yourself to the International Committee of the Red Cross who would furnish you with a one-way travel document to which you could then get a Latin American visa affixed.

The slackness of these procedures can be explained both in terms of having to work under pressure - there were a lot of people knocking at your door - and as a basically charitable, humanitarian response to human distress.

But when someone told you they had been born in A when you could tell from their accent (or their mother tongue) that they had never been near the place, then you became a party to fraud when you helped them fabricate a new identity for themselves. Even more so, when you suggested a suitable identity. (South Tyrol figures largely in Steinacher's story because its unsettled legal status meant that if you claimed to have been born there, you could also claim to be stateless and that meant the Red Cross, rather than the International Refugee Organisation, could deal with you).

In addition, Steinacher is able to claim that when high authorities in the Vatican and ICRC were told that their on-the-ground bureaucrats and systems were allowing wanted war criminals to escape from justice, they did little or nothing to change personnel or tighten up procedures. In both cases, it began to look as if the only "identity" you needed was that of being anti-communist.

All this said, Steinacher leaves us in no general doubt that in 1944 - 47 there were numerous Nazis and Nazi-sympathisers in South Tyrol, in the International Committee of the Red Cross and in the Vatican, who helped Nazi war criminals escape from Allied justice. This included people in senior, powerful positions - like the Pope's friend, Bishop Hudal - who knew exactly what they were doing and why.

Many Nazis ended up in Latin America, especially Argentina. Some ended up working for the CIA. It would be another book, but an interesting one, to trace the part they played in the reactionary politics of their adoptive countries and the amoral realpolitik of the CIA. Perhaps the invasion of the Falkland Islands was not just about Argentinian nationalism but also about Nazi revenge.

Essay: Who Reads The Book Before It Is Published?

Quite often, no one, except maybe the author. That's my hypothesis. Here's the argument.

On several occasions reviewing books here and elsewhere, I have had the feeling, "No one has actually read this before signing it off and sending it to the printers". The feeling has arisen in different ways.In the case of Gerald Steinacher's Nazis On The Run (Oxford University Press 2011) the book was obviously a first draft, repetitive and unstructured with inconclusive arguments. Surely, I felt, if an editor of any kind had actually read this - cover to cover - before it went to press, they would have called halt and asked for quite a lot of re-writing. (I realise my review of this book is not on this site, so I will add it as my next Blog).

Then in the case of Suzanne Rindell's The Other Typist (2013) reviewed on this Blog 24 June 2014, I found myself making a list of anachronisms which damaged the verisimilitude of a text which aimed to sound like the voice of a 1920s American woman. Surely, I thought, any friend of the author or reasonably alert publisher's editor would have underlined them and proposed alternatives (or told the author to find alternatives).

And then this week, reading the enthusiastic endorsements on the cover of Colm Toibin's Brooklyn (originally 2009), I really did wonder, Have they all actually read it?

Reading a book takes time, a lot of time. It's very hard to make a profit on it - I write that as someone for whom, over a fifty years period, reading comes second only to sleeping in the hours of my life it has absorbed. Publishers know there is no profit in reading, which is why modern publishing is geared towards making key publishing decisions without reading any books. 

I discover this as I look at publishers' websites - I have a book I want to offer them. Quite reasonably, I think, some of them want an initial A4 Book Proposal in order to make a quick decision on whether to take any interest at all. But quite a few of them want quite a lot more than that. On an eight page form, you not only give them a title, a table of contents, a synopsis (helpfully characterised as suitable for a jacket  blurb), but also a target market, promotional venues, a list of names of those who will provide product endorsements ("puffs") which can be printed on the jacket, the names of a couple of friends who will say that you are a jolly good person, and so on. There may be a caveat - we will, of course, send the book out for independent review before we make a decision - but it looks to me that this proposal is not just a piece of bureaucratic gatekeeping, it's basically as close to your book as the publishing house is going to get. Get past the gatekeeper and from then on you will simply be waved through.

There is, of course, a fictional trope of the Author and Editor huddled over a manuscript, of late night phone calls, of arguments and bust-ups. I am beginning to think that nowadays that may be all it is, a fictional trope.

Review: Colm Toibin, Brooklyn

I haven’t seen the film. Good films are often based on short or indifferent literary texts, but which have the potential to be transformed by cinematic treatment. Crowd scenes, dance hall scenes, tense dinner table settings, desolate graveyards, departing passenger liners, are all things which can be magicked by film and this book contains all of those.

As for the book itself, my paperback copy carries 15 major review endorsements of the literary text. I am unnerved. I am clearly missing something. For I found the writing flat to the point of banality and the narrative without effective pacing. I nearly gave up around page 100 but then the book does pick up and I made it to the end. Nonetheless, at no point did I find myself moved by what could be a moving story. Instead, I felt the story was being neatly and sometimes tritely packaged, with some heavy-handed labelling to make sure that we don’t miss the point, that Eilis is digging a hole for herself etc.

Let me give one example from a stage of the book where I was struggling to keep going, from page 89:

By the time they were removing the trifle dishes, the hall was a mass of smoke and animated talk. Men sat in groups with one or two standing behind them; others moved from group to group, some with bottles of whiskey in brown paper bags that they passed around….. Eilis thought, as she sat down with a glass of sherry in her hand, that it could have been a parish hall anywhere in Ireland on the night of a concert or a wedding …

This reads like a set of instructions for creating a film scene; and it tells rather than shows. There is nothing here to make us feel the animated talk; we just know it is supposed to be out there somewhere.

But all those 15 critics, including some heavyweights, can’t be wrong.