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The Guardian yesterday printed a disagreement between Salman Rushdie and Germaine Greer. 

Reading it, I was reminded about the spat following Rushdie’s Satanic Verses. In particular, the issue that came to my mind was Khomeini’s fatwa and the subsequent offer of a reward for anyone who can execute Rushdie.

In the fatwa, Khomeini said:

“that the blood of the author of this book….. which has been compiled, printed, and published in opposition to Islam, the Prophet, and the Qur’an, as also of those involved in its publication who were aware of its contents, is hereby declared forfeit. I call on all zealous Muslims to dispatch them quickly, wherever they may be found, so that no one will dare to insult Islamic sanctities again. Anyone who is himself killed in this path will be deemed a martyr.”  

This is a direct call for Rushdie’s assasination. It is also a call for the assasination of those who were involved in the publication of the Satanic Verses.  

Admittedly, in Islamic law, there are jurists who say that the punishment for insulting prophet Muhammad (s.a.w) is death, if one is found guilty.  

But it is extremely important to remember that the punishment is prescribed in Islamic law. The term law implies fair trial and due process. It does not mean anyone on the street can simply go out and lynch Rushdie to death. That is not at all an Islamic act. That is cold blooded, barbaric murder.  

Anyone who died while trying to carry out this call for murder is in no way a martyr. He is, simply, a murderer.

The New Statesman is viciously politically incorrect, but that is why it is outrageously good.

Alan B’stard is the puppet master who controls Tony Blair the Prime Minister. Based at 9 Downing Street, he runs the country (and the world via Condy). Condoleezza Rice drops in every now and then, discussing how to solve world problems (while B’stard dreams of her fulfilling his sexual fantasies).

No member of the British establishment was saved from being satirised.

Cherie Blair was cruelly portrayed as a dog that tried to copulate with B’stard’s leg. The Queen, John Prescott, Alistair Darling, Gordon Brown, Alistair Campbell, Mandelson…everybody was in it one way or another. 

Rik Mayall did a great job. And The New Statesman is perhaps one of the most vicious political satire recently produced.

If you are not one of those people who cringe at political incorrectness, you should go and see this play.

Can someone please tell me why the statement below is insulting?

“Islam bukan sekadar memakai serban dan janggut. Arab Jahiliah, termasuk Abu Jahal, memakai serban dan berjanggut. Tidak hairanlah bagi Rasulullah yang lahir dan membesar dalam masyarkat itu, berbuat demikian.” 

Check out the comments on Freedom Week on ASI and IEA.

I received my first pay for this new job last week. I queried the amount of tax I had to pay since it looked a bit high.

Yesterday, I got a reply from my new employer. It looks like I will be paying around £791 of taxes per month.

If you work, this is the “benefit” you get from working. What a wonderful world…

(Patrick Minford)

The actual paper is available here.

The existing tax system is uncompetitive for the economy. It benefits only those who are in median income level. It punishes those who earn above average and, at times, may be quite high for those who earn below average.

E.g.: High earners are taxed at excessive rate and this will eventually push them to go a more tax-competitive country. It is also a “punishment” for earning money. On the other end of the spectrum, even the low-earners are taxed too.

A flat tax system will be equal across society but with a much higher threshold (i.e. the minimum amount that you have to earn before being taxed). This is much fairer.

Patrick believes that taxation should be on consumption rather than on income. (I did not take detailed notes on this issue as I do not see it ever happening)

The reasons we have incremental tax rates are:

1. strong lobby from interest groups (mainly re-distributionists)
2. median-level earners forms the vast majority of voters. The best way to get their vote is to promise not to tax them too highly. In other words, tax anybody else at whatever rates, but never tax the median-level earners more than they would agree.

Flat tax rate would create economic growth.

Flat tax would also benefit from the Laffer effect. (Anak Alam, if you want to know more about the Laffer Effect, ask Abidin. He understands it better than me, I think)

The flat rate must not be high. A suggested figure is around 20% with a view to reducing it down to around 13%.

A good flat taxation system would focus on maximizing the benefits from growth and Laffer effect.

Flat tax, despite it being a much better system for the economy and for the public as a whole, is also politically unpopular. The way forward is educating the public.

Question to self: At only 2.5%, zakat is low and is flat. Isn’t that intriguing? 

(Tom Palmer.)

Tom provided a brief but detailed exploration of how people in the past fought for their freedom. A sixteen page paper accompanies his presentation and it is not possible to summarize 4500 years of history here. I will not attempt to provide a summary, but I will just highlight a few points.

There are two pre-conditions for individually liberty and constitutionally limited government:

1. The existence of a “higher law” whether expressed in terms of a transcendent God or access to an objective reality that is not dependant on perceptions (e.g. the understanding that fire burns in all circumstances).
2. An appreciation that laws can be discovered and is not merely the expression of will by the ruler.

Freedom started with a struggle to counter the might of an oppressor. Freedom is not about obliterating one power in favour of another, but it is most usually about balancing one power with another (i.e. creating a mechanism for check and balance)

Note to self: The two pre-conditions allow for the acceptance that a set of “higher law” does exist and cannot be changed. Thus, what is from God should not be changed, but we are free to “discover” new laws that were not explicitly prescribed.

(Mark Pennington)

Spontaneous order theory does not discuss the motivation behind people’s actions. Nor does it assume self-interest.

The reality is, people are motivated by self-interest.

Central does not fail because it doesn’t motivate people. It fails mainly because the planners have cognitive limitations.

Adam Smith argued that self interest will produce public good via the invisible hand only if the correct institutions exist and function. Otherwise, self-interest will bring public bad.

Public good is not an automatic outcome of self-interested actions by free-marketers. It requires the existence of certain institutions.

Proponents of public choice theory believe that government interventions in market activities are unnecessary.

Government intervention is often defended with reference to market failures arising from externalities, imperfect information and monopoly of power.

Public choice theory suggests that government intervention would only bring about more serious institutional failings, not correct them.

The market is much quicker to punish or exclude wrong doers than governmental bureaucracies. Enron is a good example. It took only two weeks for the market to completely demolish Enron. It may well take much longer if the public opted for political interference.

The political process does not provide enough dynamics to allow change and proper accountability. The market is much better at this.

Politics is the art of getting others to pay for what you want. Politicians can force you to pay for something that you do not need.

The market is about asking you to pay only for the things that you need. No one is forcing you to pay for anything. It is voluntary.

Thus, the powers of the state and its political actors must be limited and the market must be allowed to take its course.

(Professor Pierre Garello, University Paul Cezanne Aix-Marseille & Institute of Economic Studies-Europe)

The free market is not a homogenous club. Differences pervade the free-marketer community.

Some of the main schools of thought are:

1. Classical school

•  Includes names like Adam Smith, Ricardo, Malthius, Mill, Say and Bastiat.

• Subscribes to the concept of spontaneous order

• Calls for a limited state as the state does not have enough knowledge to plan (i.e.: cognitive limitations)

• Believes that the value of an item (theory of value) is directly associated with the cost of production of that item.

2. Neo-classical school

• Includes names like Marshall, Jevons, Friedman and Walras

• Re-states the beliefs of the classical school but with two main differences:

• Believes that the value of an item is directly associated with the needs and demands for that item, not the cost of production.

• Use more mathematics when dealing with economic issues

The classical and neo-classical schools missed out a very important aspect of life – the dynamics of social interactions. This gives rise to the third school:

3. Austrian school

-         Still believe in the same main principles of spontaneity and limited state.

-         Menger argued that:

o       Social phenomena change with time

o       People have limited knowledge

o       There are a lot of uncertainties

-         Combined, these result in evolution and changes of “the rules”

-         Austrian school does not support the “Rule of Reason” theory. This theory calls for every issue to be dealt with on a case by case basis. This may sound very reasonable but in reality it is not. Austrian school economists argue that the cognitive limitations prevent people from making the right judgement if everything is dealt with on a case by case basis. We simply do not know enough and our cognitive limitations make us look for answers only within the realm of our knowledge. Thus, when searching for an answer, there is always a possibility we search at the wrong place while the answer lies elsewhere(e.g. the streetlight fallacy)

-         Believes that order in the market is created by a combination of property law, contract law, tort law and the existence of properly functioning institutions to enforce the laws. The market therefore should not be regulated with laws like anti-trust or competition law. The market is just too complex to regulate.

Question to self: If you do not favour competition law, how do you deal with a situation where a monopoly charges an extortionate price?

(Kendra Okonski, International Policy Network)

The market has a way to deal with environmental issues.

Environmentalists have for so long taken a very left-leaning view of how to deal with environmental problems. They ignored the market solution and prefer banning and regulating.

In reality, we have never run out of resources that we open to market pressures.

In the market, scarce resources would rise in price and this would force the findings of alternatives and less usage of that resource. 

For example, if oil were allowed to be fully open to market pressures, its price will rise steeply if its supply were limited. This would force more research to discover alternatives. What is happening now is actually accentuating the problem as there are no real incentives or pressures to discover alternatives.

There is no historical evidence of a resource actually running out.