Extending the Civil List to billionaires?

[Gilgongo]

I was reminded of the Civil List the other day in the context of what I think is the biggest long-term problem we have besides climate collapse, and that's wealth inequality.

It stands to reason that the rich can't keep getting richer and the poor poorer at current rates as established in the 1980's. Something has to give. I'd prefer that something not to be too catastrophic, but it doesn't look good in the next few decades otherwise.

So what would happen if we extended the Civil List to include the top 10 members of the Sunday Times Rich List? Just as we do with the monarch today, we'd offer them a salary (£10M a year should be OK to keep the yachts and champagne flowing) in exchange for diverting the remaining profits from their businesses and estates to the exchequer - a process managed and overseen by the Crown Estate.

Wealth distribution arguments stuck on a "tax the rich" problem (who is "rich"?, how much tax, and of course the Laffer Curve fanbois) get nowhere. But with this idea it's not "tax the rich" it's "own the richest". No need to even mention the word tax in fact. They can still be "wealth creators", rising tides can lift all the boats etc. etc. and the businesses will keep running and expanding (just as the Crown Estate ensures they do for the monarch). But if you are generating billions that go nowhere real otherwise, then the time has come to serve your country, no?

Some useful links:

https://mkorostoff.github.io/1-pixel-wealth/

https://en.wikipedia.org/wiki/Civil_list

[CliffEdge]

It would be very inflationary, obviously.

In the overall scheme of things billionaires may be unpopular but the only billionaires that cause real problems are the likes of Putin and Trump.

The real problems are the likes of overpaid local government workers, railwaymen, dentists, GPs, surgeons.

[odysseus2000]

I was reminded of the Civil List the other day in the context of what I think is the biggest long-term problem we have besides climate collapse, and that's wealth inequality.

It stands to reason that the rich can't keep getting richer and the poor poorer at current rates as established in the 1980's. Something has to give. I'd prefer that something not to be too catastrophic, but it doesn't look good in the next few decades otherwise.

So what would happen if we extended the Civil List to include the top 10 members of the Sunday Times Rich List? Just as we do with the monarch today, we'd offer them a salary (£10M a year should be OK to keep the yachts and champagne flowing) in exchange for diverting the remaining profits from their businesses and estates to the exchequer - a process managed and overseen by the Crown Estate.

Wealth distribution arguments stuck on a "tax the rich" problem (who is "rich"?, how much tax, and of course the Laffer Curve fanbois) get nowhere. But with this idea it's not "tax the rich" it's "own the richest". No need to even mention the word tax in fact. They can still be "wealth creators", rising tides can lift all the boats etc. etc. and the businesses will keep running and expanding (just as the Crown Estate ensures they do for the monarch). But if you are generating billions that go nowhere real otherwise, then the time has come to serve your country, no?

Some useful links:

https://mkorostoff.github.io/1-pixel-wealth/

https://en.wikipedia.org/wiki/Civil_list

This is all good stuff for the last century, but with AI we now face a complete change in the economic model.

Even the primitive AI we have now that is relentlessly getting better & has an IQ of circa 150 albeit with attention deficit disorder as indeed do many young people.

Still as is, AI can do many jobs, the more technically demanding, the easier AI can do it and then one looks at the costs of and availability of for example an AI GP compared to a human one and the human is out matched on any measure.

There are numerous other professions and jobs where the future is AI and we then have to find someway to operate society to provide the goods and services we need and a level of innovation too.

At the most basic level some kind of universal basic income is needed and who or what decides who gets what?

Regards,

[Steveam]

The 2023 Reith lectures (Prof Ben Ansell and available as BBC Podcasts) address some of these issue. His main discussion is of Democracy and Government but he discusses some of the prerequisites such as cohesive social structures and inclusion. (The OP asserts that inequality is rising but one has to look at this quite carefully - do we mean only wealth inequality or also income inequality; are we looking only at some countries - our own perhaps - or worldwide; are we looking at averages or medians or distributions?)

Although not his main focus, in the third lecture he discusses the pros and cons of UBI in terms of social cohesiveness (and comes out against). He proposes various alternatives and ideas in a U.K. context (where regional inequality is a particular issue). A good series of lectures.

Best wishes,

Steve

[DrFfybes]

So what would happen if we extended the Civil List to include the top 10 members of the Sunday Times Rich List? Just as we do with the monarch today, we'd offer them a salary (£10M a year should be OK to keep the yachts and champagne flowing) in exchange for diverting the remaining profits from their businesses and estates to the exchequer - a process managed and overseen by the Crown Estate.

But why would they go for that?
Surely much cheaper and simpler to donate to your PM candidate or party of choice and wait.

[Gilgongo]

OK, you first.

Thank you for your encouragment! I am indeed working to appear in the top 10 of the Sunday Times Rich List, but I'm afraid it may take me a while yet.

[Gilgongo]

It would be very inflationary, obviously.

Do you mean public spending is inflationary? Not sure I follow.

At the most basic level some kind of universal basic income is needed and who or what decides who gets what?

Perhaps, but this isn't about UBI. It's about re-allocation of wealth from a handful of named individuals. We name one today called The King. This idea extends that to a few other people.

[Urbandreamer]

It would be very inflationary, obviously.

Do you mean public spending is inflationary? Not sure I follow.

The Civil list is poorly understood by all/many. IF you assume that the civil list, like state pensions and the armed forces, is not funded from government income. Then obviously printing money to increase spending is inflationary.

However if you argue that the civil list is paid for by income from the crown estate and that the rest is paid for by taxes, then public spending isn't inflationary.

Evidence however seems to suggest that there has been a large increase in the money supply of recent years. Some of us noticed the fact and predicted inflation.

At the end of the day, it's all about what money is.

Remember

Inflation is always and everywhere a monetary phenomenon,.....

[Gilgongo]

And presumably you’re going to do that by foricbly confiscating other peoples property. There’s a word for that.

Well, "forcibly" is a bit strong, but Parliament agreed with the monarch to appropriate the profits from (but not the ownership of) the monarch's estate in return for a "salary". And it's been that way since 1760. I'm proposing an extention of that to a small number of the richest people in the UK as well.

[Gilgongo]

do we mean only wealth inequality or also income inequality; are we looking only at some countries - our own perhaps - or worldwide; are we looking at averages or medians or distributions?)

That's a good point. What I mean is that regardless of the techncial economic or historic relative measures, inequality is ultimately corrosive. For example, the UK is like most other Western democracies in that a good edcuation, hard work and probity are held to lead to health, wealth and happiness just as it did for your parents and grandparents. Yet the lived experience of such hard work and probity increasingly doesn't deliver on those things becuase too much of the pie is being taken by too few people.

The rise of Trump (and arguably Johnson) and others is essentially the outcome of this long term with political promises broken, efforts unrewarded, people marinalised and ignored. So they will eventually seek ways to explain why. This leads to turning against the things that will in fact improve their lives (hard work, education etc.) if those things aren't seen to deliver.

https://www.resolutionfoundation.org/ev ... y-britain/

Less equal societies have less stable economies and score lower on meaures such as crime, social mobilty and cohesion:

https://equalitytrust.org.uk/about-inequality/impacts

[ursaminortaur]

Do you mean public spending is inflationary? Not sure I follow.

The Civil list is poorly understood by all/many. IF you assume that the civil list, like state pensions and the armed forces, is not funded from government income. Then obviously printing money to increase spending is inflationary.

However if you argue that the civil list is paid for by income from the crown estate and that the rest is paid for by taxes, then public spending isn't inflationary.

Evidence however seems to suggest that there has been a large increase in the money supply of recent years. Some of us noticed the fact and predicted inflation.

At the end of the day, it's all about what money is.

Remember

Inflation is always and everywhere a monetary phenomenon,.....

Except where it is caused by external price rises such as higher oil or gas prices. (Milton Friedman's Monetarism was tried in the early 1980s and failed).

[Urbandreamer]

Except where it is caused by external price rises such as higher oil or gas prices. (Milton Friedman's Monetarism was tried in the early 1980s and failed).

Ho hum. Now I certainly am not going to claim that gas or oil prices have not risen.
However have you actually looked at the UK, US or Canadian money supply?

Here is the UK chart, sorry not log.
https://www.ons.gov.uk/economy/grossdom ... s/auyn/qna

Do you HONESTLY claim the QE didn't happen? Or that the country didn't close down for Covid causing an increase in spending and reduction of tax receipts?

Inflation wasn't transitory before events caused the rise in oil and gas prices.

No, Monetarism can't change supply and demand. Hence inflation in the price of goods with inelastic demand, and supply constraints. However money printing HAS been tried, multiple times. The results are uncomfortable at best and grim at worst.

Ps, you might like this report

https://www.bankofengland.co.uk/-/media ... haskel.pdf

At first glance it would seem to back you up, and that's what the words argue. Until that is you get to chart 9 the decomposition of inflation 2020 to half way through 2023. Inflation WAS rising before the war and BEFORE energy prices went up.

[ursaminortaur]

Except where it is caused by external price rises such as higher oil or gas prices. (Milton Friedman's Monetarism was tried in the early 1980s and failed).

Ho hum. Now I certainly am not going to claim that gas or oil prices have not risen.
However have you actually looked at the UK, US or Canadian money supply?

Here is the UK chart, sorry not log.
https://www.ons.gov.uk/economy/grossdom ... s/auyn/qna

Do you HONESTLY claim the QE didn't happen? Or that the country didn't close down for Covid causing an increase in spending and reduction of tax receipts?

Inflation wasn't transitory before events caused the rise in oil and gas prices.

No, Monetarism can't change supply and demand. Hence inflation in the price of goods with inelastic demand, and supply constraints. However money printing HAS been tried, multiple times. The results are uncomfortable at best and grim at worst.

Ps, you might like this report

https://www.bankofengland.co.uk/-/media ... haskel.pdf

At first glance it would seem to back you up, and that's what the words argue. Until that is you get to chart 9 the decomposition of inflation 2020 to half way through 2023. Inflation WAS rising before the war and BEFORE energy prices went up.

I'm not arguing that expanding the money supply can't contribute to inflation just that Milton Friedman's dogmatic statement

Inflation is always and everywhere a monetary phenomenon,.....

is incorrect as other things also affect inflation.

[Urbandreamer]

I'm not arguing that expanding the money supply can't contribute to inflation just that Milton Friedman's dogmatic statement

Inflation is always and everywhere a monetary phenomenon,.....

is incorrect as other things also affect inflation.

I obviously should not have abbreviated the quote.

“Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

Over the period concerned we have had both an increase in supply and a reduction in output.

[Gilgongo]

The situation with the monarch was unique given the history behind their wealth. Applying that same logic to other citizens simply isn’t right. Unless you are a hardcore socialist at least!

I agree, but I'm not advocating for all citizens to be given this treatment, simply a tiny number of them. And yes, the situation with the monarch was unique, but I don't see how that's relevant. Plenty of laws and principles and procedures arose from unique circumstances that have no relevance today (at the risk of cliche, the Magna Carta is just one example).

[SalvorHardin]

I agree, but I'm not advocating for all citizens to be given this treatment, simply a tiny number of them. And yes, the situation with the monarch was unique, but I don't see how that's relevant. Plenty of laws and principles and procedures arose from unique circumstances that have no relevance today (at the risk of cliche, the Magna Carta is just one example).

Confiscating the assets of the ten richest people in the UK would create a huge incentive to:

1) Not be in the top ten
2) Leave the UK if you are likely to be in the top ten

The economic damage would be immense. Britain would become a pariah state when it comes to investment, having set the precedent that if you're too successful the state will nick it all. The exodus of people and capital would become a torrent.

Then there's the massive agency problem caused by administering the confiscated assets. History tells us that nationalised businesses are poorly managed, with costs being dramatically increased as politicians use them as employment programs for favoured groups and to promote their pet programs as opposed to profit maximisation and servicing their customers. Pre-Privatisation British Telecom is the poster boy for this; a hugely overmanned business where the customer was very low down on the set of priorities (e.g. a six month wait to get a new phone line installed was not uncommon).

[murraypaul]

I agree, but I'm not advocating for all citizens to be given this treatment, simply

... ones that aren't you or anyone you know?

[Gilgongo]

Confiscating the assets of the ten richest people in the UK

I am not advocating that, there would be no confiscation of assets. That's not what the civil list system does.

Pre-Privatisation British Telecom is the poster boy for this; a hugely overmanned business where the customer was very low down on the set of priorities (e.g. a six month wait to get a new phone line installed was not uncommon).

Nope. It's not nationalisation either. Apologies if I wasn't clear, but here's what I'm talking about: https://en.wikipedia.org/wiki/Civil_list

(Totally silly aside: "a hugely overmanned business where the customer was very low down on the set of priorities" is almost exactly how Elon Musk described Twitter before he cut 80% of its workforce!)

[murraypaul]

Confiscating the assets of the ten richest people in the UK

I am not advocating that, there would be no confiscation of assets. That's not what the civil list system does.

Pre-Privatisation British Telecom is the poster boy for this; a hugely overmanned business where the customer was very low down on the set of priorities (e.g. a six month wait to get a new phone line installed was not uncommon).

Nope. It's not nationalisation either. Apologies if I wasn't clear, but here's what I'm talking about: https://en.wikipedia.org/wiki/Civil_list

The Civil List was abolished under the Sovereign Grant Act 2011.

It still isn't clear what you are talking about.

[Gilgongo]

It still isn't clear what you are talking about.

I realise the civil list was abolished and replaced with a modified system. I'm just using it as it existed (and as it now exists in that Act) as a model. It's an example, if you like, which you can use to discuss the pros and cons of what I'm suggesting. That is, it's not taxation, nor confiscation, nor privitisation, nor some kind of attack or socialist plot - unless the way we fund our monarchy counts as those things. It's a way of starting to deal with wealth inequality using an exsiting system. BTW this is also worth a look https://www.thecrownestate.co.uk/about-us

I agree the central question would be whether the individuals concerned would not want, or takes steps to avoid, having the "salary". In the former case they'd need to explain what material difference an income of say, £10M per year would make to an indivdual who is used to making £100M or more. Would more cars, houses or gold rings be justified? Certainly more business investment would be welcome since that might generate more profit and jobs, and there's nothing that would be stopping that under the proposed arrangement. They still own the businesses. It's just the profits from it that woudn't go to them.

The latter case I agree is harder to work out, since defining "ownership" of wealth is slippery. I think that would take more thought.

Of course, if you don't think wealth inequality is a problem, or that it is but allowing people to make as much money as they can means there's nothing that can be done, then there's not a lot of point in discussing it