The US is an Oligarchy Princeton Concludes - Nobody is Shocked.

30% of Norway's economy is oil and the Norweigans are starting to become very nervous about relying so heavily on a niche resource extraction based economy http://ourworld.unu.edu/en/what-if-the-norwegian-oil-economy-is-a-bubble

In saying that Norway is investing its wealth correctly - I said before that the Norwegian sovereign fund were one of the biggest investors in the last company I worked for, which was a multinational gambling company (which took bets in many illegal jurisdictions, including Turkey and Brazil...). The Norwegian government are acting like Capitalists on behalf of the people, they take the wealth that the country is creating and reinvest it in the free market elsewhere, they didn't seem particularly interested in the legality of some of our grey markets, they were only interested in the dividends their investment paid, like a normal private investor is... also, if every country was like Norway there wouldn't be the free market elsewhere to invest in.

Anyway the US is an oligarchy, certainly in the betting industry you can't get anything done without greasing some official's hand - for instance, we tried to open a US online Tote business, applying for a license in Delaware. We found every State just wouldn't deal with us - they wouldn't let us set up shop because they already had their favoured companies running the licenses (they said it was a moral issue, but it clearly wasn't because they had no issues with monopolies or duopolies fleecing gamblers). We finally ended up getting our foot in the door by buying an almost bankrupt racecourse in California... we wanted to offer online gambling, but we had to buy a ****in' race course... having bricks and mortar and our own captured local consumer base walking through the door allowed us to force other States and companies into allowing us to offer online betting to their customer base if they wanted to access to our customer base. They got the whole thing sewn right up, it's ran like a cartel and it's almost impossible to get on the action unless you do something clever.

So aye, my solution is to clip the wings of Government so that it does not actually have the power to hand out favours to Corporations, or rich individuals.

 

If you try to do business in the US you'll realise how intertwined government is with the oligarchs. I could write quite a bit about how government intervention creates oligarchy, but I'll give you one personal example - In the gambling industry the UK is the world leader - no matter which country you travel to you have British people involved at the higher levels - I have friends in Beijing, Panama City, Manila - all British and all running gambling companies. The UK is also the world's most competitive gambling market - the bookies are absolutely cut-throat with each other, the likes of Bet365 gave punters half their money back on all Grand National bets etc. For me making money from UK customers is extremely difficult, they are well educated in gambling and the 100 other betting companies we're competing against mean customers are hard to come by.

Leaving aside the social issues of gambling (and only considering the business case) the reason the UK became the global leader in this particular industry is because it was the first major country to free the gambling market, after Labour abolished the betting tax in 1999. Now the Tories are reintroducing another online gambling tax from the start of this year, a tax that could very well push my company (a relatively small player) completely out of the UK market. The likes of William Hill are not worried, they are so big they can absorb the tax and they are actually gloating that the tax will push other players out of the market http://uk.reuters.com/article/2014/02/28/uk-william-hill-idUKBREA1R0BC20140228

"While it will lead to a significant additional cost for the group ... we do believe there is potential for larger-scale operators to benefit from increased market share as smaller operators may be squeezed out of the market by the additional tax burden,"

There you have it, the Tory government creates an oligarchy of big business where the consumer has lower choice - and the government don't care that they are creating an oligarchy, as long as they get their cut of the profits...

 

There doesn't need to be strong government, there needs to be strong anti-trust laws to make sure that no single player gets too big a slice of the market. The likes of the EU clipping the wings of Microsoft was a very good thing from a economic Liberal's point of view, etc. HMV and Virgin collapsed because Apple and Google pushed them out of the way (and passed huge savings on to the average person in the process) - as long as there is competition the market prevents a permanent oligarchy.

The bookies moved offshore and passed the savings on to the consumer - you can get a 99% book on a Premier League game between the top bookies (which means there is less than zero profit margin between them all). A perfectly functioning market is one where the margins that a myriad of companies make are almost zero - I bigged up Amazon the other day before it's profit margin is 0.5% over Tesco's ridiculous 5%. The more the Government gets its claws into private businesses the more costs get passed onto the consumer - Tesco pays their taxes, but the consumer loses out. The Government of course pays the money back to the consumer eventually, after it has taken its cut to pay for its massive bureaucracy...

I wasn't always a cheerleader for the free market BTW, I think the point that started to turn me was moving from Malta to Guernsey. In Malta I was paid a very decent wage, it maybe put me in the top 10 or 20% of earners in the country. The Maltese Government taxed the majority of my earnings at 35% plus 5% national insurance, plus they had 20% VAT on all purchases, etc.

When I moved to Guernsey I took roughly a 35% pay cut, which put me in the median earner bracket in that country (roughly 50% of all people were above me, and 50% of all people were earning below). As a median earner my actual tax rate in Guernsey worked out about 15%, including National Insurance - and there was no VAT on purchases (so less the 20% tax on everything I bought).

Despite earning quite literally 35% less in Guernsey I was able to save a lot more money than I was in Malta, because the Government allowed the money to stay in my pocket. I wasn't rich in Guernsey, I was well below the mean wage (lots of very high earners there) - so I was a normal average person who was in real terms richer than the top 10-20% of earners in Malta with its high tax regime.

Of course a Portuguese girl once hit me over the head with a bottle in Guernsey, and it cost me £50 in the hospital to get stitched up (the company health care policy eventually covered it), whereas I would have got the stitches for 'free' in Malta - but the fact is that as an average-Joe I was much better off under the lower tax regime than I was in a high tax regime, despite the lack of social care.

You could make the case "what about the poor ****s at the bottom who don't have health insurance and have to pay the £50 themselves" and you'd have a point - but the (utilitarian) question must be asked do you drag the whole of society down, into a big inefficient state, to protect the very bottom extremities - or can we find a way to nudge a market economy towards catering for those scenarios? (for instance I'm in favour of keeping state Health and state Education while getting rid of the majority of the welfare state, which is a system very well implemented on the Isle of Man).

 

I'd been whacked over the head by people of many nationalities and sexes, an equal opportunities victim, if you will. Apparently I stepped in to break up a fight between two wimmin, but I can't remember as I was pished. A load of the lads were around me and they didn't slag me off afterwards, so it couldn't have been that bad

 

Lower wages, but lower taxes (so you got to keep more of your wages) and lower costs for day to day life - it's not a difficult concept to understand.