Christmas reading: Churchill & Huxley

Consumerism, compassion and resolve

As we forcibly surf into the holiday season on a wave of consumerism, spare a thought for Aldous Huxley’s Brave New World, which has somehow been overshadowed by another futuristic novel, George Orwell’s 1984.

Yet the parallels with our society are more insidious. In Huxley’s 1931 book, genetically-modified babies born from test tubes are brainwashed in special centres to believe that the old is bad, the new is good and thus buying things is central to their lives. Electric shocks turn them off from simple – and free – natural objects like flowers. Instead, they are conditioned to love anything that will keep them on the consumerist running track and keep the factories busy, such as certain country sports that involve the use of elaborate apparatus. Under-consumption is a crime against society.

It is worth noting that the current UK recovery is consumer-driven, while the world as a whole still relies hugely on the US consumer. And, at a micro-level, I confess to a little thrill when I buy something fresh and glossy. Our brainwashing may not be as organised as in Huxley’s Brave New World but it is extremely effective.

Having said that, it is true that the phrase “Big Brother is watching you,” is more than relevant, given recent revelations of US spying on all global communications. The dictator of Oceania in Orwell’s novel, known as Big Brother, is alive and well in a number of countries.

Spain’s tax inspectors have announced they will now be monitoring weddings, christenings and First Communions to help determine wealth and tax avoidance tendencies. Spaniards are braced to see a man in a mac and a trilby fingering the bride’s dress in the back of all wedding photos.

Think that doesn’t happen in the UK? Her Majesty’s Revenue & Customs (HMRC) has in the past years stepped up its recruitment of inspectors. Meanwhile, a UK private bank earlier this year sent out letters to clients mentioning that the tax authorities are pressuring it about the large cash amounts taken out by customers. HMRC asks for their “help” in diminishing cash withdrawals.

This does bring home the fact that money in a bank is not really ours – how soon before we have to justify large cash withdrawals? We are not at the point of having 47.5% of the money in our accounts stolen by the authorities, as happened to those with over €100,000 in Cypriot banks earlier this year, but one should beware highly indebted governments – right now, most of those in the developed world.

Of course this rather desperate scrabbling around for tax suffers from the persistent sidelining of Laffer’s Curve, which shows that when tax rates rise too far, tax revenues will not rise as people work less, or cheat the system because they perceive it as unfair. If after the financial crisis governments had dropped tax rates substantially, in essence putting money into people’s pockets, consumption would not have fallen off a cliff.

If VAT in the UK was 7% as it currently is in Singapore, we would all be spending more, the incentive for cash payments would decrease substantially, and the tax intake could well be larger. VAT at 20% turns everyone into a criminal.

The presence of so many world leaders at Nelson Mandela’s 2013 memorial was last matched at Winston Churchill’s 1965 funeral. Both men shared a dogged determination in pursuit of their aims and a super-human capacity for compassion towards the erstwhile enemy. Mandela saved South Africa, which appeared destined for a civil war of epic bloodiness. Churchill saved the Western World.

In The Gathering Storm, which analyses the causes of the Second World War, Churchill lambasts the Treaty of Versailles, whose economic clauses demanding huge reparations from Germany were “malignant and silly to an extent that made them obviously futile…. Germany only paid the indemnities later extorted because the United States was profusely lending money to Europe, and especially to her…. All this is a sad story of complicated idiocy in the making of which much toil and virtue was consumed.”

I wish my readers a consumerist high and a compassionate heart for Christmas. They are not mutually exclusive.