Whitehall “braced for private schools collapse” 6

[ICouldBeVioletSky]

Continuation of previous threads to discuss VAT on independent school fees.

Their intentions were clearly to win an election. They are politicians, after all. Their competence appears to be no worse than that of their predecessors.

Like I said, you're entitled to your opinion.

In my opinion there are perverse incentives in this country to go into the finance industry, which made this country a disproportionately large contributor to the global financial crash. Graduates from top universities in subjects like engineering and other STEM subjects, where we are told we have skills shortages, are tempted into finance, instead, because it’s to their personal advantage. I don’t happen to think that this has been good for the UK in the long term.

I also think there is something supremely unhealthy and unfair with an economy where some people have to get help from the state for working full time in valuable and indispensable careers, whilst some other people are rewarded over the odds for doing harm, or for doing something unnecessary - and then complain about the tax they are paying. For example, if all the premier league footballers dropped dead tomorrow, the world would function just fine without them. If they were paid less, and ticket prices and broadcasting rights were not so expensive to obtain, fans would waste less money on tickets and have more money to spare on other forms of entertainment, or to save, or to get their washing machine fixed, or whatever. CEOs and CFOs of big businesses are likewise rewarded disproportionately, whether they are actually doing any real long term good to the business or not, provided shareholders are doing OK out of the business, now. It’s all so short term.

The greatest profits are not generally obtained for the greatest contributions to society, they are paid for the most successful exploitation of people or things, for good or for bad. We can see the harm this can do to sense of worth and how people measure that, how it depletes the earth’s resources, causes pollution, affects the climate, skews people’s aspirations, but we perpetuate it, nevertheless.

I honestly don’t know how this can be fixed, and I wouldn’t want a system where everyone got the same, but we could at least start with an acknowledgement that the extreme inequalities being caused by the current system in the UK, with a small number of people accelerating the accumulation of their wealth and the majority of the others being concertinaed together into a position of general dissatisfaction with their lot, is a big part of the problem and is not fixed by pretending that asking what in earth is going on with the accelerating wealth of the elite is setting up a straw man argument. I don’t think the answer to our problems is to complain about the people worse off than ourselves who are getting top ups from the state, as though there is a strong scientific connection between someone’s wealth and their true worth to society, when there clearly is no such thing. I do think we have a problem in fixing this, because we are part of a global economy, not actually capable of pulling up our drawbridge and sorting it all out in-house.

Sorry not sure what you’re saying here. Could you elaborate?

I gave up trying to say what I meant, because it posted accidentally too soon and then when I tried to amend it, created a random new post with equally incomplete comments!

It may be a Hobson’s choice, but for those who can still afford to pay for specialist provision themselves, it’s a choice. It’s also a choice where taxpayers’ money goes, and who and what gets taxed and by how much.

It’s not a choice for parents who literally do end up waiting for years for suitable provision, either while their child is stuck at home, or being let down badly in a mainstream school; it’s not a choice for mainstream state schools trying to deal with children who clearly need more specialist provision and which are forced into deficit trying and failing to meet the needs of those children until an appropriate place comes up; it’s not a choice for the other children in mainstream state schools who then have less money available to be spent on them because money is being wasted on keeping other children in an inappropriate setting; it’s not a choice for the SEN children themselves.

Well yes. Nobody’s saying that’s right that there’s no choice for the majority of families living in the UK with public services that have been run into the ground. (Which is why I vote Labour, because I’d hoped they would reverse this)

SEND need happens to families at all income levels and if you’re at a lower income level or you don’t have wider family financial support you can call on then all of those breakdowns in public services which fail your child and the kids around them, can completely ruin family lives, ruin parents’ ability to hold down jobs if their kids can’t go to school, ruin family finances, add so much stress for everyone and waste so much potential for families of kids with SEND. Obviously. How are you relating that to the addition of 20% VAT and the NI and business rates athough? What’s your point in relation to SEND kids in private schools?

@Walkaround ,

‘In my opinion there are perverse incentives in this country to go into the finance industry, which made this country a disproportionately large contributor to the global financial crash. Graduates from top universities in subjects like engineering and other STEM subjects, where we are told we have skills shortages, are tempted into finance, instead, because it’s to their personal advantage. I don’t happen to think that this has been good for the UK in the long term.’

I so agree with this!

I view the finance sector as more of a tax on everyone else rather than a sector that creates wealth. The only positive about it being in the U.K. is that The City gets to collect this tax on everyone’s industry.

Banks went from being liquidity providers to the selling of product and the extraction of value from their clients, as the employees pay continued to soar.

As an ex banker, I saw this happening during my career. As an ex private school teacher I saw the disproportionate amount of parents from the finance sector (including their minions in banking law and consultancy).

As humans, it's known that we struggle conceptually to understand very large numbers. I think a similar human limitation makes it hard for people to conceptualise the relative worth of jobs which have a small localised impact (like teacher and nurse) versus jobs which have a much wider impact (like CEO or footballer).

To take the footballer, as an example which is most relatable. A premiership match (each team plays 38 in a season) has approximately 40k people attending in person and about 16 million in the UK watching on TV, 600 million worldwide

Economics is all about the choices people make with their personal resources.

If each of those UK TV viewers would choose to pay £1 more per match for a more exciting game - because that would give them more pleasure than anything else they could spend that £1 on - then that's an extra £608 million pounds. That's nothing like the total they have to spend - just an idea of what they could use to make it a bit more exciting for UK viewers, to a value of £1 each. Eg by getting the very best players they can, in a very competitive global market.

Who are you to tell football fans that this isn't an appropriate use of their £1??

Their life would be worse if you imposed on them that they shouldn't spend that money the way they choose, and should instead spend it on things you value. That's the fundamental assumption of economics - that people will get the most utility out of their own resources if they are free to choose how to spend it according to their own priorities.

CEOs likewise make a hugely disproportionate impact. Their choices and actions will make a tangible difference to 1000s, sometimes millions of people. If you don't realise that, then it's just that you don't really understand what's involved in running a large business, and the impact the person at the top makes. That difference will have a monetary value to each of those millions of people - and the CEO's worth is the aggregate of that value to all those people.

A nurse or a teacher is very important. But they will only have a significant impact on maybe 30-50 people in a year. So the worth they bring by being amazing at what they do is aggregated only across those 30-50 people: and can be quantified by what that smaller number of people are willing to pay extra for it in total.

That's the difference.

😂 If you don’t realise fans complain about the cost of merchandise and season tickets, you live on a different planet. It’s simple exploitation. And what a disproportionately large fuck up CEOs have made of this polluted, warming planet, and financiers have made of the global economy. Their disproportionate impact is no longer positive, yet they never share fairly in the harms and losses, they only claim the lion’s share of the gains. Funny, that.

Well the good news is that Paris/Frankfurt/Zurich/Madrid are more than happy to pick up our banking sector, even footballers, CEOs, private schools, all the Chinese students (future workers) whilst we disintegrate into a divisive cesspit of lacklustre talent and cut down any and all tall Poppies, onwards into the Communist dystopia for all.
@Newbutoldfather - you clearly could not hack the banking industry long term. Perhaps not enough moralising required or too many hours in M&A? It is fine, that is why not everyone can do it 30 years plus. It is exhausting, so is corporate law. It is a 16 hour job at the top with no holidays. Not for everyone.

If you don’t realise fans complain about the cost of merchandise and season tickets, you live on a different planet

Yet they still choose to buy them. That active decision to buy proves that they prefer what they are buying over anything else they could spend that money on.

And they enjoyed watching football just as much 70 years ago when it was cheap to watch and footballers were paid less.

Can you apply your logic to doctors please. How many human lives does a neurosurgeon save in a year? How do you measure their impact and economic value compared to vast numbers of people being marginally more entertained on a Saturday afternoon? What a very strange way to look at things.

Well, obviously neurosurgeons are worthless, because hardly anyone needs neurosurgery.

Their disproportionate impact is no longer positive, yet they never share fairly in the harms and losses, they only claim the lion’s share of the gains.

That is just meaningless bullshit.

People make choices, at every level - choosing the best option they have to use their resources. That includes people making hiring choices.

There are externalities - costs which hit other people rather than the person making the choice - but externalities are a small part of the whole, and the UK is very strongly regulated to mitigate them.

You don't know best, and you don't get to make choices for other people.

@strawberrybubblegum ,

I am guessing you are an economist! One of my best friends is and you make very similar arguments, although he is more left wing.

‘To take the footballer, as an example which is most relatable. A premiership match (each team plays 38 in a season) has approximately 40k people attending in person and about 16 million in the UK watching on TV, 600 million worldwide’

I think a footballer is a really bad example, in that they are objectively and measurably talented. Lots and lots of people try to be footballers, they compete with a measurable outcome weekly and they are clearly the best at what they do. You cannot be a ‘lucky’ footballer or cheat or use influence to get to the top.

The same might apply to a brain surgeon or a top engineer. They clearly earn what the market pays them,

‘CEOs likewise make a hugely disproportionate impact. Their choices and actions will make a tangible difference to 1000s, sometimes millions of people. If you don't realise that, then it's just that you don't really understand what's involved in running a large business, and the impact the person at the top makes. That difference will have a monetary value to each of those millions of people - and the CEO's worth is the aggregate of that value to all those people.’

Now, let’s use the same test on the CEO. Objective measures are very hard, so most measure subjectively (and pretend it is objective). There is a massive amount of luck in what they achieve. And nepotism and plain dishonesty can also be very helpful.

This is especially true of the ‘professional’ CEO who has never and, probably, could never build a business from scratch. CEO skills are very nebulous. You can’t test, say, a random maths graduate as a CEO but I often think they might do just as well if not better than many on 10s of millions per annum. You only need to listen to the interviews of some of the bank CEOs during the 2008 crash to realise that they didn’t have a clue what their firms were actually doing!

Entrepreneurs are different as they create genuine value.

‘A nurse or a teacher is very important. But they will only have a significant impact on maybe 30-50 people in a year. So the worth they bring by being amazing at what they do is aggregated only across those 30-50 people: and can be quantified by what that smaller number of people are willing to pay extra for it in total.’

Without good education, the CEOs you speak about could not achieve what they do. Improving education would massively increase GDP.

And, again, economists rather simplistically only optimise on money. I often think it is weird that, in real terms, we were probably 50% poorer 50 years ago, but was society worse or were people less happy?

Football, did you not know, the opium of the people?

Where have I said I want to make the choices for other people? It’s the CEOs and financiers who are doing that. And football fans would rather not pay so much for their football tickets that they can’t afford anything else.

About 200 per year operated on by each surgeon.

The value of that surgeon's work - combined with the value brought by everyone else in the operating team, and the investment in the expensive equipment needed for the operations - is those 200 people's entire future lives.

How much would you pay for your future life? Compared to how much you would pay for your DC having a better attitude to reading (also important).

If you don't even try to quantify costs and benefits, your conclusions will be completely wrong.

If you don’t even try to consider what society needs as a whole, and pretend that economics is science, and money some pure substance that can sort the wheat from the chaff, you can come to conclusions that end in nobody wanting to do essential work, or work that might come up with technological solutions to our problems, and people being inspired to become an influencer, popstar, footballer, drug dealer, of city financier, instead. It’s a drain of talent in an unhelpful direction, and you can see the problems caused by too many people competing for the same thing and too few competing for what society actually needs, but it’s understandable from the individual’s perspective. The end result is that everyone feels unhappy and exploited, so even watching the football is somewhat marred for the fans. More and more, the talent is lured away from things that could genuinely help the planet and towards things that bring short-term pleasures. It’s like the cricket who played the violin all summer…

You are only quantifying financial costs and benefits, not impacts on attitudes, the environment, wellbeing, sense of self, development, and how this feeds into the people we become and the choices we make. My quality of life is more likely to be affected by a poorly cleaned hospital than a neurosurgeon. My parents have had massively more of an effect on my life than any neurosurgeon, so their value to me has been incalculable, but their pay for being parents - zero. A great big bomb dropping on my neighbourhood would destroy my life - at that point, I wouldn’t be happy to know how much the company that built the weapons made in profits from its sale.

And, at the end of the day, I do not want to be cared for badly by someone who is only there because they weren’t able to find better paid work. I don’t want my local hospital cleaned ineffectually by people who are only there because they couldn’t find better paid work. I don’t want to be able to afford to pay for a carer, knowing that nobody will care for them in their turn, because I have money and they don’t and that’s all that counts. I don’t want people to go into finance just because that’s where the big money is. The highest pay simply does not represent the biggest value to society, it merely represents highest value to a financial system, not to human life.

I really don’t understand how education tax helps you achieve these life goals.

I really don’t understand where you think I said that it did.

Then to be blunt, what is your point?