A maximum working week provides protection for workers.  In the Universal Declaration of Human Rights in article 23 “Everyone has the right to work… to just and favourable conditions of work” and article 24 “Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay”1 both relate to a fundamental freedom from being forced to work too hard. Working for too many hours per week can affect health, wellbeing and productivity over the medium to longer term. In extremis, as we can see in the “karoshi” phenomenon in Japan, people can work themselves to an early grave.2  Even in less extreme examples, we can see health issues affecting productivity and causing medical problems which require paying to treat. The WHO estimates that work related stress costs $300bn p.a. in the US, to take one example.3  It goes without saying that all this avoidable stress and medical trouble needs paying for. That the businesses themselves manage to push those costs onto wider society or the state doesn’t make those costs go anywhere from the point of view of an economy as a whole. Therefore a maximum working week prevents business from externalising costs to others.  1 United Nations, Universal Declaration of Human Rights, 1948


It isn't actually being suggested that we reduce the total amount of work done. What is being suggested is that we have some of the unemployed be allowed to get access to the labour that is required via limiting the hours existing workers can put in. GDP growth can still be achieved as the amount of work remains unchanged.  In fact, as more of the population become involved in the workforce a lot of other problems and costs will disappear from the economy and society that imposes a maximum working week." two economists argue that a drop of two percentage points in unemployment would mean a 9% decline in burglary, 14% in rape and robbery and 30% in assault."1  1 Prof. Rudolph Winter-Ebmer ""Identifying the Effect of Unemployment on Crime" CEPR Discussion paper, 2001


That's right, even more jobs would be created by hiring people to check on procedures, workplaces and hours worked. When there are literally millions of displaced potential workers and all the social and economic problems unemployment can cause this is no bad thing.  Not only that but there are already policing of business operations present in all advanced economies, this function could be simply added to the list of things to check for by those agencies. New employment within existing organisations is therefore created, so there is a doubling effect from this policy.


The market already limits worker hours when left to its own devices, no intrusion is required.  Long hours which reduce worker effectiveness already make a business less competitive. The invisible hand will remove those businesses which exploit their workers, or who don't take into account employee motivation and what they need to get maximum productivity far more effectively as they are beaten in the marketplace by those companies which do take those things into account.  Improvements in worker conditions always come first from the private sector seeking to maximise profits. This has been true as far back as the industrial revolution.


Small and mid sized businesses cannot afford the extra costs involved in complying with such a policy.  Each new worker has certain fixed costs associated with their employment. Tax, insurance, training, office space, record keeping, background checks, sickness, disciplinary as well as necessary equipment, the actual cost of hiring them and advertising for them and other benefits (usually this adds up to 1.25-1.4x base salary per worker.1  1 Joe Hadzima "How Much Does an Employee Cost?" Boston Business Journal (reprinted for MIT 2005)


There should be no legally mandated ceiling on weekly working hours as it limits economic growth.  The transaction, hiring and human resource costs of forcing businesses to take on more workers mean that productivity is reduced and resources are wasted. While GDP might rise because of these actions, GDP will rise due to a fallacy of the "labour theory of value"1 kind. Effort isn't in and of itself productive, though it will add to many measures of GDP. Currently displaced workers would be better served inventing new products and services for the economy they are in.  1 Mick Brooks "An Introduction to The Labour Theory Of Value Part One" Marxist.com 15th Oct 2002


Policing such a policy creates its own set of problems for the society and costs for the economy  Complying with any regulation has a cost attached, and so does policing that regulation in order to make it effective. How would anyone know who was working where and for how long without either a very accepting populace or a very draconian state?  At best there will be ignored regulations - 14-16% of the economy is already avoiding legal responsibilities1 and with employers dissuaded from taking risks that are larger than they would otherwise be, a working week cap has the effect of making the "shadow" economy even more attractive to businesses.  1 Friedrich Schneider with DominikEnste, "The Growth of the Underground Economy" IMF Paper 2002


Only some SME will be affected, and those on such a knife edge financially would probably not have lasted long in the face of competition in any event. Such enterprises are really being subsidised by taking advantage of their workers at the expense of those workers health.


Given the market is already moving in such a direction, there is no need to wait for the slow whittling away of the less optimal when it can be done right away by legislation. This will give a huge head start compared to any economy which uses the market mechanism and make any economy who takes this road advance in terms of productivity.


Unfortunately housing upgrade programs do not always equate to reductions in disease. The vital components including the need for improved community sanitation, access to services - including water and health-care are often ignored. Ananya Roy (2009) shows how the informal nature of India’s state constricts effective planning, and is continuing to ensure slums are kept off the map - limiting access to services.


Upgrading housing: tackling the disease burden  Slum upgrading involves in-situ investment to improve informal settlements; and integrate slums into the city. Two forms of slum upgrading may be classified: the provision of basic services (i.e. housing and sanitation) and the provision of secure land tenure.  The burden of disease is higher in slums due to inadequate sanitation, overcrowding, and a lack of ventilation. Diseases and infections - including diarrhoea, cholera, malaria, TB, and tropical diseases, remain prevalent throughout due to stagnant water and a lack of services. Research indicates higher rates of child and elderly mortality in Nairobi’s slums, in comparison to the rest of the population (Kyobutungi et al, 2008). Improving housing does not just mean building but also ensuring planning standards are followed to create sufficient living space and facilities to reduce the ill-health disadvantage.


There are schemes to finance homebuilding  Affordability is a key challenge for slum-dwellers to enter the housing sector - challenges range from being able to access capital required to buy property, to the volatile prices in Africa’s property market. Improving housing in slums enables dwellers a choice to exit and move up the property ladder. Different approaches have emerged of how provide a means to access finance and generate property markets.  First, housing micro-finance schemes are presenting a flexible means to access credit [1] . Second, cooperative loans, such as Nigeria’s FMBN (Federal Mortgage Bank of Nigeria) are acting to increase homeownership by providing a secondary mortgage market for low-income families and make finance available. The aim is to ensure repayments are equal to rent costs paid.  [1] See further readings: Riecke, 2013.


To tackle gender discrepancies an engendered strategy is required on land, not only housing.  For example, Gulyani and Connors (2002) illustrate the Kalingalinga slum upgrading project in Zambia resulted in negative effects for women. Following investment in slum upgrading the proportion of female-headed households declined with a rise in the proportion of renters and relocations. Slum upgrading raised living costs to women, and without legal land rights female-headed households were forced to relocate and resettle.


Ensuring supply = demand  A key issue ensuring the growth of slums is the demand for housing is failing to be met. Investment is required to supply housing.  Taking the case of Social Housing programs provided by PAHF (Pan-African Housing Fund) demand is being met by providing affordable houses. 41.5mn US$ has been confirmed by PAHF, of which will be dedicated to fulfil the need for houses. Investments are focusing on urban areas across Sub-Saharan Africa, and are operating through partnerships [1] . If slums are ever to be halted there need to be many more such projects ensuring the supply of houses outstrips demand.  [1] See further readings: PHATISA, 2013.


Cost-effective planning for ‘Slum Cities’  We live in a planet of slums (Davis, 2006), and slums remain a key, and growing, characteristic of contemporary African cities. Slums articulate the infrastructural deficit across African cities - investments are needed.  Slums are a key urban challenge; and need to be tackled, removed, and replaced. “Slums represent the worst of urban poverty and inequality” (Annan, 2003:v).  Slums represent an increasing concern. They are often in unstable environments so are at high risk of being affected by climate change which will further increase costs unless effective strategies are implemented today. Providing safe and secure housing provides a means to tackle articulated problems. Planning will organise the structure of housing communities, follow laws to provide adequate toilets for the population, and enable space for service provision - whether hospitals, police, or schools. Investing in housing will help alleviate chaos; and implement ordered planning for ‘Cities Without Slums’ [1] .  [1] The ‘Cities Without Slums’ Campaign was developed in 1999 by the Cities Alliance; and subsequently included in the MDG.


Are slums really a key challenge? Estimations on the problem of slums may vary depending on which definition is used. Second, the language of the ‘slum’ matters when analysing and applying solutions (Gilbert, 2007; Jones, 2011). The emotions and stigmatic connotations attached to ‘slum’ enables dangerous aesthetic intervention.  Working towards a ‘city without slums’ neglects how and why slums have occurred and suggests governments can apply quick solutions to rid the problem. National aims to remove ‘slums’ has forced governments to focus on the physical problem - infrastructure and housing deficits - rather than understanding who lives in slums and solutions are needed for the dwellers. There remains a need to understand slums as a space of African urbanism. Slums will be cyclically reinforced unless aspects of power, poverty, and politics, are considered.


Slums are not simply an articulation of inadequate supply of, and a hyper-demand for, housing. Alternatively, slums emerge through deterioration, crime, globalisation, and poverty. Therefore provision of housing does not provide the means for all solutions and may themselves again deteriorate into slums. Slums are heterogeneous; therefore their emergence is far from a universal causality.  Secondly, it remains debatable as to whether the needs of informal settlement dwellers are met through housing schemes, such as PAHF. In previous cases, such as in South Africa’s NUSP [1] , inhabitants have been forced to relocate, causing disruptions to livelihoods. Finally, emphasis needs to be placed on building ‘homes’, not ‘houses’.  [1] See further readings: NUSP, 2013.


Finance markets being promoted are introducing risk when insurance, and safety-nets, remain minimal. Investments in housing finance schemes needs to raise questions. Firstly, who organises micro-finance schemes? The idea of positive social capital within the community needs reflection; participation in microfinance is not democratic or available to all (see Jones and Dallimore, 2009).  Second, the provision of loans, and finance, raises concern over future repayment and whether the housing bubble proposed will remain stable. Employment within the informal sector means income is volatile and unpredictable - can housing payments be adapted to irregular income realities when profits are desired?  Incorporating slum dwellers into a financial-market will not remove slums and may simply get the dwellers into debt.


History and tradition is reflected in the building styles adopted across Africa. Upgrading schemes changing the design of housing styles, are both replacing traditional knowledge and practices, but also potentially eco-friendly designs. Investment in housing by private and public actors is failing to incorporate traditional practices, meaning cities are being built through modernist planning ideals.  Slum dwellers need the right to build. Dwellers need to be provided with an enabling environment to use their own capacities to meet their own housing needs [1] .  [1] See further readings: Turner, 1978.


Gender empowerment  Slum dwellers, particularly women, are affected by violence and crime. COHRE (2008) indicates women living in slums are at risk of violence and illnesses, such as HIV/AIDS, due to insecurities experienced on a daily basis in personal and private spaces. Figures show that in Nairobi slums 1 latrine is shared amongst 500 people (Cities Alliance, 2013). Fearing to go to the toilet at night due to risk of rape, women’s geographical experience of the city is constrained [1] . Therefore investing in houses, including building indoor toilets, provides empowerment, safety, and prevents gender based violence.  [1] See further readings: SDI, 2013.


Tackling hazardous environments  Reports are frequently raised on fire outbreaks and hazards in slums. For example, a fire in Khayelitsha township [1] , Cape Town, resulted in five deaths and significant damage. The use of highly flammable materials, in a desire for fast construction, places slum-dwellers prone to risk.  National investment in housing, by providing materials, such as bricks, or training on how to build stable house designs, will ensure safety. Haphazard building can be controlled by investing in housing designs and inspections.  [1] See further readings: Lobel, 2013.


Slum dwellers in Nairobi are shown to pay high rents for low-quality housing - a reality identified by Gulyani and Talukdar (2009). Estimations show around $31mn USD was paid in the form of rents, by poor slum dwellers in Nairobi in 2004. Nevertheless the high-prices did not lead to the materialisation of improved housing. If a landlord can charge high rents in poor housing stock why should he invest in new buildings? Moreover if not done systematically the slum as a whole will never be brought out of poverty rather the poorest areas will simply move around to where those who have not had opportunities are staying.


As long as the stated objective is to tackle the issue of housing and remove slums, informal settlements, and squatting, who is investing is not important. The end goal is a key concern. The stated objective of the investor needs to work harmoniously towards removing slums for practical change to emerge.


Housing politics: who stays in slums?  What kind of city is desired versus being implemented by urban housing investments? The effect of decisions to relocate and design housing policies present implications for the social life of cities and whether existing inequalities are sustained.  For example, issues around housing in South Africa refer to a history of racial inequalities. While in Kenya concern is raised over ethnicity and political clientalism. Further, slum upgrading schemes need to provide an opportunity to change gender inequalities. For example, the precarious position of women in households may remain unchanged unless joint-titling is provided. Widows need to be assured the houses built will enable their freedom to stay out of slums following the bereavement of the male-head in the household.  Ultimately slums remain through upgrading programs. Whether the program provides houses in-situ or through relocation, slum dwellers are contained and kept in poor housing. Ultimately upgrading can often be beneficial to a small group not to all.


Alternative: Replacing slums by providing opportunities  Slum dwellers need to be granted rights to occupy and security of tenure. Slum-dwellers need to be provided with opportunities to progress - recognised as right-holders, or obtain a greater income.  A useful method may involve regulating the informal economy - where a large proportion of slum dwellers work - to provide minimal wages and employment conditions. Such a proposal will enable dwellers to enhance financial capital and reduce vulnerability through labour security. They will then have the money to upgrade their home. Alternatively, establishing a rental market provides an opportunity for replacing slums. A key myth within discussions on the housing problem suggests dwellers want to be homeowners and the rental market remains negative. However, renting enables flexibility to inhabitants and provides an income to landlords. Such funds can be invested within microfinance, community, schemes and individual developments to replace ‘slums’.


Investment is needed: but by who?  Housing is required, however, a crucial component within the debate is who needs to provide funding and be involved in decision making; does it need to be the government? The consequences of investment are influenced by the actors involved. With the need for quality control adamant, greater recognition of who is investing, and for what purpose, is needed. Allowing everything to be done by private firms will often mean evictions and houses just being made so as to increase rent or to sell to those who are not long term residents.  Otiso (2003) provides a case of slum upgrading in Mathare 4, which showcases the need for a tri-sector partnership - involving public, private, and voluntary actors, for upgrading to meet need and resolve shortages in housing. The question might go further; can the community fund upgrading itself, if so is it the best allocation of funding and how is payment to be kept equitable?


Organisations, such as SDI and Cities Alliance, have recognised the diverse experiences of slum-dwellers and their multiple needs. The different programs are catered to local contexts, and work towards developing equal, and just, initiatives for the urban poor. The aim is to stop cyclic reinforcement of slums.


It is important to remember that many areas of policy remain under national control and even those areas that are decided at the European level are agreed by the member states (9). The EU legislation, however, is important for creating trust between trading partners in the EU. Even if some of the laws seem trivial or unnecessary, it is the trust in the other countries’ compliance even in these laws, which creates a stable market in which actors can expect larger laws and agreements to be honoured. The political aspects of the union therefore complement the economic aspects.  As regards austerity, the British are implementing their own austerity policies, without Commission involvement, and are doing just as badly as anyone else (10). On the contrary, someone needed to sanitise the Greek economy, and it was evident that they were not going to do so themselves. EU decisions, as a whole, are preferable. We should remember that when countries agree to austerity as part of a bailout it is not a violation of sovereignty; they have the choice to say no and probably default as a result.  (9) Bache, Ian; Bulmer, Simon; George, Stephen. “Politics in the European Union”, 3rd edition, Oxford University Press. 17 February 2011.  (10) Giles, Chris; Bounds, Andrew. “Brutal for Britain”, The Financial Times. 15 January 2012.


A European political union intrudes on its members’ sovereignty  Many of the policies of the political union intrude on national legislation. In many cases, EU policies go against national traditions or redefine laws that were already functional. Occasionally EU policies even cause direct harm, when countries have less freedom to tailor them to their own conditions.  During the past few years, the Commission’s powers have included monitoring Member States implementation of austerity policies in return for bailouts. However, everyone, including the IMF, agrees that austerity was unsuccessful and has seriously hampered recovery (7). Being a part of a political union inevitably means that sacrifices have to be made and this often intrudes on national sovereignty by reducing he room for manoeuvre of national governments.  Intrusion by the EU would be justified if it creates substantially better laws or solid trade benefits; however, regulations on the shape of cucumbers (8) do neither of these. The EU should not have legislative power on these areas.  (7) Blanchard, Olivier; Leigh, Daniel. “Growth Forecast Errors and Fiscal Multipliers”, IMF Working Paper. January 2013.   (8) Geiger, Susanne. “The strange curvature of the cucumber”, The German Times. January 2007.


It is uncertain how many countries would realistically want remain in a trade bloc that does not support democracy as a core value.  Distilling the EU to a trade bloc that does not care about democracy and human rights would run the risk of allowing in non-democracies which in turn would merely alienate most of its current members. Many EU countries would not wish to be associated with non-democracies. Even only concerning trade, many would not want to make trade concessions to undemocratic countries whose regimes they cannot trust, as this might jeopardise the reliability of their trade with this country. (12) As such there would be very few potential new members as a result of moving back to a trade bloc. The better solution is to bring the standard of democracy in neighbouring countries up to the point where they can join the EU. To encourage other democracies such as Norway to join there could be concessions made such as on the common fisheries policy.  (12) Mansfield, Edward D.; Milner, Helen V.; Rosendorff, B. Peter. “Free to Trade: Democracies, Autocracies, and International Trade”, American Political Science Review. Vol. 94, No. 2. June 2000.


A European political union is by necessity undemocratic  The EU is too large for a democratic structure. Since it deals not with citizens directly but with Member States, a question arises as to which agents should make fundamental decisions. Should every Member State get an equal vote, or a vote in proportion to the size of its population? If nation states get equal votes, a lot of people in larger states such as Germany, France or Spain may find themselves highly disenfranchised. On the other hand, if states get votes in proportion to the size of its population, countries such as Luxembourg will be forever hesitant to join, and rightly so, for its citizens would most likely be excluded.  The democratic deficit in the EU is no less visible in practice. The Commission is not directly elected (4); Council politics are confusing, take a long time, and grind to a halt whenever Germany is in the middle of elections (5); and the voting turnout for European elections, where MEPs are elected, is too low to be considered a fair representation of voters’ views (6).  This poses a problem the moment the EU begins having legislative power in its Member States: we must not let more and more aspects of citizen’s lives be affected by an institution that is increasingly undemocratic.  (4) “About the European Commission”, European Commission.   (5) Pop, Valentina. “German elections to set EU agenda in coming months”, Agenda, EU Observer. 2 September 2013.   (6)Dowling, Siobhán. “Europe’s Unpopular Elections: Who Is to Blame for EU Voter Apathy?”, Spiegel Online International. 3 June 2009.


It is not true that not being fully representative makes a political entity undemocratic. In national politics we elect representatives to then make decisions on our behalf rather than have constant referenda, or even rather than require unanimity within Parliament. We expect not to have perfect representation. Furthermore, states that feel disenfranchised always have the option of leaving the EU; in fact it is much easier than it would be to leave an unrepresentative nation state. It is important to remember that Member States have consented to acting within this framework.  Even if the political entity is flawed, it can always be improved. Much more power could be given to the European Parliament, and there are already plans for the President of the Commission to be elected through the Parliament. Moreover if turnout is a problem for the elected legislature’s legitimacy then this is a question of encouraging turnout which might happen organically due to increased relevance but if not could be managed if necessary through compulsory voting. Finally not being a flawless democracy must be weighed against not having an entity at all.


The reason that there is such trust in the status quo lies in that these countries have collaborated in a political union for decades. Once this structure has been removed, it is easy to turn protectionist and to start trade wars. This is precisely the source of the failure of trade blocs such as NAFTA. Without the presence of a political body, it was possible for the US to develop protectionist policies within the trade bloc framework. By subsidising their agricultural products to outcompete Mexico’s in Mexico itself, the US severely harmed its trade partner’s economy (14). This is a harmful form of trade. The EU benefits from its current more balanced, controlled and mutually beneficial structure.  (14) Faux, Jeff. “How NAFTA Failed Mexico”, The American Prospect. 16 June 2003.


The EU as a trade bloc would be more inclusive to current and new members  The European project has gone too far for many European countries. For some such as Norway or Switzerland the EU has already gone far past the amount of integration they would be willing to allow. Even Member States are increasingly finding that the EU’s intrusiveness and the cost of supporting smaller economies outweigh any potential benefit. Britain has expressed this discontent particularly strongly. (11)  This is a problem for the European Union. The problem of its alienated Member States is only likely to get worse as it seeks to continue expanding: new countries will have increasingly divergent values and will be harder to integrate while deepening will mean more countries are left behind. In practice, this means that the EU will face massive barriers to its goal of integration, and compromise all its other goals in the process. The best solution then is to go back to a stage in the EU’s development that every country supports; the single market without the politics attached. This would bring the benefit of encouraging those who have been left out like Norway and Switzerland to join.  (11) “Goodbye Europe”, The Economist. 8 December 2012.


A European trade bloc can succeed without a political union  The European area only consists of liberal democracies, which consistently honour their agreements. While historically a political union might have been necessary to further strengthen the Coal and Steel Treaty (the EU as it originated) between recently belligerent states, these countries can now obtain the benefit of the trade union through multilateral agreements. They simply have to regulate protectionism and tariffs so countries can remain competitive and barriers to trade remain low. In the event that a country does not comply, the external pressure from the other countries, together with soft sanctions, is more than enough to keep the trade bloc functional.


The EU, in practice, is not a particularly consistent or effective promoter of democracy. It has been unsuccessful in countries such as Ukraine and Georgia in the European neighbourhood (18): this suggests the EU can only lead countries into democracy when the conditions already exist for this change to happen naturally.  The example of Hungary shows how powerless the EU can be when pressing Member States to stay democratic once they have got in, extremist parties have expanded, the independence of the judiciary threatened and freedom of the press reduced (19). Its structure may make it difficult to become a member without democratizing, but also difficult to justify expelling a Member State. Such cases damage the credibility of the EU as a promoter of democracy. But a change to a trade bloc would not damage the ability of the EU to promote democracy; states could still be forced to democratize as a condition of joining.  (18) Emerson, Aydin, Noutcheva, Tocci, Vahl and Youngs. “The Reluctant Debutante: The European Union as Promoter of Democracy in its Neighbourhood”, Working Document, Centre for European Studies, No. 223. July 2005.   (19) Landry, David. “Hungary: “Test case” for EU democracy?”, Budapest Business Journal. 1 August 2013.


While it might be true that some of these benefits are a consequence of the political union, all of these can be maintained in other forms. This is particularly evident by the fact that non-EU countries such as Switzerland and Iceland participate in these schemes, without becoming members of the political bloc. By disassembling the political union, countries can furthermore opt to participate in some agreements, while not participating in others, thus maximising everyone’s benefit.


Political union lends international credibility to a trade bloc  Trust is a valued asset on the international market. When multinational corporations trade in astronomical figures, they must be able to trust in the political goodwill of the governments of the trading partner, to ensure that all parties to the agreement honour its conditions. Major trading partners, such as China and the US, are immense markets where one body can represent the whole country; this is also the case with the European Union through the European Commissioner for Trade. Having one person who can negotiate for the whole bloc has immense benefits in terms of economies of scale and making the European Union a major power in trade negotiations. Without a political union that provides a framework that binds them all members equally Europe would lose out (16).  A single point of contact for trade negotiations is good because it gives the EU a larger market share, it allows smaller EU countries to benefit from the larger EU countries’ economic gravity, and it contributes to long-term trade relations between the EU and other large international entities.  (16) “EU position in world trade”, Trade, European Commission.


Political union has numerous non-economic benefits which a trade bloc lacks  Linking countries together politically is something we have done throughout history to preserve peace and ensure consistent channels of communication. Thanks to the European Union not only have millions of people gained greater freedom of movement and a freer flow of ideas: we have also secured very stable relations between a large number of states that previously were often at war with each other. All Member States, since they are tied both politically and economically, have a great interest in preserving stability in Europe and are incredibly unlikely to engage in hostility. Simple economics does not prevent war, as shown by the amount of trade before World War I, but political unions ensure that differences are worked out through dialogue. Because of this, it seems unthinkable for war to happen in the near future, an achievement that has been recognised by the awarding of the Nobel Peace Prize (24). Eliminating the political union would compromise this great achievement.  (24) “The Nobel Peace Prize for 2012”, Announcement, Prize Laureates, The Nobel Peace Prize. 12 October 2012.


Political union is necessary for Eurozone recovery  What is needed for the Eurozone to flourish is an economic-political union with a single budget, so that capital can flow to where it is needed and fiscal policy can make up for imbalances between Member States (20). The alternative, as we have seen, is internal devaluation, which is a very painful and excruciatingly ineffective ways of achieving the same for a ridiculous price. (21) The European Union therefore needs to be looking forward to more integration rather than backwards to less. More integration can fix many of the problems in Europe; balancing regional disparities through fiscal transfers, eliminating the democratic deficit through a more powerful parliament, and preventing problems with nationalism by empowering regions.  (20) Traynor, Ian. “Eurozone should form political union, says Germany’s ECB firefighter”, The Guardian.   (21) Persson, Mats. “Can the euro be saved through internal devaluation alone – and at what political cost?”, The Telegraph. 28 September 2012.


The European political union is a tool for promoting democracy  The EU has the ability to demand certain conditions from candidate states before they join. It has explicitly set a democratic standard countries must satisfy to be members. This is a powerful tool that repeatedly has incentivised reform in terms of human rights and democracy. In particular, countries emerging from Former Yugoslavia and Turkey have engaged in structural reform during the last decade as part of the process towards becoming Member States (17). It is also stronger for enabling a common foreign and security policy which encourages cooperation between member states when setting policy ensuring all members work together. The EU, therefore, can be a strong force for democracy. This is good, not only because democracy is intrinsically preferable to non-democratic systems, but also because democracies will be more likely to trade and freer trade produces more economic benefits. If the EU were to be merely a trade bloc, it could not put pressure on its countries to stay democratic and endorse the free market. Thus, both in political and financial terms, the EU’s role as a promoter of democracy should be defended.  (17) Dimitrova, Antoaneta; Pridham, Geoffrey. “International actors and democracy promotion in central and eastern Europe: the integration model and its limits”, Democratization. Volume 11, Issue 5. 1 June 2004.


The premise of this argument is that European countries are so connected that in entering war with another European country you would directly harm yourself. A European trade bloc is enough to ensure this, by interconnecting European economies to make war too expensive to be considered.  Furthermore, while it is clear that there have been no great wars since World War Two, conflicts have not entirely been prevented; to the extent that they have, perhaps it is not the EU’s merit as the EU did not do much to prevent conflict in the former Yugoslavia (25); finally, perhaps the EU may even be blamed for the rise of nationalism and ensuing political tension in countries such as Greece so there is a growing potential for future conflict as a direct result of political union (26).  (25) “The EU and the Nobel Peace Prize”, Charlemagne, The Economist. 12 October 2012.   (26) Mariam Onti, Nicky. “Soros Blames Merkel For Golden Dawn”, Greek Reporter. 7 October 2013.


European integration has been immensely beneficial to EU economies  The political union has had extensive benefits for the European trade bloc. Member States have the same legislation, for example, on labour conditions and protection of consumers (15). They also have similar property law. This allows products and ideas to freely move and be sold in different countries much more easily as there can be less bureaucracy at borders and companies can more easily expand abroad. The European political union also allows countries to streamline their production, students to access better international tuition, companies to move to countries where they can most boost growth, and cheap labour to move to where there is demand for their work as is currently the case with people from the Mediterranean countries moving to Germany for work, it is estimated that 80,000 south Europeans are moving to Germany every year (27). If the EU did not have a common legislation, its freedom of movement and thus its economic advantage would slow down.  (15) “Consumers”, Summaries of EU legislation, Europa.   (27) Connolly, Kate, “Young Spaniards flock to Germany to escape economic misery back home”, The Observer, 7 July 2013,


The Eurozone is not the same thing as the single market, which is the foundation of the EU trade bloc. It would probably even be good for Europe for the Eurozone to be dismantled as it would allow currency devaluations to restore competitiveness to failing economies in Europe’s periphery. The European trade bloc would certainly survive, and it is likely that the weaker economies would be in a much better position in the long-term because their products would be cheaper while still being a part of the single market (22). Further political union, on the other hand, would involve huge financial risks by eliminating any form of national flexibility to deal with economic problems. (23)  (22) See “This House Would Abolish the Single European Currency”, Debatabase.   (23) Issing, Otmar. “The case for political union isn’t convincing”, Europe’s World. 1 June 2013.


The benefits outlined in the argument are only valid if the political aspect of the EU functions efficiently. The EU’s undemocratic nature and unnecessary bureaucracy create uncertainty about whether the EU will even exist in the long-term. Adding to that the growing resentment to the EU in several Member States and looming referenda, the EU is an unstable entity.  A trade bloc, on the other hand, is not conflated with issues regarding sovereignty, national identity, immigration and other sensitive political issues. Therefore, it is likely to be considered safer by potential trading partners. When the EU is not a political agreement, foreign investors can have more trust that the countries involved now will remain involved in the future.


President Bush took a series of extremely difficult decisions that were necessary for national security. Admittedly they were expensive but they made the world a safer place. His decisions on taxation ensured that all Americans benefitted from economic growth.  He had already done the heavy lifting all the Obama administration needed to do was allow the market to bring the economy out of recession. Instead he has interfered and regulated while constantly spending money that wasn’t there on policies that weren’t priorities.  There’s no denying that the economy was in trouble when Obama got the keys to the West Wing but the job of being president is solving these things, not complaining about them. He wanted the job and has singularly failed to deliver.  Instead he has pursued a left-wing, interventionist agenda that believes that government can provide all the answers. Except there is a big problem: he has no experience of running anything. He was a junior Senator in an era where the country tends to turn to former governors to fill the Chief Executive’s jacket; he simply doesn’t know what he’s doing [i] .  [i] Emmett Tyrrell. "Barbour out on the hustings." The American Spectator. March 17th, 2011


After eight years of misrule under Bush, in the middle of an appalling recession expecting everything top get done in four years was always fantasy  Given the size of the challenges facing the Obama administration when he was elected, they were never going to be resolved in four years. Perhaps his largest mistake was not amending his “Yes, we can” slogan with the caveat “but it’s going to take a while.”  A debt of $14tn was never just going to vanish like the morning mist, particularly in the depths for a recession caused, in large part, by the Bush administration’s inability to regulate their friends in the banking industry, to start unnecessary wars and to give away tax breaks to the rich.  Equally, Obama came into the job at a time when most of the rest of the world was barely on speaking terms with the US and has had to rebuild bridges with all of the traditional allies beyond the ever loyal UK and Israel – although even they were looking edgy by the end of the bush era.  Even getting up to the starting line has taken the better part of his first term, it would be folly to hand the country and the economy back to the same people who caused the problem in the first place [i] .  [i] Steven Rattner. "Ron Suskind’s inaccurate revisionism." Politico. October 1, 2011


The republican primaries have yet to even begin so it is too soon to be writing off the whole party.


Obama has delivered some remarkable reforms in fantastically difficult circumstances  On matters as diverse as healthcare to the conflicts in Iraq and Afghanistan, President Obama has pulled a whole series of rabbits out of the apparently impossible hat he inherited from Bush.  Among other surprises he took the lead in a G20 summit that produced $1.1tn to act as a bailout fund. He’s effectively resolved the catastrophes in two major conflict zones. He’s ensured that poor families actually stay in their homes. Increased funding for student loans, extended unemployment insurance at a time when 7,000 Americans a week were losing their benefits and, on top of all that he’s introduced a healthcare package that will give security and peace of mind to millions of Americans.  All of this has been accomplished in the face of extraordinary difficulties that were not of his making [i] .  [i] Athleen Rosell. "Devil's Advocate: Re-Elect Obama." The Daily Titan. April 19th, 2011


Nobody denies that Obama talks a good game and that he came into office facing some big problems. However, the reality is that he simply hasn’t stepped up to the plate. The economy is a shambles; unemployment is at over nine percent and only looks to grow, the debt is running at $14tn and the deficit is out of control.  His much vaunted healthcare plan is a rehash of Mitt Romney’s plan in Massachusetts. His only solution to any problem is to throw money that the government doesn’t have at it [i] .  Ultimately, he has proved himself long on rhetoric but very short on delivery. His campaign was based on an idea that he could provide leadership to a nation in trouble. Instead he has rushed after either verbosity or inaction and frequently both [ii] .  [i] Karl Rove. "Why Obama Is Likely to Lose in 2012." Wall Street Journal. June 22nd, 2011  [ii] John Feehery. "Opinion: Obama’s fatal missteps." The Hill. October 3rd, 2011


Given the current state of the Republican field and the gravity of the challenges facing the US, Obama may well be not only the best but the only hope  The Republican Party primary campaign currently resembles a dismembered chicken’s head in frantic search of a body. Palin, Trump, Perry… A string of gaffes followed by a collapse after collapse. [i]  Obama at the very least has the capacity to inspire confidence and the experience of four years in office. If, as seems most likely, the Republican candidate ends up being Mitt Romney, the former governor of Massachusetts, then he would represent a figure who is almost as unpopular in his own party as he is with Democrats.  Divided and divisive a Republican victory in 2012 would fragment congress, terrify the markets and worry international opinion. Furthermore, the only policy option they appear to have suggested for dealing with the economic mess is to do nothing except, perhaps, cut taxes some more; thereby increasing the deficit and further angering China.  Unless the republicans can come up with a genuine surprise (and the guy they voted against last time really doesn’t fit that bill) then the voters are presented with one very harsh reality: Vote for anybody, as long as it’s Obama [ii] .  [i] Dionne, E.J. Jr., “The Rise of the Reverse Houdinis”, 13 October 2011 .  [ii] E.J. Dionne. “GOP’s Favorite Solution: Doing Nothing”. Real Clear Politics. 13 October 2011.


There is a perennial Republican attack – that Democrats cannot be trusted with national security. Obama has proven that to be untrue settling issues in Iraq, Afghanistan and Pakistan. He has, however, managed to do it without offending anybody or having his effigy burnt on the streets in Canada and Europe [i] .  He has managed to re-forge the supportive attitude of much of the world towards combating terrorism and worked with leaders of other major economies to tackle the economic troubles in the global economy. President Bush was the one always looking for votes with his fake bonhomie and folksy charm for the voters back home. Obama by contrast treats his allies with respect and receives it in return and abundance. [ii]  [i] President Obama. "Let's reclaim the post-9/11 unity." USA Today. September 08, 2011  [ii] President Obama. "Let's reclaim the post-9/11 unity." USA Today. September 08, 2011


Obama took the lead in putting together an international solution to the financial crisis. He has taken bold decisions to prevent the crisis turning into a full-blown depression, such as pushing through the American Recovery and Reinvestment Act of 2009 which was to give an estimated $787billion stimulus to the economy, [i] and has acted to control the worst excesses of Wall Street through the Dodd-Frank Wall Street Reform and Consumer Protection Act. [ii] He has passed consumer protections legislation relating to credit cards and mortgages and established a framework to double US exports by 2015. He created and Advanced Manufacturing Fund to help the economy away from its addiction to the antics of Wall Street wide boys and return the focus to industries that make something tangible and, in the same spirit, rescued Detroit from its own suicidal tendencies.  He has freely conceded that unemployment is too high and is working to address that in the midst of an economic crisis that was not of his making. However, he is delivering public policy solutions in new and imaginative areas as opposed to the tired claims of Republicans that yet another tax cut would be a panacea for all economic ills.  [i] Recovery.gov, ‘The Recovery Act’  [ii] The Library of Congress Thomas, ‘H.R.4173 Dodd-Frank Wall Street Reform and Consumer Protection Act’, 111th Congress 2009-2010


Obamacare is neither one thing nor the other; even his flagship policy shows that Obama is always the politician and never the leader that the US needs  Obama managed to steer a bill that everyone disliked through Congress. He angered the Republicans, and lost the support of some democrats in congress, 39 voted against the bill, [i] as well as more than a few Democrat voters, and ended up watering it down enough that his own core supporters failed to show up for congressional elections in 2010. [ii]  He is reluctant to show leadership in any area of policy and when he does, as Mitt Romney puts it, acts more as “a politician in chief than a commander in chief” [iii] .  From the outset the President has been considerably more about spin than substance, usually trying to pass off his own mistakes as those of someone else. Of course all politicians do this but, usually, they also do something else as well; Obama is a one trick pony.  [i] Cannon, Carl M., ‘The 39 House Democrats who Voted Against Their Party’s Health Care Bill’, Politics Daily, 8 November 2009.  [ii] Best, Samuel J. Best, ‘Why Democrats Lost the House to Republicans’, CBS News, 3 November 2010.  [iii] Mitt Romney. "We need a leader, not a politician." USA Today. June 10th, 2010


Obama has no clear foreign policy agenda  Obama’s foreign policy to date has, frankly been a mess. He has failed to stand up to Iran and has allowed both Russia and China to take advantage of his ‘reset’ policy. He has ignored the growth of hostile powers while showing a similar disregard for America’s Allies.  Simply by dint of not being Bush, Obama had the possibility of a huge upsurge in support overseas but he has tended to act more the clown than the statesman at international gatherings, for example insulting Israeli Prime Minister Benjamin Netanyahu at the G20 summit in Cannes; responding to French President Sarkozy he said "You are sick of him, but I have to work with him every day." [i] Once again his desire to be the politician than the leader applies even at events where nobody has the vote. [ii] [iii]  [i] FoxNews.com, ‘White House Silent on Conversation With French President Insulting Israeli Prime Minister’, 8 November 2011  [ii] Nile Gardiner. "Barack Obama’s disastrous first 1,000 days." The Telegraph. October 18th, 2011  [iii] "Goldberg: Obama, abroad, is adrift." LA Times. September 6th, 2011


Obama has singularly failed to resolve Americas economic woes, which was the single largest issue when he was elected  Beyond the rhetoric, beyond the inspirational speeches, there was one issue on voters’ minds when they supported Obama; the economy and jobs. He has simply failed to deliver.  He likes to portray himself as the master of public policy; a kind of philosopher king. However the reality couldn’t be further from the truth [i] . On the issue that has dominated international discourse since his election, the economic meltdown, he has simply failed to deliver. He accepted a fiscal stimulus package that contained plenty in the way of pork but little in terms of practicality. He has failed to create jobs, the unemployment rate is still at 9% up from 7.8% when he became President. [ii] And Obama has singularly failed to tackle the deficit, which has increased by $4 trillion since he took office, [iii] apparently seeming more interested in spending on unnecessary projects.  [i] Jonah Goldberg. "Where's the evidence Obama's a policy genius?" National Review Online. October 9th, 2011  [ii] Rogers, Simon, ‘US jobless date: how has unemployment changed under Obama?’, Datablog guardian.co.uk, 7 October 2011.  [iii] Knoller, Mark, ‘National debt has increased $4 trillion under Obama’, CBS News, 22 August 2011.


The reality is fairly simple; Obama is a skilled politician, that is beyond dispute. However, he is also a respected constitutional scholar, the man who caught Bin Laden after eight years of Bush-bluster, who delivered the Democrats – and the American people - their holy grail of universal healthcare.  Contrast this with a Republican leadership who either can’t remember their own policies or who seem to base them on assertions, such as the one made by Michelle Bachman that Jefferson and Mason, both of whom owned slaves, worked tirelessly to abolish slavery. [i] Mitt Romney the candidate the Rupublicans finally decided on is out of touch with ordinary voters, making gaffes such as saying his wife drives 'a couple of cadillacs'.  The contrast could not be clearer; at least the president knows the difference between the War of Independence and the Civil War and cares about ordinary voters.  [i] Roper, Richard, ‘Bachmann, Palin should just admit gaffes, then move on, Chicago Sun Times, 29 June 2011.


This is based on several potentially faulty assumptions first the trust fund may not be aimed at helping to prevent pollution of clean up afterwards; it may simply be given the role of generating the biggest possible return. Second it assumes that politicians see themselves as tied to the people so that they have a reason to prevent pollution, in practice in an autocracy or a faulty democracy this may not be the case. The desire may therefore be to invest as much money as possible in the trust fund and therefore to exploit the resource as fully and cheaply as possible. Even if the money is going into a trust fund the self interest is in polluting as we should remember that dictators are likely to believe they will still be around to see the benefits in decades to come.


A fund would prevent pollution  Environmental damage is an example of the ‘tragedy of the commons’ where if a resource is not owned by an individual (or is free to all) then it will be overexploited. This is because it is in everyone’s self-interest to use it as much as possible. The result is pollution; politicians and oil companies want to exploit the oil as cheaply as possible so they dump pollution on the local population.  For example, the $19 billion ruling handed down last year by a court in Lago Agrio, a town near Ecuador’s border with Colombia, held Chevron accountable for health and environmental damages resulting from chemical-laden wastewater dumped from 1964 to 1992(1).  Putting oil wealth into a trust fund can help prevent this kind of abuse. There are two reasons for this. First if politicians are not getting an immediate benefit they will be less inclined to overlook pollution and there won’t be money to buy support for drilling and pollution to continue. The second is that since the fund is meant to provide long term benefits and investments one of the things it can be doing is being devoted to cleaning up any pollution that is created thus protecting the future generations.  (1) Joe Carroll, Rebecca Penty & Katia Dmitrieva ” Chevron’s $19 Billion ‘Disaster’ Gets Hearing”, Bloomberg, 29 November 2012,


Not all politicians are incapable of investing for the long term. After the economic crisis in which the world saw the perils of “living in the moment”, politicians will be more cautious in the way they spend money. Politicians have in the past been able to build visionary projects such as the EU, or high speed rail, or invest in reducing greenhouse gas emissions; in Europe, domestic greenhouse gas emissions fell by over 15 % between 1990 and 2010, due also to improvements in energy and fuel efficiency, so there is no reason to think they could not do so again.(1)  As a result, we do not need a separate group for taking these decisions for the politicians, as they would do it by themselves.  (1) European Environment Agency, “Mixed success for European environmental policies”, Spiral, 2012


Oil wealth flowing to politicians discourages democracy  The wealth from oil, or other natural resources, holds back democratization as a result of the “resources curse” or “paradox of plenty”. Resources provide money, and money is what is needed to run a security state. When money can come from natural resources there is little need to tax the people, instead it becomes a “rentier” economy where the dictator has resources to buy support without recourse to taxation. [1] It is essentially the opposite of the well-known idea ‘no taxation without representation’; if the money comes not from taxes but from oil what need is there for democracy?  This proposal takes away the option of having access to large oil revenues instead providing only a limited amount to the state rather than the pockets of the dictator. This prevents the buying of key groups such as the army and the policy who can be used to repress the population. It is not by chance that the only countries in the Arab Middle East that could be considered democracies before the Arab Spring never had oil; Jordan and Lebanon.  [1] Michel Chatelus and Yves Scehmeil, ‘Towards a New Political Economy of State Industrialisation in the Arab Middle East’, International Journal of Middle East Studies, Vol. 16, No. 2 (May, 1984), pp.251-265, pp.261-262


The biggest problem African countries face is instability whether from rebellions, coups, international conflicts, or terrorist organisation. The inevitable result is violence. What the population needs is safety to enable social benefits like healthcare and education. Money to pay for an army can therefore be a good thing. A good well paid professional force is needed to ensure stability and prevent conflict. Nigeria for example would surely have split apart without a large army; violence from terrorist groups like Boko Haram is increasing creating Muslim-Christian tensions.(1) Without stability there can be no democracy; votes can’t be held, so financing for stability is a good thing.  Egypt is a good example that shows a well-trained army can work for the benefit of democracy; it first stood aside while the people overthrew Egyptian dictator Mubarak and then stepped in when it was believed Morsi threatened democracy.  (1) “Nigeria’s troubles ,Getting worse”, The Economist, Jul 14th 2012   (2) Siddique, Haroon, ‘Egypt army was ‘restoring democracy’, claims Kerry’, theguardian.com, 2 August 2013,


Having oil does not just provide the money to undermine, or prevent democracy taking hold; it also provides an immense source for corruption. Oil revenues provide a revenue stream that is not dependent on the people but simply upon the global market and oil production. In a country with no checks and balances, accountability or transparency the money will inevitably go to the elite. This is how Equatorial Guinea can be rich while having most of the population in poverty. Dictator Obiang himself is worth an estimated $700million or the equivalent of about 4% of GDP.(1)  A trust fund can ensure that money from oil goes to the poorest not the richest. It is managed outside the country and away from political pressure. If the government is corrupt and uses the national budget to its own ends the trust fund can provide the dividends as investment in individual development projects to ensure the money is used where it is most needed. All the time it can be transparent to show when and where the government is trying to influence it or get backhanders.  (1) ‘The Richest World Leaders Are Even Richer Than You Thought’, Huffington Post, 29 November 2013,


Long term benefits  It is very tempting to recklessly use an unexpected windfall of money immediately. But the best thing to do is to invest for the long term either to build infrastructure that will pay back its cost in future economic growth, or to invest it in funds that will continue paying dividends long into the future. The example of how Britain and Norway spent their North Sea oil revenues is very revealing: “the British governments spent their North Sea winnings on cutting national borrowing and keeping down taxes. Whatever came in went straight into the day-to-day budget. By contrast, for the past 16 years Norway has squirreled away the government's petroleum revenue in a national oil fund”(1) which now has $810 billion in assets, almost twice the country’s GDP, providing 5% returns.(2)  The advantage of such investment is that they will continue to bring income even after the oil is gone. The oil will therefore benefit future generations as well as the current one. A panel of experts which are immune to political influence is the most likely body to think about long-term needs of the country and devise a plan which can ultimately bring income for a long period of time.  (1) Simon Gompertz “Has the UK squandered its North Sea riches?” , BBC News , 8 October 2012   (2) Jonas Bergman, “World’s Biggest Wealth Fund Says Record Size Is Posing Hurdles”, Bloomberg, 1 November 2013,


Preventing Corruption  Having oil does not just provide the money to undermine, or prevent democracy taking hold; it also provides an immense source for corruption. Oil revenues provide a revenue stream that is not dependent on the people but simply upon the global market and oil production. In a country with no checks and balances, accountability or transparency the money will inevitably go to the elite. This is how Equatorial Guinea can be rich while having most of the population in poverty. Dictator Obiang himself is worth an estimated $700million or the equivalent of about 4% of GDP.(1)  A trust fund can ensure that money from oil goes to the poorest not the richest. It is managed outside the country and away from political pressure. If the government is corrupt and uses the national budget to its own ends the trust fund can provide the dividends as investment in individual development projects to ensure the money is used where it is most needed. All the time it can be transparent to show when and where the government is trying to influence it or get backhanders.  (1) ‘The Richest World Leaders Are Even Richer Than You Thought’, Huffington Post, 29 November 2013,


The change need not be dramatic; it need not apply to all oil revenues at once. For example only revenues from new fields could go into the independent fund while existing revenues to the government are maintained. Services therefore won’t need to undergo contraction.  The impact on politics would also be minor; people elect those who get things done not those who blame others for their problems. Moreover all of the politicians will have the same constraint of a lack of funds so no single party will have an unfair advantage.


Politicians only think about themselves and only for the short term looking for re-election. The result will be the money used for populist measures even if it is not sustainable. The example of Greece proves this idea, as there public sector wages rose 50% between 1999 and 2007, despite having a deficit (1). Everyone wants more money, so will vote for such measures. They don’t think about the question of how that money will be acquired in the long run so will go for unsustainable policies that kick the problem to future generations. Only an independent body will be immune to short-termism.  (1) ‘Eurozone crisis explained’, BBC News, 27 November 2012,


An independent trust fund discourages investment.  When it is politicians who control both the investment and the amount funds being returned from that investment then they have an incentive to encourage more investment. They will want more exploration to find more resources, they will promote technological advances to be able to extract more from the same fields, and they will be willing to grant more production licences.  If on the other hand the money goes into a trust fund then the government and parliament has little incentive to encourage the market and every incentive to hold it up. The oil only provides a risk; unpopularity due to environmental impacts without any benefit in return.  The result will be that the costs of drilling will be seen in the environmental damage it causes while communities do not get any of the benefit as the money is being squirreled away ‘for the future’. This is hindering the market and so reducing the economic benefits to the country.


Keeping funds from government has negative consequences for spending  Let us not forget that in most of the cases when we talk about oil revenues, we are talking about very large sums of money, which can have an immense impact on the budget.  In countries where oil already contributes to the budget any change could be immensely disruptive to the government’s ability to deliver services. If we take Venezuela as an example oil revenues account for 25% of GDP (1), with government expenditure of 50% of GDP (2) any drop in oil revenues would have an immense impact upon social policies such as education, health and welfare. For those where the funding would be new that country would be foregoing a potentially transformative sum of money that could help to eliminate poverty or provide universal healthcare and education.  Such a drop in funds flowing into the government would also have a huge impact on politics; politicians would block the implementation of a proposal that takes away so much revenue. If it did happen the independent fund would simply get criticism heaped on it as an excuse for why services can’t be improved.  (1) Annual Statistical Bulletin 2013, ‘Venezuela facts and figures’, OPEC, 2013,   (2) 2013 Index of Economic Freedom, ‘Venezuela’, Heritage Foundation, 2013,


For the people and accountable to the people  A country’s resources should be used democratically. The resources that are found under the soil belong to the nation and therefore they should be used for the benefit of the people. Even where there is private ownership extending to mineral and energy resources it is the responsibility of the owners to use those resources for the good of the nation. The only way for this to happen is if there is a democratically accountable body in charge of the funding; this has to mean a democratic parliament.  Putting the money in an ‘independent fund’ is not very accountable. Even if it is independent there is no saying what the money will be used for, or that the fund is not really designed to funnel money back to a few individuals.


Is it better that money should be wasted immediately or should the return be spread out? Any prudent population would choose the latter. Most populations are wary of untrammelled exploitation of natural resources of the kind being promoted for fear of the devastating environmental impact.  Recent failures of big companies to protect the environment, like Chevron(1), only add to this discontent and lack of trust. The case of Rosia Montana Gold Company which wants to get a permit to mine for gold in Romania is also very illustrative. Following the request of this company to exploit certain mountainous areas in the Carpathian, a series of nation-wide protests have emerged. Thousands of people from across the nation are going out on the streets on a weekly basis to protest against this project.(2)  An independent fund won’t disincentivise investment; money will still be returned to the nation’s treasury to be used by politicians but because it takes longer to flow into the treasury there is less incentive for reckless investment that disregards the people’s will.  (1) “Chevron's Toxic Legacy in Ecuador”, Rainforest Action Network,   (2) Vlad Ursulean “Stopping Europe's biggest gold mine”, Al Jazeera, 27 Nov 2013


The opportunities for trade are severely limited because of barriers imposed by the international system. The arguments made by pro-trade proponents are often couched in the rhetoric of market economics. Yet the international trade arena represents anything but a free market. Instead, tariffs, taxes, subsidies, regulations and other restrictions operate to disadvantage some countries. Because of their weaker bargaining and economic power, it is typically developing not developed countries that are on the losing end of this equation. The agricultural protectionism of the EU and USA, in particular, means that developing countries are unable to compete fairly.  Furthermore, even if we were to accept that trade is more important, they should not be seen as alternatives; they can readily be complements. Trade is not inevitably magic and aid is not inevitably damaging. They depend on complementary policies. For example, aid-for-infrastructure programs that encourage trade could enable African exporters to compete with their Asian competitors 1.  1. UNIDO, Industrial Development Report, 2009.


Trade provides developing countries with an important basis for their own improvement.  To gear up to be successful trading partners, developing countries often need to go through a number of key changes. As well as developing their own economy and their manufacturing or service sectors, they may need to build trade infrastructure in other ways. For example, increased trade would focus their attention on such things as good governance, the benefits of a broadly stable currency and internal security. Although such developments may come about as a facilitator for trade, in the best case scenario they may be seen as structural changes which will have a trickle-down benefit for the broader society in the underdeveloped country. China for example has reformed its agriculture, created a large manufacturing sector and is increasingly moving into high tech sectors as a result of trading with, particularly exporting to, the rich world and as a result has lifted more than 600 million people out of poverty between 1981 and 2004 1.  1 The World Bank, 'Results Profile: China Poverty Reduction', 19 March 2010, Retrieved 2 September 2011 from worldbank.org:


Trade can be as short term as aid is; demand is very cyclical so if a country specializes in providing that good or service it can soon find that the product they are providing is no longer desired by consumers, or that there is a new product that makes what they provide obsolete. Even if there is a long term partnership between two trading partners it may simply mean tying the poor country into a different kind of dependency. Instead of the poor country being dependent upon handouts it is dependent upon the richer country buying its products or not trying to undercut it.


Financial contributions from the West have proved detrimental for Africa.  Between 1970 and 1998 when aid was at its peak, poverty rose alarmingly from 11% to 66%. This statistic alone suggests aid is damaging to African welfare. Africa began borrowing money in the 1970s when interest rates were low, but a rising rates in 1979 caused 11 African countries to default. Even after restructuring, they fell deeper into debt. While the Marshall Plan had been a success, the same approach would not favor Africa; as Dambisa Moyo contends, it lacks the required institutions to utilize capital efficiently. Debt servicing meant money was passing from the poor to the rich, leaving Africa in a precarious global position. Furthermore, countries which have rejected aid as an approach to combat poverty have prospered, indicating an additional correlation between aid and a ruined economy 1.  1 Edemariam, A. (2009, February 19). 'Everybody knows it doesn't work'. Retrieved July 20, 2011, from The Guardian:


While aid appears unsuccessful for Africa, the approach itself should not be criticized on the basis of results in one continent. Western countries have simply provided African countries with generous payments allowing them to stabilize their economy. It many aspects of life, emphasis is not often attributed to what resources are available but how they are used. Though more guidance on how to invest the money may have been useful, Africa itself must take responsibility for how it has spent the money. The evil behind aid is allegedly overreliance: a country becomes dependent on receiving more and more aid. However, a focused approach to budget and organization of capital could certainly put aid to good use.


Resources will only be scarcer without aid; further chaos and corruption will ensue. There would be no need for fighting should resources be shared out equally. If aid is transferred to governments there is surely a centralized method of doing so; aid itself is not the problem. Africa could escape the issue of receiving payments according to donors’ vested interests by administering a list of causes for which it desires support, accepting contributions where demands fall exclusively within its categories. Again, aid is not detrimental but its careless distribution and allocation is.


Trade is a long-term basis for international co-operation.  Whereas aid is mostly short term, particularly for individual projects or limited to the donors priorities, the other partner in a trading relationship is likely to represent an ongoing market for goods or services. So when a developing country has the capacity to engage in trade with another country, there is a strong likelihood that that trade will blossom into an ongoing trading partnership. This will allow a firm basis for a flow of cash or goods into the developing country, largely independently of whether the developed country is doing well or badly economically at a given moment. This can be contrasted to the flow of aid. It tends to be less predictable, both because it is manipulated for political reasons and also because it can be quite ephemeral and so, if the developed country goes through a bad economic time, the aid budget makes an easy target for a reduction in spending as is shown by the arguments in the United States where the USAID Administrator Shah "We estimate, and I believe these are very conservative estimates, that H.R. 1[bill passed by republicans in the house cutting foreign spending] would lead to 70,000 kids dying,"1.European trade with Africa may have decreased, but China’s demand for oil and raw materials is blossoming, and Africa is becoming a major supplier 2.  1 Rogin, Josh, 'Shah: GOP budget would kill 70,000 children', foreignpolicy.com, 31 March 2011, Retrieved 1 September 2011 from Foreign Policy  2 Moyo, D. (2009, March 21). Why Foreign Aid is Hurting Africa. Retrieved July 21, 2011, from The Wall Street Journal:


Systemic aid' is detrimental to African society  While aid threatens the economy, it also poses hazards for society in Africa. As Moyo contends, it merely fosters civil war as people fight over scarce resources that cannot feasibly be equally distributed. According to Dr Napoleoni, $1.6bn of $1.8bn in aid received by Ethiopia in 1982 – 1985 was invested in military equipment1.  As a result aid is often limited; some donors refuse to make payments unless a proportion is devoted to a specified cause or if some act is done in return. Moyo refers George Bush’s demand that two thirds of his $15bn donation towards AIDs must go to pro-abstinence schemes. Such requirements further impede Africa’s ability to create a domestic policy and think for itself. Aid is solely to blame for its dependent state.  1 Herrick, L. (2008, May 14). Money raised for Africa 'goes to civil wars'. Retrieved July 20, 2011, from New Zealand Herald


Aid money is often misspent, even when handled honestly. By imposing solutions from outside, it favors big projects, "grand gestures" and centralization - all of which may be inappropriate, only benefit a small number of people, and suffer from intended consequences. By contrast, the profits of trade trickle down to the whole population, giving people the power to spend additional income as they choose, for example by reinvesting it in worthwhile local industries and enterprises.


All countries have something to trade. Many of the world’s poorest countries have a lot of natural resources so they can take part in trade. Even if a country does not have sufficient natural resources it still has people. In order to be able to take part in the globalized manufacturing industry it need only be willing to accept lower wages than its rivals. Alternatively if it is landlocked and has not opportunity to trade in manufactures it can invest in education in order to become a services hub. All states have a comparative advantage somewhere, they just need to find it.


Trade requires infrastructure  Trade does not exist in a vacuum. It needs a wider infrastructure to support it, e.g. roads, railways, ports, education to produce capable civil servants to administer trading rules, etc. For example Malawi as a landlocked country needs roads and railways to link it to ports in neighboring Angola and Mozambique. Without foreign aid, developing countries are not able to develop this kind of support, and so cannot participate effectively in international trade.  This is even more the case when it comes to creating the necessary legal infrastructure and effective civil service. Aid is not always in the form of money - it may also be given through expert advisors who help countries prepare for the challenges of globalization. Such were the efforts in the 1960s by the developing world, but they were dropped in favor of poverty relief. If restarted and restructured, they would yield much better results, without the fear of commodity prices dropping, enabling African countries to eventually stand on their own two feet. Corruption is a potentially huge problem as recognized by Sudan People’s Liberation Movement Secretary General Pagan Amum "We will have a new government with no experience at governing. Our institutions are weak or absent. There will be high expectations. Hundreds of millions of dollars of oil money will be coming our way, as well as inflows of foreign aid. It's a recipe for corruption.1" As a result it is not physical infrastructure that is needed but rather mechanisms for preventing corruption. Something that aid will always be much better at achieving than trade.  1 Klitgaard, Robert, 'Making a Country', ForeignPolicy.com, 7 January 2011, Retrieved 2 September 2011 from ForeignPolicy.com


The global economy is not welcoming to African players  The international trade arena represents anything but a free market. Instead, tariffs, taxes, subsidies, regulations and other restrictions operate to disadvantage some countries. Because of their weaker bargaining and economic power, it is typically developing not developed countries that are on the losing end of this equation. The agricultural protectionism of the EU and USA, in particular, means that developing countries are unable to compete fairly. In the EU, for example, each cow gets over 12 USD every day, which is many times more than what the average Sub-Saharan person lives on 1. Furthermore, Africa has yet to break into the global market for manufactured exports: this is very difficult precisely because of the success of low-income Asia.  1 BBC News. (2008, November 20). Q&A: Common Agricultural Policy. Retrieved July 21, 2011, from BBC News:


Trade does not allocate resources effectively  Aid allows for money in a given country to be allocated well against need. At the micro- level as well as the macro, trade is an inefficient distributor of resources in a developing country. Under it, most if not all of the benefit of the trade will stay with a small elite of people who are often amongst the richest in the country in the first place. They may then move the money offshore again. Alternatively, if it remains within the developing country, it may well simply be used to buttress their own position in a way which further entrenches their social and economic position. So, the benefits of trade flow to few people and often they are the least needy. Aid, by contrast, may be targeted against specifically identified groups or areas on the basis of need, often being given through local groups, such as churches, mosques, health clinics, etc. If one looks at the Gini index (income and wealth equality) ranking, it is plain that the top (most inequality) is occupied by Sub-Saharan countries, fortifying the point 1.  1 Mongabay. (2010, January 25). Distribution of Family Income. Retrieved July 21, 2011, from Mongabay:


Free trade is dangerous  Exposing fragile developing economies to free trade is very risky. There is a short-term danger that a flood of cheap (because of developed world subsidies) imports will wreck local industries that are unable to compete fairly. For example China’s dominance in textile manufacturers has reduced the amount African countries can export to the US and Europe and is causing protests in Zimbabwe and South Africa against cheap imported Chinese clothing. 1  In the longer term economies are likely to become dangerously dependent upon "cash crops" or other commodities produced solely for export (e.g. rubber, coffee, cocoa, copper, zinc), rather than becoming self-sufficient. Such economies are very vulnerable to big swings on the international commodity markets, and can quickly be wrecked by changes in supply and demand. For illustration, one only needs to look at Greenfield’s “Free market-free fall” 2. He writes: “Trade liberalization encouraged increased production, leading to overproduction that pushed down prices, driving down farmers’ incomes…” Combined with the protectionism of the West (the CAP in the EU) trade is dangerous for Africa. Aid is more stable and certain, and is better for frail countries.  1Africapractice, 'The Impact of the Chinese Presence in Africa', 26 April 2007, retrieved 1 September 2011 from David and Associates  2Greenfield, G. (n.d.). Free Market Free Fall. Retrieved July 21, 2011, from UNCTAD:


Even if that were true, people naturally want to trade with each other, seeking to turn their particular resources or skills to their advantage. All too often trade is limited not because government action is needed, but because the government actually gets in the way with restrictive rules and statist controls. For example, regardless of their terms of trade with developed nations, developing countries could all become more prosperous if they removed the barriers they have erected to trade with each other. Putting the emphasis on trade rather than aid redirects attention from what developed states should or could be doing for the developing world, to what developing countries can and should do for themselves.


Trade may not help those most in need.  Aid is linked to need. Trade rewards those who are able and willing to engage in trade. This involves a number of elements – as well as having the rights sorts and quantity of goods and services and being willing to sell at the desired price, a country may need to meet certain other criteria of a purchasing country. For example, that country may make demands in terms of corruption, human rights, political support at the United Nations, or any other of a large number of possible preconditions for a trading partnership. This will suit some countries in the developing world. But for others it will act as a bar to trade. They will therefore not receive the redistribution of wealth that is claimed for the global trading web. In this way, trade can distribute its benefits very unevenly. By contrast, aid can in theory be more evenly distributed and can be targeted against identified need rather than against the ability to compete in a trading marketplace. While aid has not always been targeted effectively and has sometimes been wasted there have been efforts to increase accountability and coordinate aid better such as the Paris Declaration on Aid Effectiveness 1.  1 Development Co-operation Directorate, 'Paris Declaration and Accra Agenda for Action', OECD, Retrieved 2 September 2011 from oecd.org:


This argument borders on the absurd. Trade is much more likely to yield benefits for the ordinary men and women of Africa, than aid ever hoped to be. Aid and its unregulated flow are precisely what kept numerous dictators in power (Zimbabwe’s Mugabe, to name but one) allowing them to starve their people while taking weekend trips to the Ivory Coast in private jets. Trade, on the contrary, creates jobs, and those jobs create demand for other jobs - which is what matters to the ordinary person.


Yes, trade might require infrastructure, but Asian countries required it just as much, maybe more than the African ones do. As Moyo argues in “Dead Aid” all of this is to be achieved not by clinging to aid, but by creating a stable enough atmosphere with favorable terms for FDI. The Chinese have already invested billions of dollars in Africa and are likely to invest much more. That way, the African countries get both trade and infrastructure, without being at the mercy of developed nations.


Corruption in any form creates inefficiency and ‘drag’ on the economy – it is an unofficial form of transaction tax and has the same effect on the economy.  The proposition focuses on the ‘seen’ detriment to public servants of losing income from bribery but ignores the ‘unseen’ benefit of ending bribery which is that the cost of living naturally falls with the cost of doing business.


Bribery is sometimes necessary for survival  "Survival" corruption, practised by public servants, is usually the result of small salaries, perhaps in highly inflationary economies, which do not allow them to make a living. Such as with the junior police officers mentioned in the previous point. Without bribery, public administration would collapse altogether as no one would have any incentive to get anything done. Thus the level of corruption is determined by the poor economic situation of the country as well as by the policy of the government.


The developed world also carries part of responsibility for the situation in the developing world due to its role as the bribe-payer. After all, it is largely multinational corporate interests that supply the bribe payments. They defraud the citizens of developing countries who get a less good deal as a result, as well as the interests of shareholders at home whose money is diverted into the pockets of foreign officials. This shows the necessity of treating the bribing of foreign officials as a criminal offence in companies’ home countries. It also requires the publication of all payments relating to foreign deals.


Individuals may have no choice  People are often made to give bribes to officials because of unfavourable economic, social or bureaucratic conditions. Officials may refuse to serve clients unless they are paid. For example in Delhi police officers regularly take lunch without paying and more senior officers take 10,000 each month to allow the restaurant to stay open late. [1] In those countries where state institutions are extremely corrupted, refusal to give a bribe may cost financial losses for business representatives or even health and liberty for citizens who need medical service and access to justice.  [1] Burke, Jason, ‘Corruption in India: ‘All your life you pay for things that should be free’, guardian.co.uk, 19 August 2011,


The position of civil society plays a key role in reducing corruption. Its action in taking a moral stand against corrupted officials is an important precondition for effective anticorruption policy. Hence, citizens who put up with the necessity to give a bribe become a part of the problem. It is not just the case of public officials abusing their positions, but of people who are tempted to choose the easiest way out. Recent developments in India show how quickly expectations can change once people begin to make a stand. Anna Hazare went on a hunger strike creating a mass movement against bribery. Now there are websites such as ipaidabribe.com popping up to shine a spotlight on corruption. [1] The change is the first step in the fight against corruption.  [1] Campion, Mukti Jain, ‘Bribery in India: A website for whistleblowers’, BBC News, 6 June 2011,


In different cultures the lines between the acceptable and unacceptable are drawn differently. However, there are limits in all societies, beyond which an action becomes corrupt and unacceptable. The abuse of power for private gain and the siphoning off of public or common resources to private pockets should be illegal and unacceptable in all cultures and societies.


Bribery is sometimes the cost of doing business  Bribery is often inevitable for foreign companies that invest in those countries, where corruption is widespread and the conditions for business development are unfavourable. In Russia IKEA, the Swedish furniture company, was asked to pay bribes to get electricity for its stores and refused hiring generators instead, however the generators themselves had their price inflated, as a result IKEA suspended investment in Russia. [1] It illustrates that bribe giving is just a result of political system with weak democratic traditions. That is why many companies from developed countries, where corruption levels are low, tend to practise bribery in the developing world.  [1] Kramer, Andrew E., ‘Ikea Tries to Build Public Case Against Russian Corruption’, The New York Times, 11 September 2009,


Bribery is only wrong under a Western-centric notion of corruption  Norms and values differ between countries. In many non-western societies gift taking and giving in the public realm is a matter of traditions and customs. Moreover, gift giving is a part of negotiations and relationship building in some parts of the world. It is hypocritical for the west to target developing countries for this as many so-called democracies are hopelessly compromised by business interests through political funding and lobbying.  The United States Foreign Corrupt Practices Act bans large bribes but allows for the payment of small ‘customary’ sums in order to ease transactions. [1]  [1] The Economist, ‘When a bribe is merely facilitating business’ June 11th 2011,


Foreign companies simply adapt to the political and economic conditions that exist in different countries. You cannot blame them for high level of corruption, which is the inner problem of the state. Involvement of business representatives in anti-corruption actions may contradict their interests by providing access to commercially sensitive information. If bribery was banned, companies would be unable to operate, resulting in less investment and so less development in some countries.


Corruption is not always wrong – it can sometimes be a reaction to greater injustice. For example, the Mafia arose in 19th Century Southern Italy as a mediating institution for an ‘in group’ facing autocratic tyranny. Outsiders are treated badly, but then most groups of people that we label as legitimate also treat outsiders differently to their members.


Variation in standards leads to a ‘race to the bottom’ of corruptibility  International standards on prosecution of companies who bribe foreign officials may encourage positive changes in national legislation as well, thus eliminating legal flaws to combat corruption. Different national rules and standards for combating corruption are not sufficient in the era of global investments and international business transactions. Variation between national standards enables corruption to spread. In much the same way as companies and rich individuals make use of tax havens and places where taxes are lower and less regulated, all but two of the UK’s FTSE 100 of top companies are set up in tax havens, [1] companies wishing to hide illicit transactions may attempt to take advantage of weaker standards, wherever they are found. In India national laws have clearly not worked with relation to political parties as only one of 45 parties has provided information in response to the Right to Information act. [2] That is why international efforts to ensure the prosecution of the companies that bribe foreign officials are necessary in the current situation.  [1] Provost, Claire, ‘Tax havens and the FTSE 100: the full list’, Datablog guardian.co.uk, 11 October 2011,   [2] Times of India, ‘One out of 45 parties disclose information on sources of funding’, 20 July 2013,


The demand for bribes would end if companies stopped supplying them  The risk of corruption demand greater transparency from business. Companies have a big impact on the social environment and they have a responsibility to address it. Co-operative actions between the business sector and state institutions are essential for effective anti-corruption policy.  Companies that gain a reputation for reporting officials asking for bribes will find that officials stop asking for them. In turn they need a legislative environment that protects their interests. The OECD Convention on Combating Bribery of Foreign Public Officials is an important step forward in this sphere. [1]  [1] ‘OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions’, oecd.org, 1997,


Bribery is morally wrong  Corruption is the misuse of power for financial gain. It takes the core harm from unequal distribution of wealth and the resulting disparity in availability of goods and services and magnifies it by including access to just and nominally public services. It must always disproportionately harm the least well off in society either by denying them what is theirs by right or by forcing them into financial hardship to obtain it.


The bribery of foreign officials cannot be fought by international means efficiently if the level of corruption at the national level is high. It depends on the political will of national governments, the activities of civil society and other social conditions that exists inside the state. This explains why in many countries there has been little enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials. [1] In most OECD countries the political will to prosecute major bribery cases is lacking. This explains why international efforts to combat corruption are inefficient.  [1] Transparency International, ‘2008 Progress Report on Enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions’, 22 June 2008,


The much-acclaimed simplicity of the flat tax in fact makes it too simple to properly reflect a very complicated reality. Goods and services vary in order to make them accessible to different people; there exist both luxury and economy versions of the same goods because companies recognise that people have differing ability and willingness to pay, and hence price these goods differently. It would therefore be strange for the state to tax both kinds of good at the same rate, as if their respective buyers had the same discretionary income and could both afford to buy the product with the additional uniform flat tax on it.


Why a flat tax is simpler:  The current system of 'progressive' taxation whereby higher earners are taxed a higher percentage of their income requires the identification and administration of multiple different tax brackets spanning the entire spectrum of earnings in a nation. This causes a number of problems. The brackets themselves may be largely arbitrary cut-off lines based around round numbers, with no real justification as to why one person increasing their earnings by as little as £1000 should lead to them suddenly being propelled to a new tax bracket, when the actual difference to their income is negligible in overall terms. Moreover, the administration of multiple tax brackets is incredibly complicated and difficult, requiring every taxpayer to record their income and expenditure (in order to try and qualify for tax exemptions and 'loopholes') in meticulous detail and then to properly express this on lengthy and complicated government forms, a process which can cause anger, frustration and alienation amongst taxpayers. [1] In order to try and prevent tax evasion, governments are consequently compelled to have large bureaucracies that oversee this process and comb through looking for fraud, a costly and lengthy process. This may be contrasted with a flat tax system by taking the example of taxes on salaries paid to employees by a company under both systems. In the status quo, a tax collector must be aware in detail of exactly what is being paid to whom in order to ensure that everyone declares their income truthfully, allowing them to be placed in the correct bracket. However, under a flat tax, a tax collector could simply withhold the fixed flat tax rate (for example 20%) of the total company's payroll without needing to know what was paid to whom, as every pound is taxed at the same rate and thus it does not matter what goes to whom. This would allow for a massive simplification of tax forms, and for the down-scaling of the costly government departments dedicated to administering the different tax brackets. Thus the simplicity of a flat tax is a significant advantage.  [1] The Economist Special Report “The case for flat taxes” The Economist. Apr 14th 2005.


This argument ignores the fact that there is still another channel for the allocation of resources, namely the government. In the given example of agriculture tax credits verses manufacturing without such credits, if resources did not go into agriculture because of the special credit, they would have gone not into manufacturing but into government (through the closing of loopholes, and thus the disappearance of a means of being taxed less), and government is far less neutral to the market than any other allocation. Therefore, if the argument assumes that the best allocation of resources is that which most closely resembles a genuinely free market, then in this example a flat tax produces a worse situation, as any allocation of economic resources in the private sector (no matter how 'distorted) is closer to the free market (and thus 'better), than if those resources went into the hands of the government. So if reflecting the market is the uppermost concern, a flat tax is a worse proposition as it brings into higher rates of taxation many areas which currently are less taxed ('loopholes'), thus distorting the market even further as even more resources fall into government hands


Why a flat tax is fairer  In a welfare state such as the United Kingdom, everyone enjoys the same access to services provided by the government, and so it should stand to reason that everyone should also contribute equally to the funding of those services. As not all individuals are equal in their wealth and income, it is impossible to do this on the basis of everyone paying in the exact same numerical amount of money. However, this parity can be achieved by everyone paying the same percentage of their income in tax to the government, and this is exactly what a flat tax is, and so equality in contribution to government services (mirroring equality in access to government services) is achieved. This principle of equality is important for two reasons: firstly, if wealthier citizens feel they are being unfairly burdened by the current requirement that they pay higher percentages of their income to fund government services than those on lower incomes, they may feel a disincentive to work hard (which creates wealth for the whole economy), or may even be driven abroad to states with lower rates of taxation or to tax havens. [1] Secondly this removes the ability of the majority of a population to engage in what the French economist Bastiat called 'legalized plunder', where they (as the majority of voters) assign higher percentages of income tax to the wealthy in order that the state may appropriate and redistribute it to them for their own use. [2] With a flat tax in place, there would be no ability for anyone to vote for a tax rise simply on other people and not on themselves, and thus such policies would receive more consideration and not be used by the majority simply to appropriate the property of others through the law. Thus a flat tax is fairer as it equalized the basis on which everyone pays for access to equal services, and prevents a poorer majority from victimizing a wealthier minority through punitive rates of income tax for the wealthy, which may cause them to flee the country for other states with less taxation.  [1] Ramos, Joanne “Places in the Sun”. The Economist. Feb 22nd 2007   [2] Bastiat, Frédéric. The Law. Ludwig von Mises Institute. 2007