The Euro dilemma
I agree with Peter Mandelson (December) that Britain’s interests in what increasingly looks like a two-tier Europe are more likely to be preserved if the European Commission is in charge of policing any new eurozone governance regime. This seems to be the direction of travel, as Angela Merkel, the German chancellor, appears to have won that argument over France’s President Nicolas Sarkozy. It raises issues of democratic accountability, but at least there are visible institutions and mechanisms that Britain can continue to influence.
Whether treaty changes are required or not, what the euro needs to survive this crisis is greater financial discipline, in order to justify the ECB standing behind sovereign debt. I think we will see this happen—but this is a long way short of a fiscal union.
Whatever arrangements emerge should not be seen as distorting Britain’s ability to trade freely with the rest of Europe. Britain can and must continue to push for the completion of the single market in goods and services, the latter of which has been painfully slow. We should also take some comfort from the fact that the liberalisation and opening up of markets, required as part of the structural reform, should work in Britain’s favour.
Vicky Pryce, Senior Managing Director, FTI Consulting
Mandelson takes a pragmatic view—and none the worse for that. Over the past few decades we have witnessed the growth of a whining nationalism in England (Wales has benefited hugely from the EU), which has created an “other”—almost an enemy—across the Channel. We joined the EU having fought our way past de Gaulle’s blocking, but have blown our chance to be a more important player. Time for a rethink.
John EllisVia the Prospect website
Are Peter Mandelson and Ken Clarke the only two people who still believe that the way out of Britain’s European hole is to keep furiously digging? It all reminds me of General Haig’s philosophy, circa 1916: what we need is just one more big push to win the war—more men, more guns—and, after the inevitable failure: double the figures and repeat, ad infinitum.
We’ve had 30 years of ceding democratic accountability to Europe in return for (what Mandelson still describes as) “influence.” Show us the benefits and you’ll carry the argument, but all the rest of us can see is the destruction of our fishing industry, huge carbon taxes and a gravy train for farmers, mafiosi and second-rate politicians.
MJ ColmanVia the Prospect website
Mandelson is right: we’re going to have to buy tons of pain relief and just jump in. The idea of having no say in our largest market, and in the rules and regulations of the largest trade zone on earth, is simply unbearable.
J HuddlestonVia the Prospect website
A question of sport
David Edmonds (December) sums up much the same conclusion we in sports engineering have come to over the last few years. One point to add: technology lies in the domain of Newton’s laws, so that what is and is not possible is governed by physics. The laws of sport are arbitrary and a subset of all the possibilities. Conflicts occur when there is movement in either, or the laws of the sport are ambiguous. This is why I believe that the banning of certain swimsuits was a big blunder by the international swimming federation, Fina. Having allowed suits, they should have let events take their course.
Steve HaakeCentre for Sports Engineering Research
Abkhazia: the other side
I regret the skewed analysis of the situation in Abkhazia, Georgia, by Oliver Bullough (December). What sort of world would we live in if ethnic cleansing was so easily brushed aside? Of course, if you ask some of those remaining in Abkhazia you may find those who speak in favour of “independence,” but even they now increasingly realise that what they got is simply Russian occupation. And what of the hundreds of thousands, who constituted a majority in this Georgian region, that were forced out of their homes and long to return? Do they not deserve a voice? To say they “fled” is not only cruel, but willfully deceptive.
Giorgi BadridzeGeorgian ambassador to the UK
Reading Bullough’s article on Abkhazia caused me pain and disbelief. I am a victim of the ethnic cleansing campaign he made passing reference to. I lost my home. My livelihood. My way of life.
Romantically praising the Abkhaz drive for “freedom” and belittling the tragedy that befell me and 250,000 other Georgians, targeted for expulsion on the grounds of their ethnicity, helps solidify a brutal land grab in the 1990s. Glossing over the systematic discrimination of the remaining Georgian population of Abkhazia perpetuates social injustice and distracts from the real issues at stake here: that the Abkhaz “state” exists after a gross human rights violation of the civilian Georgian population, in contravention of international law. I am all for making Abkhazia known to the world, not only for its beautiful seafront which I and my friends reminisce about too, but also as a product of ethnic cleansing.
Thea MaisuradzeTbilisi, Georgia
Health emergency
James Elwes (December) was not clear that obesity can be a factor in type 2 diabetes, not other forms of the condition. There are millions of people around the world who live with type 1 diabetes, an autoimmune condition not related to weight or lifestyle. Only medical research will find the cure.
Steve HitchinsChairman, Juvenile Diabetes Research Foundation
Democracy for China?
Why does Dan Levin (December) believe a western-style press would improve China? The Republic of India has one: it is at least as corrupt as China, much poorer and has serious ethnic conflicts.
GM WilliamsVia the Prospect website
Understanding Nietzsche
Adam Kirsch (December) has delivered a fine essay on the philosophy of Friedrich Nietzsche. But he misses the mark when discussing the contribution of the great scholar Walter Kaufmann. Kirsch describes Kaufmann’s project as disinfecting, or “sanitising,” the work of Nietzsche. While he is obviously referring to Kaufmann’s rejection of all ties between Nietzsche’s philosophy and Nazism, a reader is left with the impression that it was Nietzsche’s philosophy itself, not the voluminous literature of distortion that grew up around it, that needed cleaning up.
Kaufmann once and for all let Nietzsche be read on his own terms, not according to the agendas of idiots. No one knew better than Nietzsche himself that his philosophy would be twisted beyond recognition, and used for purposes he would never endorse. His sister, Elisabeth, and her husband, the rabid anti-Semite Bernhard Förster, were only the first in a seemingly endless series of idiots who did this. In a life filled with tragedy, this is the greatest tragedy of all for Friedrich Nietzsche.
Finally, I don’t think Nietzsche would approve of the word “Nietzschean,” especially as a noun. He explicitly repudiated disciples. He would, I believe, encourage each soul to climb his own mountain; be his own Nietzsche or kind of Nietzsche; to become who he is; or to be his own man, blazing his own path.
M Mann Via the Prospect website
Kirsch compares Ayn Rand’s hero in The Fountainhead to sadistic killers. Yet in that novel, Howard Roark does not murder anyone, and its author’s objectivist philosophy opposes the use of force except in self-defence.
David AshtonSheringham, Norfolk
Although the initial difficulty with Nietzsche is how to spell his name—with the z, s, and c never coming out quite in the correct order—the whole thing could have been easier settled if he had shortened it to “Niet,” for those slightly familiar with Russian. This word, after all, neatly encapsulates his attitude towards conventional moralities.
J SandVia the Prospect website
Lehman Sisters
Emmanuel Roman’s claims for behavioural neuroscience (December) are fashionable, but ignore a simple truth. We already have a good scientific basis for assuming that mental activities like decision-making are correlated with specific neural processes in the brain. So the fact that shifting risk preferences, say, during bull and bear markets are associated with rising hormone levels among traders is no new revelation: they are just different facets of a characteristic pattern of behaviour. At most, more precise neurological details might suggest areas for research into behaviour—for example, as Roman suggests, whether the age and gender of traders may impact market volatility. Even this is no new thought—as Christine Lagarde, head of the IMF, has quipped: Lehman Brothers might have done better if they had been “Lehman Sisters.”
Alan BaileyLondon SE8
A great read
I loved “Pavilion” (Fiction, December). It was great to read a story that cracks open what a Somali is allowed to be, and what a transgender character is allowed to be: not a victim, but fierce. Three snaps for Diriye Osman!
JohnnyVia the Prospect website
What’s in a Docx?
I enjoyed Edward Docx’s account of his journey to Russia (November). But am I the only reader to wonder how one of Prospect’s contributors came to be named after a Microsoft Office file extension?
Phil VernonTunbridge Wells
Edward Docx replies:
Dear Mr Vernon, thank you for your note. I sense you are a man of rare originality and perception. But in this case you have the order of derivation the wrong way round.
I come from a long line of File Extensions stretching back to the early Plantagenet period. However, it was only during the second world war, when my grandfather was captured by the Japanese while serving as a File Extension in the British army, that he first met Bill Gates’s uncle, then serving (as a Gate) in the US marine corps. The two POWs became friends while constructing the bridge on the river Kwai. One afternoon, during a well-earned break, my grandfather found Gates’s uncle to be uncharacteristically despondent. So he took it upon himself to tell him a joke, the punchline of which was: “another fucking tortoise!” So funny did Gates’s uncle find this joke—alas, we have lost the first part—that he vowed to survive the ordeal and return to America so that he could steer his entrepreneurial nephew, Bill, into setting up a business that would celebrate and promote File Extensions around the world. The rest is history.
Keep the press free
Whilst agreeing with most of Mr. Robertson’s article, I hope that he is premature in writing off journalism as a profession. It must remain the case in a democracy that everybody should be free to contribute to newspapers. However, there is scope for those who write regularly for the press, and who uphold high standards, to form themselves into an association, membership of which would entail proof of training, experience and competence, and thereafter adherence to a code of conduct policed by a disciplinary body with powers including expulsion.
Evidence of membership of such a body would give readers confidence in appraising the integrity and accuracy of articles, would be of particular value to those approached for information or interviews, and would enable journalists with high standards to distance themselves from those who bring disgrace to their craft.
I am not sufficiently informed to judge whether the NUJ could be a basis for such a body, but would observe that the Bar have successfully married a trade union role with that of a professional organisation.
BA Hytner QCLondon
Goodbye to the good life
It beggars belief that Prospect can publish a three page article on the outlook for British living standards that makes not a single mention of influences from the world economy. I think most of us are conscious of the impact on world oil prices and world food prices on the cost of living, even if the secretary to the Commission on Living Standards and his co-author have not noticed the effect these prices are having.
The article talks about how the future will be different from the period before 2007. But it does not mention one important difference: the swing in the impact of Chinese growth from beneficial—Chinese supply reducing the costs of the manufactures we import—to harmful—Chinese demand raising the costs of the raw materials we import. The latter effect will only intensify as China (and India and other industrialising countries) has an increasing weight in total world demand.
We can expect the UK’s “terms of trade” (the price we sell our exports for relative to the price we pay for our imports) to deteriorate relentlessly. I do not know whether future productivity growth will be enough to offset the impact of the worsening terms of trade on our living standards, or whether living standards have already passed their all-time peak, and will only decline in future. I would, however, have thought that a Commission on Living Standards might have a view.
Stephen DaviesAshwater, Devon
In addition to the worries expressed in the article (December), we also need to ask what the government is doing to improve the quality of life in this country. Under the helm of a quest for growth, we notice that everything is now judged by whether and how it helps the economy. Some major ideas this government has had that weren’t reactions to the debt as such were the increase of motorway speed limits and the construction of a high speed rail line, both of which were driven by the idea that if people move faster, it helps the economy. The effect this acceleration of our society has on its people is not talked about. The suggestion by the EU to install a 20mph speed limit on residential roads to improve the quality of life and make our roads safer has been ignored. Public sector strikes are being undermined and people pitted against each other by pointing to the costs they cause to the government. The protesters at St Paul’s are being derided as discussions centre on the costs they cause to business owners.
In this current climate, we threaten to succumb to the domination of economics over our everyday life. The government, with its constant scaremongering about the debt, has managed to instil a way of thinking into people which puts money concerns first and ethics, democratic rights or human values last. What we need to remember is that, even though the financial crisis is surely bad, it is still just an economic crisis, and our lives will not be any worse even if we should cease to be a “safe haven for investors.” If we do not insist on reform that actually improves our lives and not just some faint growth prospects, we will only exacerbate the situation forecast at the end of this article.
Mario BisiadaManchester
Pictures
Thank you for the layered irony on your page 61 photograph of Rosa dos Ventos in Belém. An article on the benefits of mobile populations during globalisation shows a picture of a gift from 1960’s South Africa to Portugal for opening the sea routes. Sea routes opened only because of European strife and fear of land travel over Africa to the spices of India. Under the sponsoring sword of the order of Aviz (Padrão dos Descobrimentos) Vasco da Gama opened up the massive labour saving population of slavery during the end of the 15th centuary. All this on the reverse of page 62. You have a touch of class.
Mary KeoghDublin
How to save
Richard Lambert in his article in the October issue, points to the very low savings rate as a major problem for the UK economy. When I retired some 15 years ago, I benefited from a final salary pension scheme. Over the next few years a series of attacks on such schemes was mounted by successive governments.
1. Companies could no longer compel employees to join a company pension scheme. 2. The Inland Revenue decided that large surpluses in pension schemes were a wicked plot to depress profits, and so deprive them of revenue. They therefore encouraged companies to take pension holidays. 3. Under discrimination laws it was illegal to have different terms for men and women. This resulted in improvements for both sexes, and hence higher costs. 4. The Equitable Life decision had a significant effect on the cost of schemes. 5. Increased life expectancy added significantly to the cost of schemes. 6. At some time the tax incentives given to those making pension contributions were withdrawn.
The predictable result was that almost all final salary schemes were closed. Not only will the present generation of workers have much lower pensions than their predecessors, but the very substantial flow of funds from pension funds to the stock market has diminished. Many of these problems are either the result of government action, and others like the Equitable Life ruling could have been mitigated by legislation. It is probably too much to ask.
Mark PitmanBristol
Have your say: email letters@prospect-magazine.co.uk.
I agree with Peter Mandelson (December) that Britain’s interests in what increasingly looks like a two-tier Europe are more likely to be preserved if the European Commission is in charge of policing any new eurozone governance regime. This seems to be the direction of travel, as Angela Merkel, the German chancellor, appears to have won that argument over France’s President Nicolas Sarkozy. It raises issues of democratic accountability, but at least there are visible institutions and mechanisms that Britain can continue to influence.
Whether treaty changes are required or not, what the euro needs to survive this crisis is greater financial discipline, in order to justify the ECB standing behind sovereign debt. I think we will see this happen—but this is a long way short of a fiscal union.
Whatever arrangements emerge should not be seen as distorting Britain’s ability to trade freely with the rest of Europe. Britain can and must continue to push for the completion of the single market in goods and services, the latter of which has been painfully slow. We should also take some comfort from the fact that the liberalisation and opening up of markets, required as part of the structural reform, should work in Britain’s favour.
Vicky Pryce, Senior Managing Director, FTI Consulting
Mandelson takes a pragmatic view—and none the worse for that. Over the past few decades we have witnessed the growth of a whining nationalism in England (Wales has benefited hugely from the EU), which has created an “other”—almost an enemy—across the Channel. We joined the EU having fought our way past de Gaulle’s blocking, but have blown our chance to be a more important player. Time for a rethink.
John EllisVia the Prospect website
Are Peter Mandelson and Ken Clarke the only two people who still believe that the way out of Britain’s European hole is to keep furiously digging? It all reminds me of General Haig’s philosophy, circa 1916: what we need is just one more big push to win the war—more men, more guns—and, after the inevitable failure: double the figures and repeat, ad infinitum.
We’ve had 30 years of ceding democratic accountability to Europe in return for (what Mandelson still describes as) “influence.” Show us the benefits and you’ll carry the argument, but all the rest of us can see is the destruction of our fishing industry, huge carbon taxes and a gravy train for farmers, mafiosi and second-rate politicians.
MJ ColmanVia the Prospect website
Mandelson is right: we’re going to have to buy tons of pain relief and just jump in. The idea of having no say in our largest market, and in the rules and regulations of the largest trade zone on earth, is simply unbearable.
J HuddlestonVia the Prospect website
A question of sport
David Edmonds (December) sums up much the same conclusion we in sports engineering have come to over the last few years. One point to add: technology lies in the domain of Newton’s laws, so that what is and is not possible is governed by physics. The laws of sport are arbitrary and a subset of all the possibilities. Conflicts occur when there is movement in either, or the laws of the sport are ambiguous. This is why I believe that the banning of certain swimsuits was a big blunder by the international swimming federation, Fina. Having allowed suits, they should have let events take their course.
Steve HaakeCentre for Sports Engineering Research
Abkhazia: the other side
I regret the skewed analysis of the situation in Abkhazia, Georgia, by Oliver Bullough (December). What sort of world would we live in if ethnic cleansing was so easily brushed aside? Of course, if you ask some of those remaining in Abkhazia you may find those who speak in favour of “independence,” but even they now increasingly realise that what they got is simply Russian occupation. And what of the hundreds of thousands, who constituted a majority in this Georgian region, that were forced out of their homes and long to return? Do they not deserve a voice? To say they “fled” is not only cruel, but willfully deceptive.
Giorgi BadridzeGeorgian ambassador to the UK
Reading Bullough’s article on Abkhazia caused me pain and disbelief. I am a victim of the ethnic cleansing campaign he made passing reference to. I lost my home. My livelihood. My way of life.
Romantically praising the Abkhaz drive for “freedom” and belittling the tragedy that befell me and 250,000 other Georgians, targeted for expulsion on the grounds of their ethnicity, helps solidify a brutal land grab in the 1990s. Glossing over the systematic discrimination of the remaining Georgian population of Abkhazia perpetuates social injustice and distracts from the real issues at stake here: that the Abkhaz “state” exists after a gross human rights violation of the civilian Georgian population, in contravention of international law. I am all for making Abkhazia known to the world, not only for its beautiful seafront which I and my friends reminisce about too, but also as a product of ethnic cleansing.
Thea MaisuradzeTbilisi, Georgia
Health emergency
James Elwes (December) was not clear that obesity can be a factor in type 2 diabetes, not other forms of the condition. There are millions of people around the world who live with type 1 diabetes, an autoimmune condition not related to weight or lifestyle. Only medical research will find the cure.
Steve HitchinsChairman, Juvenile Diabetes Research Foundation
Democracy for China?
Why does Dan Levin (December) believe a western-style press would improve China? The Republic of India has one: it is at least as corrupt as China, much poorer and has serious ethnic conflicts.
GM WilliamsVia the Prospect website
Understanding Nietzsche
Adam Kirsch (December) has delivered a fine essay on the philosophy of Friedrich Nietzsche. But he misses the mark when discussing the contribution of the great scholar Walter Kaufmann. Kirsch describes Kaufmann’s project as disinfecting, or “sanitising,” the work of Nietzsche. While he is obviously referring to Kaufmann’s rejection of all ties between Nietzsche’s philosophy and Nazism, a reader is left with the impression that it was Nietzsche’s philosophy itself, not the voluminous literature of distortion that grew up around it, that needed cleaning up.
Kaufmann once and for all let Nietzsche be read on his own terms, not according to the agendas of idiots. No one knew better than Nietzsche himself that his philosophy would be twisted beyond recognition, and used for purposes he would never endorse. His sister, Elisabeth, and her husband, the rabid anti-Semite Bernhard Förster, were only the first in a seemingly endless series of idiots who did this. In a life filled with tragedy, this is the greatest tragedy of all for Friedrich Nietzsche.
Finally, I don’t think Nietzsche would approve of the word “Nietzschean,” especially as a noun. He explicitly repudiated disciples. He would, I believe, encourage each soul to climb his own mountain; be his own Nietzsche or kind of Nietzsche; to become who he is; or to be his own man, blazing his own path.
M Mann Via the Prospect website
Kirsch compares Ayn Rand’s hero in The Fountainhead to sadistic killers. Yet in that novel, Howard Roark does not murder anyone, and its author’s objectivist philosophy opposes the use of force except in self-defence.
David AshtonSheringham, Norfolk
Although the initial difficulty with Nietzsche is how to spell his name—with the z, s, and c never coming out quite in the correct order—the whole thing could have been easier settled if he had shortened it to “Niet,” for those slightly familiar with Russian. This word, after all, neatly encapsulates his attitude towards conventional moralities.
J SandVia the Prospect website
Lehman Sisters
Emmanuel Roman’s claims for behavioural neuroscience (December) are fashionable, but ignore a simple truth. We already have a good scientific basis for assuming that mental activities like decision-making are correlated with specific neural processes in the brain. So the fact that shifting risk preferences, say, during bull and bear markets are associated with rising hormone levels among traders is no new revelation: they are just different facets of a characteristic pattern of behaviour. At most, more precise neurological details might suggest areas for research into behaviour—for example, as Roman suggests, whether the age and gender of traders may impact market volatility. Even this is no new thought—as Christine Lagarde, head of the IMF, has quipped: Lehman Brothers might have done better if they had been “Lehman Sisters.”
Alan BaileyLondon SE8
A great read
I loved “Pavilion” (Fiction, December). It was great to read a story that cracks open what a Somali is allowed to be, and what a transgender character is allowed to be: not a victim, but fierce. Three snaps for Diriye Osman!
JohnnyVia the Prospect website
What’s in a Docx?
I enjoyed Edward Docx’s account of his journey to Russia (November). But am I the only reader to wonder how one of Prospect’s contributors came to be named after a Microsoft Office file extension?
Phil VernonTunbridge Wells
Edward Docx replies:
Dear Mr Vernon, thank you for your note. I sense you are a man of rare originality and perception. But in this case you have the order of derivation the wrong way round.
I come from a long line of File Extensions stretching back to the early Plantagenet period. However, it was only during the second world war, when my grandfather was captured by the Japanese while serving as a File Extension in the British army, that he first met Bill Gates’s uncle, then serving (as a Gate) in the US marine corps. The two POWs became friends while constructing the bridge on the river Kwai. One afternoon, during a well-earned break, my grandfather found Gates’s uncle to be uncharacteristically despondent. So he took it upon himself to tell him a joke, the punchline of which was: “another fucking tortoise!” So funny did Gates’s uncle find this joke—alas, we have lost the first part—that he vowed to survive the ordeal and return to America so that he could steer his entrepreneurial nephew, Bill, into setting up a business that would celebrate and promote File Extensions around the world. The rest is history.
Keep the press free
Whilst agreeing with most of Mr. Robertson’s article, I hope that he is premature in writing off journalism as a profession. It must remain the case in a democracy that everybody should be free to contribute to newspapers. However, there is scope for those who write regularly for the press, and who uphold high standards, to form themselves into an association, membership of which would entail proof of training, experience and competence, and thereafter adherence to a code of conduct policed by a disciplinary body with powers including expulsion.
Evidence of membership of such a body would give readers confidence in appraising the integrity and accuracy of articles, would be of particular value to those approached for information or interviews, and would enable journalists with high standards to distance themselves from those who bring disgrace to their craft.
I am not sufficiently informed to judge whether the NUJ could be a basis for such a body, but would observe that the Bar have successfully married a trade union role with that of a professional organisation.
BA Hytner QCLondon
Goodbye to the good life
It beggars belief that Prospect can publish a three page article on the outlook for British living standards that makes not a single mention of influences from the world economy. I think most of us are conscious of the impact on world oil prices and world food prices on the cost of living, even if the secretary to the Commission on Living Standards and his co-author have not noticed the effect these prices are having.
The article talks about how the future will be different from the period before 2007. But it does not mention one important difference: the swing in the impact of Chinese growth from beneficial—Chinese supply reducing the costs of the manufactures we import—to harmful—Chinese demand raising the costs of the raw materials we import. The latter effect will only intensify as China (and India and other industrialising countries) has an increasing weight in total world demand.
We can expect the UK’s “terms of trade” (the price we sell our exports for relative to the price we pay for our imports) to deteriorate relentlessly. I do not know whether future productivity growth will be enough to offset the impact of the worsening terms of trade on our living standards, or whether living standards have already passed their all-time peak, and will only decline in future. I would, however, have thought that a Commission on Living Standards might have a view.
Stephen DaviesAshwater, Devon
In addition to the worries expressed in the article (December), we also need to ask what the government is doing to improve the quality of life in this country. Under the helm of a quest for growth, we notice that everything is now judged by whether and how it helps the economy. Some major ideas this government has had that weren’t reactions to the debt as such were the increase of motorway speed limits and the construction of a high speed rail line, both of which were driven by the idea that if people move faster, it helps the economy. The effect this acceleration of our society has on its people is not talked about. The suggestion by the EU to install a 20mph speed limit on residential roads to improve the quality of life and make our roads safer has been ignored. Public sector strikes are being undermined and people pitted against each other by pointing to the costs they cause to the government. The protesters at St Paul’s are being derided as discussions centre on the costs they cause to business owners.
In this current climate, we threaten to succumb to the domination of economics over our everyday life. The government, with its constant scaremongering about the debt, has managed to instil a way of thinking into people which puts money concerns first and ethics, democratic rights or human values last. What we need to remember is that, even though the financial crisis is surely bad, it is still just an economic crisis, and our lives will not be any worse even if we should cease to be a “safe haven for investors.” If we do not insist on reform that actually improves our lives and not just some faint growth prospects, we will only exacerbate the situation forecast at the end of this article.
Mario BisiadaManchester
Pictures
Thank you for the layered irony on your page 61 photograph of Rosa dos Ventos in Belém. An article on the benefits of mobile populations during globalisation shows a picture of a gift from 1960’s South Africa to Portugal for opening the sea routes. Sea routes opened only because of European strife and fear of land travel over Africa to the spices of India. Under the sponsoring sword of the order of Aviz (Padrão dos Descobrimentos) Vasco da Gama opened up the massive labour saving population of slavery during the end of the 15th centuary. All this on the reverse of page 62. You have a touch of class.
Mary KeoghDublin
How to save
Richard Lambert in his article in the October issue, points to the very low savings rate as a major problem for the UK economy. When I retired some 15 years ago, I benefited from a final salary pension scheme. Over the next few years a series of attacks on such schemes was mounted by successive governments.
1. Companies could no longer compel employees to join a company pension scheme. 2. The Inland Revenue decided that large surpluses in pension schemes were a wicked plot to depress profits, and so deprive them of revenue. They therefore encouraged companies to take pension holidays. 3. Under discrimination laws it was illegal to have different terms for men and women. This resulted in improvements for both sexes, and hence higher costs. 4. The Equitable Life decision had a significant effect on the cost of schemes. 5. Increased life expectancy added significantly to the cost of schemes. 6. At some time the tax incentives given to those making pension contributions were withdrawn.
The predictable result was that almost all final salary schemes were closed. Not only will the present generation of workers have much lower pensions than their predecessors, but the very substantial flow of funds from pension funds to the stock market has diminished. Many of these problems are either the result of government action, and others like the Equitable Life ruling could have been mitigated by legislation. It is probably too much to ask.
Mark PitmanBristol
Have your say: email letters@prospect-magazine.co.uk.
