A key justification for the extraction of tax from the population is that individuals would not spend the resources as well or wisely as officers of the state. Namely, individuals might spend them selfishly, for example on food and drink, rather than a health service available to all.

Part of the justification of this view is found in the current behaviour of the population, which indeed often seems to be shortsighted even in terms of the self-interest of the individual, assuming that our perception of another individual's best interests has some validity, which in fact I am very reluctant to do. However, even granting perfect insight into the wisest course for another individual, this argument cannot be sound, since the observation of current behaviour is of individuals in a highly taxed society, and where actions are both constrained and distorted.

Indeed, heavily taxed individuals will probably discount the future very heavily on the ground that savings will be taxed and otherwise eroded by state manipulation of the currency, to reduce government debt for example, that it is best to eat, drink, and be merry for tomorrow we will have empty pockets in any case. Moreover, tax is in essence a coerced purchase, and only those on very high incomes will be in a position to duplicate that purchase by paying for private education and healthcare or engaging in substantial acts of private charity.

Thus, the behaviour of individuals under tax is no guide to their probable behaviour in the absence of tax.

Institutionalists in development and growth theory will point to features of law or ruler behavior that prevent the “accumulation of capital” (eg. Maddison, Contours of the World Economy (2007), 225), by which they seem to mean that accumulation was inhibited in private hands. The fact that this inhibition does not mean that a counterbalancing accumulation takes place in the hands of the state or the ruling authority is curious, but it appears to be a widespread assumption, and perhaps actually the case. Certainly it seems reasonable to assume, and to some extent evident from the facts, that expropriated capital tends to be consumed by the expropriating power. This occurs for two reasons; firstly a government rarely invests for income, largely because it need not plan for the future since the host does that in order to survive. Secondly, it may be best advised to consume the capital, since when rulers and their bureaucracies attempt to invest and strengthen their state and population, they tend to make errors; investment is an activity best left to the tax base. Furthermore, by consuming this capital the expropriator will augment its ability to extract more from the tax base by making itself temporarily stronger while simultaneously weakening the tax base. In other words, by consuming capital that would otherwise be returned to the private economy for management, the state can prevent the private world from becoming better able to resist taxation. It is thus obvious that expropriating powers tend to destroy economies on which they feed, which is perhaps why they so often end up being expansionists as well. There is no necessity in this destructive tendency; cunning expropriators will keep the host alive – that is the essence of the Third Way – but it is very hard to satisfy the bureacracy with a stable or steady state economy, and this need for growth in the state's own machinery will tend to push them towards exhausting the population and driving it to destruction.

The great paradox of collectivist politics is that in spite of its assertion that everyone matters and that the individual is subordinate, it has a strong, apparently inevitable tendency to concentrate decision-making in the hands of progressively fewer and fewer people. Only the most extreme royalist or Nietzschean elitist could contemplate with equanimity such a narrow base for the formation of policy determining the lives of millions.

The puzzle goes deeper than this, for collectivists happily invoke crowd-sourcing as a proof of the wisdom of the group, but when it comes to politics they are not only content with but they absolutely insist upon government in the name of the people by an elite civil service.

One may, of course, doubt the sincerity of the collectivist's interest in the aggregate output of the crowd, not least because they, unlike economic liberals, have no information theory to explain how a population of individuals can be so creative, but also because in most cases I suspect that the input of the mass is only sought to confirm views and directions already taken, as if it were a rigged plebiscite.

Or is it just another example of collectivist rhetoric being used as a mask for the prosecution of aggressive individual interest? It might be so, it might be so.

There are strong and weak uses or senses of the term 'circular economy'.

The strong sense, which is more often vaguely held or entertained than spelled out, supposes that an economy can proceed for an indefinite period without external input, simply by reprocessing the outputs of one stage as the inputs of a succeeding stage. There are no losses, and no wastes are discarded. We have never observed such an economy, and attempts to devise a system on these lines will fail because such a system is in effect a perpetual motion machine, which the laws of thermodynamics tells us is impossible.

The weak sense, which encompasses almost all practical suggestions for a circular economy, suggests that the economy achieves as much reprocessing of outputs as is possible without increasing the energy inputs to achieve reprocessing. In other words we recycle as much as is economic (that many recyclers are not aware of this limitation is true, but hardly worth discussion). This weak sense is only interesting insofar as it it represents a novel state of affairs. Since the proposition in fact describes the normal economy,it is empty rhetoric insofar as it claims novelty.

Thus the strong sense of the circular economy is false, and the weak sense is banal.

A few days ago, one of my friends, a now retired professor in the sciences, was telling me of his concern at the very large degree of overseas ownership of utilities and other assets, with consequent questions over security and the export of profits. He wondered whether the government should have stepped in to prevent this happening, and whether such things should ever be allowed to fall into private hands at all so that such onward sales couldn't occur in the future. Anxieties of this kind are very common in people of his age, if they aren't economists. It seems that the pre- and just post-war generation are thoroughly habituated to the concepts of if and only if national ownership therefore national benefit, introduced or at least institutionalised by the Attlee governments. For others, my teenage son for example, it is a spontaneous prejudice, part of what David Henderson referred to in his Reith Lectures as Do-It-Yourself Economics; but for those in their seventies it is a felt and a genuine experience, and almost unquestionable, though in my view almost certainly false.

Of course, it is not difficult to understand (yet disagree) with the anxiety at ownership by overseas nationals. That said, the remedy proposed is obviously more dangerous than the matter it seeks to address, and ought to worry any reflective person. State owned assets are usually run to an extreme of inefficiency, with terrible consequences for consumers of their product and the taxpayers who support them; and undue cost in the utilities is to be avoided if at all possible, since these are unavoidable expenditures for all or nearly all citizens and businesses, and such excesses could be very damaging to economic growth. In the case of energy they undoubtedly would be so (see my piece on Thermo-Economics).

However, rather than open up this tender subject with my friend (a lifelong civil servant), I defended overseas ownership with the observation that since 'we' couldn't ourselves afford to repair the capital in these sectors, non-British investors were unavoidable. My friend agreed, but repeated his view that perhaps these assets should never have been in private hands in the first place, at which point we started to go round in circles and broke off to talk of other things.

We should have persisted and asked ourselves why UK citizens did not actually retain or appear to retain ownership. Two answers suggest themselves:

a) In a highly taxed society the broader citizenry will simply be unable to save sufficiently to invest in assets within their own geography, other than the houses in which they live, and

b) The ownership of such sitting-duck assets, such as utilities and larger companies, will tend to become classified as foreign in order to reduce if not completely avoid taxation.

In other words, the exceptional weakening of indigenous ownership, if real, is the unintended consequence of other government interventions. The state had already stepped in, and muddied the waters.

It is remarkable that the debts of the state apparatus are usually regarded as the responsibility of the rest of the population. For this purpose the state is us, and when we say that the "the UK's debt (or deficit) must be reduced" we mean the debts incurred by the state. Yet, as Italy reminds us, the population can be productive and fundamentally healthy, but the state unable to deal with its spending and utterly unable to generate its own income through the sale of goods and services to willing rather than coerced purchasers. Indeed the state in these situations is only able to borrow because of the health of its supporting population and economy.

It is obvious that these debts were incurred in order to fund public spending, and it may be argued that the supporting population was the beneficiary of this spending. However, since the population was coerced into obtaining these goods and services, it seems that they need not acknowledge any responsibility. Those in government and employed by the state, are not only responsible, but in a defensible sense the ultimate beneficiary of state expenditure, since they end up with cash in hand to spend as they wish.

It is a curious possibility, therefore, that one way out of the horrific impasse of the public finances is for the non-state population simultaneously to repudiate the government and its employees and their debts, and say, in effect, "You, personally, borrowed this money and spent it on yourselves while palming us off with junk; it's your problem."

Cultural Buddhism is increasingly attractive. Far from trying to keep up, to be well-informed, to be well-read, to be widely cultured, or even to just be in the swim, all increasingly difficult and thankless tasks, intellectuals are becoming narrow and exclusive, a deliberate specialisation that proves, if proof is needed, that knowledge and the science that produces it is a private good.

In the literary arts this has resulted in a studied negligence of the media-endorsed writers. I am hardly illiterate, and I read a great deal, but I have no interest or much knowledge of contemporary fiction or poetry, and I feel no particular loss or guilt about this omission. In 2009 I took the trouble to read the Booker prize shortlist. It was a tedious experience, and only one of the books left any positive impression on me at all, Sarah Waters' Little Stranger, which is an unpleasant, indeed a nasty, but perfectly written and constructed satire on the National Trust and Mole's enthusiasm for the Water Rat's picnic. The rest I found lacking in interest and, in the case of Hilary Mantel, quite literally unreadable at the sentence level.

At around the same time I bought a number of anthologies of contemporary poetry, and even a few single volumes by better known writers, and read them diligently, but found the sight of mature adults affecting adolescent confusion and ignorance quite repellent. The experiment thus over I returned with relief to energy, economics, and political theory, which, though hard work and often monotonous does actually make progress. The range of reference is very broad, and often novel for even a well-educated reader, and these materials are handled in ways that are both imaginative and intellectually creative. Fiction generally, and modern fiction particularly, on the other hand, seems to leave no residual conceptual trace; it flares up and burns brightly, but the combustion does no work in the thermodynamic sense, and there is no residual trace except the unstructured ashes of a forgotten experience. It seems best to take the short-cut and, after recalling Hume's magnificent advice, throw the things into the metaphorical furnace immediately:

If we take in our hand any volume; of divinity or school metaphysics, for instance; let us ask, Does it contain any abstract reasoning concerning quantity or number? No. Does it contain any experimental reasoning concerning matter of fact or existence? No. Commit it then to the flames: for it can contain nothing but sophistry and illusion.

Thinkers tend to represent themselves, both to inner reflection and in their external presentations, as being selfless labourers in the common interest. They believe themselves to be under-appreciated and under-rewarded. I wonder if any of this is true.

Intellectual activity is essentially a private good, undertaken for the rewards it brings to the thinker, these rewards being self-satisfaction, which is an index of probable speculative success in the wider world where it is expected to manifest itself as the gratitude and adulation of the public. We can confirm this by reminding ourselves that a very great deal of this activity is produced without payment, or in the case of academics for very small rewards. Indeed, the majority of academic salaries, in the UK at any rate, are barely sufficient to cover the time required to teach, and these people think, research and write in their own time, if they so at all.

Even if speculation is publicly successful, the private returns to the thinker in terms of conceit and perhaps even a little mastery of the world, are not trivial. Indeed, we may even seclude our thought to protect these private benefits, like technologists hiding their inventions from the competition.
It is therefore hardly surprising that the man and woman in the street regard intellectuals as at best self-serving and for the most part quite irrelevant to any other party. They think this because all the evidence suggests that it is true

In some earlier remarks I have already touched on the unhelpful implications of using the phrase "the market" as a general descriptive term referring to a liberal economy with private property rights and the rule of law. This misdescription falsely suggests an organic unity, for which there is no evidence, and distracts attention from the obvious fact that a liberal economy is a population of independent actants.

In another place I have observed that it is misleading to speak of "the state" without reference to the people employed in it, and observed that effective criticism of the illiberal economy must be personalised to make it clear that "the state" is composed of living, breathing individuals, real people consuming real taxes, flesh and blood taxeaters as Cobbett would have said.

Both errors arise from hypostatisation, and probably have a single root, the understandable tendency in efficient analysis to abstract or summarise over separate pieces of information or members of a population to produce a single entity with fixed (or at least less variable) characteristics. However, the losses in these two cases are too large, and the gains from abstraction too little to compensate. It is also true, that in civilised discourse we are reluctant to personalise an attack, but this reluctance must be overcome for the problem that we face is not impersonal; it is humanly political.

In isolation both the errors described above are dangerous, but in combination they are deadly to the aspirations of liberal thinkers to demonstrate the wisdom of their position. Indeed, the combined error hands the game to their opponents.

By describing the liberal economy as "the market", and suggesting that it is a single organism, the listener is led to perceive it as set up in distinct distinct opposition to themselves, or as an individual to whom they must pay money for goods and services. This matters since it is universally understood that profit alone motivates free market businesses, and, again understandably, there is always a degree of resentment in the transaction between purchaser and seller. The purchaser has had to offer the seller a margin over the costs, in effect a share of future growth in the economy, which is a slightly disadvantageous barter, and the fear that this persuasive margin is excessive haunts the mind. We don't like being ripped off, and the purchaser is inherently suspicious,and should be.

Thus, by hypostatising the market and personalising the abstraction, the individual can be led into the position of mistrusting the mass of operations which lies beneath that abstraction. But this is a self-inflicted wound, since in effect the individual is misled into distrusting their own freedom, both as purchaser and seller, for they possess both roles in a liberal economic situation.

In other words, the individual is encouraged, by the liberal side of the argument of all people, to distinguish themselves from the exclusive entity known as the market, which in fact is nothing more than an abstraction describing activities amongst which are their own willing sales and purchases.

When deceived into self-hatred in this way the individual is susceptible to the further ingenious ploy of describing the state as a single organism, a tactic that allows its myriad beneficiaries, the employees of state, to pose as a disinterested figure, an organic whole unmotivated by profit, that taxes the suspected Market (in other words the self-hating individual), and from this bounty returns free or fair goods and services to the listener.

The two errors are thus one error, that of depersonalisation. To resolve this problem it is necessary to repersonalise politics. The economy consists of millions of free individuals, each of these individuals making decisions about what and when to consume, and how to trade goods and services for individual benefit. The movements of the "market" are simply the aggregate of millions of individual choices, some of the weightier than others it is true, but none permanently so. If we say that "the market has decided something or other", we are making a statistical observation, merely, not indicating a state of mind; the economy doesn't have a mind, it has minds.

The "state", on the other hand, is the same, but different. It is composed of millions of individuals, each consuming taxes levied on the non-state economy, and for whom the individuals in the non-state economy labour and dissolve their assets to pay for goods and services that they are compelled to buy. Individuals within the state are in essence no different from any others in that they trade goods and services with the rest of the population, but they have the enormous advantage of being able to name their price without fear of being undercut, because there is no competition permitted, and being able to shelter from the dissatisfaction of their customers behind the power of the state. And of course the state is an all but invincible shield since it is permitted by law to arm its employees in the name of national defence, and, in its role as the executor of the rule of law, to deprive others of their liberty.

This tactic is all the more effective because the state has authority once vested in a personal monarch and now vested in the Crown as an abstraction. Traces of this history remain in the actual persons of the Queen in the UK, or the Emperor in Japan, and in the temporary incumbents of bureaucratic positions such as the US Presidency or the Prime Minister. The real individuals who live within and through the State can and do hide behind the monarchical abstractions and the less enduring temporary representatives, pretending to be their servants and thus the agents of a benevolent power. The truth is that they are as self-seeking as any, and more able to express themselves in action since their selfishness is unqualified by the need to drive an acceptable bargain with the purchaser. That their outward demeanour is mild and courteous is because it need not be otherwise, so secure and superior is their position. And the purchaser, who fears all vendors is least suspicious when they should be most on their guard.

It is as if talent takes two different paths to wealth, the first through the provision of goods and services in an open and competitive market, the other by using the powers of the state to compel the public to make purchases from this supplier and no other.

Two psychological types manifest themselves: one is wild, aggressive, openly individualistic, arrogant, conceited (especially when successful), candid, voluble, risk-taking, physical; the second is civilised, passive, quietly selfish, deferential, modest (especially when successful), covert, quiet, careful, and intellectual.

One group is quite nice to know (in my opinion); the other is intolerable (even, I suspect, if you are of that group, which I am not). Which is which? Decide for yourselves.