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Christmas eve, 1717

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On 24 December 1717, three hundred years ago today, a northwesterly storm hit the coasts of North Europe. About 14.000 died, over 2.000 of these in the Dutch province of Groningen but only 150 in neighboring Friesland. Why this difference? We do know the answer: Friesland had better coastal defences. Frisian ‘dijken’ were better designed, higher and, especially, better maintained than in Groningen. As Frisian public governance of these public goods was better. In 1716, the Groningen government had been warned, see the extensive report by Thomas van Seeratt, the newly appointed ‘master of coastal defences’, available and transcribed here. After 1717, money became available and the very able and dynamic van Seeratt did a good job to improve the Groningen ‘dijken’. The history of coastal defences is long, simple and somewhat repetitive: ‘After the storm, we improve our public coastal defences’ (why do you think these Frisian ‘dijken’ were better): again and again taxes are increased and monetized, governance is centralized, and designs and maintenance are improved, leading to lasting improvements. I love taxes (plus good government).

Happy Christmas.

  1. December 23, 2017 at 1:29 pm

    “In 1716, the Groningen government had been warned,” but nothing was done before the storm.

    Similar thing happened in Japan. It was warned that a high Tsunami may hit Japanese coast, just as the Indian Ocean Tsunami attacked many coasts of the Ocean in 2004. Japanese government ignored the warning. Top management of Tokyo Electric Power Co. ignored it. In March 11, 2011, the East Japan Earthquake and Tsunami attacked Japanese coast as well as the atomic power generation plants. You know the result.

  2. Steve McGiffen
    December 23, 2017 at 1:36 pm

    Perhaps Friesland was better protected because of its distinct culture and language. In modern times these thing create greater solidarity within a community, and if things were the same back then, perhaps they contributed.

  3. December 24, 2017 at 11:10 am

    According to a 2012 report from the Congressional Research Service (http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf),

    The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and
    productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

    However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.

    In short, the report told all who read it (obviously few Republican members of Congress) that adjusting the top marginal tax rate has no effect on economic growth or investment, or saving or productivity. The report notes also that the US economy has functioned better when the top marginal tax rate was high (highest being 90%). Tax policy matters. It matters depending on whether we want a livable and civil society, or a hell hole of corruption and vice. If we want the food we eat, the water we drink, the schools our children attend, the roads we drive over to serve all of us or a rich elite. What kind of society do we want? According to Greg Palast in Vulture’s Picnic,

    But the Big Problem with government is that we don’t have enough of it; the rules aren’t tough enough to stop BP from blowing Cajuns to Kingdom Come. Or the rules are corrupted, made by politicians who are greased….If you’re screaming for the “guvmnt to git of” your back, I see your point. But you’re still a loser, a cheap mark, a decoy duck, a dim, unwitting stooge for forces even more powerful than that ugly guvmnt, a toy for powers who are shitting on you while telling you it’s raining chocolate.

  4. Jean
    December 25, 2017 at 2:15 am

    Thank you for your very appropriate christmas story, which I read to my family gathered in the Laurentian mountains. Happy holidays to you and yours.

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