In past years government bodies have become louder and louder about women quota. An often-heard goal is to have ‘40% of boardroom members to be female’. The European Commission states in their definition of a quota:
The quota-instrument is a positive measure that establishes a fixed percentage or number for the representation of a specific category of persons.
If governments face a budget deficit that is deemed to be too high, two actions can be taken: government spending is lowered, or government income is increased. The lion’s share of government income comes from taxes; increasing government income as a way of reducing budget deficits therefore translates to increasing taxes. But taxes are not increased, really; tax rates are increased.
But what few people know is that in certain situations raising tax rates will actually reduce government income from taxes.
In the past days the Dutch tradition of Sinterklaas has been criticised more severely than ever, or so it seems. The discussion culminated in the involvement of the United Nations a few days ago. U.N. reporters apparently received information that the tradition of Sinterklaas is in essence racist, and that Zwarte Piet, stupid and a servant, feeds the stereotype of Africans as second class citizens. Dutch citizens, activated by explicit racial accusations and demands to abolish their much-loved tradition, somewhat to my surprise revolted. Online petitions received hundreds of thousands of ‘likes’. Maurice de Hond, mostly known as a the most important ‘pollster’ about elections in the Netherlands, reported that a staggering 92% of Dutch people says that there is nothing to worry about, that there is no racism involved, and that it’s just about a great feast for children. Similarly, De Telegraaf (a Dutch newspaper) surveyed 5.000 people, finding similar conclusions.
I don’t wish to reiterate all the points one can find in public discussions; I do however want to make 3 points:
The tradition is already lost: A prediction
The tradition is already lost: The influence of current discussions on future celebrations
The Dutch economy needs highly qualified and highly educated workers and the Kennismigrantenregeling (“knowledge-migrants-measure”) is an important tool to get them. The Netherlands is a frontrunner in Europe in this matter, according to the Dutch government. It’s all one, big lie.
Innovation is deemed crucial to sustained economic growth and welfare improvement. One may subsequently pose, as I do, that innovations require some sort of inequality before they can blossom. This does not mean that some people need to be kept poor so that others can innovate; it means that those individuals who have the potential to significantly improve things for society should be enabled (or left free) to act on that potential.
One of my favourite writers (and speakers), Milton Friedman, explains that experimentation, which is closely related to innovation, can bring tomorrow’s laggards above today’s mean. I’ve drawn the picture below to illustrate what he means (or at least how I understood he meant it):
Bringing tomorrow’s laggards above today’s mean
Thus, if we accept that today some inequities exist, which means that some are poorer than others, tomorrow the poorest (the “laggards”, on the left end of the graph) may be better off than the average today. The crucial insight is that inequalities are relative. Even though some may be better off relatively, everyone is better off absolutely.
Much of the literature on venture capital (VC) policies is inspired by the success of a handful highly visible companies such as Microsoft, Compaq, Intel, Google, and Apple. These companies, nowadays, are huge and extremely powerful, but at some point in their development they had to resort to VC. These companies are, of course, the envy of many countries – who wouldn’t want to have such firms flourishing in his or her country?
Working at the Ministry of Finance in the Hague was a very pleasant and rewarding experience, despite the lengthy daily train journeys. I worked in a directorate with young people, who helped me enormously with my research. I have been there for over 4 fulltime months. At the beginning I had no real clue about venture capitalism aside from a general understanding of its mechanisms, let alone about public policies that optimally support venture capital investments.