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Wednesday, February 22, 2017

Ukraine: Building a Cashless Economy While Even Officials Shun Banks - Bloomberg

snippet

Shortly after Ukraine slapped curbs on cash transactions to help rein in the grey economy, the head of the nation’s tax service told reporters he won’t entrust his savings to banks. His stash of dollars, euros and hryvnia was the equivalent of $1.8 million

[From

Ukraine: Building a Cashless Economy While Even Officials Shun Banks - Bloomberg

]

Who knew a life in public service could be so rewarding?

Sunday, February 19, 2017

Films for planes review of "Eye in the Sky"

Eye in the Sky ☀️☀️☀️☀️☀️

I think more war films will be like this in the future: people in bunkers controlling drones, at least until the AI takes over. Basically the story is about a drone strike on terrorists in Kenya, and whether and when to pull the trigger. This is an ideal movie for a plane. 100 minutes long, just right for drinks, dinner and relaxing. Genuinely interesting story line and you don’t know how it’s going to turn out. Good actors, script with tension and thought-provoking without being too preachy.

It’s also Alan Rickman’s last film and he’s very good in it.

I didn’t buy the mini-drone but hey, it’s a film right.

Rating System

In case you’d forgotten, I use a five sun rating system. It works like this:

  1. Movie gets one sun for interesting story with good acting

  2. Movie gets one sun for not having an English villain

  3. Movie gets one sun for not being too dark or having lots of special effects, so you can enjoy it properly on an airplane screen

  4. Movie gets one sun if I watched all the way to the end without falling asleep or turning over because I was bored

  5. Movie gets one sun if it doesn’t have Kate Winslet in it

So any movie I watch on a place gets at least one sun, and if they pull out all the stops they can get five.

Thursday, February 16, 2017

Our Wall

Mr. Trump’s plan to build a thousand mile wall along the border between the United States and Mexico is attracting a lot of attention. A good friend of mine, noted for her knowledge of strategy and history, told me not to get too worked up about this harmless public works project. After all, this kind of things is often undertaken by national leaders to secure a place in the national imagination. Although it may never become a tourist attraction to rival the Great Wall of China, and indeed may become a new Maginot Line for future generations to investigate, it may well become a Keynesian landmark integral to the tourist industry of the southwestern states. 

I am pretty sure, however, that what it will not become is a barrier to the smuggling of people, drugs or money.

How do I know this?

Well, we Brits have been there and done that. We built a wall. We built a wall that was twice as long as Mr. Trump’s wall. And there is absolutely nothing left of it today.

In the days when Her Majesty Queen Victoria was Empress of India, the British administration in the subcontinent had, amongst other depredations, increased the hated salt tax (which later spurred the noted rebel Mahatma Gandhi to begin his campaign against the many benefits of British rule with the Dandi March). 

Our salt tax was not the first  (under the Mughal Empire, for example, there was a salt tax of 5% for Hindus and 2.5% for Muslims) but it was particularly despised because hundreds of millions of people in India’s interior were dependent on salt from the coast to survive and it had become something of a cash cow under British rule. Increases in the salt tax meant that the price of salt more than tripled and the natural result was that it was smuggled from the Bay of Bengal to the interior. Other things were smuggled too — opium, people and so on — but it was the smuggled salt that upset us Brits the most.

Now, rather as the United States is run by Trump Inc., India was at that dawn of Victoria’s reign ruled by the Honourable East India Company (until 1858, when it was taken under the wing of the Crown following the rebellion of 1857). So it was that the Company decided to do something about the salt smuggling.

The Company decided to build a wall down the middle of India.

A big, beautiful wall. And the Indians would pay for it.

This wall, or the “Inland Customs Line” as it was called, turned out to be quite hard to build. In large parts of India, there wasn’t the rock needed to build it or bricks to build it from. But a civil servant thought laterally and came up with an amazing solution. Allan Octavian Hume, a political reformer, ornithologist, botanist (and one of the founders of the Indian National Congress), a man who remains unknown to the masses but who should be as celebrated and revered as a British innovator in the mould of a Barnes-Wallis or a Dyson, was appointed Commissioner of Customs for the North West Province (1867-1870). 

The Line became Hume’s problem. An observer of local flora and fauna, Hume had noticed that along various sections of the Line, thorny hedges had taken root. In 1869 he began to experiment with different shrubs and as a result of his work, the British were able to grow a thorny barrier that stood in for rock, bricks and other traditional materials. A green alternative had been found! As the map below shows, it became the greater part of the Line.

Yep. You read this right. The British built a hedge to stop the smuggling of salt, opium, cannabis, sugar, people and who knows what else. This astonishing feat of gardening is described in detail in one of my all-time favourite books, Roy Moxham’s The Great Hedge of India,  and that is how I shall describe it hereafter.

The Great Hedge is described in the official proceedings of the British Parliament (Hansard) on 13th August 1878:

In order to prevent the ingress into our territories of salt taxed at lower rates, a line had been maintained of many hundreds of miles in length—at one time 2,400— consisting principally of a hedge of thorny trees and bushes, supplemented by stone walls and ditches, which could not be passed by anyone without examination.

From EAST INDIA REVENUE ACCOUNTS—THE FINANCIAL STATEMENT. (Hansard, 13 August 1878)

Wowza. The Great Hedge of India. It really happened. There were customs posts every mile, and in order to pass through you had to pay the tax. Many of the customs posts had a police cell where smugglers could be detained on the spot. These were called “chowkis”, the Indian word for a police station (from the Hindi cauki). This is why English people of my parent’s generation (my grandfather served in the British Army in India in the 1930s and my mother lived there as a small girl) still refer to prison as “chokey”, the anglicisation of the word.

It was not only smugglers who found the Line inconvenient. From the beginning, the British Viceroys of India didn’t like it either because it was an impediment to trade. They did not feel that the tax collected to the benefit of the East India Company would compensate for the reduction in trade. You can read about it in “The Economic History of India Under Early British Rule: From the Rise of the British Power in 1757 to the Accession of Queen Victoria in 1837”, where Romesh Chunder Dutt writes:

The East India Company would not willingly sacrifice even a revenue of £220,000, or any portion of it, for the prosperity of the internal trade of India. Professing the utmost anxiety for the material welfare of the people of India, they were unwilling to sacrifice a shilling to promote that welfare.

Walls everywhere are a barrier to trade, and trade is essential to prosperity. Hence the objections of the commercially-minded. The Line had all sorts of negative impacts on the trade in things other than salt. Sugar, for example.

Sugar was one of the most important products of our own people in Northern India; but the effect of the Customs line was to place artificial obstructions upon its export. "So far as competition exists," said Sir John Strachey, "the duty acts as a protective duty in favour of foreign and against our own sugar."

From EAST INDIA REVENUE ACCOUNTS—THE FINANCIAL STATEMENT. (Hansard, 13 August 1878)

Yet the Line was built and by 1872 had a staff of 14,000! Even with this manpower it did not stop the smuggling. In some places the smugglers just drove laden camels through the hedge, in other places they threw the salt over the top of it. I suspect that rather than use laden camels to circumvent Mr. Trump’s proposed barrier, smugglers will choose more modern pathways, ranging from drones and boats to ladders and tunnels. (I note incidentally that there are expert tunnellers in Mexico, so unless every Tom, Dick and Harry will be welcome across the border, the wall will need to go down a fair few feet too.)

Smuggling was reduced, but at an unacceptable cost. Apart from the substantial running costs, it also led to clashes between smugglers and custom officers (including an event in 1877 when two customs men attempted to arrest 112 smugglers, with predictable results) as well as stimulating bribery and corruption. Dutt again:

evils had grown under British Rule as compared with the state of things under the Nawabs of Bengal; manufactures were killed and internal trade paralysed by the Customs’ Officers who were paid so low that it was possible for them to live only by extortion; travellers were harassed and the honour of women passing through the lines of customs houses was not safe; and that this huge system of oppression was maintained for the sake of an insignificant revenue.

In the end, there was a victory for common sense and the Line was abandoned. The first quote from Hansard above actually began with Mr. Stanope telling Parliament that “it had been so often described that he was almost ashamed to ask the House to bear in mind what it was desired to abolish”. Work stopped in 1879.

There is nothing left of the Line today. When India became independent in 1947, the remnants of the hedge were torn up. In some areas, the Line provided the only surveyed straight line and so it was used for the route of highways in the new country, which is why no Ozymandian testament stands as a reminder to the executive power of the Honourable Company today.

Hence this practical suggestion. Why doesn’t America create a cheap, green and sustainable wall out of thorny cacti, which flourish in abundance in places like Texas and New Mexico? After all, since the wall won’t make any long term difference, why waste money?

What eventually ended the smuggling wasn’t the wall but tax reform, as is always the case. Hansard again (I have reformatted to make it easier to read):

The steps, therefore, necessary for the abolition of the line were

  • first, to extend railways into the salt-producing districts, and to enter into arrangements with the Native States of those districts, so that all salt might be taxed at the place of production;

  • secondly, to remove the inequalities in the rate of duty in different parts of the country.

Sir John Strachey (the minister whose tax review led to the abolition of the Line) later described it as “a monstrous system, to which it would be almost impossible to find a parallel in any tolerably civilised country”. Oh well, what did he know about building walls. Sad.

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