The tax system could well be the most idiotic, hypocritical and unnecessarily complicated part of modern industrial economies. The system needs to be rebuilt.
What is the right size for pensions? That question can be approached in two ways: “then” and “now”. Pensions, and other economic arrangements to support elderly people, may be considered repayments for what they did back then, when they were young. Alternatively, these payments may be considered as a share of output right now. In rich countries, the two approaches are in conflict. The “then” logic, which is based on promises made long ago, supports higher pension payments than the “now” logic, which is mindful of rapidly ageing populations. Politicians struggle to find acceptable compromises between the two approaches.
The Islamic approach to finance was once the most advanced in the world. The period of pre-eminence ended six or seven centuries ago, but the religion’s fundamental insights into the field could help form a financial system suitable for the 21st century.
When I was a boy I was fascinated by my parent’s copy of “The Family of Man”. The book, taken from a 1955 photography exhibition at the Museum of Modern Art in New York, was like a window into the big world. The beautiful images of people from many countries showed that the human condition was essentially the same everywhere: we all went through the same noble story of birth, love, struggle, religion and death. Much later I learned that the photographer Edward Steichen, who designed the show, wished to inspire exactly such sentiments. In the words of Carl Sandburg, taken from the book’s prologue, the human race was “one big family hugging close to the ball of Earth for its life and being”.