A very merry Christmas to all, and a happy and prosperous new year. In the spirit of wishing goodwill to all men, both friends and otherwise, I hope in particular that 2008 can be the year Kenny Richey returns to the UK and has the opportunity to live some of the life he's been deprived of over the past two decades.

At this time of year, when people always seem so much more tolerant of each other, may I also express a hope, with slightly less optimism, that 2008 is the year we start talking sensibly about immigration. There is nothing sensible about point systems or quotas or English tests of deportation of foreign criminals or Campsfield, though its almost taken for granted that there is. It seems whenever we talk about immigration, politicians like to focus on the "practical" issues or the "economic" issues, though these are usually clouded in half-truths, propaganda and innuendo. In my mind, though, the right to the freedom of movement, and the right to the opportunity of prosperity, regardless of the patch of land you were fortunate or unfortunate enough to be born on will always be a moral issue.

However, if we are going to do this the old-fashioned way, then let me say the following. In general, it would be fair to say that immigrant labour is more motivated and productive than the homegrown equivalent, that children of immigrant families, especially from Asia, outperform the children of British families, and that they are no less likely to pay their taxes. There are low skilled and high skilled jobs that all need filling and the country is better off if the most able person gets the job, regardless of background. And if being able to speak English makes a person more suitable for the job, then telling people they need to learn the language is probably unnecessary. If they are most suitable for work without good English, then telling people they need to learn the language is a waste of resources. That would be the "economics".

If we open the borders, illegal immigration will drop to zero in a minute. People who can enter a country freely tend not to need the help of people smugglers or druglords, and are less likely to end up in slavery or forced prostitution. Immigrants may be doctors, nurses, teachers, bus drivers, train drivers and builders, all of whom would probably be employed by the hospitals, schools, public transport services and housing development that are supposed to burst under the weight of all the new doctors, nurses, teachers, bus drivers, train drivers and builders we keep letting in. Social cohesion, if that really is a worry, will only be solved by engagement within communities. Banning foreigners from coming, or making them pay a bond for visiting families here, won't help at all, and may even make the problem worse. That, for those keeping count, is the "practical".

A little to the left, I guess.

I was motivated by Tom, today, to make this completely outlandish prediction: John McCain will win the Republican nomination next year. I actually think this.

http://www.guardian.co.uk/business/2007/dec/14/marksspencer.europe

This is interesting. Let's do some economics.

A quantity of an untaxed product is supplied at the producer price. This quantity is increasing in the producer price - firms produce more goods when they get paid more per unit. This plots out the supply curve.

VAT raises the price paid by the consumer. If a producer supplied ten units of the good if he could sell them (untaxed) at £10 each, then with VAT at the usual rate, he would have to be able to sell it at £11.75 for him to be happy to still supply ten units. The tax shifts the supply curve up - same quantity will be supplied at a higher price.

People demand products in a quantity inversely related to the price - the lower the price the higher the demand. This plots the demand curve. The equilbrium market clearing price is that which makes demand and supply coincide. So what is the effect of a tax? Obviously, the price rises. However, it does not rises by 17.5%. Some of the tax is paid by the customer, while the rest is paid by the producer.

Why? Because higher prices reduce demand. This reduction in demand means firms need not supply as much of the good. They require a lower price to be happy to meet the new demand, and it is this price which the tax is added to. Thus, the new equilibrium price increases by less than the tax rate - and it is only the price rise that is passed on the consumer.

So, how much should M&S be paid back, if the tax wasn't valid? Clearly its more complicated than repaying all the tax paid on teacakes - some of this was paid by the customer. Furthermore, the only really interesting metric is lost profits, not lost revenues. If it can be demonstrated that M&S lost profits because of this tax, then this is what they should be claiming.

One last point - as customers paid some of the tax, are they entitled to a rebate? It would be hard to say how exactly to implement that, and anyway, all customers were presumably willing to part with that much money for the product. Other customers would have bought the product if the price had been lower (without the tax), so maybe they should be compensated in some way. This complicates the question enough, but just to add one more level, we really have to think about why the tax was imposed. The revenues from the tax probably were spent on something useful and good for society (like a poster that tells me what wonderful things governments spend their money on). Plus, cakes are bad for you - the higher prices may have helped save a few people from themselves.

Yes indeed.

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Terry Pratchett has early onset Alzheimer's, which is incredibly sad on more than one level.

As a person who considers himself creative and imaginative and at least a little bit intelligent; as a person who exists most of the time within the confines of his mind, and as a person who hates being dependant or burdensome, this awful disease probably rates as one of my biggest fears. This news reiterates the fact that I must make sure I do all the things I want to do, creatively, artistically and intellectually, before its too late. Could someone keep reminding me of this?

I recently bought Primordial's latest, "To the Nameless Dead". They sound like this (try Empire Falls or The Coffin Ships).

They are absolutely amazing: heavy, yet melodic; dark, yet soaring. The vocals are emotive and powerful, while the lyrics read like poetry. I was reading the liner notes, which explains some of the lyrical influence - the album is about nations, about the "nameless dead" who gave their lives for a cause or for their country, though no empire has lasted forever. It touches on faith and belief, and has a lot to say about how we take for granted the often bloody and painful history that has brought us to where we are now - "Tell me what nation on this Earth, is not born of tragedy?".

I must go and watch them live.

http://news.bbc.co.uk/1/hi/uk_politics/7125521.stm

I have no problem with anyone following any religion they choose - in my experience, people of faith are made happy because of it. But there is no place for modern government in upholding any traditions of any faith, including Christianity. It's survived 2000 years so far, and faced worst problems than some shops not wanting to selling cards with the name of their second-most important festival on the front.

Is there some reason, given so many people apparently care about this and it's not actually breaking any laws, that Christmas card and Advent calenders aren't still made?

More black metal in the mainstream media. Not a band I've really listened to much, but an interesting one. They made headlines recently in Norway for staging a series of photos where they "downloaded" a sheep belonging to a Norwegian minister in response to his suggestion that it should be legal to download music for free.