October 20 1996
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   Ferdinand Mount 
   
   Opinion: Lesley White 
   
   In cyberspace, nobody can hear you yawn
   
   Nothing in this world is certain, we used to be told, except death and
   taxes. Now it seems there is a question mark over the second of the
   two unavoidables. The electronic revolution is said to be emasculating
   governments, leaving the Inland Revenue powerless to catch up with us
   while we surf the Internet, roam the superhighway and meander with our
   modems. The Independent on Sunday devoted most of its magazine last
   week to fantasies of a future in which "All over the world, the state
   withered away", and an impotent prime minister "blames it all on Bill
   Gates, founder of Microsoft, now revered by digital revolutionaries as
   a new Karl Marx".
   
   According to William Rees-Mogg in The Times: "Most of those who
   understand the development of information technology expect there to
   be a deep worldwide erosion of taxing capacity in the next 10 years."
   The Internet is moving into money transfers. It now costs only £80 to
   buy Internet encryption software, which the taxman cannot read. And
   what he cannot read, he cannot tax. Ergo, the bloodsuckers retreat in
   baffled fury and, without revenue, governments dwindle into
   insignificance, just as Marx said they would ­ but for a reason he
   never dreamt of.
   
   Those who share this vision of the withering state put it to very
   different purposes. Lord Rees-Mogg invokes it to prove that the euro
   cannot work, because it won't have the revenue base to support it so
   long as continental governments continue to indulge in high social
   expenditure. Anarchists, on the other hand, use the idea to weave
   their playful utopia, a land of Cockaigne and cocaine, with no buff
   envelopes, in which the tiny pulses from a keyboard enable the
   lightest whim to be registered anywhere on the surface of the globe,
   where we can play hide-and-seek with authority in the knowledge that
   authority cannot catch us (the same liberty is, of course, also
   available for pornographers, paedophiles and drug smugglers). After a
   century and a half, Charles Babbage's galumphing old "analytical
   engine" has finally evolved into a magic device which can transform us
   into elusive weightless beings in cyberspace. The whole thing sounds
   rather like the last act of Iolanthe in which "everyone is now a
   fairy", including the entire House of Lords.
   
   It is a thrilling prospect. But is it grounded in reality? After a
   century of ever-accelerating technological progress, in most western
   countries the state still takes as high a proportion of the GNP as it
   ever has in peacetime ­ usually on the wrong side of 40%. If you take
   a long view, the Thatcher-Gingrich revolt against high taxation looks
   like a fairly modest rolling back of the state. Far from the rich
   managing to pay less tax, the reduction in top tax rates has resulted
   in them paying a higher proportion of the total yield than they used
   to. As for the rest of us, of the £285 billion Kenneth Clarke reckons
   to rake in this year, £70 billion is to come from income tax, £79
   billion from Vat and excise tax, and £47 billion from social security
   contributions ­ taxes which for most of us cannot be dodged because
   they are either deducted at source or levied at the checkout. And the
   chancellor can always cut off funds to local authorities, leaving them
   to rely on the council tax ­ even harder to evade, short of selling up
   and emigrating.
   
   Corporations are indeed footloose, but corporation tax is only a minor
   contributor to the Treasury ­ £27 billion this year, less than a tenth
   of the total take. All the same the new globalists tell us that the
   giant "transnational" corporations are now the true rulers of the
   world. This takes me back to the 1960s when J K Galbraith was arguing
   in The New Industrial State that the huge multinational corporations
   had become invulnerable and immortal. A little sadder and possibly
   even wiser, Galbraith now concedes in his latest book, The Good
   Society, that the largest firm is subject to the discipline of actual
   or prospective bankruptcy. True, governments have to be considerate to
   the geese that lay the golden eggs, for they will flap their wings and
   be off if the pickings are slim locally. Yet they must eventually come
   to earth and obey the ground rules after landing. Even Sir James
   Goldsmith has to live somewhere (in fact, he tells us proudly, he is
   now paying his taxes here).
   
   Nor has the state grown more indulgent to its wayward citizens. It
   will be a strong point in the Conservatives' next manifesto that the
   number of policemen has increased by 15,000 since 1979 and the number
   of prison officers has increased by 76% ­ which must be the largest
   increase in so short a time since Newgate began to employ professional
   turnkeys. Not much sign of the state withering away there. Patriotic
   spirit is said to be not what it was, people have forgotten their
   country's history or have never been taught it, but the nation state
   looks to me like a tough old buzzard.
   
   All this seems pretty implausible to anyone who has ever been at an
   England football game. All those knowledge tests in The Daily
   Telegraph designed to show how our traditions are being neglected
   often show the reverse, since while people may be vague about the
   industrial revolution, three-quarters of the sample usually turn out
   to be pretty clear on Guy Fawkes, Churchill and the battle of
   Waterloo. The mystery is why anyone should imagine that our
   consciousness should be profoundly altered by the Internet, any more
   than it was by the telephone or television, which also encouraged
   staying indoors and minimising physical contact.
   
   Of course, the Internet offers wonderful new openings for the
   fraudster, as have all innovations since the printing press. But some
   of the finest old scams are still committed in the flesh, as in the
   hallowed formula: "I could knock a bit off for cash, squire". Despite
   modern technology, it is noticeable how many ticklish transactions
   still depend on large envelopes of cash being handed over in person,
   right up to the level of vice-president of the United States, in the
   case of the late lamented Spiro Agnew.
   
   As for tele-shopping, the beauties of such things are usually hymned
   by male commentators who have not had to wait in for the delivery van.
   In that respect, it is hard to see that our convenience has improved
   much since Mr Pooter's day (circa 1890) when the butcher's boy called
   every evening and the postman delivered half-a-dozen times a day.
   
   For the Lords of Creation at their City screens, the new globalism is
   an article of faith, but they still get stuck in the traffic jam on
   the way home.
   
   For as Montaigne pointed out, when sitting on the loftiest throne we
   are still sitting on our own bottoms.
   
   Opinion: Lesley White 
   
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