Corporate totalitarianism

The Thoresen review of generic financial advice hasn't got the attention it deserves. Which is a shame, because it demonstrates a sinister ideology - a mix of corporatism and totalitarianism.
The totalitarian aspect lies in the presumption that the state should concern itself with individuals' character. "Good money sense needs to be as much part of people's lives in the 21st century as healthy eating and keeping fit" says Thoresen. But the people cannot be trusted to be prudent left to their own devices. They must be taught to be so. Hence Thoresen's recommendation that the "government" (meaning taxpayer) must spend up to £832 million  providing financial advice.
Nor is it merely the state that must do the teaching. The lessons must be more intrusive than that. Thoresen wants them inserted into soaps*.
And guess who'll benefit from this? The financial "services" industry. Thoresen reckons (pdf) it could gain over £5bn, as financial advice cuts bad debts, reduces the need to advertise and drums up demand for savings products. All this at the tax-payers' expense.
The justification for this, Thoresen claims, is that it'll be a net saving for taxpayers. He reckons the government will make up to £6bn, as it rakes in tax revenues from the additional savings products and spends less on pension tax credits.
But this is highly doubtful. Good financial advice should direct people towards tax-efficient savings vehicles such as ISAs and personal pensions. So tax revenues could fall. And it should tell poorer ones that there's no point saving modestly for a pension, as they're guaranteed a minimum income anyway.
What we have then, is a nanny statism in which tax-payers' money is to be used to prop up private industry. And where does the supposedly objective report which recommends this come from? The chief executive of a financial "services" firm.
As I said, big business and free markets are two different things.
* He forgets that Corrie has already featured a financial advisor - Richard Hillman - who was a psychopathic serial killer, which was a pretty accurate estimate of the moral standing of the industry.

Comments

[reason]

Besides which isn't it true that any advice you get will be both short term self serving and long term self-defeating. (Short term self-selfing as the price of recommended products is bid up, long term self-defeating as the yield of such products falls).

[michael webster]

Sorry, what is wrong with a nanny, again?

[Aaron Heath]

I think teaching people how to manage money is a good idea. But it should be part of basic schooling, not some retrospective and expensive propaganda exercise with the insidious - if misguided - aim of raising more revenues.

If all politicians are democrats, why don't they just get rid of these hidden taxes, and charge us a simple single amount? Well, because Politicians are liars.

Oh, I've always considered soaps a government tool anyway.

[ortega]

That reminds me of the campaign that the spanish socialist (XIX C version) made to reduce car accidents. Their motto was: "We cannot drive for you".
As I saw it, there was a double implication:
1. They were regretting they could not, but they would like very much to.
2. They were convinced that they would do it much better than us, the stupid drivers.
In that case, like in the money one, why don´t they just limit themselves to build safe roads ?

[Ian]

Interesting.

The fact that schools teach nutrition, environmentalism and 'citizenship' (whatever that is - we didn't have that 10 years ago), but next to no economics has long bemused me. And yes, it leads to a shocking ignorance of even the basics of money management.

Additionally, the idea of using soaps as an educational tool is not novel. In 1999, for instance, Brookside was used as a vehicle for an adult literacy campaign, 'Brookie Basics'.

My opinion on it really depends on the execution of Thoresen's suggestion. It's an issue where I'm prepared to allow pragmatism to override anti-intervention principle. Basically, if it is being done purely for education, and is balanced, I don't have a problem. If it is used to promote a viewpoint or a commercial service, on the other hand, then IMO the distinction between programming (the soap itself) and advertising has become unacceptably blurred.