RSS Feed for This PostCurrent Article

The great unwashed

We take soap for granted these days, but, in Britain, the government once restricted its availability. In the seventeenth century, the government interfered with the soap market, imposing quotas and geographical restrictions on production, at one point only allowing production in London and Bristol. In 1712, Queen Anne introduced a tax on soap, and an excise official was required at each soap boiling. This helped soap remain a product for the rich. The tax continued right until the middle of the nineteenth century when Chancellor of the Exchequer Gladstone scrapped the tax. It had been a tax on being clean.

It is sad, therefore, that we find many developing countries making similar mistakes. Across the developing world, we find essential medicines made inaccessible thanks to taxes and tariffs - killer tariffs. Even Tanzanian-made anti-malaria bednets don’t escape. Developing countries could learn a great deal from Gladstone, a man who (in addition to scrapping the soap tax) massively cut tariffs. Indeed, Britain saw its total number of tariffs cut from 1163 in 1845 to only forty-five by 1859. Taxes and tariffs are bad for personal hygiene and for access to medicines in addition to being bad for economic growth. That’s why cutting taxes and tariffs is always and everywhere a good policy prescription.

Trackback URL

RSS Feed for This PostPost a Comment