There are many different types of regulatory instruments and tools. Chapter 6 classifies and examines regulatory tools according to their underlying technique or ‘modality’ of control or source of influence, examining five such modalities in turn: command, competition, communication, consensus and code (or ‘architecture’). This chapter also considers algorithmic regulation and the role of reputation as a form of regulation.

Even if a loss or outgoing fulfils the requirements of the general or a specific deduction provision, another provision may expressly deny or limit the deduction available to the taxpayer. For instance, an important provision that limits deductions is s 27-5 ITAA97. As discussed, this section denies a deduction to the extent that a loss or outgoing includes an amount relating to an ITC or a decreasing adjustment under the GST law. This chapter examines a number of other common provisions that deny or limit deductions. These provisions have been enacted for a broad range of policy reasons and are scattered throughout the ITAA36 and ITAA97.

The subjected status of the coloni equalled them to persons alieni iuris, as slaves were too, but they were still free. It made marriages with those not in this way subjected with regard to the transmission of status ‘unequal’. It implies that children follow the status of the mother. This ‘unequal marriage’ and its consequence was introduced by earlier laws. To prevent the children out of marriages of a colonus with a not subjected woman being not subjected, the senatusconsultum Claudianum was applied. That made children follow the status of the father. The abolition of the senatusconsultum led Justinian to introduce the faculty of estate owners to recall coloni from such marriages in order to prevent the loss of labour force. CJ 11.48.19 established that every colonus after thirty years of service was no longer alieni iuris and thus subjected to their estate owner, but free from his control over him and his property. Such coloni are called ‘free’ coloni (coloni liberi). They remained tied to the estate and had to render services and to pay poll tax, but could now fulfill public functions as no longer being of subjected status.

The slow or negative growth rates combined with high rates of inflation in the 1970s led to strong reactions. These reactions would give more power to the market while reducing that of governments. Various economic theories, some new and some rediscovered old ones, were advanced, to call for a reduced government role. Some of these were the Ricardian equivalence, rational expectations, Laffer Curve, efficient markets, effects of high compensations on some individuals, impact of globalization, etc. The new environment made some very conservative politicians win elections, in the United Kingdom, the United States, New Zealand, and some other countries. The era of welfare states was over and that of market fundamentalism had arrived. Future years would be different from past ones. To some exient it would be a return to laissez faire.

The Great Depression introduced doubts in the minds of many about the virtue of a free market economy. The absence of safety nets, at a time when unemployment had reached 25–30 percent, created major difficulties. The need for redistribution and stabilization was felt by many. The changes in the structure of the economies had facilitated tax collection. The new environment led to welfare states with high and growing progressive taxes, high levels of social spending and growing power by labor unions. For a while harmony between the roles of government and state seemed to grow. Then difficulties would begin to appear and to grow over time and this would set the stage for a counterrevolution in later years. Slow growth and growing inflation starting in the late 1960s and continuing in the 1970s would increase the reaction to the welfare policies and to the great power that labor unions had acquired. There would be increasing calls for a return to a growing role by the free market.

Chapter 16 establishes the concept of an externality, a situation where a decision carries additional costs or benefits to a party not involved in the decision-making process. The chapter classifies several types of externalities and explores how and why they lead to undesirable outcomes. Then potential solutions to externalities as well as their strengths and weaknesses are discussed: subsidies, taxes, regulation, and the assignment of property rights. The chapter ends with a discussion of cost–benefit analysis and its role in evaluating interventions aimed at combatting externality problems.

This essay challenges the historiographical myth of salutary neglect on many levels, beginning by exploring how it came to its current, dominant interpretive status. I argue that it grows out of a desire to see the colonies as relatively democratic and independent, but that such a perception is deeply problematic. The levers of imperial control were powerful throughout the colonial period; colonial political systems did not develop “in a state of nature”; the tendrils of legal control were invidious and far-reaching; and force–the power of empire–was never far away. British navies, in particular, supplemented by occasional armies and colonial militias under the command of the Governor, along with all the mechanisms of legal control–sheriffs and executions, heads on stakes at the public crossroads–lurked always on the horizon, ready to intervene if necessary, sometimes only in the public imagination, but often in fact. This chapter is a call to think deeply about the power of empire during the colonial period. Doing so will lead to a richer understanding of what broke down between 1763 and 1776, but also of what came before. Salutary neglect it was not.

This chapter examines John Rawls’s uncritical acceptance of “sound” finance, how it reflects his use of his constructive method, his influences in neo-classical economics, and the regrettable consequences. It also suggests how we can unlearn deference to neo-classical thinking, using Rawls’s method, in view of Abba Lerner’s functional finance and an egalitarian form of central banking.

The second chapter focuses on the tale of Calandrino and the heliotrope (8.3). It asks two primary questions: why does Calandrino need to be a real historical person and what is the role of the custom agents in the tale? The answers to these questions are related because Boccaccio’s documentary style turns the pranks against Calandrino into a form of community policing. The shaming of Calandrino is a group effort and a public spectacle, a form of pittura infamante. In a justice system in which art could function as social conditioning by making citizens feel continually seen, it makes all the difference whether the person depicted can be identified. The tale of Calandrino and the heliotrope is justly celebrated as a masterful reflection on art and illusion. This chapter illustrates the political nature of this reflection. Namely, is Calandrino simply a bad friend—or is he also a bad citizen? Contemporary readers would thus have understood the real threat posed by Calandrino’s illegal—and supposedly undetected—border crossing when he passes through the gates without paying the custom agents. At stake is why we should obey the law when there is no one around to see.

After 1450 the size and scope of more centralized government institutions increased in many parts of Europe. Rulers of larger states, beginning with the Ottoman sultans, established permanent standing armies and supported more professionalized naval forces. They developed new types of taxes and bureaucracies to pay for these increased military expenditures, and engaged in shrewd marital strategies to expand their holdings through marriage as well as warfare. The processes of consolidation followed similar patterns, but with local variations in England, France, Spain, Portugal, the Ottoman Empire, Poland–Lithuania, Muscovy, Denmark–Norway, and Sweden. In the Holy Roman Empire the Habsburg emperors were unable to establish a centralized nation-state because of political and religious divisions, and in Italy wealthy city-states ruled by merchants dominated politics. Everywhere lower levels of government, such as cities, villages, and parishes, also collected taxes, issued laws, and maintained courts, and traditional elites adapted to new circumstances very well. Rulers in the fifteenth and sixteenth centuries did not limit their activities to what we would consider politics but often attempted to shape the cultural and religious lives of their subjects as well, recognizing that these were integral to maintaining power.

Athens and the Aegean were at the centre of the economic life of the Greek world in the late archaic and classical period. Like the other cities of the Aegean, Athens actively exploited its territory, but the specific characteristic of its economy was the presence of the Laurium mines, which gave it an unbeatable natural advantage over the other players. In the Hellenistic period, the Aegean cities were only one of the many players on the international landscape, and they had lost their pre-eminence, although to a certain extent the city of Rhodes succeeded Athens in its role of platform for international trade, and the little island of Delos ended in being for a while the main hub of trans-Mediterranean trade.

This chapter considers the key characteristics of the digitalised business models discussed in Chapter 2 and outlines seven key challenges to the current international tax system devised by the 1920s compromise. These are the vanishing ability to tax business profits, the use of data (and the corresponding difficulties of assessing contribution and value), the reliance and mobility of intellectual property, the characterisation of income, the failure of transfer pricing in certain multinational transactions, the inadequacy of residence-based taxation and, lastly, competition by states.These issues remain, making the current international tax system fragile to the expansion of highly digitalised business notwithstanding the outstanding and prompt action by the OECD on the BEPS action plan.

This chapter considers the key characteristics of the digitalised business models discussed in Chapter 2 and outlines seven key challenges to the current international tax system devised by the 1920s compromise. These are the vanishing ability to tax business profits, the use of data (and the corresponding difficulties of assessing contribution and value), the reliance and mobility of intellectual property, the characterisation of income, the failure of transfer pricing in certain multinational transactions, the inadequacy of residence-based taxation and, lastly, competition by states.These issues remain, making the current international tax system fragile to the expansion of highly digitalised business notwithstanding the outstanding and prompt action by the OECD on the BEPS action plan.

The level of disposable income inequality in Israel has increased noticeably since the mid-1980s, and today it is above most developed countries. In contrast, market income inequality, which hit a record level in 2002, has reversed its course since then and has shown a sharp decline in subsequent years, and it is now below the OECD average. This chapter offers tentative explanations for the inverted U-shape evolution of market income inequality in Israel in the last twenty-five years, which is distinctive in view of most developed countries℉ experience. In addition, this chapter addresses the unique combination of income inequality in Israel which has one of the highest levels of disposable income inequality but is ranked below the OECD average measure of market income inequality.

The introduction summarizes some of the main issues and findings covered in the book. The first section relates this volume to its two predecessors, arguing that while the last two decades signaled the fulfillment of many of the hopes raised in the previous volumes, the economy still suffers from many of the maladies highlighted in them, including low levels of productivity and high levels of inequality. Section 1.2 is concerned with the background to local economic developments, including the massive immigration wave of the 1990s and fluctuations in the conflict with the Palestinians and in the global economy. Section 1.3 discusses the reduction in government expenditures and taxes and the reaction of monetary policy to the global financial crisis. Section 1.4 summarizes the main structural reforms aiming to reduce government intervention and increase business sector competition, as well as the attempt to reduce economy-wide concentration. Section 1.5 focuses on economic growth and its determinants: changes in employment, physical and human capital, and productivity. The final section highlights two issues: (a) the improvement of Israel’s level of economic freedom and its position relative to other rich countries and (b) the increase of inequality in income and the deterioration of social services.