The Beatles

There's a reason they wore those ties

Daniel Finkelstein calls The Beatles a triumph of capitalism:

When the lads were playing their lunchtime concerts at the Cavern Club in 1961 they were a fabulously tight and talented rock’n’roll band. But that’s all they were until [Brian] Epstein offered to be their manager. It was only then that they properly became the Beatles. He was the owner of a large local record store and Harry Epstein’s boy, son of a wealthy businessman. And easily the most impressive person who had ever offered to be involved with them. Epstein transformed the Beatles into a professional showbusiness act. He put them in suits, protected their image, added theatrical touches to their stage shows, made sure they turned up on time.

...Appreciating the role of Epstein, allows one to appreciate that the Beatles are as much a triumph of commerce as of art. They were not merely brilliant musicians fusing avant-garde influences with rhythm and blues music. They were a showbiz act managed by an inspired entrepreneur. They weren’t simply class rebels against the Establishment, they were the brilliant product of capitalist enterprise, the early pioneers of globalisation.

It's a good point. Capitalism rewards excellence and democratizes it so that everyone can get a piece for a reasonable price. How many great artists or musicians emerged out of the Soviet Union?

Another lesson of The Beatles, Finkelstein points out, is the danger posed by unrestrained government and its ravenous tax appetite:

Money normally enters the Beatles story only as a reason for their demise. When Epstein died, the group famously began to argue about management and contracts and cash. Born out of music, killed by money, that’s the usual story.

However, Tony Bramwell provides a different account. Bramwell was friends with all the group, present when Paul met John; he was Brian Epstein’s right-hand man, fixing gigs for Jimi Hendrix and mixing drinks with the Rolling Stones; and was still there when Phil Spector produced Let It Be. In his recent book Magical Mystery Tours (a wonderful insider memoir) Bramwell argues that it was penal tax rates that helped to destroy the group’s cohesion.

First told to give away vast amounts to avoid tax bills — which they did in a series of madcap ventures, offering money to any old person who dropped by with a demo tape — then told they had to make £120,000 in order to keep just £10,000. Soon their finances were in chaos and their energy sapped, as nutters beseiged Apple HQ pressing tapes on them. They also ran a clothes shop as a tax dodge.

Bramwell blames Harold Wilson, the Prime Minister, directly. “There were enough new regulations and red tape to tie up free enterprise for years ... One minute Swinging London was like a giant theme park, the envy of the world, then they — Wilson and his gang — closed it down. It was as if they went out and stamped on it.”

John Stossel has more:

In 1966, the Beatles came out with the song “Taxman”. According to George Harrison’s autobiography, Harrison wrote the song when he realized that the Beatles were losing most of their new income to high British “super-taxes.” In the Beatles Anthology documentary, Harrison said: “In those days, we paid 19 schillings and 6 pence out of every £1.” That translates to 97.5% of their income. “A heavy penalty to pay for making money,” as Harrison described it.

British taxes got so bad that wealthy elites, including the Rolling Stones, fled the country to avoid having their fortunes taxed away. Eventually the British “super-tax” was ended, and today the top British income tax rate is 40%, going up to 50% next year. It’s not 97.5%, but the effects will be similar – some high earners are expected to flee en masse.

Good point. It's already having an impact on England's Premier League.