I'm thoroughly enjoying this discussion, because it's forcing me to challenge my assumptions and think things through. Before I respond, let me clarify - there's general game theory which I'll mention, and there's my opinions on governance, and I try to keep them largely separate. Your comment mixes your thoughts on both a little bit, but I'm happy to weigh in on both topics. I'll try to note which I'm weighing in on - I mention this because game theory type analysis is less subjective than figuring out what "good governance" is, which is a lot more open to opinion and interpretation. But I enjoy both topics and am happy to weigh in on both.

> Now, the way you tell the story, it's the legislators' fault for the secondary effect of amending the law causing Google to leave.

I try not to make moral judgments when pointing out consequences - I wouldn't call it "fault", so much as simply saying it happens. I find words like fault/blame, fair/unfair, good/bad, good/evil, and so on cloud a discussion. I'm more interested in finding out what's going to happen in a given scenario first, and then once we have all the data, then come to a decision. So I wouldn't say it's a legislator's "fault", I would simply say it's an unintended consequence of their actions.

> But equally, you could take the view that Google should have never entered the market relying on a tax loophole which was never supposed to be there in the first place that lawmakers were unaware of.

Whoa, whoa, whoa - reread and think that through. You want private citizens and organizations to guess what the laws are supposed to read like and act accordingly? You want them to guess what lawmakers were aware of in the laws they wrote? Wow.

> It was Google who changed any equilibrium by using the loophole.

What if they had no operations in Europe? They certainly don't need operations on the ground in Europe. So if they had no ops and no business presence, there's no basis for taxation. What next? Block them at the ISP level China-style unless they pay taxes? And so on.

> You can espouse the benefits of low taxation and the evils of legislators and bureaucracies and the laws of unintended consequences therein, but I don't see how game theory works in your favour in that argument.

I'm a huge devotee to the "Never ascribe to malice what can be explained by incompetence" school of thought. I don't think legislators and bureaucracies are evil, trying to drive business out of their countries and hurt people. No, I think they're well-meaning but clumsy.

As for game theory, it handles situations of competition and cooperation - it covers government/business interactions decently. John Forbes Nash actually won the Nobel Prize for economics by using these ideas in market economics. So I'm both not slinging mud at governments using game theory, yet noting that game theory is very applicable for slinging mud at governments if you so choose ;)

> I think taxation is a careful balance between maximising revenue and encouraging business and work, but this is increasingly difficult to balance with the existence of free trade agreements and the existence a global market. But whatever you think about tax policy, we should be able to agree that tax loopholes have no place in that equation, and that tax policy shouldn't be implemented via the backdoor with the benefits only available to large corporations with sufficiently clever accountants.

I completely disagree. I think it's awesome that governments are being forced to compete with each other for citizens and industry. I think a lot of old world government assumptions are going to fall apart when governments are forced to compete, and we're going to be left with a much better world. But now we're totally straying from game theory and getting into governance.

> N.B. England doesn't have a government - it's the UK Government.

Cheers for that - Clumsy American that I am, I slightly tweaked a few Englishmen by calling them "British" instead of "English" when I spent time in London, so I probably go a little too far in calling everything "English" now just to be on the safe side. For anyone that knows, what's the appropriate adjective for the UK government? British government? Or would you just say UK government every time? Cheers for pointing that out, and thanks for the discussion.