So I was not surprised to read that the European Court of Justice has declared such transactions illegal. Employers must somehow be protected from this kind of exploitation.

Nevertheless, I am sure some will find the ruling outrageous. If employer and employee are both sane adults, why should they be prevented from freely entering into such a transaction? Our entitlement to 28 days’ holiday is surely not an obligation to take 28 days’ holiday. If you have thoughts along these lines, I sympathise. But our holiday entitlement is only the tip of an iceberg of entitlement-driven compulsion.

In this case it has taken a court decision to turn an entitlement into an obligation. But judges are rarely required; money is usually enough on its own. The entitlements that politicians delightedly announce, as if they were gifts of some kind — free childcare, free education, free medical treatment and all the rest — are nothing but compulsory purchases.

Take a simple example. How much are you willing to set aside to cover the cost of medical care in your old age? Personally, not much. I would rather spend the money now to enjoy life while still deluded that I am young and healthy. I will save only enough to cover my basic medical needs when old and clapped out: enough for false teeth and a few months’ supply of morphine should suffice.

But wait. Like everyone else, I am entitled to comprehensive medical care when old, whether I can pay for it or not. So here is what I will do. I won’t save anything and then I will take all I can get free from the National Health Service, as will everyone else. How will the Government pay for all this “free” medical care? By taxing me, of course, along with my fellow entitlement holders. In the end, my “entitlement” simply obliges me to buy medical treatment that I do not think worth the cost. It is a compulsory purchase.

Those politicians who make it their business to extend our entitlements are not billionaire benefactors. The burden of funding our entitlements falls back on us. That is why increasing them simultaneously decreases our ability to consume anything else.

Suppose Gordon Brown were to make a legal reality out of the rights he proclaims at Labour Party conferences. Suppose he guaranteed everyone “the highest standard of free healthcare”, “the best start in life” and all the rest. To ears reddened by Mr Brown’s rhetorical style, this may sound like Utopia. In fact, it would be serfdom. The highest standard of medical care would alone cost so much that funding it would require taxes to be 100 per cent of GDP.

Of course, Mr Brown will not lift taxes to 100 per cent, if only because the policy would result in the disappearance of any income to tax. But, to pay for our present entitlements, tax is already 40 per cent of GDP. Only the rich can afford to pay for items such as education and healthcare from their post-tax incomes. Most British citizens have no choice but to accept what they are allocated by the State.

The entitlement-based policies of all the main parties muddle up two quite different goals: one worthy, the other disgraceful. The worthy goal is redistributing wealth. Since a pound is worth more to a pauper than to a millionaire, transfers from the rich to the poor increase aggregate wealth (at least, until the size of the transfer undermines incentives to work). It also helps to avoid civil unrest, which benefits everyone, including the rich.

The disgraceful goal is to compel people to live in ways that they would not choose for themselves, or to buy things they do not think worth the cost. This is precisely the effect of confiscating a large portion of someone’s income and then providing him with services to which he can no longer afford an alternative.

To avoid this oppression, there should be no state services and no specific entitlements, except to a minimum income. All redistribution of wealth should be in cash. There are today no state supermarkets or state tailors. The unemployed are given cash with which to buy food and clothes. They may choose how to allocate their wealth between food and clothes, and they may also decide what they will eat and wear. Why not give them, and everyone else, the same autonomy with respect to education and healthcare.

Left-wing friends always object to my “all cash” suggestion on the ground that people would spend the money unwisely. They would blow it all on booze and fags or something similarly frivolous. This displays an absurdly dim view of the population. My guess is that spending on health and education would increase under such a system.

The objection also reveals an extraordinary admiration of politicians. Is Mr Brown so vastly superior to you in morality and intellect that, sitting in his office in Westminster, knowing nothing of your circumstances or preferences, he can decide better than you how to allocate your spending? It is a great historical irony that politicians who genuinely aim to help the poor have pursued policies that exempt only the rich from being vassals of the ruling class. And funny to the point of making you weep that such policies are commonly described as “generous”.

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