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What Should The Public Sector Provide?


tahoma
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And you have no authority over me to tell me what is your property and what isn't. OK? I don't ever recall giving my direct consent for you to own anything, and you are saying that no general social contract exists.

Someone's fist striking against your sanctimonious face is all the contract you would need to leave their property the hell alone.

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And you have no authority over me to tell me what is your property and what isn't. OK? I don't ever recall giving my direct consent for you to own anything, and you are saying that no general social contract exists.

I own what I made. I don't need your consent for that because I made it.

That's not a logical position. It's a pretty infantile one; most kids get out of it by the age of 3.

You're saying that up to the age of three people realise that they have no right to assert authority over another, but them they "grow out of it"?

I guess you are a big fan of being domesticated and obedient. Can I get you to roll over, sit, and chase sticks too?

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So, no state funded Pensions, Health Care or Welfare Benefits.

How are these to be paid for?

And if your answer is that people should self insure, how do we deal with the 99% of the population that have already contributed into the state system and are expecting that to pay, some from tomorrow (literally)?

(And that's before we get to the discussion of whether a State provided system is actually cheaper for most individuals).

tim

they are in for a shock

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For me, health care is essential. I'm not saying private healthcare as a suppliment to the NHS is bad, but you only need to look at the US to know that a private systems is naff for many sections of society. The last thing I want when I'm ill is to have to have some battle with an insurance company over whether the illness is covered, or if I made a typo on the declaration form.

It strikes me that the Free market fundamentalists "utopia" is great if you are an inteligent and healthy person with a well rounded personality full of commonsense who can see the value of boring services (well maybe not if the even more wealthy capitalist builds an industrial estate around your previously open country house, after all its a free country and who are you to oppress him with regulations if thats what he wants to do?), but for well meaning people who maybe have just a few problems (oh dear you've got cystic fibrosis and can't work too effectively so don't have much money; well why would Mr Insurance want to help you get medical care?) then all of a sudden the free market fundamentalist "utopia" becomes quite brutal and unforgiving.

Agree that there's no such thing as a perfect system, and there's definitely a few major things that need sorting with our current setup, but I'd prefer today's system anyday to the free market fundamentalist "utopia" some propose.

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There is an awful lot of public sector bashing here, much of it by me. What do HPCers think the public sector should provide, and how, for how much? Here is mine:

Well, rather than going for a shopping list I'd go for some general principles.......... from which we can derive a shopping list......

The government should provide......

Public Goods. - These are good that are non-excludable and non-rivalrous. The classic example is defence. I can't defend my house from a russian attack without defending Injin's house. If a majority of us want our houses defended, then we can argue we have a moral right to provide the good, and force Injin to cough up his share if he tries to freeload on our common defence.

So....... Defence, Police, Fire Services etc.

Goods that private markets cannot provide more efficiently than the state - This ones going to be controversial. There are some goods that the private sector can supply (in contrast to public goods) but can only supply them so inefficiently than even an inefficient public sector can produce them more effectively. This often occurs in markets where only one party has perfect information (health insurance for example). This seems to be a requirement just for the fact that it saves us money (and if you beleive it doesn't look up the difference between US and UK healthcare costs)

IMO this would include ........ Pensions, Healthcare, Libraries.

Markets that are natural Monpopolies - This might also be controversial. Some markets naturally form monopolies, they can only efficiently operate in this paradigm. The National Grid (for example), possibly also gas supply infrastructure (but not extraction), railway track, motorways. The private sector can only be efficient where there is competition. Unless you wish to build 2 identical motorways next to each other from, say, London to Birmingham it is difficult to provide this competition in naturally monopolistic markets. In this circumstance, govt. may be able to provide the service more efficiently (and without rack rents from the monopoloy position).

IMO this would include....... National road network, National rail track networks, National energy supply networks (but not neccessarily extraction/generation of energy).

Providing a scheme of regulation that enforces the general public interest on private markets - Markets work to make profit. In some cases they can make profit by damaging/hurting the public at large. Certainly, they are not automatically constrained from only making such profits IF they provide a net benefit for people. Regulation that enforces this on private markets is therefore neccessary...... the common example is externalities....... regulations saying "You can't just dump that radioactive mush in the river because it's cheaper" enforce rules that actually allow the private sector to be more efficient at providing net benefits to the whole of the population.

IMO this would include........ Pollution Regulation and other externalities regulation. Monopoly and Merger regulation and other regulations concerning fraud, malpractice and proper information sharing. Possibly, and controversially, to include Carbon regulation.

Providing the framework private markets need to operate efficiently - This one should be a no brainer. Courts, Contract Law, Enforcement of said law, company information disclosure laws, laws against insider trading and so on.

Services that must be ubiquitous to be fully effective - Private markets work by rationing. Ultimately some cannot afford their goods. However there are some markets where the provision of such goods to all provides an additional impetus to economic growth. Private markets could not access this impetus so the government should be able to step in and make up the difference so that the service is ubiquitous. So......... education, possibly healthcare.

Goods where a fee for service inherently undermines the value of the service - Again, in private markets...... the consumer is king. There are some goods and service that rely on the consumer NOT being king, but on fair application of the service to all comers regardless of ability to pay. Should be a no-brainer........ Courts, Civil and Criminal Law, Governance more generally including the FO and Treasury/BoE.

Counter-Cyclical Spending and Prevention of Death ! - I don't want to see any Brit starve to death in a land of plenty...... nor do I want starving brits constantly burgling my house for money to buy bread...... the truly indigent should be given a stipend to ensure that they can eat and are warm. Bread and a minimal circus. Ultimately, this will save me more in security costs than it costs me to keep them in basic food and shelter, especially if the stipend is enough to keep skin and bone together but not so much as to make it an inviting "lifestyle choice". Somewhere around the current £40 a week dole is fine, it also provides a counter-cyclical automatic staboiliser which is neccessary. The truly indigent on this stipend should also be given whatever assistance is required in the way of training or education in order to get them off this stipend.

Tax rates should be set at a rate to cover all of the above.

You could have this as a progressive taxation, or as a flat tax IF the tax-free allowance is set high enough.

I have no real problem with the current system (despite being in the 40% bracket). But if you wanted to go for a flat tax I'd suggest working out what is a "reasonable standard of living wage for 1 adult and 1 child" and only applying the flat tax above that level, to ensure the poor can eat, sleep, clothe themselves and have some minimal entertainment (a TV set) before they start paying taxes.

Perhaps you could set that at around 12-15k a year......... and have whatever flat tax over that amount you require to meet the above spending.

Yours

TGP

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Agree that there's no such thing as a perfect system, and there's definitely a few major things that need sorting with our current setup, but I'd prefer today's system anyday to the free market fundamentalist "utopia" some propose.

I understand what you are saying, and 5 years ago I would have agreed.

But we just can't afford this stuff any more. Our standard of living is going to plummet, and we really need to isolate just what the state is supposed to providing and live within our national means again. Hence my OP.

Edited by tahoma
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I understand what you are saying, and 5 years ago I would have agreed.

But we just can't afford this stuff any more. Our standard of living is going to plummet, and we really need to isolate just what the state is supposed to providing and live within our national means again. Hence my OP.

I can agree with your opinions but unfortunately when you set the system up so people can vote for other people to give them stuff there's only ever going to be one answer, and it isn't restraint. Look att he current position; the nation is bust but can imagine the electoral success of any party going to the Polls in May saying that stuff?

The Founding Fathers had the right idea; to set the default position as "no government", but we appear far to far gone for that now.

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I can agree with your opinions but unfortunately when you set the system up so people can vote for other people to give them stuff there's only ever going to be one answer, and it isn't restraint. Look att he curreMy linkinknt position; the nation is bust but can imagine the electoral success of any party going to the Polls in May saying that stuff?

The Founding Fathers had the right idea; to set the default position as "no government", but we appear far to far gone for that now.

yep

the arrow of collectivism is barbed - maybe the economy needs to die first to defeat it

not much fun unless you can watch from the sidelines detached from it all

link

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I can agree with your opinions but unfortunately when you set the system up so people can vote for other people to give them stuff there's only ever going to be one answer, and it isn't restraint. Look att he current position; the nation is bust but can imagine the electoral success of any party going to the Polls in May saying that stuff?

The Founding Fathers had the right idea; to set the default position as "no government", but we appear far to far gone for that now.

It's the cycle of state.

Small state - free people go and run around and make stuff for each other.

Statists look on and want some of what's been made.

Staists can't really be stopped as they are the most violent, people appease because it's "only a little bit of tax."

State expands, again can't really be stopped.

State gets too big, collapses the society it was feeding off. <--We are here.

State collapses. <----next up for us in the west.

Society gets crazy for a short period, new state is instituted in the absence of any other solution, usually by violent autocrat or if lucky, small government republicans.

Back to the start - Small state - free people go and run around and make stuff for each other.

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It's the cycle of state.

Small state - free people go and run around and make stuff for each other.

Statists look on and want some of what's been made.

Staists can't really be stopped as they are the most violent, people appease because it's "only a little bit of tax."

State expands, again can't really be stopped.

State gets too big, collapses the society it was feeding off. <--We are here.

State collapses. <----next up for us in the west.

Society gets crazy for a short period, new state is instituted in the absence of any other solution, usually by violent autocrat or if lucky, small government republicans.

Back to the start - Small state - free people go and run around and make stuff for each other.

do you know how many times has this cycle has repeated

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NEWS IN BRIEF

Libertarian Reluctantly Calls Fire Department

CHEYENNE, WY—After attempting to contain a living-room blaze started by a cigarette, card-carrying Libertarian Trent Jacobs reluctantly called the Cheyenne Fire Department Monday. "Although the community would do better to rely on an efficient, free-market fire-fighting service, the fact is that expensive, unnecessary public fire departments do exist," Jacobs said. "Also, my house was burning down." Jacobs did not offer to pay firefighters for their service.

(original here)

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Private markets work by rationing.

There was a lot in there I disagreed with, but that's fair enough. I just didn't understand this bit at all.

Lets take widgets. Widgets cost £100 to produce.

In a private market...... if you can come up with £101 you can buy a widget. If all you have is £99 you can't buy a widget.

Based on price the market "rations" the available supply of widgets. Those who have the neccessary readies (or can borrow them) can buy the widgets and everyone else can not do so.

The market "rations" between the two groups.

Should demand for widgets increase (and in this case we'll assume inelastic supply) the cost of widgets goes up......lets say to £150 even though the cost to produce them still remains at £100....... and the market rations the available supply of widgets out, due to increased demand at the higher price, £150.

Markets are a rationing tool based on price. It rations out the available supply of any good based on peoples ability to pay for that good. Of course this level can never be lower than the cost of production....... but it CAN be higher than the cost of production by some considerable margin if thats what is required to "ration" the limited supply.

However, some goods you don't WANT rationed in this way....... in those circumstances there is a govt. role to play.

Probably the best scenario for seeing this is university admissions. You WANT the top 10-20-30-50% (pick your figure) by academic ability to go to university.......NOT......... the top 10-20-30-50% by parents income. It's ultimately much better for the economy if it's the former rather than the latter.

So the govt. subsidises/outright pays for university admission to ensure it isn't rationed on price, but rationed by another attribute (in this case academic acheivement at 18+ level).

Other "markets" you don;t want rationed AT ALL....... because ubiquity in access to the market is such an economic boost....... like Primary School Education. A fully literate society is much more productive than a society in which (say) 50% of the populace don't get basic education because of their parents inability to pay. Again, here, there i9s a role for the government to play because it doesn't want this good rationed by price.

I can agree with your opinions but unfortunately when you set the system up so people can vote for other people to give them stuff there's only ever going to be one answer, and it isn't restraint. Look att he current position; the nation is bust but can imagine the electoral success of any party going to the Polls in May saying that stuff?

The Founding Fathers had the right idea; to set the default position as "no government", but we appear far to far gone for that now.

I'd say that this problem has been largely overcome in the modern era by the portability of capital. In the modern era it CAN really only end one way (but not the way you were thinking). If the majority keep voting themselves the minorities cash. The minority takes it's cash to other nations where the majority is more restrained.

The trick for the majority is to take just enough, and provide a good enough societal infrastructure with that money, that the minority still regard it as a good enough deal to stay (30-50% tax rates seem to be the level, depending on the quality of services provided).

Most would rather pay 40% in the UK, with it's nice public good environment, than 10% in Latvia, with consequently poorer public good environment. Despite the "price" being higher, the plainly still regard it as the better deal as evidenced by the fact that the minority still reside in the UK.

Yours,

TGP

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I notice that nobody has mentioned care services.

For all the "all I get for my £1500 a year is my bin emptied once a fortnight" types you'll be suprised that over 50% of it your total council tax goes to the care sector. This includes care homes, childrens homes, child protection services, drug and mental health services.

I presume we are all against letting the mentally ill, the elderly and orphans dying on the streets so this service has to be paid for somehow.

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I notice that nobody has mentioned care services.

For all the "all I get for my £1500 a year is my bin emptied once a fortnight" types you'll be suprised that over 50% of it your total council tax goes to the care sector. This includes care homes, childrens homes, child protection services, drug and mental health services.

I presume we are all against letting the mentally ill, the elderly and orphans dying on the streets so this service has to be paid for somehow.

I'd much rather that people were paid for results, rather than stasis.

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No clue what this means, sorry.

Who does what where?

Sorry, I have no real desire to be controled by dipshit moral arguments or ad hominems.

Can you make a logical case for what you are saying please, starting from the ground up?

I owe you money/time and energy because......<something more than middle class hand wringing goes here, Fluffster.>

Where's your logical case? Your entire moral thesis seems to be 'every man for himself and damn the consequences'.

Edited by Boom Boom
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