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Dave Beans

6.1 Million Employed In The Public Sector

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Well the democratically elected coalition government seem to agree with me

That there is no legitimacy to democracy or that they're holding a gun to your head ? Really ?

, since they've taken office they've been adament that we need to reduce the reach of the state. It just seems odd that such a believer in the democratic process is willing to deny the legitimacy of the coalition's approach to good governance.

Well, I never actually said that. And, just to be clear, I'm not. Apart from that - top response, Cheffers, top response :)

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Not quite sure how you get to this figure.

HMG spends 40% of GDP so employing 40% of the workforce doesn't seem impossible (and it probably did in 1960).

Though as you say, currently much of the money that HMG spends is outsourced to the private sector, but how much? 75% seems to me to be on the high side, 50% more reasonable, leaving HMG employing 20% of the work force directly.

tim

GDP INCLUDES government spending...so the more they spend the higher the GDP...Its pointless therefore to compare Government spend WITH GDP.

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Agreed. But so is the private sector. That's the point - you've been arguing against the former when it's the latter that's the thing I've been trying to get across.

thats right. But its private sector that produce the wealth in most cases....in order that the public sector can collect tax to pay for itself.

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thats right. But its private sector that produce the wealth in most cases....in order that the public sector can collect tax to pay for itself.

<shrugs>

depends how you look at it. The source of that wealth is people buying stuff from them, directly and indirectly.

With the public sector it's much the same people paying, directly and indirectly, just through a different mechanism.

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<shrugs>

depends how you look at it. The source of that wealth is people buying stuff from them, directly and indirectly.

With the public sector it's much the same people paying, directly and indirectly, just through a different mechanism.

the difference is one is self financing with excess, the other cant exist without the first as it pays for it.

Its like me employing a maid...If I dont earn enough I cant have a Maid. or if the Maid wants to carry on working, whether I can afford her or not, she takes out an indefinite loan to pay herself her wage,...except she charges the interest to me and employs a helper to administer it all, then she demands a creche for her sprogs, a pension scheme and a lawyer...

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the other cant exist without the first

Of course it can, in principle. Might be a weird society but it can exist. And the world in which there were no public sector would also be weird...

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real question is not how much public and how much private - but how much goes to real production/service and how much goes in bureaucracy/admin/management in either

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real question is not how much public and how much private - but how much goes to real production/service and how much goes in bureaucracy/admin/management in either

+1

Managerialism is what's strangling the country; crappy 1980s management-by-write-it-down worship

Bad enough in the private sector, bonkers in the public. Public services should be run as services, not pretend-businesses

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With the private sector I can choose who I use and what I pay

Like with a sky package, right? Not.

And not in a lot of companies if they can help it i,e it is often the nature of the goods/service that determines whether you can pick and choose not the nature of the company itself.

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What is the correct level of public sector employment, and how do you reach this figure.

Anything between 0% and 100% is sustainable and good assuming the jobs are needed and wanted by the public.

Lets take an example of the electricity providers. Some 1 million people are employed in the sector directly or indirectly. Well if it was nationalised or baught out by the government than public employment would jump 1 mil and private down 1 mil. What has changed? Nothing. Just the name of the owner

Public sector jobs that are wanted and productive are not a bad thing. The state could employ 80% of the workforce and function just fine

However the argument is that the state employs useless people to do useless jobs no one want or needs. That is the number that is vital. That is like hiring one guy to dig a hole and his mate to fill it back up. Two useless jobs.

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Like with a sky package, right? Not.

And not in a lot of companies if they can help it i,e it is often the nature of the goods/service that determines whether you can pick and choose not the nature of the company itself.

Natural or artificial monopolies can occur in private enterprise but it is discouraged and often outlawed. In the public sector well it is a natural monopoly. That is basically the route cause of its failure. Worst yet it is a natural monopoly with laws saying you have to buy its products and services if you want to or not.

Sky might have a monopoly on certain things but I can choose not to buy it at all.

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GDP INCLUDES government spending...so the more they spend the higher the GDP...Its pointless therefore to compare Government spend WITH GDP.

Under normal circumstances the Governmemt doesn't make any money so all of GDP is generated by other methods.

tim

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Not if its a rich fecker doing the hiring.

It doesn’t matter who is hiring. If no one wants to pay for a product or service willingly then it is useless.

The government could potentially hire 1m people to dig holes and another 1m to fill them up paid for via taxing “the rich” however how has this helped the citizens of the country?

The government could hire those 2m to do something we want or need.

Alternatively if they didn’t tax those “the rich” they would either spend it on something they want creating useful jobs or they would save it allowing someone to invest that in something we would need or want.

Both in the public and the private sector providing something people are willing to pay for freely in a productive and efficient way is real wealth. The public sector does create weath, so does the private sector. Both also destroy wealth, eg spending hundreds of million to dig an oil well that turns up dry or hiring a council worker who spends 39/40h browsing the web.

The general argument is that the private sector has competition so has the incentive and the necessity to be productive and efficient and of course it has to provide something that someone will buy willingly. The public sector can provide something no one want and do a bad job of it and keep doing that with no fear.

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What do you propose we do with them all then? There's no private sector jobs to give them.

I agree too many people work in the public sector - but I don't see the government doing anything new to help create private sector jobs to replace them (e.g. tax breaks to attract investment).

If no-one has a job, anarchy would follow and then they will just take what you have by force. What a mess we are in.

What do I propose we do with them?

I do not propose anything, its not my problem. If they offer something I am not willing to pay for then I guess they are out of work until they find something productive to do. If however they work and do something there is a market for then rest assured the private sector will pick up the tab.

It is not for government to 'create private sector jobs', it provides (or should provide) the rules of the game that is all.

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Under normal circumstances the Governmemt doesn't make any money so all of GDP is generated by other methods.

tim

Forget the word money as it confuses most people.

Wealth is providing things people want in a free and fair way.

If you want a massage and someone gives it to you, BTW free or paid for, that is wealth.

If the public sector provides some services which you value and would pay for in a free market it is creating wealth.

Of course by definition the private sector does that as it hasn’t got a big police force and courts to order you to buy its products if you want it or not at the price they say you must pay for it. however there are many example of monopolies or difficult entries into the market to have near monopolies but that’s hardly a “free market”.

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What do I propose we do with them?

I do not propose anything, its not my problem. If they offer something I am not willing to pay for then I guess they are out of work until they find something productive to do. If however they work and do something there is a market for then rest assured the private sector will pick up the tab.

It is not for government to 'create private sector jobs', it provides (or should provide) the rules of the game that is all.

What he was asking is where will the jobs come from to hire those 6m or however many are not needed.

The answer is simple in that there is an unlimited number of jobs in the private sector as each job that is taken creates one jobs in the demand from the spending and saving of that created job.

It is proven simply by looking at population growth/shrinkage and population size of many countries. When populations grow unemployment doesn’t increase, eg USA has gone from about 100m to 300m over the last 100 years. unemployment isn’t 200m higher. Or closer home the UK population has increased a lot in the last 15years and the number of people in jobs even today in the recession is higher than 15 years ago.

Compare EU countries and you will see the number of people in work correlate well to the population size, that is to say more people in work = more work required.

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Of course they do. Even avoiding your logical fallacy about income tax, they pay VAT, stamp duty, alcohol, tobacco, fuel and car tax etc etc etc

They do however contribute to the pension of everyone who works for every company they buy goods and services from ;)

No they don't - because even when they pay VAT etc they are still just handing back money that the Government has given them.

It appears that you really can't get your head around this.

If you take things to their logical conclusion and everyone was employed by the state then there would be absolutely no point in having any taxes at all - it would just be an entirely pointless money-go-round.

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Of course it can, in principle. Might be a weird society but it can exist. And the world in which there were no public sector would also be weird...

A fully Public Sector society possibly does exist in small pockets if you consider something like a small village in Papua New Guinea. The society owns all the assets and resources together and assigns each other roles that support the lifestyle through a command and moral duty system rather than through a market system.

I guess this just becomes very difficult to control when you have a larger group that doesn't really feel like a single society with mutual interests and goals.

A few years ago I probably would have agreed with people proposing a free market style solution for everything, but the last few years has shown me that the efficient free market concept hasn't really been implemented properly yet. I suppose there are too many people who make quite a nice living of the information asymmetry that exists.

In the end I would agree that there needs to be a balance and the balance should be quite easy to find using the balanced budget approach.

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real question is not how much public and how much private - but how much goes to real production/service and how much goes in bureaucracy/admin/management in either

...high percentage goes on public sector Chief Executives and Directors and their remuneration expenses, bonuses and pensions....the names are misnomers borrowed from the private sector probably introduced by recruitment agencies to drive up total remuneration for these positions to increase their percentages on the head hunting fees.....and we let it happen.... :rolleyes:

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Natural or artificial monopolies can occur in private enterprise but it is discouraged and often outlawed. In the public sector well it is a natural monopoly. That is basically the route cause of its failure. Worst yet it is a natural monopoly with laws saying you have to buy its products and services if you want to or not.

Sky might have a monopoly on certain things but I can choose not to buy it at all.

Exactly! Something the socialists never seem to grasp. Along with how people in the public sector and people on benefits pay no tax.

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That's actually a failure of attempted reductio ad absurbum because the possible existence or not of such extremes doesn't affect the way our current system functions.

Ofcourse it does, without point of service payment based on supply/demand laws you end up with Russia where I believe they manufactured an abundant oversupply of tractors.

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Under normal circumstances the Governmemt doesn't make any money so all of GDP is generated by other methods.

tim

no, you missed the borrowing aspect of government...its even got a name...DEFICIT SPENDING.

Now think this one out:

If you get a debt, you work to pay it off...Private sector HAS to or it dies.

Government doesnt give a shite until its borrowed so much it kills the golden goose. Or maybe you guys could suggest we INCREASE Government to ensure we can achieve payoff?

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Anything between 0% and 100% is sustainable and good assuming the jobs are needed and wanted by the public.

Lets take an example of the electricity providers. Some 1 million people are employed in the sector directly or indirectly. Well if it was nationalised or baught out by the government than public employment would jump 1 mil and private down 1 mil. What has changed? Nothing. Just the name of the owner

Public sector jobs that are wanted and productive are not a bad thing. The state could employ 80% of the workforce and function just fine

However the argument is that the state employs useless people to do useless jobs no one want or needs. That is the number that is vital. That is like hiring one guy to dig a hole and his mate to fill it back up. Two useless jobs.

wrong..because the state isnt efficient...it is unionised, it is prone to empire building and cronyism...so it bloats, no-one can be sacked and everyone gets great perks and pay..

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OK, Fred builds a widget which he sells to Pierre in France for £100. Fred pays £40 tax on his earnings. Joe in the local Town Hall gets Fred's £40 tax and then uses it to buy himself £20 of petrol. Where did that £20 come from?

No.

The local Town Hall sets up a tier of committees to outsource its widget-making as everyone says that that's The Future . After previously paying £45 each to make widgets in house it awards the contract to Fred, who builds widgets for a mere £40 each. Town Hall managers celebrate the £5 saving per widget & go on a foreign jolly to preach the New Approach to other Town Halls. It costs an unspecified amount to administer & police the contracts that are now needed for this new system. This is more than the savings made by making the inhouse widget makers redundant. Meanwhile Fred, having the monopoly contract & realising that the Town Hall can now longer make its own widgets (having dispensed with its widget makers & sold the widget workshop for conversion to BTL flats), increases the price of his widgets to the local Town Hall for £100 each. Fred pays £40 tax on his earnings. Joe in the local Town Hall gets Fred's £40 tax & uses it to offset the £100 the Town Hall are having to pay for widgets. The Town Hall pays a net £60 each for widgets that used to cost £45 to make in house. Moreover, the Town Hall now needs tiers of managers, accountants & administrators to run the widget contracts.

So....

The Town Hall employs management consultants at a cost of £2,000 per day to investigate the losses on the widget manufacturing.

They recommend more managers & administrators to renegotiate the widget contract. As that's The Future. Repeat to fade....

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  • 192 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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