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tomandlu

The Public Sector - A Different Perspective

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In general, I'm in favour of CI, and am fascinated to see what happens in Switzerland, but CI to me isn't a goal but a solution. The real goal is to address the question "how do we solve the problem of improved productivity if infinite growth is neither possible or desirable?".

This got me wondering if expanding the public sector isn't to some extent an alternative solution. To some extent, we're almost there - albeit via the slightly absurd mechanism that everyone should work for their benefits (it always strikes me as slightly odd that many detractors of the public sector support this idea, despite it essentially being an expansion of the public sector in all but name - in general I regard paying people to do something as, y'know, a job).

In other words, let the public sector create as many jobs as are needed for full (or near full) employment?

Advantages:

  • Low unemployment
  • Competition for workers with the private sector would return some wage abitrage power to the workers
  • A better environment and better public services

Disadvantages:

  • Still not as good as CI (I'd rather give individuals the chance to work out what productive activity they want to do)
  • How to ensure that the taxation required is fairly applied
  • Ensuring that it leads to improved services rather than just a monolithic and self-serving monster
  • Rentierism

To some extent, most of the problems are inherent in any system, so to some extent they're not so much 'disadvantages' as 'stuff that sucks anyway', but feel free to add to both lists...

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Nooooooo... There is only one logical outcome to making the state bigger than it already is .... It is very poor at operating effeciently or providing value for money simply because of its monopolistic nature. The outcome can only be the complete eradication of any genuine wealth creation... On the other hand, reduce the working week to 4 days and let people enjoy the benefits of increased productivity to ensure full employment.. Its been done before... We have evolved from 7 day working as hunter gatherers to 5 day working.. Its time for the next stage... But the state cannot grow bigger than the 50% + of the economy that it already is.

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Nooooooo... There is only one logical outcome to making the state bigger than it already is .... It is very poor at operating effeciently or providing value for money simply because of its monopolistic nature. The outcome can only be the complete eradication of any genuine wealth creation... On the other hand, reduce the working week to 4 days and let people enjoy the benefits of increased productivity to ensure full employment.. Its been done before... We have evolved from 7 day working as hunter gatherers to 5 day working.. Its time for the next stage... But the state cannot grow bigger than the 50% + of the economy that it already is.

To some extent I agree (although I have my reservations about the efficiency of the private sector). However, what you are proposing is an outcome with no route to it. How are you going to persuade the private sector to pay two people a living wage when they can get away with just paying one person? And it's worse than that - the private sector is incentivised to just pay one person, since this will force wages down due to higher unemployment.

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Nooooooo... There is only one logical outcome to making the state bigger than it already is .... It is very poor at operating effeciently or providing value for money simply because of its monopolistic nature. The outcome can only be the complete eradication of any genuine wealth creation... On the other hand, reduce the working week to 4 days and let people enjoy the benefits of increased productivity to ensure full employment.. Its been done before... We have evolved from 7 day working as hunter gatherers to 5 day working.. Its time for the next stage... But the state cannot grow bigger than the 50% + of the economy that it already is.

People have a real problem understanding the scale of state spending. For every pound spend by anyone int the country anywhere in the country the state also spends a pound. You do your weekly shopping, the state spends the same amount as you, as well as everyone in the queue, everyone in the supermarket and in all supermarkets in the country. You buy petrol, the state spends the same amount as you and everyone else in the country combined. Every house or car that is sold, every pint of beer drunk, every loan taken out, every penny paid to anyone in the private sector, the state spends the same.

The state is incredibly big. As a proportion of the economy it's more than double the size of communist China's state. It consumes everything and impoverishes everyone.

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It consumes everything and impoverishes everyone.

This could also be a description of unregulated capitalism.

Edit to add - I don't want a huge state, I'm just trying to puzzle out a solution to the bind we're in. My general motto is that governments should do what they have to do, not what they can do.

Edited by tomandlu

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We have evolved from 7 day working as hunter gatherers to 5 day working..

Hunter gatherers probably spent fewer hours per year obtaining food, fuel and shelter than you do.

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Hunter gatherers probably spent fewer hours per year obtaining food, fuel and shelter than you do.

Indeed - I'm pretty sure I've read an article about that. Life was precarious, but it wasn't particularly arduous.

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CI is not the answer......it is not a good idea to try and treat the symptoms of the faults instead of looking to cure the causes of why there is such a big disparity between the have far too much and the have not so much.......pulling up the level from below will only encourage higher inflation/costs thus causing CI to have to increase to meet the same buying power every year......starts off at £200 to end at £2000 and still nobody is any better off.....also everyone will want a piece of the action. ;)

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Indeed - I'm pretty sure I've read an article about that. Life was precarious, but it wasn't particularly arduous.

It was probably only precarious for the very young and old.. or males involved in conflict.

Hunter gatherers generally have a large range of different possible foods and can move if local conditions change. It's when you go over to farming that the problems happen. Farming can support far more people on a given bit of land - which makes it a trap, you can't stop once you've started - but you often end up absolutely dependent on a couple of crop species.

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CI is not the answer......it is not a good idea to try and treat the symptoms of the faults instead of looking to cure the causes of why there is such a big disparity between the have far too much and the have not so much.......pulling up the level from below will only encourage higher inflation/costs thus causing CI to have to increase to meet the same buying power every year......starts off at £200 to end at £2000 and still nobody is any better off.....also everyone will want a piece of the action. ;)

Only if you fund it by printing money.

The realistic alternatives to CI are to have government allocate the tax money on your behalf, as they do now, or to allow private landlords to collect all the money as rent, like they did in the past.

How on earth do you justify those choices?

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The state is incredibly big. As a proportion of the economy it's more than double the size of communist China's state. It consumes everything and impoverishes everyone.

This sounds more like propaganda than an argument.

Most state spending goes on things like pensions, healthcare, education and social security. The existence of these things certainly does not impoverish me. Quite the opposite - if I had to pay health insurance, private education for the kids, save for a pension equivalent to the basic state pension on top of other provision, and paid unemployment insurance as well, I'd probably be worse off than I am now, and I'm a higher rate taxpayer.

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This sounds more like propaganda than an argument.

Most state spending goes on things like pensions, healthcare, education and social security. The existence of these things certainly does not impoverish me. Quite the opposite - if I had to pay health insurance, private education for the kids, save for a pension equivalent to the basic state pension on top of other provision, and paid unemployment insurance as well, I'd probably be worse off than I am now, and I'm a higher rate taxpayer.

Well clearly there is a plenty of historical evidence that the state does not provide efficient services.

I am not sure, why people are running from the East to the West if they would be worse off ???

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In general, I'm in favour of CI, and am fascinated to see what happens in Switzerland, but CI to me isn't a goal but a solution. The real goal is to address the question "how do we solve the problem of improved productivity if infinite growth is neither possible or desirable?".

This got me wondering if expanding the public sector isn't to some extent an alternative solution. To some extent, we're almost there - albeit via the slightly absurd mechanism that everyone should work for their benefits (it always strikes me as slightly odd that many detractors of the public sector support this idea, despite it essentially being an expansion of the public sector in all but name - in general I regard paying people to do something as, y'know, a job).

In other words, let the public sector create as many jobs as are needed for full (or near full) employment?

Advantages:

  • Low unemployment
  • Competition for workers with the private sector would return some wage abitrage power to the workers
  • A better environment and better public services

Disadvantages:

  • Still not as good as CI (I'd rather give individuals the chance to work out what productive activity they want to do)
  • How to ensure that the taxation required is fairly applied
  • Ensuring that it leads to improved services rather than just a monolithic and self-serving monster
  • Rentierism

To some extent, most of the problems are inherent in any system, so to some extent they're not so much 'disadvantages' as 'stuff that sucks anyway', but feel free to add to both lists...

Awoogah!

MMT 8ollax alert..

It is very attractive to suggest that if you are a spending Government, you may as well pay a person to do a Government job if the alternative was that you are going to pay them on the dole.

But, the issue here isnt the waste of doing a non job, its the loss of everyday freedoms as millions are spending their days doing a non job, thousands managing them and hundreds earning fat salaries and pensions, all having a task now, the main task of the day is justifying their existence outwardly to the paying public. (who are getting poorer as this monster expands).

The other issue is that no-one is left behind these days, so benefits are way to high to protect the failures....once in the "system" they have little incentive to get out of it....house paid for, food paid for, everything paid for if the newspapers are to be beleived.

In short, government has no money...if it pays Peter, then John Paul George and RIngo have to dip into their earnings to ensure Peter gets his cut, along with an army of other Peters looking after Peters interest.....till it becomes frack you, Pay me.

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Well clearly there is a plenty of historical evidence that the state does not provide efficient services.

I am not sure, why people are running from the East to the West if they would be worse off ???

[imghttp://upload.wikimedia.org/wikipedia/commons/3/3a/Depense-publique-sur-PIB.png[/img]

Not the clearest picture (blue is lowest, then green, then yellow, then orange and red for higher government spending).

So people moving from Eastern Europe to the west - specifically the UK, France, Germany and Benelux are going from low government spending to high.

Maybe you need a better measure.

Edited by fluffy666

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Only if you fund it by printing money.

The realistic alternatives to CI are to have government allocate the tax money on your behalf, as they do now, or to allow private landlords to collect all the money as rent, like they did in the past.

How on earth do you justify those choices?

How else are they going to pay for it?......why justify two options when there are others out there...kind of reminded me of the well known fisherman's story. ;)

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "only a little while."

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15 - 20 years."

"But what then?" Asked the Mexican.

The American laughed and said, "That's the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!"

"Millions - then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

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Depense-publique-sur-PIB.png

Not the clearest picture (blue is lowest, then green, then yellow, then orange and red for higher government spending).

So people moving from Eastern Europe to the west - specifically the UK, France, Germany and Benelux are going from low government spending to high.

Maybe you need a better measure.

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[imghttp://upload.wikimedia.org/wikipedia/commons/3/3a/Depense-publique-sur-PIB.png[/img]

Not the clearest picture (blue is lowest, then green, then yellow, then orange and red for higher government spending).

So people moving from Eastern Europe to the west - specifically the UK, France, Germany and Benelux are going from low government spending to high.

Maybe you need a better measure.

you missed the state spending of the Eastern Europe between 1945 and 1990

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you missed the state spending of the Eastern Europe between 1945 and 1990

So what you are saying is that the more they (in the East) cut state spending, the more the people want to come to high-spending Britain?

State spending in Somalia isn't that high either.

Do you not think that there may be a bit more to it than just state spending?

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So what you are saying is that the more they (in the East) cut state spending, the more the people want to come to high-spending Britain?

State spending in Somalia isn't that high either.

Do you not think that there may be a bit more to it than just state spending?

Absolutely, without wealth creation there is poverty regardless of the units the "government" cares to create and "spend"

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So what you are saying is that the more they (in the East) cut state spending, the more the people want to come to high-spending Britain?

State spending in Somalia isn't that high either.

Do you not think that there may be a bit more to it than just state spending?

we are talking here about the public sector and not the state spending

in the Eastern Europe till 1990 the public sector was about 95% of the economy and clearly it did not work

for example my father bought a new car for about 45 months salary after tax; he had to wait 10 months for the delivery; he could not choose even a color; and the aircon was not even manufactured; and to compare it to the cars from the West it was a total crap

only thing which actually works is the capitalism and free market

Edited by Damik

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we are talking here about the public sector and not the state spending

in the Eastern Europe till 1990 the public sector was about 95% of the economy and clearly it did not work

for example my father bought a new car for about 45 months salary after tax; he had to wait 10 months for the delivery; he could not choose even a color; and the aircon was not even manufactured; and to compare it to the cars from the West it was a total crap

only think which actually works is the capitalism and free market

Well, I'm happy to agree that the state should not be making consumer stuff - Cars, TVs, PCs, etc.

In fact, I support the principles of markets. They make a good organizing principle for much of the economy.

But there is more to it than that.

Markets cannot function without trust. They cannot function without stable and relatively non-corrupt institutions. They cannot function if the big players are allowed to do whatever they like (such as: stomping the small players). They have limited time horizons.

And frankly, the provision of things like healthcare, education and pensions by the markets just does not work, any more than your state-manufactured car.

Governments need to be stable, they need to be transparent and they need to produce the safety need the lassiez-faire markets don't provide. The idea of 'public bad private good' is way to simplistic.

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CI is not the answer......it is not a good idea to try and treat the symptoms of the faults instead of looking to cure the causes of why there is such a big disparity between the have far too much and the have not so much.......pulling up the level from below will only encourage higher inflation/costs thus causing CI to have to increase to meet the same buying power every year......starts off at £200 to end at £2000 and still nobody is any better off.....also everyone will want a piece of the action. ;)

CI can't work imo because £200 doesn't really start to cover the cost of welfare lifers....council tax, rent, disability top ups etc. before you even get to the basic income, so you would have to have CI+ for those considered more equal. The cost would be unaffordable.

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we are talking here about the public sector and not the state spending

in the Eastern Europe till 1990 the public sector was about 95% of the economy and clearly it did not work

for example my father bought a new car for about 45 months salary after tax; he had to wait 10 months for the delivery; he could not choose even a color; and the aircon was not even manufactured; and to compare it to the cars from the West it was a total crap

only thing which actually works is the capitalism and free market

Peugeot, Citroen, Renault say your argument is flawed.

The consumer side of the economy in the socialist countries was not seen as important. That's why your dad had to wait and the quality was dire. It's nothing to do with the balance of private/public. EE had some of the best education and social care networks anywhere in the world in the same period as well as the highest social mobility the world has ever seen, etc.

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Well, I'm happy to agree that the state should not be making consumer stuff - Cars, TVs, PCs, etc.

In fact, I support the principles of markets. They make a good organizing principle for much of the economy.

But there is more to it than that.

Markets cannot function without trust. They cannot function without stable and relatively non-corrupt institutions. They cannot function if the big players are allowed to do whatever they like (such as: stomping the small players). They have limited time horizons.

And frankly, the provision of things like healthcare, education and pensions by the markets just does not work, any more than your state-manufactured car.

Governments need to be stable, they need to be transparent and they need to produce the safety need the lassiez-faire markets don't provide. The idea of 'public bad private good' is way to simplistic.

1/ The live expectancy in the Eastern Europe before 1990 was about 10 years lower than in the West. It improved sometime after 2000.

2/ You are here in a schizophrenic position. You want to have a public healthcare, education and social care, but they are all consuming products and services of the private sector. Which are superior than if provided by the public sector.

And yes the free market does not work without the strong competition and some basic government regulation. But it is not a fault of the free market. It is the definition of the free market. Plus on the top we need some level of social care, so the economical losers will not drop dead on the streets.

The idea of the public is bad is quite a realistic one as we assume that there is no competition in the public sector. However if you introduce competition in the public sector you can get great results. But you will start to have problems with your "trust" issue as some competitors will cut the corners.

In general the problem of the public sector is that it is motivated by bigger budgets and bigger headcounts. The private sector is motivated to maximize profit, however this is controlled by the free market competition to be reasonable.

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