Chancellor Hammonds £10,000 pm rental income

[Darby Ram]

1 minute ago, adarmo said:

I will play devil's advocate for the sake of making the point. 

You think it all comes from the public sector? I would put it to you that the private sector is far more efficient at picking winners, the public sector far better at backing losers. Certainly the company I work for has been backed to the tune of billions in PE (that's Private, not Public, Equity). Without the use of Google can you name any large brands seed funded by the government? Perhaps MG Rover? . Here's the other thing, Private Sector investors have the choice about investing or not. In the Public Sector money is taken by law from tax payers and then 'invested'. The Tax Payer has no choice in the matter.

You are straight-up ill-informed, as I initially said, about how the public sector is involved in seed funding and R&D, hence the 'picking winners' and 'choice' nonsense is just that - nonsense. It's not how it happens, except in the imagination of Daily Telegraph readers. And if you think private equity isn't on the receiving end of some juicy government tax breaks - and that you are therefore working in the thrusting private sector, unlike those public sector schlubs - then I've got a bridge to sell you.  

[adarmo]

4 minutes ago, Darby Ram said:

You are straight-up ill-informed, as I initially said, about how the public sector is involved in seed funding and R&D, hence the 'picking winners' and 'choice' nonsense is just that - nonsense. It's not how it happens, except in the imagination of Daily Telegraph readers. And if you think private equity isn't on the receiving end of some juicy government tax breaks - and that you are therefore working in the thrusting private sector, unlike those public sector schlubs - then I've got a bridge to sell you.  

Thank goodness you are here to educate me. So please, go on (but don't post anything from the Guardian and I'll avoid the Telegraph deal?) Meanwhile, you've seized on a niche area of government spending that can add value. What about the rest of it?

But wait, there's more

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/researchanddevelopmentexpenditure

About £21bn out of £31bn came from Business in 2015. 

BTW I'm loving how you start off stating I'm ill informed and then assume (with absolutely no basis) that I'm a DT reader.

[The Knimbies who say No]

8 hours ago, adarmo said:

What's the public sector equivalent of entrepreneur? Or wealth creators? 

What's the private sector equivalent of creating a housing shortage?

How many public sector non-job admins are there for every young student working part time in an iPhone shop?

On the first question, My missus works in the public sector, her role is to bring private businesses in to pay to use publicly funded insanely complicated science equipment, plus the relevant academic expertise to analyse the output, to advance product development and drive costs down, and as a result, business success.

Some businesses don't know how some of this stuff is of use until they turn up, which is not a criticism. E.g. Race teams binning wheels after x miles due to rules of thumb about longevity; with a decent light source you can examine whether there is any internal structure issue and run them much longer, or remove cracked items sooner. 

I'm sure they all display the public sector input to their product enhancement proudly 

Question 2: Buy to Let, as much as that can be described as 'private sector', rather than publically owned banks scooping housing benefits.

Edited July 17, 2017 by The Knimbies who say No

[Darby Ram]

46 minutes ago, adarmo said:

Thank goodness you are here to educate me. So please, go on (but don't post anything from the Guardian and I'll avoid the Telegraph deal?) Meanwhile, you've seized on a niche area of government spending that can add value. What about the rest of it?

But wait, there's more

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/researchanddevelopmentexpenditure

About £21bn out of £31bn came from Business in 2015. 

BTW I'm loving how you start off stating I'm ill informed and then assume (with absolutely no basis) that I'm a DT reader.

Educate yourself. I work in the private sector and won't do that sort of thing for free. It's more of a freemium service. I'm happy to point out blowhards who don't know what they're talking about; anything more, and you have to start paying. 

(Your use of GERD as a statistic is, of course, circular. As government's contribution to R&D falls, the proportion of R&D attributable to the private sector rises. Therefore, if you squeeze investment in the public sector, you can justify a further squeeze by saying "look at the proportion of GERD that the private sector contributes!". GERD is also a very broad-brush statistic. As @The Knimbies who say No says, attribution of innovation is a problem and GERD is pretty poor at picking up those distinctions.)

[adarmo]

7 hours ago, Darby Ram said:

Educate yourself. I work in the private sector and won't do that sort of thing for free. It's more of a freemium service. I'm happy to point out blowhards who don't know what they're talking about; anything more, and you have to start paying. 

(Your use of GERD as a statistic is, of course, circular. As government's contribution to R&D falls, the proportion of R&D attributable to the private sector rises. Therefore, if you squeeze investment in the public sector, you can justify a further squeeze by saying "look at the proportion of GERD that the private sector contributes!". GERD is also a very broad-brush statistic. As @The Knimbies who say No says, attribution of innovation is a problem and GERD is pretty poor at picking up those distinctions.)

So. Attack the messenger and then attack the numbers. 

Back it up with figures and a link or troll off.

[adarmo]

7 hours ago, The Knimbies who say No said:

On the first question, My missus works in the public sector, her role is to bring private businesses in to pay to use publicly funded insanely complicated science equipment, plus the relevant academic expertise to analyse the output, to advance product development and drive costs down, and as a result, business success.

Some businesses don't know how some of this stuff is of use until they turn up, which is not a criticism. E.g. Race teams binning wheels after x miles due to rules of thumb about longevity; with a decent light source you can examine whether there is any internal structure issue and run them much longer, or remove cracked items sooner. 

I'm sure they all display the public sector input to their product enhancement proudly 

Question 2: Buy to Let, as much as that can be described as 'private sector', rather than publically owned banks scooping housing benefits.

Your wife's job sounds interesting, but my point on the public sector was basically it creates less value than the private sector.

Imho btl doesn't create a housing shortage. The houses are already there so in terms of total numbers it matters not. Second home ownership is another matter though of course. 

[LittlePig]

25 minutes ago, adarmo said:

Your wife's job sounds interesting, but my point on the public sector was basically it creates less value than the private sector.

Imho btl doesn't create a housing shortage. The houses are already there so in terms of total numbers it matters not. Second home ownership is another matter though of course. 

Yes - massive government spending on research that is not immediately profitable is a total waste of money and would be better performed by the private sector...

I think a black and white government vs private seems very dogmatic and theoretical - something we have all suffered for.

 

[adarmo]

1 hour ago, LittlePig said:

Yes - massive government spending on research that is not immediately profitable is a total waste of money and would be better performed by the private sector...

I think a black and white government vs private seems very dogmatic and theoretical - something we have all suffered for.

 

Can people not understand the concept of more than, or greater than? Nor did I say it is a total waste of money. How on Earth do you reach this conclusion from what I've stated? 

I've never said anything about timing. R&D is by it's very nature not immediately profitable but that doesn't stop the Private Sector investing £21bn a year of the £31nb total spend (figures from ONS 2015). 

Some statements are binary and rightly so, some are not. 

Here's another one for you, if I say we could get by with fewer police for example, would you then jump up and down like a Guardianista child shouting "Yeah, that's right get rid of ALL the police". Or if I said we should raise taxes to cover off the deficit would you say "Yeah, that's right, tax everyone until they have nothing left or leave!"? can you see my point now?

[ThePrufeshanul]

13 hours ago, adarmo said:

1. Not in the public sector is he if he leaves it to become an entrepreneur. Also, surely it is the private sector funding the surgeon in the first instance, and then said worker returning to work (presumably to the private sector in your example) that generates the wealth, not him paying a mandatory charge for health cover that patches him up?

2. And the public sector that came up with the green belt, and mental planning regimes, and building codes, and bribes (sorry development surcharges)

3. There are indeed but I was responding to the flippant diagonal comparison of doctors to iphone sales people. Incidentally, I estimate your take home pay would not triple, and the choice is not mine unfortunately otherwise you would be working out of office hours without the £6k dicking opt out or you'd be fully private with no NHS work. Incidentally what is this market rate and who actually pays it? is it the private sector covering it via taxes?

1. He hasn't left it - that's the point. He makes money, the university gets a cut of the IP, and the shareholders make a profit from the product. So how is he not a public sector entrepreneur or a "wealth creator"? This happens in every University up and down the country.

I can't believe the second of your points is serious. The surgeon has been trained from the public purse not the private sector (unless you count the money he has spent training himself). So, again, public sector wealth creation.

 

2. No - again, its a function of the political machinery, voted for consistently by the centre-right populace.You may not like regulation but I prefer it to another 2008 global financial crash.

 

3. What's "flippant" is trying to equalise public and private sector wages without taking into account the difference in the jobs that are performed. It's downright idiotic. I wouldn't expect a Primary School child to advance that as an argument let alone the Chancellor. 

I'm not sure how accurate your estimate of my take home pay would be given that you have no idea what kind of speciality I do or what hours I work but that's OK. I have absolutely no problem going "fully private"  - my estimate comes from being qualified for 14 years and seeing what state the health service is in in the country. I have friends who have quite easily migrated to the US, Canada, Australia, NZ, Singapore, the Middle East for vastly different wages. In the UK there are fewer and fewer doctors covering increased rota gaps and the service is on the brink of falling apart. In that situation, limited healthcare supply with increasing demand, and a captive market, wage pressure will only be in an upwards direction. Right now I am reasonably paid but my wages are suppressed by the NHS - which I'm happy with because I believe in it as a social movement.  If you want to privatise the service then you will have the same staff and equipment delivering the same service but this time asked to do so for ourselves or for companies like Virgin Healthcare. Fair enough - but if you want to access my expertise at 3am to treat your relative then you will have to pay the going rate. And there's no reason why i would charge the same as I do now to make Richard Branson even richer - why should I?

Sadly people only realise what they have lost when it's gone. In the US the majority of bankruptcies are filed due to medical bills - often from people who are "insured".  The attitude of "public sector workers don't create wealth" is just asinine - in fact, probably as much as saying "house prices only ever go up". 

But, yeah, if you think that paying me more money for essentially the same service is going to create more wealth for you then please be my guest.

[iamnumerate]

3 hours ago, LittlePig said:

 

I think a black and white government vs private seems very dogmatic and theoretical - something we have all suffered for.

 

I agree not all government spending is equal. 

[ThePrufeshanul]

12 hours ago, adarmo said:

Thank goodness you are here to educate me. So please, go on (but don't post anything from the Guardian and I'll avoid the Telegraph deal?) Meanwhile, you've seized on a niche area of government spending that can add value. What about the rest of it?

But wait, there's more

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/researchanddevelopmentexpenditure

About £21bn out of £31bn came from Business in 2015. 

BTW I'm loving how you start off stating I'm ill informed and then assume (with absolutely no basis) that I'm a DT reader.

There's a useful and thought provoking book recently published - the review is below:

 

Interrogating the entrepreneurial state

This week, Mariana Mazzucato will give the inaugural New Statesman/SPERI prize lecture for political economy. Her 2013 book, The Entrepreneurial State, has provoked widespread debate about the role of government in innovation. But do her arguments stack up as a guide to policy? Nesta’s Stian Westlake has some doubts.

 

 

 

 Mariana Mazzucato giving a TED Global talk in June 2013 on the themes of her book, The Entrepreneurial State. Photograph: TED.com

 

 

Stian Westlake

Tuesday 11 November 2014 07.42 GMTLast modified on Sunday 7 May 2017 20.46 BST

It’s rare for a book about innovation policy to break out of the technocratic ghetto and make it into the political mainstream. It happens perhaps once every decade.

Michael Porter’s Competitive Advantage of Nations (1990) sold the world on clusters. Richard Florida’s Rise of the Creative Class (2002) launched a thousand arts-based regeneration schemes. The Entrepreneurial State (2013), by University of Sussex economist Mariana Mazzucato, is on the way to being the next breakthrough success.

The book has convinced readers from Martin Wolf to David Willetts to Liam Byrnewith its argument that the government has been wrongly written out of the story of how innovation happens.

By reminding us that public money paid for the research behind the internet, the Web, GPS, fracking and algorithmic search, Mazzucato takes on the libertarian line that the government should “just get out of the way” when it comes to innovation.

This is a timely and important argument, especially today when small-government Republicans control the US Congress, when British policymakers are tacking right to counter UKIP, and when some of the most prominent voices in Silicon Valley have little time for government. It’s no wonder that the book has provided a rallying point for many, and not just on the left.

But for all the importance of its headline message, when one looks into Mazzucato’s arguments in more detail, they seem more problematic.

Consider first of all the central problem that the book identifies: the idea that the public sector takes most of the risks in the modern innovation process, but gets little of the reward.

The first part of this problem, the fact that the state takes the big risks, is exemplified by a memorable case study of Apple. Mazzucato points out how all the key technologies of the iPhone, from the chips within it to the software it runs, had their origins in government funding.

The Apple case study has become something of a meme, but it’s far from clear that it proves the book’s point. By focusing on the origins of the technologies in the iPhone, it overlooks Apple’s real achievement: integrating these technologies with one another; improving them to make them usable, reliable and portable prototypes; brokering deals with cellular carriers and record labels so iPhones could make calls and download songs and be affordable; and marketing iPhones in a way that people would be willing to buy them. All of these were risky, difficult undertakings.

Apple’s contribution to the innovation process is characterized as “integration” (p 93) or “hybridizing” (p 102), and Apple’s low R&D-to-sales ratio is taken as a sign of free-riding (p 92).

This seems unfair. Anyone who doubts that commercializing smartphone technologies was difficult should try using a pre-iPhone smartphone. As a wag once remarked, they were more PoS than iOS, despite having access to the same government-funded technologies.

Anyone who doubts that commercializing smartphone technologies is riskyshould look at what happened to the share price of companies like Nokia, RIM or Motorola that screwed up, often rather mildly in objective terms, despite having access to the same public technologies Apple did.

Some of this is about downstream development – the “D” in R&D. This is not as glamorous as invention, but is generally more important, and is often done by businesses. By way of example, the University of Sheffield’s Richard Jones recently observed that IBM’s role in applying the principle of giant magnetoresistance to hard drives was as significant as the publicly funded discovery of the principle itself.

It is also about other innovation investments that don’t involve R&D. Companies risk a lot more money on these “integrative” undertakings than either they or the government spends on technological R&D. Work by Jonathan Haskel suggests that for every £1 that British businesses spend on R&D, they spend £8 on other intangible investments of the sort that Apple used to make the iPod a success: design, new business models, marketing and software development. The figures in the US are similar. And for every $1 US companies spend on R&D, the state spends only 55 cents. (The Entrepreneurial State acknowledges the importance of intangible investments beyond R&D on elsewhere, but this is not prominent in its discussion of Apple.)

By focusing on the invention of new technologies rather than their development or the other investments needed to make them useful, The Entrepreneurial State risks understating the role that business plays, and makes it easier to imply that businesses take no innovative risk at all – to use the book’s metaphor, to describe them as pussycats, not lions (p7).

The Entrepreneurial State’s also complains that businesses hog the rewards of innovation. It’s unfair, the book suggests, that the government and the public who bankrolled the development of the underlying technologies that make the iPhone work gets no upside from Apple’s success, while shareholders walk off with $453 billion worth of market cap.

This also seems harsh on businesses. For a start, it overlooks the benefit than consumers get from better technology: good old consumer surplus. Intuitive, powerful smartphones make life better for people who buy them. This isn’t just an elite: 56% of Americans and 72% of British people now own smartphones. William Nordhaus argued that innovative business captured only 2% of the values of their innovations, with most of the rest of the benefits going to consumers. Even if this estimate is an order of magnitude too low, it still suggests that the non-financial rewards of innovation are too big to ignore.

It also leaves out the matter of tax. For all the talk of tax avoidance today, you’d be forgiven for thinking that no innovative businesses paid any tax at all. But over 20% of corporate profits in the UK go back to the public purse in the form of corporation tax, to say nothing of VAT and other taxes. Tax is the government’s claim on the cashflows of innovative businesses, and it’s a significant and powerful one, which seems perverse to ignore.

So just as it’s wrong to suggest that the state takes all the risks of innovation, it’s also wrong to say that shareholders get all the rewards: the public (as consumers) and the state (as tax-collector) do very well too.

The book’s policy recommendations are something of a mixed bag. An appendix provides a longer list of UK-specific measures taken from the book’s original incarnation as a Demos pamphlet. Many of these make good sense: the argument that governments should not underinvest in R&D and human capital formation (p 196) is wise, especially (as Mazzucato points out) in the context of ongoing Eurozone austerity. The idea of expanding and reforming the Technology Strategy Board (now Innovate UK), scrapping the patent box and taking a hard look at small business subsidies and the short-termism of British capital markets are sensible ideas that have been advocated by a wide range of economists and innovation experts.

But the book’s most novel and prominent policy proposal seems more problematic. This is the idea that the state should be entrepreneurial by participating in the upside of its innovation funding.

The point of this recommendation is to change the balance of risks and rewards the state faces when it comes to innovation: “reward the wins when they happen so that the returns can cover the losses from the inevitable failures”. Mazzucato suggests three ways of doing this: “golden shares of IPR and a national innovation fund”, “income-contingent loans and equity” and “development banks”.

I’ve explained before that this has several problems. It’s difficult to administer in practice (there are lots of opportunities for avoidance, and which innovation policies count? Research grants? Procurement?). It’s a tough political sell: the government would effectively be charging a special levy on companies that make use of government research, which are generally the ones that invest more in innovation themselves. You can see how ARM, Rolls Royce or GSK would lobby against such a policy, and why it would be hard to spin it as a policy to support innovative enterprise. And it’s not how most of the successful entrepreneurial state activity described in the book actually took place. It’s notable that technology funding in the countries with the most entrepreneurial states, such as Finland, Israel or the United States, generally make unrestricted grants, and where they seek a return, this is generally capped at the original level of the grant – the state can get its money back with interest, but not an equity share.

It’s not made clear why funding innovation this way is more effective than funding it from taxation, nor whether looking out for a direct financial return is compatible with the kind of visionary magnanimity that led to the great state-sponsored innovations like the Internet, GPS or the Human Genome Project.

This is a shame, because the question of how governments can fund innovation well is an important one, and one to which even the experts don’t seem to have clear answers. Certainly in my conversations with Finnish policymakers at TEKES and SITRA, with Israel’s Office of the Chief Scientist, and with various US bodies charged with promoting innovation, I get the feeling that even these successful organisations are still feeling their way, and constantly adapting their model to address new challenges.

This is perhaps a good place to conclude. The headline argument of The Entrepreneurial State - that government has a role to play in backing new technologies - is surely correct. And the book is a superb piece of argumentation: I’m sure I’m not the only innovation policy wonk who thought, on reading it, that it set out arguments that I ought to have been making, in a far more compelling way than I had ever managed. At a time when government action of any kind is ideologically suspect, and entrepreneurship is unquestioningly lionized, the book’s importance cannot be understated.

The best way to advance this agenda is through a detailed and rigorous attempt to work out how governments can back new technologies effectively, and how to replicate the successes that countries like the United States, Finland and Israel have achieved in the past. Let’s hope that the remarkable success of The Entrepreneurial State helps to bring this about.

Stian Westlake is executive director of policy and research at Nesta, the UK foundation for innovation. He is @stianwestlake on Twitter. This blogpost is drawn from a longer essay on The Entrepreneurial State, published today by Nesta.

[adarmo]

15 minutes ago, ThePrufeshanul said:

1. He hasn't left it - that's the point. He makes money, the university gets a cut of the IP, and the shareholders make a profit from the product. So how is he not a public sector entrepreneur or a "wealth creator"? This happens in every University up and down the country.

I can't believe the second of your points is serious. The surgeon has been trained from the public purse not the private sector (unless you count the money he has spent training himself). So, again, public sector wealth creation.

 

2. No - again, its a function of the political machinery, voted for consistently by the centre-right populace.You may not like regulation but I prefer it to another 2008 global financial crash.

 

3. What's "flippant" is trying to equalise public and private sector wages without taking into account the difference in the jobs that are performed. It's downright idiotic. I wouldn't expect a Primary School child to advance that as an argument let alone the Chancellor. 

I'm not sure how accurate your estimate of my take home pay would be given that you have no idea what kind of speciality I do or what hours I work but that's OK. I have absolutely no problem going "fully private"  - my estimate comes from being qualified for 14 years and seeing what state the health service is in in the country. I have friends who have quite easily migrated to the US, Canada, Australia, NZ, Singapore, the Middle East for vastly different wages. In the UK there are fewer and fewer doctors covering increased rota gaps and the service is on the brink of falling apart. In that situation, limited healthcare supply with increasing demand, and a captive market, wage pressure will only be in an upwards direction. Right now I am reasonably paid but my wages are suppressed by the NHS - which I'm happy with because I believe in it as a social movement.  If you want to privatise the service then you will have the same staff and equipment delivering the same service but this time asked to do so for ourselves or for companies like Virgin Healthcare. Fair enough - but if you want to access my expertise at 3am to treat your relative then you will have to pay the going rate. And there's no reason why i would charge the same as I do now to make Richard Branson even richer - why should I?

Sadly people only realise what they have lost when it's gone. In the US the majority of bankruptcies are filed due to medical bills - often from people who are "insured".  The attitude of "public sector workers don't create wealth" is just asinine - in fact, probably as much as saying "house prices only ever go up". 

But, yeah, if you think that paying me more money for essentially the same service is going to create more wealth for you then please be my guest.

1. Fine, he makes money for the university which is funded by government and in part by his sales with equity raised by share holders. Sounds like a public private initiative. Even if it's fully public sector then again, as I've said, the public sector can create wealth, but it is nothing compared to what it wastes, and the wealth created by the private sector. 

Here's another point. Sure, the surgeon could fix up someone who goes back to work, but they could also fix up someone who is retired, or someone on benefits. Again, the black and white is more grey I'm sure you'd agree. Some NHS spending yields tremendous value, some of it is a dead weight loss 

2. public sector has no impact then on the housing shortage by imposing a lax migration policy and combining with the highly restrictive planning rules? how many houses have been provided by the public sector v private sector in the last 25 years? and how many of the social homes have been funded out of private homes by rules requiring their provision as a bribe to local authorities? I'm all for regulating the banks btw - or not and then letting them fail. They can't have it both ways. 

3. I see, this was your point in comparing doctors to iphone sales people? 

Again, you're comparing one niche area (your dedicated area of medicine) with the whole of the public sector which is inane. I've never said that areas of the public sector can't create wealth, but on the whole it is way behind the private sector. By Public Sector workers you're pointing to the areas than can create wealth. But my point is not that, my point is that the Public sector does not create as much wealth now as it consumes. Give me £500bn of cash and I'll deliver £300bn of wealth... sure I'm delivering wealth but it's not cost effective. 

To take you last points though about wealth creation, is paying a fortune to keep someone alive in their late and unproductive yeas conducive to wealth creation? Or is spending more to heal someone than they could earn wealth creation? It is not a nice thing to consider and goes against the principals of equality and the NHS, and the Hippocratic Oath  etc, but from a cold, hard-nosed perspective would we be (wealth wise) better off not paying for that 3am visit for someone in their death throws? Just as an example. 

[adarmo]

31 minutes ago, ThePrufeshanul said:

There's a useful and thought provoking book recently published - the review is below:

 

Interrogating the entrepreneurial state

This week, Mariana Mazzucato will give the inaugural New Statesman/SPERI prize lecture for political economy. Her 2013 book, The Entrepreneurial State, has provoked widespread debate about the role of government in innovation. But do her arguments stack up as a guide to policy? Nesta’s Stian Westlake has some doubts.

 

 

 

 Mariana Mazzucato giving a TED Global talk in June 2013 on the themes of her book, The Entrepreneurial State. Photograph: TED.com

 

Thanks - I will watch this tonight. 

[Fromage Frais]

13 hours ago, adarmo said:

I will play devil's advocate for the sake of making the point. 

You think it all comes from the public sector? I would put it to you that the private sector is far more efficient at picking winners, the public sector far better at backing losers. Certainly the company I work for has been backed to the tune of billions in PE (that's Private, not Public, Equity). Without the use of Google can you name any large brands seed funded by the government? Perhaps MG Rover? . Here's the other thing, Private Sector investors have the choice about investing or not. In the Public Sector money is taken by law from tax payers and then 'invested'. The Tax Payer has no choice in the matter.

Do not get me wrong, we need a Public Sector and it is useful but it should remember that it is better remunerated and shielded from the risks of the Private Sector before it goes marching off for populist backing for pay rises. 

It's a house, not a flat. I do not expect (in an entitled sense of the word) the government to backstop the price of anything I've just bought, I just can't see the government opening up a new policy aimed at crashing house prices.

I cannot see it either they are guaranteed to loose at the moment.

Leaders take hard decisions and do whats best for the country.

this lot will sit tight and milk everything in the hope that something will change over the 5 years.

Maybe that will work for them

[ThePrufeshanul]

4 minutes ago, adarmo said:

1. Fine, he makes money for the university which is funded by government and in part by his sales with equity raised by share holders. Sounds like a public private initiative. Even if it's fully public sector then again, as I've said, the public sector can create wealth, but it is nothing compared to what it wastes, and the wealth created by the private sector. 

Here's another point. Sure, the surgeon could fix up someone who goes back to work, but they could also fix up someone who is retired, or someone on benefits. Again, the black and white is more grey I'm sure you'd agree. Some NHS spending yields tremendous value, some of it is a dead weight loss 

2. public sector has no impact then on the housing shortage by imposing a lax migration policy and combining with the highly restrictive planning rules? how many houses have been provided by the public sector v private sector in the last 25 years? and how many of the social homes have been funded out of private homes by rules requiring their provision as a bribe to local authorities? I'm all for regulating the banks btw - or not and then letting them fail. They can't have it both ways. 

3. I see, this was your point in comparing doctors to iphone sales people? 

Again, you're comparing one niche area (your dedicated area of medicine) with the whole of the public sector which is inane. I've never said that areas of the public sector can't create wealth, but on the whole it is way behind the private sector. By Public Sector workers you're pointing to the areas than can create wealth. But my point is not that, my point is that the Public sector does not create as much wealth now as it consumes. Give me £500bn of cash and I'll deliver £300bn of wealth... sure I'm delivering wealth but it's not cost effective. 

To take you last points though about wealth creation, is paying a fortune to keep someone alive in their late and unproductive yeas conducive to wealth creation? Or is spending more to heal someone than they could earn wealth creation? It is not a nice thing to consider and goes against the principals of equality and the NHS, and the Hippocratic Oath  etc, but from a cold, hard-nosed perspective would we be (wealth wise) better off not paying for that 3am visit for someone in their death throws? Just as an example. 

I understand that you think the public sector is wasteful - and of course everyone has seen examples of this in both the private AND the public sector - but the crux of your argument seems to have shifted from "the publice sector doesn't create wealth" to "the public sector creates wealth but wastes more than it creates". 

I'm not really sure what you base this on but the only real test would be to privatise everything and see what happens to healthcare costs. If they go down then you could argue the public sector was more wasteful than the value they generate. If costs go up then you would have to conclude the opposite. And, as far as I can see by any basic economic argument of supply and demand, the costs would go up massively.

That's the thing about the public sector - it generates more wealth than the private sector if it does necessary jobs at a lower cost than the free market (thereby freeing up more money for people to spend on other things such as housing). 

[adarmo]

4 minutes ago, ThePrufeshanul said:

I understand that you think the public sector is wasteful - and of course everyone has seen examples of this in both the private AND the public sector - but the crux of your argument seems to have shifted from "the publice sector doesn't create wealth" to "the public sector creates wealth but wastes more than it creates". 

I'm not really sure what you base this on but the only real test would be to privatise everything and see what happens to healthcare costs. If they go down then you could argue the public sector was more wasteful than the value they generate. If costs go up then you would have to conclude the opposite. And, as far as I can see by any basic economic argument of supply and demand, the costs would go up massively.

That's the thing about the public sector - it generates more wealth than the private sector if it does necessary jobs at a lower cost than the free market (thereby freeing up more money for people to spend on other things such as housing). 

I don't just think - I've seen it first hand auditing and advising them on it. There are examples of waste in the Private Sector too, but it is either addressed or the firm goes under in the long run. How is waste addressed, or even detected, in the Public Sector?

You are comparing a statement over the entire Public Sector (which I never said can't create wealth, only that it, in aggregate it is far less efficient at creating wealth than the Private Sector) and attributing it to Healthcare. This doesn't form a basis to challenge the assertion. Again, you seem to be suggesting that I think everything should be privatised but this is also a sub-optimal solution since there are, in some areas, inherent efficiencies  with respect to natural monopolies for example. 

Healthcare costs rising or falling if privatised can not be used as a proxy for the entire Public Sector.  

[ThePrufeshanul]

How much money do you estimate would be saved if the public sector was replaced by the private sector?

Not just healthcare but education, the army, fire service, police force, social work, energy regulation and so on?

Presumably, if what you say is correct, with more money being wasted than saved, there must be potentially massive costs to be recouped?

[adarmo]

6 minutes ago, ThePrufeshanul said:

How much money do you estimate would be saved if the public sector was replaced by the private sector?

Not just healthcare but education, the army, fire service, police force, social work, energy regulation and so on?

Presumably, if what you say is correct, with more money being wasted than saved, there must be potentially massive costs to be recouped?

Yes and no. Imho the Public sector needs to be slimmed down. 

If we went down the route of Somalia then of course there would be huge wealth lost. 

Let me take the other side of this and say the Public sector is less wasteful than the Private Sector, can we look at countries where socialising everything has worked out well? 

That was not my point and not what I was arguing for and surely you're more than smart enough to see that. 

Here's a question for you. Would you like the public sector to be bigger or smaller than it is today. By public sector I mean everything include Healthcare, not just healthcare.

[iamnumerate]

27 minutes ago, adarmo said:

Yes and no. Imho the Public sector needs to be slimmed down. 

If we went down the route of Somalia then of course there would be huge wealth lost. 

Let me take the other side of this and say the Public sector is less wasteful than the Private Sector, can we look at countries where socialising everything has worked out well? 

That was not my point and not what I was arguing for and surely you're more than smart enough to see that. 

Here's a question for you. Would you like the public sector to be bigger or smaller than it is today. By public sector I mean everything include Healthcare, not just healthcare.

I would like the amount spent by the public sector on giving other people houses to be reduced (I include people on benefits and politicians).

[ThePrufeshanul]

37 minutes ago, adarmo said:

Yes and no. Imho the Public sector needs to be slimmed down. 

If we went down the route of Somalia then of course there would be huge wealth lost. 

Let me take the other side of this and say the Public sector is less wasteful than the Private Sector, can we look at countries where socialising everything has worked out well? 

That was not my point and not what I was arguing for and surely you're more than smart enough to see that. 

Here's a question for you. Would you like the public sector to be bigger or smaller than it is today. By public sector I mean everything include Healthcare, not just healthcare.

It's an incredibly difficult question to answer. 

The appeal of the last three decades of deregulating everything and creating "independent" central banks to drive neoliberal economies certainly yielded "wealth" for a while but has increasingly turned into corruption, nepotism, decreased social mobility and an increased squeeze on the middle class and productive parts of society. 

 

For all the talk of "wealth generation" it was the private, virtually unregulated, sector which has wiped nearly 40% from the world's wealth in 2008. 

Now, if you were able to do a sum score of all the "wastefulness" of the public sector would it be more than the repercussions of 2008?

My view is increasingly becoming one that a reasonable social democracy aiming for high wage, high employment levels is far superior to the notion of creating unemployment in pursuing free-market solutions to problems. I still don't think the country has recovered, for example, from the unemployment caused in the 80's. IN teh end it has cost more than it saved.

I do think that further private involvement is leading to increased costs and therefore worse efficiencies so I would say there is an argument for increased public sector involvement in a number of areas.