There is no correlation between high public spending and social and economic equality.
I favour much greater redistribution of both income and capital than allowed by the current political consensus in the UK. But I also favour much greater cuts in public spending – perhaps four times greater, over a decade – than Osborne just delivered. The two are not incompatible.
Under New Labour there was a massive step change in levels of public spending and in the percentage of GDP comprised of state activity. Did social equality improve? No. The wealth gap between the wealthiest and the poorest yawned wider and wider. Even in the public sector itself, the gap between richest and poorest grew until it is now seriously proposed, with a straight face, that the situation be redressed so that the highest paid executive in a public organisation should only (!) be paid twenty times more than the lowest paid employee.
Blairism should have shattered forever the notion that very high levels of public spending are the answer to social inequality. But it is a notion to which the left is addicted.
I favour redistribution because Sir Fred Goodwin, Wayne Rooney and Tony Blair area perfect reductio ad absurdumof the notion that a system that rewards the ability to grab money in a laissez faire manner has desirable results. The Duke of Westminster does the same for accumulated capital. I also truly hate the pvoerty in which so many good people are trapped. But the notion that Britain’s vastly over-inflated bureaucracies address this problem is tenuous, to say the least.
I also believe that it is not coincidental that New Labour’s huge physical increase in the state coincided with a massive erosion of civil liberty.
So I view those protesting against cuts in public spending as well-motivated but trapped in a historical accumulation of palliative devices which each attracted a massive superstructire of self-interested providers and administrators.
I haven’t actually endorsed this specific package. And you missed outthe bit where the IFS says the cuts may not be deep enough. I am saying that tne left’s defence ofhighpublic spending ismisplaced as high public spending does not achieve the left’s ostensible interests, but does protect the interest of a public employee class.
If we have a government within a government, a deep government as people call it, then this hidden government would need finance. Maybe, just maybe the hidden government has large shares in companies contracted by the overt government. It’s very interesting to see how many of the Establishment and their lackeys get financially rewarding positions in such companies including security/ mercenary companies.
Craig, I guess that last post by ‘alan’ was by you and meant for alan campbell?
it is about nuances, isn’t it? calling for higher public spending per se is as meaningless as approving cutting it per se. the ‘public employee class’ may be the highly paid executives, or they may be the binmen. even then the chief exec of a council will earn dramatically less than a head banker, in a job with far less security. as someone who’s been around both sectors a bit, not as right, or left, i agree with Vronsky.
re the NHS: have you read Allyson Pollock? It has been deliberately run down and increasingly sold off: these cuts are part of an ongoing process of privatisation. I would prefer cleaners in a hospital to be employed directly by the hospital, for example, instead of farmed out to agencies to ‘cut costs’; better for them, the hospital and us, though not for the privatised middle management who cream off their salaries from our taxes. the idea that jobs which are useful to, and which benefit, the public should be paid for by and directly accountable to the public seems a straightforward one to me.
Fatuous discussions around left/right economic planning obscure the simple fact that we are on the brink of a sharp economic downturn because of the central banking system.
The central banks owe the commanding position they enjoy from their government-granted monopoly of the note issue. They would have us believe that a central bank like the Fed or the BOE
is a natural product of banking development. This is emphatically not the case. It is imposed from the outside or comes into being as the result of government favours. The creation of money is actually the bounty conferred on bankers by governments over which they have gained control.
Such control is wrested from the legislature by means of the extravagant donations bankers make to the major contenders in elections. Contenders who are clearly not going to play ball with the bankers see their more financially-backed opponents triumph over them at the election.
Establishing a central bank has an immediate inflationary impact because a fractional reserve system allows the creation of book-entry loans and thereby money a number of times greater than the amount the bank actually holds in its deposits or reserves.
The current restriction of the money supply will work just like it did 1929-39 to spark a leaden deflationary spiral.
Central banking wrests all control over public money from the government and the people. Forcing governments to commit to maintaining large standing armies and the inevitable wars that follow allows banks to create the inextinguishable debt on which they thrive parasitically by enslaving the people to pay the interest on the debt they (the bankers) have artificially created.
All the income tax we pay is absorbed by the interest the government pays to the central banks for its loans. In other words all the money we pay has gone before it can be spent on the public services people expect their taxes to fund. After interest payments and government waste nothing of the income tax goes towards these services.
Any discussion of the incipient economic depression that makes no mention whatever of central banking and the Rothschild Inter-Alpha group betrays those who engage in it as commentators who rely on the likes of Stephanie Flanders and the corporate media for “information”.
Craig’s post from July 11th:
“Apostate, Freeborn and Steelback (who may or may not all be the same person) are not welcome on this site, under these or any other names, for persistent anti-semitism and holocaust denial.”
This constant drip-drip demonising of the “public employee class” by Craig and his new friends from the Bullingdon/Westminster Right is worrying. Scroungers, layabouts, never doing any real work. That is the less-than-hidden message. Meanwhile we are about to enter bonus season. Bottoms up!
“If we have a government within a government, a deep government as people call it”
Worth exercising some thought as to whether this is possible. Michael David Morissey argues that a distinction between ‘government’ and ‘deep goverment’ is not meaningful. Not saying I agree, but worth consideration.
tinyurl.com/deepstate
Craig,
It depends what you mean by public spending. True, the Left tend to favour high spending on public services, but I don’t think they would include wars, PFI and the subsidising of wealthy farmers and privatised transport under that heading.
As has been said before in many other contexts, follow the money. Yes, the budgets of certain govmt departments may well have increased substantially during the latter phase of Nu Labour, but at the same time the amount of money sluicing out the back door via private sector contracts/providers/PFI payments has also increased substantially. I have no figures but the hip-deep involvement of the private sector in public provision is bountiful proof if every it was needed. Corporations in the UK have long looked with envy at the military-industrial arrangements that prevail over in the US, and when Blair came to power he made it clear that he was going to turn the public coffers into a giant honeypot for the private sector. Hence the incessant propaganda denigrating public provision, claiming that its not as efficient as the private sector while departments face cuts and reorganisations (under conditions of secrecy, as well).
Government departments can indeed be made more cost-effective but only up to a point; the core function of the NHS, for example, is to take care of the wellbeing of the population (which it does very well compared to the insanity that reigns in the States). The core function of a private sector health provider operating in the marketplace is – maximise profit, minimise loss. And here’s another thing – the NHS budget exists to pay for the health of the nation, not to provide revenue streams for private sector providers who are incapable of functioning with a government subsidy.
Doh, should read at the end – “incapable of functioning without a government subsidy.”
Exactly, Mike, Alan, Vronsky, Rick, technicolour. I agree 100%.
Good general statement Craig. Now we will look forward to the details.
Re: Chris and the massive step change in spending
“Stepchange” was not the right word but the oscillation in public spending as government swings between left to right is clear. Under Old Labor spending reached 45% of GDP, under Thatcher/Major it sank to 38%, NuLabor then raised it to a peacetime high of 47%.
Somebody urges us to look at MediaLens. Does everyone know that MediaLens just received $1 million from George Soros?
Courtenay Barnett wagers “that the largest single itemmised expenditure in the budget is defence and the military.” How much were you wagering Courtenay? You can send the cash to me. Pensions in 2011 will total 123 billion, Healthcare 122, Education 84 and Defense 46.
Writerman makes a number of important points: “The problem with these cuts, on this scale, at this particular time, is, what happens to demand when one shrinks the economy like this? ”
If government deleverages then there must be credit expansion in the private sector or there will be economic contraction. The exponential expansion in private borrowing since 1945 (see Steve Keen’s data for the US and Australian which must must more or less parallel those for the UK (http://www.debtdeflation.com/blogs/2010/09/20/deleveraging-with-a-twist/)) has left consumers over-leveraged. That leaves only the business sector to maintain economic momentum. How do you get a business investment boom going in a depression? LOL.But here’s one way (perhaps?): a massive tax-cut stimulus to investment (end corporation tax, end the national insurance tax on wages), the stimulus to be paid for by a sharp reduction in the size of government with or without a noticeable reduction in useful public services (probably with, since bureaucrats are good at making cuts painful). If new business investment is productive it will generate the income necessary to amortize the debt and pay the interest. If it is unproductive, it will hurt primarily the wealthy, i.e., the investing class.
For those who advocate more government debt instead, the question is how do you make more government spending achieve a sufficient return on investment to amortize the new debt and pay the interest, for if it cannot do that then the debt will be paid with printing press money, which will mean a reduction in the standard of living.
Otherwise, one could consider capital export controls to restrict further outsourcing, a tariff or a cancellation of debts.
It’s so depressing, it seems like Thatcher’s ghost has been running the loud discourse, received orthodoxy and the country for 30-odd years – with all the worst aspects of ‘Right’ and ‘Left’ and ‘In Between’.
This is because, in my view, the perceived interests of the ruling classes (that tiny percentage of the population) are more-or-less diametrically opposed to those of most of us. The ruling classes in this country dso not behave in the best interests of the country, but of themselves. This differs from, eg. Germany. Viewed from the outside, we are a very distorted society in many respects. Deep down, the class system is probably at the heart of the malaise. And so we have class arrogance versus class envy with the hollow, tasteless food of aspirationism the ‘catalyst’.
Actually, Alfred does have a point specifically about MediaLens and George Soros and his prominent role in the imperial project. Foundation funding for oppositional organs is one way of exerting control of all sides of the discourse.
Mike:
Re: “the core function of the NHS, for example, is to take care of the wellbeing of the population (which it does very well compared to the insanity that reigns in the States).”
The US system is insane, but it is also not a free market system. There are, for example severe restraints on the number of doctors as a result of restricted entry to medical schools and great difficulties placed in the way of immigrant doctors wishing to practice in the US.
There could be much advantage in a genuine free market healthcare system. In particular, we might begin to see how advancing technology can make healthcare cheaper year by year instead of more expensive. Why not for example, drive in clinics for all the most common surgical interventions, such as hip replacement, hernia etc. — you know, along the lines of Midas Muffler: drive in, they have you up on the hoist, a team that does the procedure a hundred times a week fixes you up in half an hour and you go home with a bottle of aspirin, all for under a hundred quid.
This way, the health provider “operating in the marketplace [to] maximise profit” would be “guided by an invisible hand” to maximize public health.
Who’s the anonymous PC moonbat who hasn’t shuffled off his Frankfurt School programming yet?
People who scream “antisemitism” and “Holocaust denier” are degenerate Pavlovian dupes of the Zionist central banking cabal who instigate the depressions and wars and use the corporate media to manage the public perception of them.
Thus degenerates like anonymous above are conditioned to have no political acumen beyond their being ready act as anti-racist thought police so that we look the other way out of shame and guilt while the real ethno-supremacists pillage the nations.
P.S.Freeborn,Steelback and myself are still posting regularly on the 911 thread. So the PC thought police and their Hasbara shill overseers are NEVER going to have everything their own way.
Alfred, I’m sorry, but that’s like something out of ‘The Simpsons’. I’ve heard this type of thing since around 1989 and it just doesn’t work, I mean it really does not work.
ATOS ORIGIN
This is the outfit who carry out 1 million health assessments for the DWP each year and who will obviously see large growth in their activities. Note how many ‘solutions’ that they have on offer.
http://www.atosorigin.com/en-us/about_us/Locations/United_Kingdom/default.htm
I have just been watching Ch 4 News. Snow interviewed Duncan Smith and cited the example of a woman with breast cancer who was certifed by ATOS as fit for work several times, both just before and after operations including two weeks after a mastectomy. She offered to show them her scar but they declined the offer.
She had to go to an employment tribunal in the end to preserve her employment support allowance which is approx £95 a week. If she had lost her appeal she would have only had entitlement to Job Seekers Allowance which is £65 a week approx (and nothing if you have savings of £16,000).
Duncan Smith spoke of ‘wrapping a work programme’ around such benefit applicants whilst waving his hands around a lot in the style of Clegg and Cameron. I expect Duncan Smith’s income is many hundreds of times greater than this unfortunate but strong minded woman.
Atos Origin, a multinational based in France, has a €6billion turnover. See Wikipedia.
“I mean it really does not work. ”
Well, OK, Suhayl, not quite as described.
But I remain convinced that a competitive market could yield excellent cost-effective services in the medical field and that the benefits of such a market are presently limited by restrictive trade practice in the medical profession.
One way around the problem is to outsource the services as is already happening, with heart patients going to India for treatment.
Actually, maybe Britain should outsource everything. Pensions and pensioners to India — nice warm climate, no heating bills, plenty of low cost fruit and vegetables. Cheap housing. Could reduce UK pension costs enormously.
Then there’s the civil service. Why not outsource that along with the call centers. It may be an unfair stereotype, but somehow one imagines Indians as being peculiarly suited to managing a massive bureaucracy. And heck, with their low wages, it might be possible to re-introduce the dog license and turn a profit on it.
What amazes me is that these proposed ‘cuts’ and means tests and restructurings must be about to cost us a fortune in bureaucracy, surely. All those new benefit claims, all those interviews, examinations, prosecutions, records, evictions.. The time and organisation and paperwork it’s going to take to implement and maintain this new regime!
Btw consider the knock on effects on public health, mental and physical, which poverty and insecurity cause, and you remember that some of the richer people believe that 20 percent of ‘wastage’ at the bottom of society is quite acceptable. Those of us not in that 20 percent ie most of us need to keep our nerve and prepare to support the scapegoats, I think.
Is it at all relevant that the UK could feed itself (using a mixture of largely arable with some dairy for optimum nutrition)? I don’t know why it should be, quite. Ditto that a friend and i once worked out that a universal wage in the UK would come to about £25,000 each. I can’t remember how.
Btw of course Craig’s quite right to point out that public sector time and money has increasingly gone towards spying on ourselves, under New Labour. Rolling back the surveillance state was one of the Lib Dem’s major promises, wasn’t it? Are they?
(and thanks, Courtenay, for continuing to provide relevant & interestingly awful stats.)
Indeed, Rick. “Public spending” does not necessarily mean armies of bureaucrats passing pieces of paper to one another all day long. Nor does it have to mean giving money to professional claimants.
It could mean improving the nation’s infrastructure, such as a massive upgrade of public transport. Mainline railways to all areas of the country, monorail and trams for urban travel, all made in this country and highly affordable. That would mean vastly less car use, which in turn would see us reducing our payments to oil sheiks in dictatorships such as Saudi Arabia.
Public investment – not simply “spending” – could greatly improve schools, hospitals and other public buildings, to make them weather-proof and more energy efficient, and also furnished with micro-generation. Investment in large scale alternative energy sources further reduces our dependence on foreign sources, and again improves our balance of payments.
Investing in the next generation by educating them properly, up to their full abilities, is not simply pouring money away. Saddling graduates with huge debts does not encourage them.
Investing in sports facilities and youth centres, as alternatives to drinking alco-pops and cheap ‘cider’ in bus-stops, would benefit the country long term.
All could go on, but I suppose I’ve already identified myself as an irrational leftie who thinks the likes of the above might just improve the quality of life in this country for the majority.
Ha!!
But corporations are already being allowed to take over primary care like Tescos do the High St. It’s for profits. Local coops are being deliberately not given tenders for political – ideological – reasons. This was happening under the ‘Labour’ Govt. and continues now. We are going to be paying for PFIs for a zillion years. A massive drain on the taxpayer. It’s got nothing to do with ‘restrictive trade practice’ – that’s actually more a description of the US healthcare system. Nurse practitioners and other paramedical professionals actually do a heck of a lot of good work already.
Sorry for disjointed post above: tired.
Alfred re outsourcing: I read a very good Sunday Times report a couple of years ago which showed how the demands, hours and insecurities of working in UK servicing call centres were having a devastating effect on the lives and welfare of Mumbai families. I suppose many of us are resigned, if not hardened, to not seeing our own children/partner/parents/friends because of shift work or simply hideous hours, and quite used to bullying and abuse in offices, but they were new to it, and suffering.
Yeah, I really think it’s sad and pathetic and also embarassing – for them and us – when they can’t even use their own names! Like, there are lots of South Asian in Britain and we use our own names and it’s no problem for most people. So why do people who clearly are not called ‘Sean’ have to use fake ‘British’ names? It’s so silly. A small point, perhaps, but indicative of the demeaning nature of the whole enterprise.
Apologies… as this is probably irrelevant; but my brother, who works in the city for a large investment bank, has just be told that he is in line for a plump bonus for Christmas… wait for it… £100,000! Nice. That’s on top of his £60,000 basic salary!
What’s rather ironic, if one has a taste for the grotesque, is that he’s hinted over the last couple of years that his bank is, in reality, bust. It’s debts and other liabilities far, far, outweigh their assets. The bank is insolvent.
Funnily, this is apparently the case with almost every bank. They are all insolvent, but the vast losses, the foundation which is mere sand, is being systematically hidden off balance sheet, because the consequences of admitting the true state of affairs are too dire to go public with.
So why is my brother in line for a huge bonus? Because paying huge bonuses gives the impression that the banks are not bust, but successful and the recovery is just around the corner. Exactly how long one can keep up this charade is debatable.
When I asked Robin, in jest, if I could borrow £10,000 for Christmas expenses, without missing a beat, he said ‘sure, easy come, easy go.’ And we are all supposed to be in this together, don’t make me laugh, or maybe that should be cry?
“Local coops are being deliberately not given tenders for political – ideological – reasons. ”
Well what’s that Suhayl if not a restrictive practice. I wasn’t saying doctors were solely responsible for the continual rise in healthcare costs with advancing technology, while in every other industry cost decreases with technological advancement.
Tech,
I wasn’t totally serious about outsourcing the UK Government, although it is an intriguing thought. You might even outsource the military. The Brits always liked an Indian army, so much more colorful that the British in their dreary camouflage gear.
“Rolling back the surveillance state was one of the Lib Dem’s major promises, wasn’t it? Are they?”
Yes it was, no they’re not.
http://www.theregister.co.uk/2010/10/20/imp_coalition/
glenn, v interesting. remember i heard something like this about insurance companies: they were all bust too.
it’s sounding like one big pyramid scheme? which is somehow where the uk’s ability to feed its population without having to foot the costs of importing comes in, perhaps.
mind you, we could vote as a nation to import say, ten luxuries that can’t be grown here. my vote would go to the cocoa bean.
“After the election the coalition said it would “end the storage of internet and e-mail records without good reason”. But the Strategic Defence and Security Review shows ministers now believe the massive surveillance programme is necessary.”
Jesus, MJ. Er, thanks.
Not sure OH has his business plan quite straight but his proposal is something to think about for those who think the private sector cannot compete with the welfare state.
http://www.oldholborn.net/2010/10/welfare-vs-workhouse.html