The Left’s Irrational Addiction to High Public Spending 151


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.


151 thoughts on “The Left’s Irrational Addiction to High Public Spending

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  • Alfred

    “Mmm. Perhaps he’ll have a small moustache.”

    If you keep driving down the Weimar road don’t be surprised if you come to the expected destination.

  • technicolour

    Gosh, Alfred, you’re being so revolutionary and divisive. Take a chill pill, Lenin.

    The middle-class thing is a myth. The middle classes are struggling as much as anyone, as far as I know, they’re just doing it in slightly better built houses. They’re being faced with eviction and food parcels too. And I think it’s a bit cheeky of Alfred to adopt the voice of a struggling inner city dweller when a) he is not and b) they are usually much nicer.

  • Alfred

    Again, Techie, you mistake statement of fact or belief with the assertion of principle, or policy. Of course I do not, and did not, urge revolution. I urge, um, repentance. LOL

    As for “The middle-class thing being a myth”, what is this “thing” you are talking about?

    Are you saying that there are not millions of civil servants who consider themselves middle class?

    And are you saying that those in the public sector are not paid largely from the taxes on the wealthiest section of the community (well plus printing press money), hence my reference to crumbs from the bankers table.

  • Anonymous

    I suppose i’m not so interested in working people up to a fever pitch of indignation, Alfred. I’m more interested in solutions than in blaming the people currently trapped in this system. From what I’ve seen it’s fun for very few of them, barring the media and artists and that far less so now.

    But I believe when I mentioned ‘equality’ you suggested a ‘kick up the arse’.

  • technicolour

    alfred 8.43: I was referring to my previous comment, as people do. Apologies; I’ll spell it out next time.

  • Alfred

    “But I believe when I mentioned ‘equality’ you suggested a ‘kick up the arse’. ”

    Steve was talking of benefits recipients who seem to despise those who work. Metaphorically, public policy that requires such people to work for a living would amount to a kick in the arse. It would also mean greater equality for the working poor whose taxes go, in part, to cover the welfare costs of those who evade work.

  • technicolour

    Alfred, I think our general problem is that, when faced with a financial problem, I think in terms of gently liberating excess income or land from those who can’t possibly need it and to whom, from my experience, it’s generally a burden not a joy (I agree with glenn: I’d leave them a million so they didn’t get angsty). You seem to thinking in terms of screwing the people at the bottom of the income pile even further.

    Correct me if I’m wrong. Otherwise, we’ll have to agree to differ, since it’s late.

  • Alfred

    “You seem to thinking in terms of screwing the people at the bottom of the income pile even further. ”

    Come on. How can you infer that from what I’ve said. What I said was largely in response to what Steve said about people who chose a life on welfare, which is consistent with what other observers have reported, e.g., Theodore Dalrymple who has written about the way in which doctors are often intimidated by those insistent on living “on the sick” and won’t be refused a sick note.

    What I have said repeatedly about the working poor is that their taxes should be lowered, actually that they should pay no income tax. So how can you accuse me of wanting to screw people at the bottom of the income pile.

    What I did say is that those who held work in contempt should be given powerful incentives to change their attitude. Such a change would be a step toward the regeneration of society. The idea that because there are rich people, everybody else can lol around watching tel, or boozing at public expense is beyond my comprehension.

    The idea that if the rich were looted we could all live a fine easy life is simply a mistake in mathematics. Some rich people live very well but most actually have their money invested in productive things that create the wealth on which we all depend. Farmers, for example, work the land and produce food. Bill Gates has money invested in MicroSoft, presumably. He may live better than me, although when I used to commute on the ferry between Victoria and Vancouver, I spotted him a couple of times, a geeky fellow with a laptop sitting with everyone else in the public lounge. As a percentage of his total wealth, his personal consumption is almost certainly negligible. So if you loot the likes of Bill Gates to feed the poor what happens is capital is consumed with a consequent reduction in GDP. Then the poor will be even poorer.

  • crybaby

    I think you are getting into a poor state when you start measuring up to others on grounds of willingness to accept remunerative work.

    Much of the efforts and attention by which people can benefit others are non-remunerative, while much remunerative effort is only parasitic.

    AND – You might work hard to earn a wage and pay your way in an ecomony (with its deep cruel roots), and you might also generaly be an unpleasant or unhelpful or ruthless shit.

    In a stressed, word weary state, *many* people do function like that, while resenting the people who dont, who are apparently spoiling their economy, and contributing to their burden.

    But to live happily and healthily, if it were not for taxes, industrial and commercial excesses, most people would *need to consume* and produce very little. Food and shelter could be trivial to provide in this age of emense production technology, of battlegroups and substandard product cycles, and everything… surely you know?

    Apart from the occasional gadget and harmfuly cheap heavily taxed booze, ‘scroungers’ consume very little of the countries scarce resources.

    Many ‘scroungers’ are much nicer people -have a much better effect on their society – than the ‘remuneratives’ who consume orders of magnitude more environmental resources and of other peoples services.

    Of course there is shocking squalor and destructiveness in the poor and unwanted. I see that as a product of their history and the ignorance of us? -the circumstantialy solvent.

    The demonisation of the type is an ego-centric, materialistic trap.

  • Alfred

    Crybaby said:

    “Many ‘scroungers’ are much nicer people -have a much better effect on their society – than the ‘remuneratives’ who consume orders of magnitude more environmental resources and of other peoples services.”

    However, Steve said:

    “I understand it is very hard to believe that people make a choice to stay poor but they do because like I said they are not poor. Most familise on the poverty line are getting incomes far in excess of £25000 a year. Its what they choose to do with that money that makes them poor. If you dont pay rent you dont pay council tax or income tax and you are getting a couple of hundred pounds a week thats disposable.”

    How many of the people Steve describes exist is unknown to me. But it was the putative existence of such people that prompted this discussion.

    Further, the notion of the good “scrounger” is hard to accept. If you are pennyless due to no fault of your own, why certainly you could expect your fellow creatures to help you out. But if, as a matter of principle you maintain that work is for suckers, or that people who do the world’s work, are all self-serving shits and over-consumers, then I for one would not voluntarily contribute to your “benefits.”

  • crab

    >Apart from the occasional gadget and harmfuly cheap heavily taxed booze,

    -oh no, that sounded bad. I mean those are the sort of things which the workshy are resented for aquiring. But i think they are quite trivial.

  • crab

    “Most familise on the poverty line are getting incomes far in excess of £25000 a year.”

    That doesn’t sound right at all, especialy if it is supposed to be on top of rent and tax.

    “But if, as a matter of principle you maintain that work is for suckers, or that people who do the world’s work, are all self-serving shits and over-consumers, then I for one would not voluntarily contribute to your “benefits.” ”

    Work is for fulfillment.

    Remunerative work is for…

    “The world’s work” -there is a concept..

    Ive toiled for cash, and worked for nothing. I wouldn’t begrudge anyone the minimum tokens required to survive in our monetarised reality, who is not guilty of an actual crime. And yeh some of the best people i ever met were ‘scroungers’

    Anyway, ain’t spending plans tremendous.

  • technicolour

    If you are on £25,000 you are not on the poverty line. It is defined as £268 for two adults and 2 children a week, which comes out at about £13,000 a year.

    “What I have said repeatedly about the working poor is that their taxes should be lowered, actually that they should pay no income tax. So how can you accuse me of wanting to screw people at the bottom of the income pile.”

    Removing income tax on a wage of £250 a week (a careworker’s wage) would be an extra £25 a week. That’s three cinema tickets for a family, or a take-away. I don’t think it counts as taking the screws off.

    “The idea that because there are rich people, everybody else can lol around watching tel, or boozing at public expense is beyond my comprehension.”

    Yes, rich people lol around watching tel & boozing too. They just do it in larger places, with more expensive wine.

    Anyway, what has happened to Microsoft since Bill Gates gave that money away? Has it collapsed?

  • Roderick Russell

    Alfred at October 22, 2010 9:33 PM ?” It’s not the rich who are in danger of being looted today, but the middle classes. As Leona Helmsley so honestly said: “Only the little people pay taxes”. You don’t need to worry about the super rich being looted with a resultant destruction of their capital; they never are ?” not in the UK, and not in BC either. Indeed, I don’t know of any Western society where the rich pay anything close to their fair share of taxes; they know how to work the system, or at least hire the people who do.

    Surely, the biggest consumption (destruction) of capital in recent times is the City’s banking fiasco where though it’s the rich bankers (and their clients) who have lost the billions of capital; it’s the middle class UK taxpayer who will be looted to finance the resultant bailouts. As you will recall this comes only a decade after Britain’s middle classes were looted to bailout the City’s “Lloyd’s of London” insurance fiasco. So, yes we are experiencing a destruction of capital, but it’s the wealth of the middle classes that is being destroyed. I too used to commute between Vancouver and Victoria on a regular basis, but that was a long time ago.

  • writerman

    What’s going to be ‘interesting’ is how the comfortable middle-class is going to react to be squeezed and pauperized; it’s their turn now, the traditional working-class have already been done.

    As the economy shrinks over the coming decades, and the mass, consumer-led, capitalism is replaced by austerity and want, with no state intervention to soften the blows, the middle-class will face a big question; do they sit passisively by and watch, or do they react?

  • peacewisher

    It’s not a left obsession, Craig. It is common sense for a country to have its people in work.

    I could never understand the economics behind the Thatcherite approach. If someone loses their job providing services to the public almost everyone loses:

    1. the public – fewer or no services

    2. the individual – no job

    3. the govt… the state has to support the individual they put out of work

    4. those remaining in work in public services (e.g. ploice, teachers, nurses) who have to cope with the consequences of unemployment.

  • peacewisher

    I’ll go further – I’ll say that the general media glee and rubbing of hands about the cuts (and the inevitable consequences) is an indication of what a sick society we are being encouraged to become.

    If you really do condone the unnecessary loss of people’s livelihoods, Craig, then shame on you for supporting this.

    LOL re HMS Astute, however.

  • Vronsky

    @Roderick

    I was joking about outsourcing government. Besides, I think we have already outsourced it.

    Armando Iannucci on the cuts: “I think the cuts were fair. It’s about time bedbound homeless people with learning difficulties were taken down a peg or two.”

  • Vronsky

    Here’s the sort of public spending that raises no complaint from the right:

    “The Pentagon has paid the manufacturer of BioThrax $1.3bn, for a vaccine that an independent report calculates cost only $250m to produce.”

    tinyurl.com/3868pfo

  • Alfred

    “the general media glee and rubbing of hands about the cuts (and the inevitable consequences) is an indication of what a sick society we are being encouraged to become.”

    It is astonishing, isn’t it, that in the most technologically advanced society there has ever been it is now accepted as a matter of inevitability that everyone must be pauperized.

    This is of course rubbish. But extremely vicious rubbish. The elite have decided they do not need billions of massively consuming plebs to service their needs, so first they are cutting your living standard so you take up less space, use fewer of the resources that people like Al Gore need to service their executive jets and mega mansions. Then they’ll teach your kids that their parents are unfit to instruct them. You know, parents who expect their kids to be disciplined, properly educated, get married have kids of their own. That’s all crap now, you know, bourgeoise, sexist, reproductionist, homophobic, whatever. Soon the mere idea of having a job will be a joke. Everyone’ll be on the dole with a plasma TV in every room: a people in the final stages of self-destruction: the fulfillment of a programme of autogenocide.

    I am looking forward with huge interest to the next installment in the unfolding of Craig’s economic plan. I absolutely agree with him that most government spending is wasteful and therefore detrimental to social welfare. But how to offset the spending cuts without further shrinking the economy.

    The Economist, incidentally, thinks there’s no alternative. See here:

    http://tinyurl.com/36dgjyv

    “First, the reductions in gross national product from the UK public spending cuts are inevitable …” Sir Andrew Large writes.

    This is total crap, actually. If the economy is operating at less than capacity it means that there are resources (factories, infrastructure, people) that can be employed at essentially no cost, since if they are not employed they will simply be wasted.

    So what to do? Find opportunities for investment that yield a sufficient return to amortize the capital and pay the interest. Now obviously government is very bad at doing that. Very few things the government does yield a positive return on investment. Government is a necessary evil and a constant danger to the public’s economic health.

    So what is the alternative?

    The private sector, obviously. That means you, maybe. But in any case what is needed are incentives to massive new private investment in manufacturing, transportation, construction, and infrastructure. Hence my proposal for immediate elimination of the corporation tax and the National Insurance tax (benefits equivalent to those provided under the national insurance scheme to be provide in future on a means tested basis. I am sure that Writerman does not need the old age pension).

    Probably much more than those tax incentives are needed and could be implemented. For example, procedures for the rapid assembly of urban land for redevelopment, so that Britain can get on with the essential task of rebuilding the industrial wastelands and crap post-war commercial and residential developments that deface the land. Huge public investment in research on, e.g., energy conservation, urban transportation, combined with legislative action to facilitiate rapid transformation of urban transport: get cars out of cities, to be replaced by small, coin-operated electric buggies with inductive power transmission embedded in the roadway, and using robot guidance. You jump in, use a touch screen map display to indicate your destination and sit back: almost silent, no air polution, no parking problems — cool, hey.

    But no. You’re all stinkers and deserve to be punished.

  • anno

    Steve

    After recovering from a breakdown caused by feminism/ Thatcherism/ despair at UK foreign policy in dismantling Yugoslavia as if it were somewhere beyond outer space, I tried social work and I spent three years volunteering in a drop-in centre for homeless people.

    But I realised that if I had understood for my own personal situation that I needed spiritual solutions to my external problems, then it would be hypocritical to suggest external solutions for others.

    I found Islam and I jettisoned the entire burden of my own culture, namely that state or private financial generosity could possibly compensate the individual for the damage done by the donors lying through their socialist or capitalist teeth.

    Lying is what grinds us down as human beings and unfortunately some of the biggest liars are Muslims. They think that they have to lie in order to survive in a world addicted to lying.

    That is far, far, far from the truth. In fact God mentions two punishments. First for not practising Islam oneself – lying being incompatible with being a Muslim – and second punishment for not showing the non-Muslims what Islam is.

  • Suhayl Saadi

    anno, peace be with you, man, peace be with you.

    Surely, the two go together, in a kind of a unified way – the external and the internal. You’re right, there is inherent in modern society, a certain death of the spirit. It’s something I’ve tried, in my own, confused way, to explore many times.

    Perhaps it is partly because of the perceived failure of religion to properly and convincingly answer new questions, perhaps it is because of an inherent flaw in the cerebration of religious belief itself, or perhaps it is simply that the celebration of the human being as quasi-divine subject ultimately is destructive. Or perhaps it is this central focus on materialism that is rotten. I know you’ve found that universal system in Islam. I know many others who have done the same, in whatever faith in which they have found it.

    I’m pleased you feel that peace and strength and I wish you well. Your story really moved me.

  • Alfred

    Ingo, It’s just the usual academic rubbish. You can bet that the traders and banksters who were thrilled by the crash held short positions — like Joseph Patrick Kennedy during the crash of ’29.

    They guy in the picture holding his head shorted BP at $26.75 just before it rebounded to $45.00.

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