Breaking out of our Soviet economy…

I was a guest of NIGAG on Friday evening at their Christmas soirée. Guest of honour however was Owen Paterson, Tory shadow Secretary of State. There was, let’s say, a robust exchange of views. Patterson’s response to complaints that Northern Ireland had missed out on several public sector initiatives was to contrast the situation north of the border. He noted that “34% of GDP accounts for by public sector in the Republic against 71% in Northern Ireland. That’s at Soviet levels. Whilst in the south it makes sense for anyone with ambition and intelligence to start their own business, in Northern Ireland it makes much more sense for the most intelligent to go into the public sector or leave.” He reckoned that if the transformation of the Republic was anything to go by, it would probably take about twenty years to effect an economic transformation. Probably not far removed from the kind of message Gordon Brown sent the First and Deputy First Minister at the start of term. Grow an economy first, then you can have your money. Until then, not a penny more!

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  • iain

    s’pose Unionists should be happy. Northern and Southern Ireland are now completely different countries. Though it might irk them that the Southern Irish probably have more in common with the English than Ulster does!

  • George

    It will take a lot longer than 20 years to sort this out at the rate things are moving.

    Looking at the GVA per head (ONS statistics) we see that Northern Ireland was 78.95% of the UK average back in 1997 and by the end of 2006 this was virtually unchanged at 79.6%.

    So the gap on the rest of the UK remains virtually the same despite the peace dividend and the billions in handouts.

    But I suppose they should be grateful for the stagnation. Wales has fallen from 79.6% to 75.5% in the same period, despite devolution.

    It seems the Sovietisation of the UK is continuing apace and the idea that Brown is implementing policies to prevent it isn’t backed up by the continued reliance of the “peripheral” regions of the UK on government cash to keep within shouting distance of the wealth generating regions of southern England.

  • Nevin

    It could be a Happy New Year for some; one to watch

  • Rory

    …it makes much more sense for the most intelligent to go into the public sector…”

    The recent experience of Northern Rock might say otherwise to smart bankers and those who would invest in them (on the stock market that is, not those small suckers who trust them with their savings).

    The really smart bonzos of course get into the privatised supply side of the public sector – the “defence” industry (especially the “attack” side), health, education, any local authority needs – water, sanitatation, waste collection and the care of the elderly, the mentally ill and the socially outcast.

    It’s a wonderful system – Little Joe Public pays and Big Joe Private profits. But it’s good for us. It must be. The papers tell us so.

  • Nevin

    NIGAG’s members believe that the lobbying of politicians and governmental institutions is an entirely proper and legitimate activity in itself. It occurs in all free and democratic societies, and is indeed a fundamental democratic right. Lobbying fulfils a number of highly proper functions:

    * Lobbyists act as a bridge between policy makers and wider civil society. They ensure that politicians and civil servants are aware of the needs, desires and interests of particular groups of people or organisations; or alternatively that they can play a part in ensuring that the interests of specialised and homogenous (sic) groups are represented;

    * Lobbyists enable interest groups and sections of the electorate to participate in the political process beyond casting votes at elections, ensuring decision makers remain responsive to public opinion between elections; and

    Lobbyists assist public office holders to find solutions to specific policy problems or issues, thus improving the quality of our government.”

    What a load of old lobster (OOPS) cod!!

    And the Lobbyist of the Year for 2007 goes to – Junior!!

    I wonder if he’s received his ‘fresh turkey and boiled ham’ from the landlord of the Dulisk Delicatessen!!

  • Mick Hall

    Mick

    What is it with this private is better than public crap, where is the evidence and why bring Stalinism into it, that is simply parroting right wing propaganda a la the current neo-liberal economic thinking. It would be far better to look at peoples quality of life. I do not have the figures but surly before we all cry great, perhaps we should look at how things actually add up.

    Of course the model for such a system is the USA, a country which has more millionaires than most, but where average wages are lower than most of the top 12 industrial nations, people work longer hours and have less paid holidays.

    For many US families having two jobs has become a necessity to keep bread on the table, what quality of life is that? Now if that is the kind of future you want for the north fair enough, but in reality I doubt you do.

    We now know the neo-conservative were completely wrong with their middle east strategy, Israel, Iraq, Afghanistan, having brought impoverishment and misery to millions of people. Yet due to the cash cow that is the Iraqi occupation, this has been for the multi nationals and contracting industry and they regard this as a success. We no better though.

    Yet few people seem to be challenging the other half of the neo liberal crap, privatization and de-regulation. If you doubt the disaster that is waiting, have a look at the mess the UK public services are descending into.

    Never mind asking the private sector and their political gofers, whom you spoke to last Friday, as they have a vested interest in the cash cow that sees profit as all; for it enables them to get their greedy snouts into the trough.

    The future for the north’s working class people looks bleak, for both of the parties who mainly represent them, SF and the DUP are in the process of betraying them having bought in or been bribed to accept neo-liberal economics.

    I will make a prediction, the smaller the public sector gets in the north, the worse a majority of the peoples life styles will become.

  • Comrade Stalin

    What is it with this private is better than public crap, where is the evidence and why bring Stalinism into it, that is simply parroting right wing propaganda a la the current neo-liberal economic thinking.

    On the contrary. Peter Robinson was on the phone the other day for some insight into the implementation of our first five-year plan.

    I informed him that the first priority must be the destruction of the kulaks, starting with those resident on the Malone Road (and the bourgeois students in the Holylands as well), most easily resolved by their deportation to Craigavon, followed by appropriate re-education in a non-selecting comprehensive style school. Catriona Ruane has already benefitted from my expertise in that department.

    The next step in boosting the economy shall, of course, be to sign a non-aggression pact with North Korea and put troops on the Isle of Man. There are lots of kulak fifth-columnist Trotskyites there, whose only objective is to damage the NI economy and, worst of all, derail the peace process.

  • From Mick Hall:

    “I will make a prediction, the smaller the public sector gets in the north, the worse a majority of the peoples life styles will become.”

    On that reasoning, if we want to make people’s lifestyles even better then we should put the public sector up to, oh, 100 pc of the economy. And look how wonderful life was in the Soviet Union. Weren’t there only occasional bread shortages?

    Or else we could finally realise that a low tax private sector driven economy is the key to prosperity. If you want to have good public services then you don’t tax to kingdom come the businesses providing you with your tax take. Actually most of us already realise this: it is just those under The Blanket, huddled over their cherished Das Kapital, who are still to be convinced.

  • Only one P in Paterson, BTW.

  • Mick Hall

    Watchman
    There were public sectors of economies before the Soviet Union existed and there will be long after its demise. Only people who cannot muster a logical argument against the public sector go down the road of scare mongering and smears.

    If you believe the US version of health care is better than what exists in northern Europe, argue your corner, if you believe the nationalized railways of France etc are worse than the privatized railways of the UK argue your corner.

    If you believe that privatized water is better than state or communally owned water companies and morally justified, argue your case, If not please not not involve me in your arguments that are so last century.

  • Mick – there was no state that had a public sector that size for long before the Soviet Union existed, for the simple reason that the Total War of WW1 was the spur for the creation of the modern state. Germany, Britain, Australia and New Zealand had nascent welfare states before that point but they weren’t on the scale of that even in modern ‘hardcore capitalist’ countries like the UDA or Japan.

    I think you’re letting your emotion cloud your judgement here. Even Socialists need to generate wealth before they can redistribute it. The left and the voluntary sector in Northern Ireland spend their time bleating about how their pet projects are underfunded and they need more resources. They don’t have a clue about how we generate them given that we are already at the practical limit of how much the public sector can dominate any economy, and already guzzle thousands of pounds worth of subvention per person per year.

    The community sector’s approach to the Bill of Rights Forum is the apogee of this denial; who needs politicians and elections when courts can mandate public spending for all our pet projects? It will all end up in tears.

  • Comrade Stalin

    Only people who cannot muster a logical argument against the public sector go down the road of scare mongering and smears.

    The argument is pretty straightforward; the private sector innovates (in every sense); the public sector stagnates. Economies like the Soviet Union or China (pick any communist country you like) are examples of what happens when you take it to it’s logical conclusion. Luckily, most people quite correctly believe that while the state must have a role, there are sensible barriers. Fortunately, they aren’t barriers made out of steel and concrete designed to keep people prisoner.

    If you believe the US version of health care is better than what exists in northern Europe, argue your corner,

    Reasonable enough, take a look at France, where the private sector has much greater involvement than in the UK. The state merely provides an insurance scheme and pricing structure. If you were to implement this (arguably superior in terms of health care deliver) system in the UK, you’d be booed down as a raving Thatcherite.

    if you believe the nationalized railways of France etc are worse than the privatized railways of the UK argue your corner.

    Look at the nationalized railway in Northern Ireland. Inefficient, poorly maintained, and does not attract passengers. On the other hand, compare the Luas in Dublin. Or the bullet train in Japan which is run by the private sector. There is a little more to it than a straight public vs private debate.

  • Dewi

    “But I suppose they should be grateful for the stagnation. Wales has fallen from 79.6% to 75.5% in the same period, despite devolution.”

    Yeah George – we never really bought into this capitalism business. Nonconformism and Anarcho-syndicalism both a bit scathing about wealth creation.(Our dominant 20th century ideologies) Mind you I’m in that tradition – Better poor and free than rich and conquered !!

    No, seriously, a big issue here – we’ve just squandered £700m of Objective 1 Aid and gone backwards cf other European countries. Some of the problem was in the nature of spend allowed but a lot in the culture and nature of the politics of the Assembly – cool on equality but a bit immature on wealth creation. (United59 – now that has to mean something)

  • Comrade Stalin

    Even Socialists need to generate wealth before they can redistribute it.

    Oh, this brings back memories. Of course, under the Tsar, people used to be forced to work and then just hand over their goods to allow the government to fund the war. We changed all that, so under Communism, people were forced to work and hand over their goods in order to fund the building of the state in order that it could go to war. Of course, many people asked me, “Comrade Stalin, what is the difference?” which dovetailed nearly with the final part of my strategy for identifying the traitors and rounding them up.

    Many people don’t understand the crucial difference for USSR citizens after the revolution, but that’s because they’re counter-revolutionary fifth-columnist Trotsky-fascist bourgeois pay-lackeys.

  • Comrade Stalin

    More seriously, as Sammy points out, Communist states had to generate wealth in order to fund their pet projects. Leaving the value of those projects aside, the funding was done by seizing food from poor people and selling it abroad, leading to massive famines in both Russia and China, and a similar pattern in other places (I think Romania was another example).

    Here, we generate wealth by asking other people for it. Then we spend it on silly little projects, like this bullshit “old person’s commissioner” thing that’s coming up. Old people will die this winter as a result of not being able to purchase fuel or electricty to heat their homes. But that’s alright – we’re going to have an Old Person’s Commissioner (budget – likely in the £0.25m sector, by the time offices, secretaries, paper, and the Commissioner’s salary are paid) who will be paid to pester the government about it.

    It’s not so much about slicing back our public sector spend (although it is an issue) .. couldn’t we at least find better things to spend it on, things that result in better-paid jobs being created ? There’s a shortage of plumbers, electricians and joiners at the moment. Why can’t we set up more or better schemes to get people into these (relatively) lucrative trades ?

  • Dread Cthulhu

    Comrade Stalin: “Here, we generate wealth by asking other people for it.”

    In a more proper turn of phrase, you beg for it, the actual creation of wealth being something that, given the Stalist character of the N.I. economy, is not well understood.

    Now, when we tentacled horrors from beyond space and time want wealth, we get it the old-fashioned way, reaching up from the depths of the ocean and pulling vessels down into the sunless depths, where our non-Euclidean domus rests until the stars are right… its a hard life, but rewarding.

    Comrade Stalin: “Then we spend it on silly little projects, like this bullshit “old person’s commissioner” thing that’s coming up.”

    Hey, no pain, no gain, Josef — the economy isn’t going to stagnate on it own and you can’t reach 100% without achieving 80% along the way.

    Comrade Stalin: “Old people will die this winter as a result of not being able to purchase fuel or electricty to heat their homes. But that’s alright – we’re going to have an Old Person’s Commissioner (budget – likely in the £0.25m sector, by the time offices, secretaries, paper, and the Commissioner’s salary are paid) who will be paid to pester the government about it.”

    Is this not the moral equivalent of the old Soviet Union borrowing from the Western capitalists — use their money to strengthen yourself? By duping the UK into paying for your lobbying wing / quango, a whole host of party hacks will have gainful employment… is this not an unemployment solution?

  • DC

    Feck this time for a scapegoat, feckin violent IRA people pestering and Unionist political intransigence.

    Im fed up watching Dubliners get off the Enterprise at Central in the morning looking better clad than the rest of us put together on the other platform catching the train to Botanic and Gt Victoria Street to implement public policy.

    It’s a disgrace!!!! And besides, those Paisley’s have built up an empire, a wealthy one, while keeping our own people, of all hues, in their places thus ruining wealth creation for Northern Ireland during a time when Europe was restructuring economically and building for a better future.

    Fecking Chuckle Brother’s, what a fucking liberty! Where’s Catherine Tate.

  • Frustrated Democrat

    The problem with Northern Ireland is one of jealousy, the majority don’t want to see other people succeed they take pleasure in other peoples’ failure.

    I see an attitude amongst many of the NI intelligensia who can’t really understand why ‘inferior intellects’ could be sucessful in business while they hold down jobs with 35 hour weeks and 8 or even 12 weeks holidays. “I could do it too if I wasn’t doing something more important for society” would typify their outlook on life.

    Until that attitude changes and sucessful business people or even those who are willing to try are respected NI will continue to lag in it’s performance.

  • DC

    FD, a good point but this is a wider mindset one that permeates throughout especially in certain contested classes where getting ahead is tight, tight because of the limited opportunities available in N I economy, in many ways you could argue the economy is part of this problem, know your place and wait your turn.

    Mindsets, entrepeneurial spirit, positivism, etc. Key ingredients for change.

    Is it possible to blame resistance to change and communal difference for the quest of maintaining at least politically social conservatism which only compounds the problem of knowing what your place is and helps to maintain very tight social circles where everyone knows everyone else. Ensuring that if you get ahead or fall behind of the group must surely leave you open to questioning, good and bad.

  • Frustrated Democrat

    DC
    I think I agree with that if I could understand it.

    If you are saying that people who leave the norm of their social peer group become ‘outcasts’ then I agree.

    However I believe people make their own opportunities some take risks some don’t, some succeed some fail.

  • Mick Hall

    Sammy

    It is all very well to talk about creating wealth, but in todays world the important factor is how that wealth is distributed, if as increasingly is the case it sticks to the fingers of those who provide the finance, then what good is it for the majority of humanity.

    A mad rush for growth and wealth is pointless unless the mass of humanity benefits from it. How we distribute the wealth we earn as a society is the most important question facing human kind in the 21 Century, for if we do not get this right we are on the road to barbarism

    People like you sammy will not face up to this question as you cannot get your head beyond private property, even to the extent you believe gods bounty water belongs to multi national corporations, how ridiculous that is seems to have passed you by.

    Plus when debating this issue you act as if the north was a normal stateor society, it is and always has been a kept woman; and whilst the British remain this will always be so and the excuse for politicians in the north will never face this fact. Why should they, either the British exchequer provides or Ireland is reunited.

    When you mention the USSR you are are in a cold war time warp, the way to look at the USSR from our century is as a horrible experiment, never the less an experiment from which economist have much to learn. It is simply not enough to say that it was un competitive etc, for in some areas this was not true.

    If the USSR was so incompetent what does that make capitalist Russia of today, which basically is a single product economy and I might add is increasingly becoming a planned economy in the Soviet model, although crooks own the means of production not the State and the bureaucrats who run it. [the people owning the means of production never came near in Stalin’s USSR ;}

    If mankind is to survive and prosper and begin to live a life worth living, we need to look at all economic models and not dismiss those because they failed to produce paradise in the USSR. After all if you look at capitalism its track record is no better than the planned economy, far worse in fact.

    The people of the USSR may not have drunk fine wine and shopped at Harrods or Macy’s, but they did not spent a whole lifetime living on less than a dollar a day, as two thirds of the people on planet earth do, now did they?

    Finally it was not the planned economy that created the Stalinist dictatorship but democratic centralism and stalinism, there have been planned economies which worked perfectly democratically.

  • DC

    What I’m saying is that, for example, those middle classes are usually doing work in the Civil Service, public sector.

    In that line of work, to get ahead and get ahead well especially in Northern Ireland requires a break of good luck in that for some reason you have a wealth of experience in a particular field or have shown excellence on public sector promotion boards/ mental tests.

    So when people do actually succeed it becomes all the more noticeable because opportunities are tight and restricted, largely speaking.

    Re the public sector it is a very rigid in terms of promotion, you’re talking step by step progression up the ranks within the Civil Service, i.e. you wont get rich quick, which you could apply to around 60% of the workforce, roughly.

    So when Mr Jo Uppity, of no real high education status, sits a few mortgage exams, say during 2004, joins an estate agent and receives lavish commission for mortgage-based performances during the boom period over 2005-2006, is it any wonder that those people get jealous. Mr Uppity creams in bonuses and salaries never attainable in the NI Civil Service.

    What I am saying is that lack of economic opportunity stagnates thought. Conservatism, at a socio-political level compounds this by being unable to think outside the box, especially those cultural-identity politicians which Stormont is flush with.

  • Comrade Stalin

    When you mention the USSR you are are in a cold war time warp, the way to look at the USSR from our century is as a horrible experiment, never the less an experiment from which economist have much to learn. It is simply not enough to say that it was un competitive etc, for in some areas this was not true.

    I think it’s sufficient to say that it was a living nightmare for the people who lived there. That’s why they had to make criticizing the government, or leaving the country without permission an act of treason. You can’t try to sell this bullshit anymore.

    The USSR, like other communist countries, was incapable of innovation. The best it could do was take other people’s ideas (usually by theft, force or espionage, or thanks the stupid postwar Labour Party, through donations) and make them bigger or faster. Their economy was incapable of innovating, because it was fundamentally led by politicians who directed what people would need and consume, rather than being led by people making guesses, taking cognitive leaps and, most importantly, taking risks. Risks were pretty much illegal in the USSR.

    If the USSR was so incompetent what does that make capitalist Russia of today, which basically is a single product economy and I might add is increasingly becoming a planned economy in the Soviet model

    Russia has gone from being a socialist nightmare to being a capitalist one. I won’t try to claim that life is all fine and dandy for Russians right now. But at least they won’t be rounded up and put into camp because their uncle’s friend’s brother’s cousin wondered why there wasn’t any bread in the shops.

    , although crooks own the means of production not the State and the bureaucrats who run it.

    Capitalism has a functioning legal and regulatory system as a prerequisite. That said, a cynic would find much to compare between present-day Russia and the USA.

    Finally it was not the planned economy that created the Stalinist dictatorship but democratic centralism and stalinism, there have been planned economies which worked perfectly democratically.

    I could ask “which ones?” but before you answer that, you’d need to explain what is meant by “worked perfectly”. I’m not aware of an economy anywhere in the world which “works perfectly”. There are greater or lesser degrees of inequality, inefficency, market failure etc.

  • Dread Cthulhu

    Mick Hall: “It is all very well to talk about creating wealth, but in todays world the important factor is how that wealth is distributed, if as increasingly is the case it sticks to the fingers of those who provide the finance, then what good is it for the majority of humanity.”

    Another “equality of outcome” statist. Those who take the risk — yes, including those who provide capital, are entitled to profit for that risk.

    Mick Hall: “A mad rush for growth and wealth is pointless unless the mass of humanity benefits from it. How we distribute the wealth we earn as a society is the most important question facing human kind in the 21 Century, for if we do not get this right we are on the road to barbarism”

    Failed Marxist rhetoric, dusted off and polished for the 21st century, Mick. “Society” does not “earn wealth,” since wealth is created, whilst wages are earned.

    Those who take the risks are entitled to the rewards — the greater the risk, the greater the reward. The worker is entitled to his wages. The worker only takes those risks associated with the job and should be rewarded accordingly. The capitalist, however, risks his wealth and is entitled to the wealth as a result.

    Mick Hall: “When you mention the USSR you are are in a cold war time warp, the way to look at the USSR from our century is as a horrible experiment, never the less an experiment from which economist have much to learn. It is simply not enough to say that it was un competitive etc, for in some areas this was not true.”

    The USSR, like it or no, is the longest standing experiment in Marxist/Leninist/Stalinist economics in action. That you don’t like the example does nothing to diminish its validity.

    Mick Hall: “If mankind is to survive and prosper and begin to live a life worth living, we need to look at all economic models and not dismiss those because they failed to produce paradise in the USSR. After all if you look at capitalism its track record is no better than the planned economy, far worse in fact.”

    Socialism is a mixed bag, but it generally fails the test, succeeding best in populations like Sweden, where a small, highly educated and highly motivated (that ol’ Protestant work ethic in action…). However, the confiscatory tax rates that are required to support the Socialist state, along with the level of intrusion meant to enforce that regieme, are ultimately corrosive — raises mean little in a state where the marginal rate takes two thirds (or more) of a worker’s raise.

  • Aquifer

    Too often public spending cuts mean cutting investment and direct spend and leaving a bloated salary budget intact.

    Public sector jobs should be temporary and conditional on performance and ability, just like private jobs. Making administrative jobs permanent puts a premium on obedience and cynicism, which are the opposite of enterprise.

  • Aquifer

    What we need is progressive property taxation, so that the rich and secure pay more, and better public transport. What do we get? Rate rebates and new roads.

  • Mick Hall,

    Where have I said I am opposed to the public sector existing? I detest the UK’s privatised railways and much admire the state-operated Swiss ones. I don’t believe the sky falls in because something gets a public subsidy. But I also believe that, as have been pointed out already, that you can’t redistribute wealth unless you have earned it in the first place. You’re the one living far in the past.

  • Comrade Stalin

    Dread,

    I think that is very interesting. I’d have always defended a more statist approach by pointing to Sweden. But for a proper social democratic state to work, people need to be honest and not try to screw it. I’d love to know what the rates are of welfare fraud, etc, in Sweden.

    The point about risk is fundamental to free market economies. It is how technological development happens, and how change and progress proceed against humanity’s inherent aversion to it. That said, it can’t be denied that a point comes in the career of very rich people where there are no longer any risks. What difference does it make to Rupert Murdoch or Donald Trump whether he has $1bn in the bank, or $2bn ?

    Also, I think many of us would agree that a social welfare and health system on the level of the one in the USA would be unacceptable to people here. There are people who cannot help themselves, who need help and support to go about their lives. Where we go wrong is distinguishing these from the people who want to help themselves but just can’t get a leg up. I think it was one of the trade unions which had the slogan “a hand up, not a hand out” which is a good way to put it.

    It’s interesting these days about how the marxists and socialists are not on their soap box about the right to work and have a job.

  • willowfield

    He noted that “34% of GDP accounts for by public sector in the Republic against 71% in Northern Ireland. That’s at Soviet levels.

    Really? Almost 30% of GDP in the Soviet Union was created by the private sector? Have you a link?

    Comrade Stalin

    The USSR, like other communist countries, was incapable of innovation.

    Ever heard of Sputnik?

  • Frustrated Democrat

    DC

    If someone in the Civil Service in a secure well paid job with excellent pension benefits is jealous of someone who lives by their wits and who has a very precarious existence that represents exactly what I am talkng about.

    They could leave and do the same but do they ………almost never, they prefer to carp about people while they remain in their safe secure positions.

  • iain

    I don’t think the those public sector jobs are safe though. Cut backs are on the way. Rates on housing are on the way. In the UK we’ve been living in boom times over the last 20 years, paid for by selling off state assets, North sea oil revenue and ballooning personal levels of debt. The state is out of money and frankly it has less to lose from NI suffering (labour don’t have seats to lose here) than from other places suffering. Add to that there is probably no desire amongst local parties to change the status quo that guarantees them power. Why would Sinn Fein actually want to unify with the south. They would find it hard to get into government there. best to keep the old emnities on the go here (not just SF incidently, DUP are the same). each tribe is so well trained now (just look at almost any discussion on slugger) to find the correct position in any arguement and mindlessly follow it. NI isn’t like a soviet society. Its like an 1984 society.

  • Frustrated Democrat

    iain

    Then they should get out when the going is good!

  • Mick Hall

    As I said caught in a cold war time warp, not one of you have dealt with my two main points,

    1/A mad rush for growth and wealth is pointless unless the mass of humanity benefits from it. How we distribute the wealth we earn as a society is the most important question facing human kind in the 21 Century, for if we do not get this right we are on the road to barbarism”

    2/ Approximately one in three of the worlds population lives on less than a dollar a day.

    Instead you go into group speak reminiscent of the cold war. No where have I said that humanities problems can be solved by a ridged state run economy but it is simply untrue to suggest a planned economy cannot be innovative. Indeed the USSR survived for many years on innovation alone, as to did the planned WW2 war time economies of Britain and USA, indeed one of the reasons why the nazis failed was because they lacked a totally war time planned economy, no matter what propaganda to the contrary Herman put out.

    When people talk about Capital risking all as if they are like a guy climbing Everest I can but laugh, capital these days takes risks in much the same way a man does on the roulette wheel who has just robbed a bank.

    I am not talking about corner shops here, today even when a CEO looses the companies and share holders money they walk away with a massive redundancy package. As I said you lot are caught in a time warp. When was the last time a CEO risked their own many, do keep up to speed comrades.

    apols for my shortness but I have little time today.

  • George

    Willowfield,
    Ever heard of Sputnik?

    As Bob Hope said after the successful Sputnik launch:

    “Their German scientists are just smarter than our German scientists.”

  • Reader

    Aquifer: What we need is progressive property taxation, so that the rich and secure pay more, and better public transport.
    Ahem – as a steady, cautious type, who spent money on a good house instead of foreign holidays, new cars, or eating out, I think there should be huge VAT on frivolous spending instead, and property taxation on my home should be regressive.
    But that’s the politics of envy for you. Tax them, not me!
    The problem is, are you sure that higher tax will fix the economy anyway? Will you persuade people to start up businesses?

  • The Dubliner

    The difference being that your ‘Soviet’ society is funded by capitalist enterprise in the UK regions that create wealth and redistributed to you via subvention, so you enjoy a standard of living beyond your means, not because of the state (which isn’t a creator of wealth, merely a distributor of it), but because of the hard work and enterprise of others. The result of that dynamic is that politics in NI – in so far as it strays into economics – is essentially the art of demanding more money from central government (demanding more taxes on the generators of wealth) rather than promoting an indigenous enterprise culture wherein your region generates its own wealth. The problem is that so many people in the public sector have a vested interest in promoting the status quo that they have prospered under, so it is very difficult to promote a self-sufficiency alternative to it (particularly when major political parties gain support from promoting quasi – Marxist dogma – hence Gerry Adams being laughed out of the Republic during the last election when he spouted “The people create the wealth” during a debate of RTE about economic policy). Still, he did say recently that his party needs to be more ‘comfortable’ with words like prosperity and enterprise.

    However, it isn’t all doom and gloom for NI. A growing enterprise culture may lead to a healthy wealth-creating private sector, with the Total Entrepreneurial Activity Index (TEA) showing marked improvement in some areas over the last 5 years. This enterprise culture is vital to NI’s future.

    “What stands out in Northern Ireland is that, as in 2005, fewer people believe they have the skills to set up in business compared to all other UK regions. Fear of failure is once again higher in Northern Ireland (it is highest of the UK regions). There has been an improvement in attitudes towards entrepreneurship in Northern Ireland since 2002.”

    It isn’t helped by socialist propagandists and those who have a stake in the public sector, et al, telling people that entrepreneurs and the free market are evil incarnate, vile exploiters of the working class, to be reviled rather than revered. Not that such crap will keep a good man down, it’s more a case of the absence of popular support for an enterprise culture keeping the ‘government’ from helping it along with incentives, less oppressive legislation, etc – if there is no votes to be gained or lost in it, then they don’t care about it.

    One reason for the low GVA that George quoted is low productivity, which can only be rectified by targeting enterprise producing high-value added goods and services as part of a development strategy (which means upskilling the workforce over decades). Private sector contribution to economic output grew by 58% (to £17 billion) since 1996 but that increase, though substantial, was merely enough to keep you standing still rather than getting closer to convergence with the UK. But without it, where would you be?

    At any rate, you need to seize ownership of your own futures and force your politicians to formulate and implement a national economic plan. You need to do that because the tribal leaders you elected don’t give a flying fig about you. As far as they are concerned, the UK taxpayer only exists to pay for their state cars and you only exist to vote for your tribe. Gordon Brown doesn’t care, either: he had devolved the power to sink or swim to NI’s citizens – and you can all drown as far as he is concerned.

  • Mick Hall

    At any rate, you need to seize ownership of your own futures and force your politicians to formulate and implement a national economic plan. You need to do that because the tribal leaders you elected don’t give a flying fig about you. As far as they are concerned, the UK taxpayer only exists to pay for their state cars and you only exist to vote for your tribe.

    Dubliner

    I agree completely with the above, but the question is can the north on its own become viable economically, myself I doubt it and so to do the majority of its politicians, hence whether DUP or SF they cling to the British exchequers apron strings.

    Best regards.

  • The Serpent

    Been thinking a lot about all the left/right public/private narratives…. nothing to add really.

    have decided though that the Alliance Party is a bit gay.

    I’ll get me coat >>>>>>>>>

  • willowfield

    I’ll ask again.

    Is it the case that almost 30% of GDP in the Soviet Union was created by the private sector?

  • Joey

    There has to be an umpteenth warning against this absurd notion that the Southern Irish economy is some kind of model for excellence, talk of seeing people ‘well clad’, the LUAS a fine service, etc.
    This is a pretty dangerous sacred cow.

    I always found it strange how many Unonists in Northern Ireland agree with such right-thinking privitisation schemes, yet wish to opt out of a Republic and retain the ‘British’ NHS. The malaise is shared. Put simply the Republic is living beyond its means, the wealth concentrated in the upper echelons of the society – the result being that Dublin is one of the most expensive cities in the world, and people pay rather a lot of money for crap, inept housing. Leaving aside those silly little working people born into poverty who should just work harder (‘get on their bike’? as the murderous Tebbit would bleat) in the Republic being left behind by the private sector, the incursion of massive amounts of debt feeding a consumer-based economy might prove pretty disastrous in the long run.

    No mention or reference above to the fact that state-run railways in France are deliberately run at a loss; presumably the French see it as a price worth paying. And to the private sector enthusiasts – by God those trains DO run on time and are well-manned, ventilated, and efficient. They contrast sharply – as any British train passenger can now testify – to the dreadful ‘leaves on the line’ failings of the private sector effect on the British railways. But you’d object to that because you’d have to pay more tax for it. Then accept the paucity of the system you so cherish.

  • George

    Willowfield,
    Is it the case that almost 30% of GDP in the Soviet Union was created by the private sector?

    Owen Paterson said:

    “34% of GDP accounts for by public sector in the Republic against 71% in Northern Ireland. That’s at Soviet levels.”

    I immediately understood this as meaning you would have to look at the Soviet Union if you wanted to find another state which had a public sector as large as 71%.

    I very much doubt that Paterson was saying that the public sector in Soviet Union was at 71%.

  • willowfield

    Thanks, George, I guess yours is the more likely interpretation of what Paterson meant.

    But assuming the private sector in the USSR was nowhere near 29%, isn’t he engaging in sensationalism? The USSR was a communist economy with – as far as I know – virtually no private enterprise. NI is not remotely like that, albeit it has a relatively large public sector.

    Perhaps someone could also explain to me what is meant by the public sector accounting for 71% of GDP. How is the figure arrived at?

  • dewi

    One of the problems of the devolution project is the lack of links between taxation and revenue. Barnett formula anachronistic nonsense. Not Barnattising Olympics a disgrace but even when it works our way it’s still a daft mechanism.

  • George

    My understanding of the figure is the ratio of public spending as a percentage of GDP.

    So let’s say Northern Ireland’s GDP in 2006 was 26 billion pounds, then it has a public spending bill of around 18 billion.

    The Irish Republic had a GDP of well around 170 billion in 2006 with public spending of just over 50 billion.

  • Dread Cthulhu

    Comrade Stalin: “The point about risk is fundamental to free market economies. It is how technological development happens, and how change and progress proceed against humanity’s inherent aversion to it. That said, it can’t be denied that a point comes in the career of very rich people where there are no longer any risks. What difference does it make to Rupert Murdoch or Donald Trump whether he has $1bn in the bank, or $2bn ? ”

    Firstly, the wealth is there to be reinvested — it is only out of the market if they put it in a mattress and sit on it. Ergo, their increasing wealth ends up invested somewhere, either directly, via Murdoch or Trump making a direct investment, i.e. undertaking a new risk, or indirectly, by putting it in a bank or bonds or other investment — funding someone else’s risk in exchange for some consideration. Additionally, large blocks of wealth allow for “maverick” investments, rather than having to deal with conventional wisdom’s fetters.

    Secondly, it becomes, I suppose, a matter of ego for the players.

    Obviously, I consider point one more important than point two.

    Comrade Stalin: “Also, I think many of us would agree that a social welfare and health system on the level of the one in the USA would be unacceptable to people here.”

    Much as a zoo animal would have difficulty in the wilds, yes. The United States subsidized European economies (and still does), allowing them to experiment with soft socialism.

    Oddly enough, when the US makes a cost cutting move, such as withdrawing divisions from Germany, suddenly the presence of our troops, usually the target of popular discontent, become some sort of socialist jobs program, with the chants of “Yankee go home” being replaced “but what about our jobs?”

    America has the best health system — latest technologies, newest drugs, excess capacity for disenchanted Canadians and Europeans, etc. They carry the freight for these things — the research for new drugs and the development of new procedures. These things cost. I suppose were we to withdraw our troops in Europe, the money supporting those bases could be re-tasked — but, as the German locals wheezed, what about their jobs?

    Trade unions, like any other organization, are susceptible to corruption, become dysfunctional, etc.

    As for the rest, there are accomodations made for the poor in the United States — where else in the world can one own a car, a color TV, etc., and still be “poor?” — but the breadth of society is expected to provide from themselves. Europe’s main problem is that they have tried to make the free market wilds into a petting zoo — try firing someone in France or Germany, for example.

  • kensei

    “I immediately understood this as meaning you would have to look at the Soviet Union if you wanted to find another state which had a public sector as large as 71%.

    I very much doubt that Paterson was saying that the public sector in Soviet Union was at 71%. ”

    Actually, it’s hard to judge exactly under the Communist system, but as the Eastern block emerged from Communism, the share of GDP based on the public sector was running at 60-70%. Russia might have been worse, but I’m not sure. It really is that bad.

    There is a point that can be here. Wages are generally lower in the North of England, and the Celtic parts of the UK. So it makes sense to put public expenditure were wages where wages are lower: it’s part of the reason the SE of England’s average can be low, and the average is at 45%.

    In our case however, I don’t think that is a huge component, but rather been indulged because of the Troubles.

  • Dread Cthulhu

    Mick Hall: “1/A mad rush for growth and wealth is pointless unless the mass of humanity benefits from it. How we distribute the wealth we earn as a society is the most important question facing human kind in the 21 Century, for if we do not get this right we are on the road to barbarism” ”

    Wealth belongs to its creator. Not to the government, not to a collection of alleged “stakeholders” who risked nothing, but wish to “dip their beaks” and sop off another’s achievement and certainly not to some happy-sappy pie-in-the-sky internationalist vision.

    The biggest problem is the left is anti-progress. Regardless of the power source, the are against it — coal is too dirty, oil is too precious, nuclear too dangerous, wind power kills birdies, etc. Likewise, collectivism generally dulls and fetters the indivdual — there is no incentive to take risks is there is no benefit to the risker.

    Mick Hall: “At any rate, you need to seize ownership of your own futures and force your politicians to formulate and implement a national economic plan. ”

    Yes, you’d best prepare for a series of Planned Five Year Great Leaps Forward, coming from a kommissar near you soon…

  • Mick Hall

    Dread
    You really are becoming a bore with your bloody five year plans, as I said stuck in a cold war time warp. Who risks their own capital today, the directors of the northern rock perhaps? Only a fool invests their own coin these days and certainly not the sharks you admire so much.

    Note you never went near the water question, if you did and used your theory we would have to arrest those who run the multi nationals for stealing gods water

  • George

    Mick Hall,
    have you ever asked yourself whether it’s more important for you to achieve things your way or whether the things are achieved?

    I don’t pay any water rates in the Republic (or any rates for that matter) but that won’t stop another 5 billion being pumped into the water system under the current National Development Plan. That’s on top of the billions pumped in during the last one.

    The question is how can the Republic afford it and who is paying?

    I do pay 21% VAT on most things I buy so it seems indirect tax seems to work on getting the cash in.

    I think there are a million more people in work than a decade ago, including my good self, so it seems getting people to work is also beneficial.

    While in the last 20 years the percentage of GDP spent on public spending has dropped the amount spent on public services has rocketed as the economy boomed. A smaller slice of a much bigger cake.

    There are those who argue that it is the reduction in the size of public spending as percentage of GDP and the low tax/ indirect tax fiscal policy that spurred the growth and job creation.

    The contrasting fortunes of Belgium and Ireland in the last 20 years have been cited.

    20 years ago, Ireland cut its public spending by up to 20% (like to see them stomach that type of medicine up at Castle Stormont), slashed taxes and began getting its national debt under control while Belgium maintained its generous welfare provisions, kept taxes high and let its national debt spiral out of control.

    Ireland’s tough measures had the unfortunate side effect of forcing many like myself to emigrate in the early 90s but most of us returned within a decade as the economy took off. Nearly one in five of the first generation Irish in the UK have returned home in the last decade, for example.

    Ireland has the highest birth rate in the EU as well as the fastest growing population and
    is, in my view, a much more pleasant, prosperous, tolerant and diverse country to live in than it was 15 years ago.

    In my experience, the private sector seems to encourage production while a reliance on the public sector seems to stifle it. Low direct taxes encourage people to work.

    As a result of more people being active, we had a situation where the stronger economic growth in Ireland has led to an increase of social spending in real terms of 118% between 1980 and 1998 – three times the rate in Belgium.

    You even get more on the dole here than in Belgium these days.

    Irish family benefits rose by 262% in the last two decades while Belgian family allowances went down.

    There is loads more info on the Belgium/Ireland situation here:

    http://www.workforall.net/sustainable_growth_part_3.doc

    Ireland isn’t socialist but socialists have a major battle on their hands when even more “socially-minded” administrations like Belgium are having difficulties keeping up with the “Irish model” in the delivery of services to their people.

  • Dread Cthulhu

    Mick Hall: “You really are becoming a bore with your bloody five year plans, as I said stuck in a cold war time warp.”

    And you’re gamboling through a rainbow-strewn cloud-cuckoo land, replete with blue skies, candy-cane trees and toy airplanes for all. You want me to embrace a system whose practical accomplishments in anything beyond an atypical monoculture, such as Sweden, have been dismal. You give me no rational arguments or credible reasoning for this need to change, beyond some dire predictions couched in purple prose.

    You dash in, proclaim the need to socialize the whole world’s works without giving a credible why, beyond a sinister suggestions of “coming barbarism” and dash out again — how seriously can I be expected to take such an argument?

    You’re indulging in boot-strap levitation — you have the answer you want and want it accepted by the gallery without question or argument.

    Mick Hall: “Who risks their own capital today,”

    Every sole proprietor, partnership and small businessman out there, Mick. These are the real drivers of an economy and one of the first entities crushed under the weight of a socialist ecnomy — tied up in red tape and buried under mountains of regulations. Hell, every time a corporation take monies that would have otherwise gone to investors or been retained earnings (i.e. capital) and buys anything durable, they are risking capital. Even if they borrow, all they are doing spreading that investment over a period of years.

    Mick Hall: “Note you never went near the water question, if you did and used your theory we would have to arrest those who run the multi nationals for stealing gods water ”

    Mainly because you’ve tried to jigger the question, Mick, so as to come to a predetermined answer.

    Now, if you would like, I will gleefully stand in the dock and wait for the complaintant, i.e. God, to come and make his case. In any event, in the scenario you outline, you would lack standing to bring the case, making the whole thing moot. Unless, of course, you’d like me to think you’re God, out slumming on a discussion board.

    That said, if you need an answer, I would have to say that unless your dip your water from the stream, then someone has made a capital investment, simplifying your life by pumping, purifying and piping water into your domus and is entitled to a return on their investment, unless, of course, that person was you, either directly (i.e. you dug a well) or indirectly (you hired someone else to dig a well).

    Now, in most civilized parts of the world, we would call these entities “utilities” and their operations would be limited / guided by the state — which is not wholly unreasonable, given that they have, essentially, been granted a monopoly by the state and operate outside some of the normal rules of the free market. In exchange for a guaranteed return, these entities operate for the public good by producing a public good.

    The weakness is your argument, beyond that you seek to force false choices tied to the tails of the curve, is that you appear to want to correct the failures of politicians by giving politicians more power over the individual and the state.

    I have no problem with a social safety net, but I don’t have a great deal of faith in politicians and political systems, the temptation to use “social” arguments to try and buy votes and to invoke short-term solutions (selling the utilities to private corporations without retaining sufficient control) that create long-term pain.

    Socialism doesn’t work, as a rule, as it has no answer for the problem of free-loaders and other less desirable aspects of human nature, along with misplacing economic incentives. Capitalism, in its rawest form, has better attractions and encourages different behaviors, but needs to be alloyed with other mechanisms, insofar as it’s not a political system in an of itself. But, then, in its rawest form, democracy is five wolves and three sheep voting on what to have for dinner.

  • The Dubliner

    Willow, excluding the black market, the USSR didn’t have a private sector prior to Gorbachev’s economic and social reforms beginning in 1988 (which China began a decade earlier), so it is just meant as a jibe rather than a statistical comparative.

    Joey, nonsense. Bank of Ireland’s annual Wealth of the Nation report put the number of millionaires in Ireland at 33,000. That is more millionaires per capita than anywhere else in the world. And before you carp on about it all being the price of a house: the principal private residence is excluded from the wealth calculation. Add that in and the number of millionaires would boom to insane proportions. Of that 33,000, 3,000 have a net worth of €5 million and €30 million; 330 have a net worth of over €30 million, and the other 31,670 have a net worth of between €1 million and €5 million.

    The report also states Ireland’s household balance sheet is in “very good health” with assets outstripping liabilities by a multiple of six. Clearly, Ireland is cash and asset rich, and is not credit fuelled. In fact, the report goes on to state personal outdoes other OECD countries with percentage of income saved being 14 times higher than the US and 3 times higher than the UK. Only Germany even comes close to Irish savers where their citizens save 10% of income (compared to 14% for Irish citizens, equating to €10 billion at the end of 2006.

  • The Dubliner

    Typo: “…goes on to state that personal savings outdoes…”

  • Dread Cthulhu

    Oh, and for the record, Nazi Germany failed and the Allies succeeded because the latter went on a total war economy immediately and the former did not, at least not until 1943/44, iirc.

    Likewise, to conflate the American and British emergency measures with those that were de rigeur in the USSR is misleading at best. For example, it was the free market that built the industrial base in the United States that won the war, not any “emergency measures.”

    Furthermore, the Soviet Union “made do” not on innovation but on the philosophy of “more is better.” Even the T-34, while a superior tank to the Panzer III and IV models on the Eastern Front, was not so much an innovation as the application proven technologies on a mechanically simple platform. The Russians won primarily on being willing to spend lives beyond what Germany could afford, aided and abetted by a complete lack of strategic vision on the part of the OKW and the little Austrian corporal, along with the American transfer of the jeeps, trucks, aviation gas and radios that enabled the Soviet war machine to operate during the perilous period between 1941 and 1944 — even after the victory at Kursk, the Soviets contemplated a seperate peace with the Germans.

    On the other hand, if you want to see “innovation,” the best places to look would be the German equipment and tactics — some brilliant designs incorporating new technologies (along with a few very strange concepts so far beyond their time they’re only now being toyed with), ranging from jet fighters to infra scopes and guided missiles in the final years, a tactical doctrine head and shoulders above anything the Allies had in hand at the start of the war, having cashiered or exiled their visionaries — Zukhov to Siberia, for example — rather than embracing change. Even those crucial technologies, such as the RAF radar system, were installed as “scientific installations” so as to pass through a pacifistic Parliment.

  • willowfield

    The Dubliner

    Thanks

  • Comrade Stalin

    Willowfield:

    Ever heard of Sputnik?

    Yes, a technological leap it was, albeit one ultimately intended to push the envelope for weapons delivery systems.

    Dread:

    Much as a zoo animal would have difficulty in the wilds, yes. The United States subsidized European economies (and still does), allowing them to experiment with soft socialism.

    I’d love to know how the USA subsidized Europe (and Canada too, if some people are to be believed) while still remaining the largest economy by far in the world. What subsidies do we get and how are they paid ?

    Oddly enough, when the US makes a cost cutting move, such as withdrawing divisions from Germany, suddenly the presence of our troops, usually the target of popular discontent, become some sort of socialist jobs program, with the chants of “Yankee go home” being replaced “but what about our jobs?”

    It’s hardly my business if you decide you have a need to put soldiers in various places around the world. I don’t hear much of the “but what about our jobs” talk, but if it does happen then it’s definitely ridiculous.

    If a couple of thousand troops here and there is supposed to be a subsidy, I’d have to say that you were joking. You’re paying for the use of land and services here.

    America has the best health system

    By several metrics, it emphatically does not.

    —latest technologies, newest drugs, excess capacity for disenchanted Canadians and Europeans, etc.

    It’s hardly my problem if the way you organize your economy leads to your own citizens subsidizing everyone else. Don’t bitch at the rest of us about it, fix it.

    They carry the freight for these things—the research for new drugs and the development of new procedures. These things cost. I suppose were we to withdraw our troops in Europe, the money supporting those bases could be re-tasked—but, as the German locals wheezed, what about their jobs?

    I do not care about whether American troops are here or not, as long as they are well behaved (which apparently they usually are).

    As for the rest, there are accomodations made for the poor in the United States—where else in the world can one own a car, a color TV, etc., and still be “poor?”—but the breadth of society is expected to provide from themselves.

    Not a particularly good measure. If I sold a standard portable colour TV, it would maybe pay for two weeks’ grocery shopping here, and probably something similar in the USA.

    There are people who cannot provide for themselves.

    Europe’s main problem is that they have tried to make the free market wilds into a petting zoo—try firing someone in France or Germany, for example.

    It’s really sad when you’re defining the greatness of your country by illustrating how easy it is to fire people. That said, all that nasty socialism has been tried in the USA, and very effectively too where it worked. Try privatizing the TVA, and tell me about it. And in Europe, as far as I know we don’t have any direct equivalent of Fannie Mae and Freddie Mac.

    I’ll tell you the difference between these “socialist” states and the USA. At the end of the day you’ll likely find that there are not significant differences in the overall tax take as a percentage of GDP. The difference is purely about how it’s spent. In the case of the USA, this is on the military, to the sum of$1 trillion per year (source. The fact that this massive tax and spend exists proves that business and economy in the USA isn’t hurt by taxation. A small fraction of this money could be used to establish a national and affordable health insurance scheme, for example. So what gives ?

  • Dread Cthulhu

    Comrade Stalin: “I’d love to know how the USA subsidized Europe (and Canada too, if some people are to be believed) while still remaining the largest economy by far in the world. What subsidies do we get and how are they paid ? ”

    What percentage of GDP would Western Europe have to expend to have the equivalent of the NATO (i.e. US) military guarantee? Most estimates I’ve seen run 2 to 4% of GDP. Beyond the UK, Western Europe is a military paper tiger, with a theoretical 2 million men under arms, but strained to project 40,000 overseas. Even that requires US military logistical support.

    So, where do you think another, oh, 3% of GDP could be come up with to fund and create a functioning military?

    Comrade Stalin: “It’s hardly my problem if the way you organize your economy leads to your own citizens subsidizing everyone else. Don’t bitch at the rest of us about it, fix it. ”

    Ah, but it is not how we’ve organized the economy — the US isn’t in the business of organizing the economy. Likewise, I’m not bitching, I am making an observation. This is simply how it works at present — what chance would, say, Bangladesh or most of sub-Saharan Africa have under a wholly free market system?

    Comrade Stalin: “Not a particularly good measure. If I sold a standard portable colour TV, it would maybe pay for two weeks’ grocery shopping here, and probably something similar in the USA.”

    I agree. But, apparently, there are those who seem to think that the measure of poverty is income, not accumulated assets. Under the current tax regieme, there are those whose income is subsidized via a “negative tax” called the “Earned Income Tax Credit.” To remain eligible for other programs (such as Medicaid), rather than use this money wisely or to clear past debts, this money is quickly spent, so as to remain below certain thresholds. As I have said elsewhere, the misplacement of economic incentives.

    Comrade Stalin: “It’s really sad when you’re defining the greatness of your country by illustrating how easy it is to fire people. That said, all that nasty socialism has been tried in the USA, and very effectively too where it worked. Try privatizing the TVA, and tell me about it. And in Europe, as far as I know we don’t have any direct equivalent of Fannie Mae and Freddie Mac. ”

    Clear your blinkers, Josef.

    The employment laws in Europe have created high unemployment in France and Germany. As a result, there is low productivity, with companies unable to eliminate those individuals who are on the employment roles without actually doing any work.

    And do not confuse the government providing a public good with “socialism.” There is a place for public goods, especially in those marginal spaces where a private provider would be reluctant to provide services. As for Freddie, he’s as much, if not more, of a business as anything else, publicly traded on the NYSE. As for Fannie Mae, between the inefficiency and the accounting scadal, I would say that they’ve managed to grasp the worst ends of both the public and private entity.

    Comrade Stalin: A small fraction of this money could be used to establish a national and affordable health insurance scheme, for example. So what gives ?

    Oh, I can think of a few things. I wouldn’t want my medical care brought to me with the same beside manner as the IRS or efficiency of the US Postal service. Likewise, given the US gov’t’s track record of creating common sense programs that suddenly balloon to cover those who have not paid into the system, I really am not comfortable with simply handing over 12% of the economy to the gov’t. Lastly, given the current crop of potatos running for executive power, none has suggested cutting the military (or anything else for that manner…) in order to pay for “a national and affordable health insurance scheme,” instead proposing new levels of taxation.

  • George

    Dread,
    I think you also need to remove the anti-European blinkers – at least partially.

    Germany outstripped the US in productivity growth in 2006 and just in case you failed to notice actually has a trade surplus with China.

    Also, if you factor out the population increases, European economic growth has matched American growth in the last 15 years. That while Germany was rebuilding one third of its country from scratch and taking in half a million Bosnian refugees too.

    German society is still relatively cohesive, has low crime, provides superb health care to all and doesn’t need to imprison huge numbers of people to maintain its system.

    The USA has 738 prisoners per 100,000 for a total of over 2 million prisoners while Germany has 95 per 100,000 for a total of just 78,000.

    In my view, having to do things like deny tens of millions of your citizens access to health care while also imprisoning nearly eight times as many people per capita as somewhere like Germany is not a price worth paying so that I can live free or die.

  • Dread Cthulhu

    George: “In my view, having to do things like deny tens of millions of your citizens access to health care while also imprisoning nearly eight times as many people per capita as somewhere like Germany is not a price worth paying so that I can live free or die. ”

    First of all, no one is denied access to health care, George. By law, no facility that receives federal money (meaning just about all of them) is permitted, by law, to turn away a patient on the basis of ability to pay. Period. Not even illegal aliens or left-handed vegisexuals.

    Secondly, as at least some of your data is qualified, i.e. cherry-picked and twisted to make it fit an argument, rather than stand on its own merits, some of what you bring to the table is less than persuasive. But let us get down to cases, shall we?

    George: “Germany outstripped the US in productivity growth in 2006 and just in case you failed to notice actually has a trade surplus with China. ”

    Ooooh, one year… bravo, were it the truth.

    German economic growth = 2.8% (2006 est.)
    US economic growth = 2.9% (2006 est.)

    German industrial growth = 4.4%
    US industrial growth = 4.2%

    German unemployment = ~7.1%
    US unemployment = ~4.8%

    So, where is this “outstripping,” George?

    George: “Also, if you factor out the population increases, European economic growth has matched American growth in the last 15 years.”

    In other words, if you selectively ignore reality (and the shrinking German population (8.2 births per 1000 vs 10.71 deaths per 1000 (2007 estimates), you can make an argument.

    George: “German society is still relatively cohesive, has low crime, provides superb health care to all and doesn’t need to imprison huge numbers of people to maintain its system. ”

    America is more diverse, is expected to accept all comers, even by European nations who balk at doing the same. We are a younger nation in most sense of the term, including historically and demographically.

    Prisoners are not imprisoned to “maintain the system,” but as a consequence of the prisoner’s criminal activity. Some of this crime arises from the greater diverisity (unless there has been a sea change, crime rates are highest in the areas of greatest population density, with racial / ethnic diversity being a related and moderately correlated factor((Vermont and Wyoming safe, NYC not so much…). Much of the surge is the inevitable “second shoe” to the crack epidemic of the Eighties — less tolerance for drugs and related drug crimes, harsher penalties for rock vs powder cocaine, etc. Their imprisonment, ergo, does nothing to maintain the system, but is a result of bad law arising from lax laws and a period of economic displacement, following the Johnson / Nixon / Ford / Carter economic mismanagement — the “War of Poverty,” price controls and Jimmy’s misery index (the sum of high interest rates, high unemployment and high inflation) all contributing to a rise in crime.

    I can cherry-pick stats as well, Georgie.

    Last I checked, Germany edges out Arkansas in terms of per capita GDP and is well behind Connecticut. Not exactly a world beater, there.

    But, then, poverty is a relative thing — half the American “poor” own their homes (although this is subject to change — the mortgage mess is highly overblown, but still an issue), with three quarters having cars and air-conditioning, as opposed to, say, France… Heat-wave deaths in a first world nation? Shocking…

    This next part is more for Josef than you, but to quote a Swedish think tank, Timbro, the problem with the EU is “The expansion of the public sector into overripe welfare states in large parts of Europe is and remains the best guess as to why our continent cannot measure up to our neighbor in the west,” the authors write. In 1999, average EU tax revenues were more than 40% of GDP, and in some countries above 50%, compared with less than 30% for most of the U.S”

    I can’t imagine that this is changed much, given the aging population and welfare states, although Germany and France have potential under their current leadership. Likewise, for all the good talk that the EU gives about Kyoto and the environment, would you care to wager whether it is the US or the EU which has made better progress in cutting emissions? Hint, it is not the EU.

    Lastly, don’t confuse anti-socialist and anti-statist with being anti-European, Georgie.

  • The Dubliner

    Keep up the good work, Dread Cthulhu. Josef will exit this thread with one less tooth than Shane McGowan. 😉

  • Comrade Stalin

    Dread,

    We were talking about state versus private sector in the economy and, without me noticing, the conversation strangely seems to have drifted to you mounting a dogged defence of the USA, despite me at no point making any kind of major criticism of the USA. My opinion is that the USA and Europe do a lot of things differently, often one is better than the other depending on how you look at it, but overall they come out around the same. I don’t care for this “my country is better than yours” bull.

    What I don’t like is people insulting my intelligence. Take this claim, for example :

    First of all, no one is denied access to health care, George. By law, no facility that receives federal money (meaning just about all of them) is permitted, by law, to turn away a patient on the basis of ability to pay. Period. Not even illegal aliens or left-handed vegisexuals.

    I’m left with the impression that you think people here don’t know how it works in the USA. For a start, your claim is highly misleading – federal law in the USA requires emergency room access, not general access, although despite this I know that there are a lot of hospitals which will not turn sick people away. The first response to your comment is “why do people in the USA have health insurance if hospitals can’t turn people away” ? Clearly, emergency room access is not considered by the majority of US citizens to be the definition of sufficient healthcare. The US government does not think so either, which is why it funds Medicare and Medicaid.

    Secondly, once you accept the principle of not turning sick people away even if they cannot afford treatment, you have already created “socialized medicine”. If someone is seriously injured in a car accident but has no insurance, and is treated and fixed up in the ER, who pays for it ? Either the hospital absorbs the cost (which is then reflected in the sums it bills paying users for care) or it gets written off (in which case the hospital’s shareholders, and the taxpayer, pay). All you need to do is take that arrangement, regularize it and bring in price controls, and hey presto, you’ve got the guts of a national healthcare system. That wasn’t too hard, was it ?

    While we’re on about free markets and efficiency, look at the expenditure on healthcare in the USA. You pay more than double of the sum paid by most other European countries, yet the difference in terms of improvement in health is barely measurable. This is a pretty straightforward example of the free market insurance companies and health providers collaborating in a way that is reminiscent of a soviet operation. Costs are spiralling because there is no motivation to improve efficiency, and there are middlemen everywhere lining their pockets. You can’t possibly claim that this state of affairs is either effective or USA capitalism working at it’s best.

    Next you go on to statistics. Despite the USA’s supposedly radically superior way of organizing it’s economy (and I say “organize” – laissez faire is still a government decision), your economic statistics are not markedly superior to those in Europe. Despite all the savings on tax, despite the higher employment (which one might reasonably expect would lead to higher productivity), productivity levels and growth are approximately the same. This is during a time period where Europe is integrating former Eastern bloc states into it’s economy and repairing the long-term damage done by Communism.

    It’s ridiculous to say that size of the prison population to suggest that you’re somehow enforcing laws that we don’t enforce here, just as it is ridiculous to say that the ability to fire people at will makes the US economy strong (no evidence has been presented for this). The fact is that the USA has higher levels of criminality. I don’t know the reasons for that, but something doesn’t appear to be working properly.

    Next, we have this gem :

    But, then, poverty is a relative thing—half the American “poor” own their homes

    Is this some sort of joke ? How can anyone possibly afford a home on minimum wage in the USA ? Unless your definition of “home” is a trailer or a mobile home. Over here, a “home” is a dwelling made out of bricks and cement that doesn’t blow away in a strong wind.

    with three quarters having cars and air-conditioning,

    But can they afford to run the aircon when they have to ? There’s nothing cheap about it.

    as opposed to, say, France… Heat-wave deaths in a first world nation? Shocking…

    Not as shocking as what was allowed to happen in New Orleans. Are we going to sit here all day and trade tit for tat national insults, or what ?

  • Dread Cthulhu

    Comrade Stalin: “We were talking about state versus private sector in the economy and, without me noticing, the conversation strangely seems to have drifted to you mounting a dogged defence of the USA, despite me at no point making any kind of major criticism of the USA.”

    Um, perhaps you weren’t paying attention, but I think it started somewhere between your rubbishing of the American medical system for not being another freebie and my suggestion that soft socialism in Europe grew out of the NATO security guarantee being used as cover for Europe to underspend on defense.

    Comrade Stalin: “I’m left with the impression that you think people here don’t know how it works in the USA.”

    And that impression is reinforced just about every time the subject comes up.

    Comrade Stalin: “For a start, your claim is highly misleading – federal law in the USA requires emergency room access, not general access, although despite this I know that there are a lot of hospitals which will not turn sick people away.”

    And as someone who actually works in healthcare finance, I know that it is your comment is not accurate, based both on my knowledge of the law, news stories that circulate through the office as a matter of professional interest (hint: hospitals caught “dumping” patients end up in deep kimshee) and the plain facts that I encounter in the course of my professional career, including an illegal alien comatose at one facility for the past five years, despite being entitled to only a year of Medicaid. Weighing what I know and what I see against your assertations, I find your presentation wanting.

    Comrade Stalin: “The first response to your comment is “why do people in the USA have health insurance if hospitals can’t turn people away” ?”

    Health insurance as a common “perk” became widespread as a result of wage controls during World War II — companies could compete on wages, so they competed on other bases. Arguably, the growth of health insurance, with its regulations, is part of the problem. For instance, the Medicare program mandates that all facilities have a single, uniform pricing structure. However, Medicare also demands a contractual allowance — they will not pay the provider’s charges at full freight, but negotiate a lower reimbursement rate. This is common with private insurance, but, as these systems evolved, unintended consequences arose. Back to the original point, it was a trifle difficult to put the genie back in the bottle after the end of the war.

    Comrade Stalin: “This is a pretty straightforward example of the free market insurance companies and health providers collaborating in a way that is reminiscent of a soviet operation.”

    Actually, it is a result of the tinkering with the system. The feds decided they didn’t want a worse deal that the private companies, so they imposed regulations for a single price schedule, although the gov’t and private insurance have negotiated “contractual allowances” into their deals, meaning the only folks paying full freight are the folks paying cash who don’t qualify for other programs, public or private.

    The Medicare system went from charges to a percentage of charges (resulting in a price hike) to an attempt to get to costs through a cost-to-charge ratio on the cost report (resulting in other number games) to a system based on a fixed reimbursment (with some supplements for outlier services).

    Comrade Stalin: “Despite all the savings on tax, despite the higher employment (which one might reasonably expect would lead to higher productivity), productivity levels and growth are approximately the same.”

    Actually, George went there, but why let fact get in the way of a good misrepresentation… AS for growth, the rates may be similar, but the base of that growth is not. The smaller the base, the easier it is to achieve higher percentage growth.

  • Dread Cthulhu

    Comrade Stalin: “It’s ridiculous to say that size of the prison population to suggest that you’re somehow enforcing laws that we don’t enforce here,”

    What you believe is immaterial, Josef. The fact is that much of the growth in the US prison population boils down to matters of law and policies relating to the enforcement of the law. They imprison a lot more recreational drug users here than in Europe, Josef, including non-violent end-consumers. I’d also wager that the “safe harbor” for “personal use” is lower here than there. Rolling from the Rockafeller drug laws in NY in the sixties to the Eighties “War of Crack,” and on into methamphetamine, aspects of the Puritan heritage have had their impacts to the system. Throw in knee-jerk “feel good” policies (three strikes and you’re out), and the law of unintended consequences comes into play. 70% of the growth fromt he late seventies to the mid-nineties were non-violent offenders.

    http://webb.senate.gov/pdf/prisonstwopager.html

    “Much of the growth in the prison population is due to changing policy, not increased crime. Many criminal justice experts have found that the increase in the incarceration rate is the product of changes in penal policy and practice, not changes in crime rates. Changes in sentencing, both in terms of time served and the range of offenses meriting incarceration, underlie the growth in the prison population.”

    Comrade Stalin: “Is this some sort of joke ? How can anyone possibly afford a home on minimum wage in the USA ?”

    Your preconceived notions are showing — few teens settle for the minimum wage, Josef, let alone grown-ups.

    As for the rest… its drawn for US census data.

    http://www.heritage.org/Research/Welfare/BG1713es.cfm

    Comrade Stalin: “Not as shocking as what was allowed to happen in New Orleans. Are we going to sit here all day and trade tit for tat national insults, or what ?”

    First of all, I consider my rebuttal of George seperate and distict from my conversation with you, save for the rebuttal of your assertion that the tax burdens in the US and the EU are nearly the same.

    Secondly, nothing was “allowed to happen” to New Orleans — are you normally conspiracy minded, or is this a special occasion?

    Thirdly…

    Katrina flooding deaths (2005) = 2,541
    French Heat Wave deaths (2003) = 14,802

    That one pretty much speaks for itself.

    Lastly, given George’s use of Germany as an example, were I to get insulting, I think I could have done far better than point out the failure of France’s system, neh?

  • the USSR didn’t have a private sector prior to Gorbachev’s economic and social reforms beginning in 1988

    Depends what you mean by a private sector. The private plots held by farmers in kholkozy were responsible for 40% of Soviet agricultural production in the middle- to late-Soviet period, and over 20% even at the height of Stalinism.

    I’d call that a fairly significant private sector even if, for ideological reasons, the official vocabulary of the USSR and its modern-day apologists wouldn’t.

    Ever heard of Sputnik?

    The Germans built Sputnik, the same way they ran the Apollo Programme.

  • will82

    “The people of the USSR may not have drunk fine wine and shopped at Harrods or Macy’s,”

    no they did not but they spent $7 for every $1 earned by the USSR.

  • will82

    Since its inception in 1955, the Swedish system of handouts — to parents, retirees, the ill and the poor — has been based on trust: If you filed a claim, you were simply believed. But those days are over.

    With fraud costing the state about 1 billion kronor, or $141 million, a year, the Social Insurance Administration began last year to set up the squad of investigators, which has since fanned out across the country to uncover welfare cheats.

    The cost of Welfare is 400 billion (European Milliard) Kronor so the rate of fraud is taken to be 1 in 400.