Government spending and corruption


by Rumbold
29th October, 2007 at 9:43 am    

From nabobs buying votes in the House to Neil Hamilton asking questions for cash, from James I selling Baronets to the ‘loans for peerages’ scandal, corruption and politics have always been intertwined. The above are examples of obvious corruption. Should however our definition of corruption in government be widened? At what point do government actions become a form of corruption?

Governments are elected on a manifesto which promises certain things; tax cuts, higher spending in certain areas, new laws and suchlike. Though each act by government will be portrayed as benefiting the majority of people in the country, in reality most government actions will only benefit certain groups. Governments are seen to have a mandate to spend taxpayers’ money and make laws by virtue of their electoral victory. So far, so uncontroversial. My question is whether some of this expenditure and law making, legal and above the board though it might be, is actually a subtle form of corruption?

Take two examples (for balance): Margaret Thatcher allowing people to buy their council homes, and Gordon Brown giving millions to the trade unions so that they could modernise. Both acts were perfectly legal, and everybody knew what was going on. Neither Mr. Brown nor Mrs. Thatcher personally received any financial reward as a result of these actions, yet both actions could be said to be suspect. In Thatcher’s case, the taxpayer was short-changed, while in Brown’s case the loss was even more explicit.

There is a rational case to be made for both policies: people owning their own homes could be said to be good for society, while unions do need modernising to some degree. That is not the issue though, rather the issue is whether or not these actions were corrupt. Being allowed to by one’s home at subsidised rates created a class of people likely to vote for Thatcher. The Labour-unions agreed to carry on funding Labour, and the Labour government gave them (and other non-Labour unions) millions of pounds to fund their modernisation process.

If it turned out that everybody who voted for the party in power was to receive a thousand pounds each, there would be howls of protest. Yet there is little complaint when governments spend large amounts of money in marginal constituencies or constituencies which elected MPs of their party. Both parties are filled with lawyers, and surprisingly enough they are both inclined to make laws, helpfully providing more work for their former compatriots. Corruption? Why not?

I am well aware that taken to its logical extreme this argument could imply that all government spending could be classed as corrupt because the government of the day wants to stay in power. But if you reject this line, ask yourself, where does favouritism end and corruption begin? Does the very nature of the democratic process give governments the right to lavish our money on whomever they choose?

(Note to lawyers: I am not saying that any of the actions described outside the first paragraph are examples of corruption, merely raising the point).


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  1. Tim Worstall — on 29th October, 2007 at 11:15 am  

    “I am well aware that taken to its logical extreme this argument could imply that all government spending could be classed as corrupt because the government of the day wants to stay in power.”

    Well, quite, it’s called public choice economics. Several Nobel’s have been awarded for pointing it out, that politicians and bureaucrats do things which benefit politicians and bureaucrats, not thngs that benfit everyone else.
    Thus the simple answer is that politicians and bureaucrats should have the minimum possible amount of power and the smallest possible amount of money to splurge on their interests.

    The smaler the State the better, witha certain irreducible minimum being necessary.

  2. Morgoth — on 29th October, 2007 at 11:19 am  

    Tim basically said what I was going to say.

    On the expansion of the state, Civilisation 4 (which I’m playing a lot of at the moment) has a wonderful quote (derived from Oscar Wilde I believe) on this:

    The bureaucracy is expanding to meet the needs of the expanding bureaucracy

  3. sahil — on 29th October, 2007 at 11:37 am  

    “Several Nobel’s have been awarded for pointing it out, that politicians and bureaucrats do things which benefit politicians and bureaucrats, not thngs that benfit everyone else.”

    Well possibly, but as the article said the majority of the ‘bribing’ (during election times) is done for the floating voters. Maybe what we need is more fractuious politics i.e. greater choice in who can get elected and greater menu of choices regarding public policy. Or maybe people should get smarter and try to convince politicians that they are floating voters.

    BTW Tim what is the “irreducible minimum being necessary.”?

  4. Dan — on 29th October, 2007 at 12:16 pm  

    I’m not sure it’s helpful to widen the definition of corruption because it’s not clear where it gets you. Your widened definition is not sufficiently clear cut and straightforward that there could be widespread agreement about when it had happened. So it couldn’t be used very well in any legal proceedings.

    On the other hand, I think it’s extremely useful and important to focus on these sorts of dubious activities, and think about ways of reforming our democratic structures to make them less likely to happen. State funding of political parties and the banning of all private funding would remove the need for corruption for parties to make money (if done properly, etc.). Proportional representation would minimise the problems of the party focussing on the needs of the floating voter (or median voter).

  5. ZinZin — on 29th October, 2007 at 12:49 pm  

    Rumbold a popular definition of politic is who gets what, where and when. If you accept that politics is about the allocation of resources then you can have no complaints.

    Corruption is unethical,immoral and illegal conduct, for example paying an individual a sum of money for their vote is deplorable. Promising him/her a slice of govt monies if they vote for you is politics.

  6. Sunny — on 29th October, 2007 at 3:10 pm  

    Why shouldn’t a government spend money in a way to attract voters? After all, democracy itself is about the majority over-ruling the minority. So it’s not surprising that a government will then try to understand its constituents and pander to them in different ways. I see that as part of the system.

    Now, the problem with reducing the state in certain cases (though I’m generally in favour of a smaller state) is that corporations have to step in. For example, taking your argument furtherr, you could say the NHS is a form of distributing wealth to the poorer and thus a form of buying votes (hence corruption). But the absence of universal health care means corporations.

    Now, I’m not opposed to corporations or the free market as such but your problem is more about imperfect information than anything else. If voters were aware of what was going on they could make up their own minds as to whether they agreed or not.

    If the problem is lack of information, it won’t be better under corporations since they have more of an incentive not to provide information about their activities and motivations.

    So I’m not an advocate of minimising the state as far as possible because in some cases voters lose out.

  7. Morgoth — on 29th October, 2007 at 3:16 pm  

    Why shouldn’t a government spend money in a way to attract voters?

    Because that’s not a function of government.

  8. Rumbold — on 29th October, 2007 at 7:28 pm  

    Tim Worstall and Morgoth:

    I agree with you completly about governments having as little money to spend as possible. This sort of thing will always go on, so we might as well limit the damage.

    Sahil:

    “Or maybe people should get smarter and try to convince politicians that they are floating voters.”

    That might get them more money. Heh.

    ZinZin:

    “If you accept that politics is about the allocation of resources then you can have no complaints.”

    But is it right that the allocation of resources is so partisan?

  9. Rumbold — on 29th October, 2007 at 7:31 pm  

    Sunny:

    “Why shouldn’t a government spend money in a way to attract voters? After all, democracy itself is about the majority over-ruling the minority. So it’s not surprising that a government will then try to understand its constituents and pander to them in different ways. I see that as part of the system.”

    But what if you are penalised because you did not vote for / donate money to a particular party (e.g. Brown using your money to fund the unions which fund his party)?

  10. Sunny — on 29th October, 2007 at 8:43 pm  

    But what if you are penalised because you did not vote for / donate money to a particular party

    This is the argument you are Morgoth are making, but I’m afraid it doesn’t stand up. We live in society where money is put into a central pot and then out of that its spent, and we judge govts on that basis.

    Otherwise, why should lefties pay for a defence industry? Why shouldn’t companies pay for ruining my air by chucking fumes into it, and pay extra for ruining the natural water of this country?

    Public Goods would not exist if everyone wasn’t forced to pay for them.

    If you’re penalised, vote for someone else.

  11. Rumbold — on 29th October, 2007 at 8:47 pm  

    Sunny:

    “This is the argument you are Morgoth are making, but I’m afraid it doesn’t stand up. We live in society where money is put into a central pot and then out of that its spent, and we judge govts on that basis.

    Otherwise, why should lefties pay for a defence industry? Why shouldn’t companies pay for ruining my air by chucking fumes into it, and pay extra for ruining the natural water of this country?

    Public Goods would not exist if everyone wasn’t forced to pay for them.”

    Sorry Sunny, I should have been clearer. I was not objecting to money being spent on things I do not like, rather on taxpayers’ money being spent on groups that favour the government (and used both Conservative and Labour examples to illustrate this). I do not accept that this spending is necessarily on Public Goods, though it might be in some cases.

  12. ZinZin — on 29th October, 2007 at 9:07 pm  

    I was not objecting to money being spent on things I do not like, rather on taxpayers’ money being spent on groups that favour the government

    Do you mean the voters?

  13. Dave S — on 29th October, 2007 at 9:15 pm  

    I think it’s self-evident that government itself (all government) is an inherently corrupt institution, and is incapable of being any other way. These days (at least in the UK), they barely even try to conceal it.

    Just look at Kim Howells MP (and the rest) brown-nosing the tyrannical Saudi government today. It speaks volumes that ministers are prepared to condemn countries such as Iran and Zimbabwe, but will overlook far worse violations of human rights and democracy in the interest of favourable trade with Saudi Arabia – and that’s before we even get as far as highly questionable arms deals!

    The corruption is rife, and it’s largely on display. Yet time and time again, the public ignore the mountains of historical evidence pointing to government corruption, and put blind faith in the idea that somehow, with a bit of luck, “the next lot” might not be so awful.

    In my opinion, it is literally impossible to vote for “a better government” – because no such thing exists. It’s an illusion – a trick of the mind that we’ve been told all our lives is attainable if only we vote for the “right” leaders – when in reality, nothing could be further from the truth. There is no right leader – that’s the point.

    But sadly, hope triumphs over experience, and a minority of the public still buy the deception just enough to elect and “legitimise” the next bunch of parasites to rule over us without even so much asking the question: “Couldn’t we do this a completely different way?”

    It’s as if the existence of an overbearing, universally loathed state, with it’s much abhorred politicians and bureaucrats, is seen as so inevitable that most of us don’t even stop to question the necessity of it’s existence.

    When is it going to stop? Well, actually, I think it may already be coming to it’s natural death, if voter turnout is any sort of indicator – though that’s not to say it’s anywhere near dying off for good, yet. I think low voter turnout is far, far beyond simple apathy, and wholly into the territory of antipathy – an almost universal loathing and total distrust of politicians of any political colours. Maybe those who still vote hope it can be reformed, but experience and an honest examination of the evidence should tell them otherwise.

    The problem is the feelings of hard-won rights being cast away – the right to vote, that old chestnut. We’re told that if we don’t vote, we lose our voice and have no say in the running of things.

    “People fought and died to give you that right, and you can’t even be bothered to use it? You don’t deserve your freedom!”, will say vast swathes of the population every time the issue of voter turnout comes up. Then, like dutiful servants, they put a cross in a box every few years, and are only too happy to wash their hands of the whole thing and blame the politicians when it all goes horribly wrong.

    Needless to say, I completely disagree with them.

    If we take off the rose-tinted glasses for a minute, we can see the reality of the situation – we are not represented, and nor will 99% of us ever be.

    What if voting itself was the thing which took away our voice? The thing which allows politicians to take away our freedom on a daily basis, conducting themselves in ways that are not only not representative of us, but are blatant examples of corruption and criminality. (We’ll take canoodling with the Saudis as today’s example, but it’s not difficult to find countless more examples.)

    I believe this is the case – if we vote, we are willingly rolling over and allowing them to do this. Voting takes our voices and our freedoms, and it assigns it to a lottery ticket in a game where we will lose every time, even if our number does actually come up. Not only that, but it’s a convenient get-out clause for us having to actually take any responsibility for our own lives.

    If there is a system which you know is completely broken, and totally unrepresentative of the people it purports to represent, and you continue playing along with it in the full knowledge that it doesn’t work, then you are complicit in silencing not only yourself, but everyone else too.

    In casting our vote for one of any number of largely indistinguishable sleazebags – all of whom promise us the world and none of whom will deliver – we are the suckers, the losers, the mugs. Every single time, whoever we vote for.

    But there is another way. In fact, there are a multitude of other ways it could be done, and I wouldn’t even dare to pretend I have all the answers. (That’s another thing we need to get away from – believing people who tell us they have all the answers!)

    Electoral reform isn’t enough, because what difference does it make to change the choosing process, when that is only one of a multitude of tricks that are used to deny us any real say in the running of our lives? We could change the voting system, but it wouldn’t matter in the slightest – the power will still be there in the hands of the few (more often than not, the powerful who are outside of the voting system), and they are not interested in anybody but themselves.

    No, what’s really needed, is for us to join the dots and realise that nobody is willing or capable of representing us but ourselves. Then, we must recognise that those who are currently at the steering wheel will never willingly give up their control, or even hand back small bits of it – we’re going to have to take it back, and it’s probably not going to be pretty. They will try to denounce us, divide us, and use their full arsenal – the press, police, military, other members of the public – to hold us back.

    When we get to that stage, we then need to be very careful to make sure we don’t simply recreate the same nightmarish system all over again. To be honest, that’s probably going to rank among the hardest things to achieve – because nobody can escape their influences, even influences they detest.

    But I believe it is absolutely inevitable (subject to us surviving impending ecological meltdown and resource depletion) that we will eventually win, because what they (the politicians and authoritarians) are defending is one of the biggest lies in existence – the lie that we need them, that we’d all tear each other to shreds without them.

    Their lie is shown to be a lie, day in, day out. The illusion they have created requires constant propping up from other lies in order not to come crashing down around them.

    We have the truth and the will of the people on our side – we are everywhere, we are everybody, and we are fed up with being lied to.

    Don’t vote for me – don’t vote for ANYBODY! Vote for yourself.

    Finally, to Rumbold:

    This sort of thing will always go on, so we might as well limit the damage.

    It only goes on because you allow it to. If people would stop saying “that’s just the way it is” and get together to not just demand, but actually create the necessary change – we could solve it in a matter of days.

    Utopian? Certainly – but why aim for anything less?

  14. Rumbold — on 29th October, 2007 at 9:15 pm  

    ZinZin:

    “Do you mean the voters?”

    No, I mean groups directly connected with the government of the day.

  15. ZinZin — on 29th October, 2007 at 9:17 pm  

    I knew you would pick me up on “that”.-)

  16. Rumbold — on 29th October, 2007 at 9:23 pm  

    Dave S:

    Excellent post, but I especially agreed with this bit:

    “No, what’s really needed, is for us to join the dots and realise that nobody is willing or capable of representing us but ourselves. Then, we must recognise that those who are currently at the steering wheel will never willingly give up their control, or even hand back small bits of it – we’re going to have to take it back, and it’s probably not going to be pretty. They will try to denounce us, divide us, and use their full arsenal – the press, police, military, other members of the public – to hold us back.”

    As a small-government libertarian I often find the notion of anarchism rather attractive, though think that it would not work so well in practice. I respect true anarchists like you though (as opposed to those who complain about all rules until it suits them to enforce the power of the state).

    ZinZin:

    Heh.

  17. Mangles — on 29th October, 2007 at 9:52 pm  

    Is there such a concept as power to the people? Can it be enforced without literally anarchy? Though utopia it would certainly be if it didn’t end this way.

  18. Dave S — on 29th October, 2007 at 11:26 pm  

    Rumbold – cheers, thanks for that.

    See, what I find interesting about anarchism is that (with perhaps the exception of those who wish to rake in *serious* physical riches and/or exercise supreme dictatorial power – but we’re never going to find common ground with such sociopaths) I think it has potential for almost universal appeal.

    While traditionally anarchism is considered part of the leftist milieu, I often think it departs from there in rather interesting ways – ways that would (expectedly) hold considerable appeal for those on the libertarian right.

    While I don’t doubt that I am pretty much “left-wing”, I really have no urge for any “dictatorship of the proletariat” or anything at all like that! (Actually, me and my anarchist chums regularly have a good laugh at the crazy antics of the authoritarian left… what a bunch of nutters!)

    Still, I’m confident I would fare just as well as anybody in a right-libertarian society – though my affinity with the planet and desire for universal equality are my main reasons for not desiring such a society. In some ways it would be a step in the correct direction, but money can be every bit as much a small state with it’s own dictators, as actual countries can. I think the trouble with a libertarian society based on the free market is that really, it’s only a libertarian society for those with the capital, and it’s still going to result in ecological meltdown.

    So this is really why I have my fascination with anarchism, and why I believe it’s a credible, formidable political position – more relevant to where we are now than it has ever been in history.

    Ultimately, if we can cast off incorrect assumptions and deliberate misinformation about it, I think it can actually unify many aspects of the left and the right, in the way that we can all be “rich beyond our wildest dreams” (though I’m talking about more than material possessions). Not at the expense of each other, or to the detriment of each other’s personal liberty – but in free co-operation with each other.

    I detest the idea that we are all the same, or that we should all think the same way or have the same desires in life. Again, I think anarchism really delivers here, because one of it’s central ideas is that nobody knows what is best for you better than you do yourself.

    What I am interested in is where there is common ground for coming together with others, to get on with sorting out what’s mutually agreeable for us all.

    I couldn’t give a crap whether you think you’re left, right, whatever… we all live here, and we need to get along. Bickering over differences needs to be left in the dustbin of history, where it belongs along with those party politicians who’ve perfected it’s pointless ways.

    Anarchists generally don’t expect other anarchists to agree with them. In fact, I have never met another anarchist I had exactly the same views as, and I have met a LOT of anarchists! But this is the point – far from being a stone pillar, anarchy is a living praxis, that fully expects to have to resolve disputes and disagreements. It is simply a level playing field, so that such disputes and disagreements can be resolved in as peaceful and fair a way as possible.

    Society isn’t going to change overnight, but with a concerted effort, solidarity with each other and a different type of enlightened upbringing (bear in mind how much kids get drummed full of dog-eat-dog mentality in school), I really believe it would work.

    Moving on, in reply to Mangles as well as yourself – to quote Leo Tolstoy:

    “Even if the absence of Government really meant Anarchy in the negative, disorderly sense of that word – which is far from being the case – even then no anarchical disorder could be worse than the position to which Governments have already led their peoples, and to which they are leading them.”

    I never think of anarchy as being an “end” or an “answer”, but a constant process that will result in the best overall solution. It’s simply a way of working things out and taking responsibility for ourselves in the equation, rather than expecting someone else to do it for us.

    This (in part) is why at the weekend, I proposed to discuss aspects of anarchism in depth on here sometime – because I’d like to explain my take on it a little more, and demonstrate how it relates to the issues we’re faced with today.

    I really don’t consider myself an “expert” on it – but also, that is an area where I think it delivers again. Anarchism (and thus politics in general) should not be some complex, distant thing requiring “experts” to deal with it for us. Politics is a very real thing, affecting us all, and any adult should be able to understand it, formulate a reasoned point of view, and reach an agreeable, respectful compromise with others.

    Accessibility and transparency are again, the point – because openness, mutual trust and respect are the best overall protection against corruption and misuse of power.

    No “enforcing” needed, Mangles! ;-)

  19. Sunny — on 30th October, 2007 at 3:00 am  

    Interesting and well made points Dave, though you do go on a bit… like all anarchists ;)

    Rumbold – I’m afraid I don’t agree with the view taken by yourself or Tim that small governments are the best way forward.

    A small govt could still pass laws that favour its own constituency. The Republilcan party, under Reagan (when it favoured big corporations) and now under Bush (when it has favoured Christian evangelicals) has used the law to shore up its fanbase rather than handing out money.

    So the problem doesn’t go away… because in effect a govt could make it easier for companies to pollute (thus harming us) or give them legal advantages (biased against individuals) which amounts to the same.

    The only way to get around this would be to have a much more federal structure of government, very de-centralised, and then have regular debates and referendums about such laws.

    Unfortunately, if we only had the choice of commercially driven news organisations, like the Daily Mail, this debate would not happen nationally because they’d be too busy chasing up politically correct doctors or fundo-Muslims :)

  20. Rumbold — on 30th October, 2007 at 9:39 am  

    Dave S:

    “While traditionally anarchism is considered part of the leftist milieu, I often think it departs from there in rather interesting ways – ways that would (expectedly) hold considerable appeal for those on the libertarian right.

    While I don’t doubt that I am pretty much “left-wing”, I really have no urge for any “dictatorship of the proletariat” or anything at all like that! (Actually, me and my anarchist chums regularly have a good laugh at the crazy antics of the authoritarian left… what a bunch of nutters!).”

    Spot on. Good man.

    “Society isn’t going to change overnight, but with a concerted effort, solidarity with each other and a different type of enlightened upbringing (bear in mind how much kids get drummed full of dog-eat-dog mentality in school), I really believe it would work.”

    But would anarchism in practice really foster solidarity? Even if 90% of people reacted in a positive way, the lawless behaviour of the other 10% may cause life to be unbearable.

    Sunny:

    “Small govt could still pass laws that favour its own constituency. The Republilcan party, under Reagan (when it favoured big corporations) and now under Bush (when it has favoured Christian evangelicals) has used the law to shore up its fanbase rather than handing out money.

    So the problem doesn’t go away… because in effect a govt could make it easier for companies to pollute (thus harming us) or give them legal advantages (biased against individuals) which amounts to the same.

    The only way to get around this would be to have a much more federal structure of government, very de-centralised, and then have regular debates and referendums about such laws.”

    The point Tim, Morgoth and I were making was that a smaller government will still spend money in the same way, but it will just have less of our money to spend so the distortion/damage will be less. Reagan’s reign is not easily classified as small-government, for though he preached minimalism, he still spent massive amounts of taxpayers’ money.

    I am not sure why decentralised government will help, though I am generally in favour of stregthening local government. Regional government would be just as bad as central government mind.

    “Unfortunately, if we only had the choice of commercially driven news organisations, like the Daily Mail, this debate would not happen nationally because they’d be too busy chasing up politically correct doctors or fundo-Muslims.”

    Heh- I knew that sooner or later it would be the Daily Mail’s/Melanie Phillips’ fault.

  21. Tim Worstall — on 30th October, 2007 at 12:18 pm  

    “BTW Tim what is the “irreducible minimum being necessary.”?”

    Whatever I approve of, obviously. Slightly more seriously, a State strong enough to protect citizen’s rights and weak enough not to threaten them.

    “Public Goods would not exist if everyone wasn’t forced to pay for them.”

    Sunny, that’s an insane statement. Public Goods are not, as you seem to think, things provided publically, nor are they things provided from taxation. They are things which are non rivalrous and non excludable.

    The Theory of Gravity is a public good. Lighthouses are a public good (and as one of the UK’s Nobel Laureates, Ronald Coase, pointed out, they were not and are not provided from taxation). Knowledge is a public good.

    Now it is true that theory then goes on to say that public goods will be “underprovided” unless there is taxpayer subsidy, but there is absolutely nothing that states that public goods “must” be funded by taxation.

    Your very statement shows that you simply don’t know what a public good is.

  22. sahil — on 30th October, 2007 at 12:25 pm  

    “Sunny, that’s an insane statement.”

    Not really if something is non rivalrous then we have a massive freerider problem. I remember this case illustrated by Shelling:

    http://www.polisci.ucsd.edu/~bslantch/courses/gt/04-strategic-form.pdf

    Page 31 in the PDF, where people see and accident, but no one ends up calling because they assume someone else will even though they care about the person in the accident. This is extreme example, but underfunded would be a merit good Tim.

  23. sonia — on 30th October, 2007 at 5:10 pm  

    there currently isn’t much agreement on the/a definition of corruption – is there? i think that’s definitely the problem. this article seems to suggest – in the case of the british government anyway – are ‘working on it’.

    this is Transparency International’s defintition?

    There’s a lot of discussion about defining corruption – academics, lawmakers, everyone.

    The World Bank has this to say..

    “..We challenge the conventional definition of corruption as the ‘abuse of public office for private gain’, making a distinction between legal and illegal forms of corruption, and paying more attention to corporate patterns of corruption (which also affect public corruption).

    the The OECD, the Council of Europe and the UN conventions don’t define “corruption”, but establish a range of corrupt offences: “The OECD Convention establishes the offence of bribery of foreign public officials, while the Council of Europe adds trading in influence and bribing domestic public officials too. In addition, the UN Convention covers embezzlement, misappropriation of property and obstruction of justice. One frequently-cited conundrum is distinguishing illegal trading in influence from legal lobbying. The Council of Europe Convention criminalises trading of “improper influence”, i.e., there must be corrupt intent. The UN Convention only covers peddlers who “abuse” their influence. The glossary notes that international definitions of corruption for policy purposes are common, and cites “abuse of public or private office for personal gain” as a useful example for policy development.”

  24. sonia — on 30th October, 2007 at 5:11 pm  

    when I was doing my masters, for one of my classes, i focused ( for some reason!) on transnational organised crime (heh) and there was one academic, Nikos Passas, whose definition of corruption I used, that was a good one, but alas without access to JStor i can’t get hold of it.

  25. Katy — on 30th October, 2007 at 6:21 pm  

    Legal forms of corruption? ! :S

  26. Sunny — on 30th October, 2007 at 6:27 pm  

    Sunny, that’s an insane statement. Public Goods are not, as you seem to think, things provided publically, nor are they things provided from taxation.

    Erm tim I’m sure you’ve done Economics too so I don’t know what you find insane about that. Public goods HAVE TO BE provided through blanket taxation because, as Sahil pointed out, the free-rider problem makes them irrelevant otherwise.

    Lighthouses are a good example, but we also see National Defence and Roads as public goods, although if lots of people used them then obviously others can’t. By your definition the BBC is a public good because millions more can tune into TV and Radio without there being less for others. Agreed?

  27. Dave S — on 30th October, 2007 at 10:57 pm  

    Sunny:

    The only way to get around this would be to have a much more federal structure of government, very de-centralised, and then have regular debates and referendums about such laws.

    That’s really very similar to the structure that would be proposed by many (maybe even most) anarchists; localised autonomous groups in free association with each other. I guess the main difference is that in an anarchist society, there is no coercion to take part in something you disagree with.

    Assuming the decision making process was by consensus, you’d have various options at your disposal if you disagreed: stand aside (meaning you don’t take part but you don’t stop the group doing it), block the proposal (this requires a rethink and further discussion), or leave the group altogether (if it’s not mutually beneficial). There are other options available to help the process along – sometimes just taking a break and coming back to it later gives everyone time to reflect and reach an agreement.

    Now, I agree consensus is a rather high thing to aim for, but it does actually work as long as the people involved are really committed to making it work – committed to respecting each other, treating each other as equals, and coming to a mutually agreeable conclusion.

    That’s the aspect that would require quite a bit of “reprogramming” (for want of a nicer word) of our brains, since we’d need to reach the stage where we accept that involvement in a (possibly long-winded or somewhat difficult) co-operative decision making process is by far preferable to being ruled from above.

    The crux of the is issue really: are you committed to having a real say in your life, or do you just want to be told what to do and have no choice in the matter?

    I think it’s a no-brainer really, but clearly I’m probably in the minority here (if only in terms of how far most people have really considered or tried the idea).

    Still, I think Peter Kropotkin described it rather well, when writing about how an anarchist-communist society would work:

    “Anarchist Communism maintains that most valuable of all conquests – individual liberty – and moreover extends it and gives it a solid basis – economic liberty – without which political liberty is delusive; it does not ask the individual who has rejected god, the universal tyrant, god the king, and god the parliament, to give unto himself a god more terrible than any of the proceeding – god the Community, or to abdicate upon its altar his [or her] independence, his [or her] will, his [or her] tastes, and to renew the vow of asceticism which he formally made before the crucified god. It says to him, on the contrary, ‘No society is free so long as the individual is not so!’”

    “God the community”… heaven forbid it! ;-)

    Rumbold:

    But would anarchism in practice really foster solidarity? Even if 90% of people reacted in a positive way, the lawless behaviour of the other 10% may cause life to be unbearable.

    This is a common argument used to put the case against anarchism, and I can completely understand where it’s coming from. It’s a difficult question, and one that I probably can’t give a short answer to (when can I ever?). However, there is actually a compelling answer to this, but I need to get my head together enough to be able to explain it without writing pages and pages again! I think it’s going to have to wait until tomorrow, as I’m absolutely knackered tonight! Watch this space…

  28. Tim Worstall — on 31st October, 2007 at 3:58 pm  

    “Erm tim I’m sure you’ve done Economics too so I don’t know what you find insane about that. Public goods HAVE TO BE provided through blanket taxation because, as Sahil pointed out, the free-rider problem makes them irrelevant otherwise.”

    The free rider problem makes them irrelevant? What are you burbling about? That I get the Theory of gravity for free, thus making me a free rider, means that said theory is irrelevant? Or that the method of funding it was wrong?

    It may well be that certain public goods are “better” provided by blanket taxation but it certainly isn’t true that they must be. Lighthouses are used as an example here: they’re paid for by lights dues, which are paid as part of harbour dues. That means that only those boats that dock at British (an Irish) ports pay for them, but any ships passing through British waters get to use them. Sure, they’re free riders. But it’s not a problem of sufficient magnitude that we’ve moved lighthouses into being paid for blanket taxation.
    Having lifeboats is clearly something that is publically beneficial too….but they’re funded by charity, not taxation.

    “By your definition the BBC is a public good because millions more can tune into TV and Radio without there being less for others. Agreed?”

    Free to air broadcasts (whether ITV, Capital or the BBC) are indeed public goods. They are non-rivalrous and non-excludable. As you can see from those examples, there is no need for them to be funded by blanket taxation.

    My point I think?

  29. Sunny — on 31st October, 2007 at 4:09 pm  

    Certain public goods, where you can track your audience more easily, it can work. Toll Roads, Lighthouses etc.

    but generally you need a body like the state to oversee it all… and even build roads in the first place so people use them. Defence spending is another one you avoided mentioning.

    Because the BBC is non-rivalrous, the free-rider problem makes it very difficult to fund it otherwise. You end up with a piss-poor example like PBS.

  30. Sunny — on 31st October, 2007 at 4:12 pm  

    Assuming the decision making process was by consensus, you’d have various options at your disposal if you disagreed: stand aside (meaning you don’t take part but you don’t stop the group doing it), block the proposal (this requires a rethink and further discussion), or leave the group altogether (if it’s not mutually beneficial). There are other options available to help the process along – sometimes just taking a break and coming back to it later gives everyone time to reflect and reach an agreement.

    Dave S – I’m afraid in a large enough group of people this is impossible.

    Certain people you cannot exclude because they are part of society and will still benefit if you went ahead with the service.

    For example, defence spending, street lighting, public roads… even radio/television/web.

    So you need to make people pay even if, let’s say for moral reasons, they don’t want to take part. If someone says they don’t want to pay the defence part of their taxes, they end up in jail. Simple as. Otherwise you have a mess of a society.

  31. ChrisC — on 31st October, 2007 at 4:50 pm  

    The web???
    Thank God it’s not state run!

  32. Sunny — on 31st October, 2007 at 4:56 pm  

    I meant bbc.co.uk

  33. Tim Worstall — on 1st November, 2007 at 12:39 pm  

    Sunny,
    “Certain public goods, where you can track your audience more easily, it can work. Toll Roads, Lighthouses etc.

    but generally you need a body like the state to oversee it all…”

    I’m not arguing against the existence of the State. I’m not arguing against taxation per se. I’m not even arguing that there are not public goods which can and should be provided through blanket taxation.
    I’m taking issue with your statement that all public goods must necessarily be provided via blanket taxation.
    Something which, belatedly, you seem to agree with….now.
    Once we’ve agreed that, then the discussion can move on to which specific items should indeed be provided through blanket taxation. But you do need to accept that your original statement was wrong before we do so.

  34. Dave S — on 1st November, 2007 at 6:24 pm  

    (I still haven’t got around to answering the other part of Rumbold’s that I said I would… maybe later on tonight.)

    Sunny:

    Dave S – I’m afraid in a large enough group of people this is impossible.

    No Sunny, it’s not impossible, it’s just (apparently) beyond what you’ve thought about yet.

    Besides, even if something is “impossible”, that doesn’t mean we can’t strive towards it and get most of the way there, arriving at a workable approximation.

    Or we could sit around calling any sort of ideas about progressive change “impossible”, and then the status quo wins every time.

    People said that the abolition of slavery was impossible. That women voting was impossible. That humans travelling to the moon was impossible.

    If increasing equality within society so everybody’s voice is heard can be written off as “impossible” without even a second look, then to be honest we might as well just give up now.

    When it comes to creating the type of society we want to create (whatever that might be), the only thing that stops us doing it is people saying things are “impossible” without even trying them.

    There are plenty of ways it could be done – in fact, I even have a book which explains one of them in great detail.

    Even if you think we couldn’t run absolutely everything this way, do you disagree that we could still run most things in society based on a localised decision making process involving the people the decision affects?

    Certain people you cannot exclude because they are part of society and will still benefit if you went ahead with the service.

    Anarchism isn’t about excluding anyone (with the exceptions of authoritarians and fascists, since there is no middle ground). As far as is physically possible, it is inclusive of absolutely everyone – even so-called “trouble makers”, as I’m sure you witnessed at Climate Camp. Nobody is left out or excluded.

    In the type of society I wish to help create, it wouldn’t matter if someone benefitted from something without having to “pay” for it. In fact, mutual benefit and mutual ownership of everything is pretty much the basis by which such a society would function – by which crime would almost cease to exist overnight, since the opportunities in which much of it could take place would be virtually eliminated.

    For example, defence spending,

    I’ve got to stop you on that one. Nobody benefits from defence spending except arms manufacturers.

    We all lose.

    Yet who is it to protect us against? Usually other governments or people who want to tell others what to do.

    Perhaps if we could all get over ourselves and stop being so stupid, we’d realise what a complete waste it is to invent (let alone use precious resources to build) sophisticated ways of killing each other.

    All it takes for this to happen is for people to think for themselves and refuse to be told what to do by ANYBODY.

    No army, no police, no politicians.

    street lighting, public roads… even radio/television/web.

    Do you have a problem with people getting things for free? Stuff that benefits everybody universally? Why?

    What about berries in a hedge, or apples on a tree? Should someone be there collecting a toll every time they are eaten by passing strangers?

    The world is full of price tags – all of them put there by humans – and none of them actually mean anything.

    So you need to make people pay even if, let’s say for moral reasons, they don’t want to take part. If someone says they don’t want to pay the defence part of their taxes, they end up in jail. Simple as. Otherwise you have a mess of a society.

    We already have a fucking mess of a society, and it is BECAUSE of politicians and people following what they are told to do like sheep.

    So I defy your “impossible”. Some things may be extremely difficult, but we humans are at our best when faced with adversity.

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