In private business, if you're shit at what you do, you go bust. In the government business, if you're shit at what you do, they give you more money. This is what the (ill) Met (by moonlight) Office is saying with its risible demand for a better computer, and it is an example of the inverso-world of state finance. Another is the leaked email (H/T Calling England) showing quangocrats looking for ways to blow £1 million of our money, confiscated by the predatory state.It may be the case that even within large bureaucracies of a private nature there is found the tendency to max out a particular departmental budget, for fear of seeing that budget reduced in the next tax year, but this tendency is very much stronger and almost ubiquitous within state organs.
This is unavoidable. The problem was diagnosed by Mises. In socialism there can be no economic calculation. Hence they need to find some substitute from the market data of profit and loss. They use targets, but these cannot counterract the gravity drag towards ever bigger budgets. This latter is the measure of success.
In the market the idea is to make profits, which can only be done by keeping costs down and providing goods and services that people want to buy. Economising is imperative in a world of scarce resources. As the individual must manage his home economy, if you'll forgive the tautology, so the businessman with his business.
The pressures within a state organ are wholly different. In order to continue gaining funding, hopefully in ever larger amounts, one must spend. One may try to spend wisely, but one must spend come what may. An efficiently run state organ will always spend their alloted loot down to the last penny, and be ready to use all additional cash which may become available often at short notice.
Amongst other adjuvants, is something of a moral hazard. If, saith the statocrat, we don't spend this cash, if we are efficient in the market sense, the money we save through thrift and hard work will most likely be handed over to others within the spralling Gormenghast of government, who through profligacy and mismanagement have overspent. It will not be saved in any real sense. Knowing this, the conscience of the diligent, albeit misallocated, public-sectorer, feels morally obliged to spend every penny, rather than allow it to be wasted - and every penny you don't spend is a penny wasted, in the context of state departmental bureaucracy.
3 comments:
Dear Trooper Thompson
A free market economy is driven by Adam Smith’s hidden hand – mutual self-interest.
Forced expropriation by the state eliminates mutuality and we are left with one sided selfish-interest of the state: government is un-mutual. The only creed is greed and growth of the state sector; huge corporations have grown up whose sole purpose is to help government spend taxpayers’ money. They do so with alacrity, offering public servants plausible methods of disposing billions of pounds on things that are never meant to work, from computer systems to increases in education or health budgets. Public servants equate billions spent with value, ignoring diminishing marginal returns. Cost equals value; if it costs twice as much it must be twice as good: a salesman’s dream. No wonder the ‘B2G’ (business to government) sector is so big, growing and ‘successful’.
As government budgets grow, the responsibility of public servants grows to ‘deliver’ ‘successful’ ‘outcomes’, so their salaries must grow. No conflict there.
Plainly government is addicted to taxpayers’ money. They are addicted to spending cash on stupid projects, they are addicted to granting themselves ever increasing salaries and pensions and earlier retirement followed by lucrative part-time sinecures in the quango and fake charity sectors.
It is our duty to help them break this addiction; force them to if we must. The only way to do this is to starve them of the source of their addiction – taxpayers’ cash.
We must stop paying taxes. Now.
DP
"We must stop paying taxes. Now."
Ah, but you are overlooking for an instant the fact that they are creating money out of thin air. If we stopped paying taxes, it would only make them print more!
Dear Trooper Thompson
They do that anyway.
The value of sterling has been debased to 10% of its 1973 value - in only 38 years our supposed monetary 'authorities' have destroyed 90% of the value of the pound.
Stopping the flow of cash will have an effect, notwithstanding the urge to print money. It will remind them where the real power lies. Besides which, it is fun. Do it because you can. And it’s legal too.
Printing money would achieve Zimbabwean status for our government, and possibly allow us to be ‘saved’ by those awfully nice people at the EU, but they are going to do that anyway.
DP
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