What is wrong, and why we can’t seem to fix it

Throughout most of my life I have been living under conservative governments, and the nicest way I can find to describe political conservatism is to say that it embodies the popular phrase ‘If it ain’t broke, don’t fix it’. However, as we all know there are many things wrong at present, and they need fixing. No amount of ignoring them will make them go away. This blog is about those awkward facts of world that won’t go away and which political conservatism won’t make go away either.

What I’m going to aim to do is post a blog once a week, on a Friday, so you can digest it over the weekend. The next week’s blog will either be the next in my series, or a discussion of issues that have arisen from the comments.

I’m going to have a very strict comments policy, comment will only be accepted if they are intelligent and polite contributions to discussion around the topic of the post. Everything else will be moderated.

If you find a blog here sympathetic, you might consider reading the blogs from the beginning, as they are supposed to be a more or less continuous argument.

Thursday, 2 June 2011

Impediments 4: Government/Private Sector

This week I want to talk about our attitudes towards government versus the private sector. At present I believe we are, in Australia, the US, Britain and elsewhere, suffering from a bad case of anti-governmen-itis—the ‘get government off my back’ meme that has manifested itself in the Tea-Party movement in the US, the fatalistic acceptance of Tory government vandalism of social institutions in Britain in the name of fiscal rectitude, and in Australia the current unbelievable popularity of the federal Opposition.

It is, of course, a given that almost all the centre ground in politics in Anglo-Saxon countries at present is taken up by market liberalism, the belief that the market (the aggregate of private sector activity) always delivers the best outcomes for society and the less that it is tainted with government intervention the better.

On a global level this is clearly nonsense. As this blog repeats ad nauseam (because the fact is not widely recognised) currently global economic activity is registering at 150% of global ecological capacity. So the free market has clearly failed to produce the best outcome for humanity (and, it should be pointed out, were it not for government interventions, such as pollution controls, conservation measures &c, the situation would be even worse).

To parody the learned Tony Abbott, Adam’s Smith’s ‘invisible hand’ of the market is the cancer that is paralysing the planet, or more accurately, the cancer that is killing the systems that support continued human existence.

Smith’s argument about the invisible hand had much more credibility when he made it in 1770s because then economic activity was so small compared the ecological resources of the planet anyone could be forgiven for not realising that in less than two centuries global economic activity would overshadow natural systems. Now it is absurd (I word I seem to using a lot in these blogs) to pretend that we can get by without limits being set to economic activity, and obviously business itself cannot do this. Global institutions are presently without sufficient power to carry out this task, so the only institutions left to carry out this task are national governments. (This is particularly the case as in the future businesses will be dropping like flies, unable to maintain profits in the face of collapsing demand and shortages of raw materials and power).

When the global financial crisis hit in 2008 it was, after all, governments which had to bail out the private sector, although in some cases governments were compromised by their foolish economic policies. It was most famously the President of the US who said to the banks ‘tell you what, let’s pretend that these trillions of dollars of worthless US Government bonds do in fact represent genuine assets against which money can be borrowed’, found funds to allow bank bailouts on a grand scale.

In the future, because of the likely ecological and societal chaos caused by global warming and ecological breakdown, it will obviously fall to government to take control and ration and regulate. Writing this sentence I am reminded that about a decade ago I was sorting out my parents’ papers in the UK and came across a document saying ‘Petrol Ration Book’ on the cover. ‘Ah,’ I thought, ‘a Second World War document’. On closer inspection, however, I noticed that it dated from 1973, the post Yom Kippur oil crisis, when the British government had passed legislation and prepared a scheme to ration petrol in the event of supplies running out. This was not implemented at the time, but we will be seeing activity like this before too long on many fronts I don’t doubt.

None of the above, of course, is meant to imply that governments are always correct or clear-sighted in their activities, (or that every government program or activity is warranted or necessary). Quite the contrary, in fact for the past 40 years or so governments have usually been abdicating their responsibilities and facilitating unwarranted aggregation of power to the private sector. I need only mention here the ‘privatisation’ movement, which resulted in the theft of publicly-owned assets from their owners, the citizens, and their sale at knock-down prices to the private-sector under the misapprehension that the private sector could run them more efficiently. (Actually I don’t believe that many politicians at the time really believed this, it was simply that they were corrupted by business-interests and were, in many cases, well rewarded afterwards).

One of the most effective rallying calls of the ‘get government off my back’ movement is that taxes are too high. You would have more respect for people who proclaim this if such people were not perpetually deceived by the ‘tax-cuts’ that are proclaimed at every budget in Australia, only to be taken back quickly by ‘bracket-creep’ so that the same tax-cut is given over and over again.

In reality, far from needing to cut government services to fund tax cuts, what we really need is to reform our society so is not so dysfunctional that expensive social services are required, and we need to get used to paying for the ones we have no option but to pay for. We have to recognise that such costs as healthcare and education are very expensive and there is nothing anyone can do about that (we can, of course, make healthcare and education better and more efficient, but this will not lower the costs by much). If these costs are pushed more on the individual then poorer individuals will fall behind and be disadvantaged, society will become more unequal and the money saved by these false economies will have to be spent on other social ‘services’, like prisons.

Speaking personally I don’t bother about taxes because I don’t consider my gross income as mine. I only think of my after tax income as ‘mine’ and so I don’t care how high taxes are, so long as the net income is enough to meet my needs. Other people, of course, especially the self-employed, do see their gross income and then have to part with a portion of it. But there is something a little dishonest in complaining about taxes whilst benefitting from services funded by them (health, law and order, education, roads &c). Sure, people may object to certain schemes that are funded by taxes (I object to federal government money being given to wealthy private schools, and as subsidies to the coal-industry and other corporate welfare bludgers), but there you are, it’s up to you to use your vote to try to get a government that spends as you would wish.

The fundamental thing we should recognise is that business and the private sector have enormous power to corrupt and deform the political process (as we saw during the campaign in Australia in 2010 by the mining industry to avoid paying new taxes), but very little power to do anything constructive other than their core business (which may, of course, not be constructive). Even worthy activity by private enterprise and the efforts of individual wealthy philanthropists are transitory and cannot be sustained easily in the legal framework our society operates under. Only government has the permanence and power to preside over society in the long-term interests of citizens (even though government at present is a essay in short-termism).

Next week: Bad Religion

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