Friday 7 March 2008

"Assembly members' 8.3% pay rise"

This sort of crap prompts me to sum up a few basic facts:

1. There are core functions of the state such as law'n'order, protecting private property rights and defence that by definition cannot be delegated, however well or badly the state does it.

2. Apart from that, the state is pretty lousy at everything it does, in particular as a provider of services (health and education - which should be replaced by taxpayer funded vouchers).

3. Every layer of government adds another layer of waste, corruption, meddling and inefficiency.

4. There are a few things that have to be done or decided or harmonised at national level, let's say immigration, declaring war, signing treaties, the basics of criminal law and legal system. And (being realistic about it) collecting fuel/alcohol duties and a 20% flat rate income tax* to pay for core functions, old age pensions and health and education vouchers. Apart from that, I can't think of much else.

5. Everything else could and should be down to (up to?) local councils - policing, planning permission, licensing laws, transport infrastructure, public spaces, refuse collection, pay rates for public sector workers etc. Sure, local councils are on the fiddle as well, but at least that's only one level of waste and corruption, not four or five, of which the EU is probably the worst. And if any of this costs money, they should fund it out of local Land Value Tax** - if that spending makes an area more desirable, then councils can collect more tax, and vice versa. And if people decide they don't want to have (for example) licensing laws, public transport or restrictions on land use, then they can of course elect a local council which does away with them.

* VAT and National Insurance are the worst taxes, in terms of economic inefficiency, and they are also regressive (see Table 4 of this), so getting rid of them boosts the economy enormously and reduces need for welfare payments.

** And out of rents from social housing, which is currently ring fenced and earmarked so local councils do not currently benefit if they collect more in rent, it all has to be handed over (or is knocked off a council's entitlement to funds from central government). So under this system councils in so-called 'deprived' areas with lots of social housing would have a much larger income base than now, so even less need for redistribution from rich to poor areas.

1 comments:

Simon Fawthrop said...

"1. There are core functions of the state such as law'n'order, protecting private property rights and defence that by definition cannot be delegated, however well or badly the state does it.

2. Apart from that, the state is pretty lousy at everything it does"

The State is lousy at those things in #1, its just that nobody has come up with a sensible model for doing it outside the State