Tuesday, 21 January 2020

The state/private divide

Anecdote: I was with the Ukippers at Westminster several years ago, lobbying our MPs. When it was finished, we discussed what we were doing next and I told them I was off up to St Pauls to give the Occupy people a bit of support. Those who expressed an opinion said I was bonkers, either you're right wing or you're left wing.

I didn't see a contradiction. The elements of the EU I don't like is the corporatism and the general meddling in people's lives; I agree with the Occupy people that The One Per Cent are taking the piss. Many incorrectly assume they were 'anti-capitalist" and some were, but if you think about it, the Occupy movement was anti-corporatist (mainly anti-banks).

My view on all this is quite simple and coherent, there is:

a) "the state" or "society" (that which belongs to everybody and/or nobody), and

b) the private sector (private businesses and what people get up in their own homes or their own business premises).

All developed states/societies do fairly similar things and have similar values, we just have to accept that. Czechoslovakia split into two and each half continued doing pretty much what the predecessor country had been doing.

In a perfect world, states only do things where the benefit exceeds the cost/burden (provide public and merit goods, welfare/pensions, regulate or break up monopolies etc). There are plenty of examples. And there are plenty of counter-examples: HS2, tobacco control officers, foreign aid payments, Help To Buy etc.

To the extent that the state does things, they should benefit (or burden) everybody as equally as possible. That is the only way to maximise the value that a state can add (which they clearly can, as the alternative is anarchy or warfare); and the only way to maximise people's personal or economic liberty. The freedom of people not to be slaves is more valuable than the freedom of a minority to own slaves.

As far as possible state should not do things which only benefit a particular group of people (like immigrants getting favourable treatment under New Labour) or things which only burden a particular group of people (like immigrants being treated like crap by the Tories). Or give favourable treatment to those hereditary welfare claimants, the Royal Family. You can't favour one group without there being an equal and opposite (though often invisible) burden on everybody outside the group.

The state shouldn't really do things that only benefit owners of a particular type of asset (like land or IP) or a particular type of business (mainly FIRE sector). But where practicalities say it has to (private land ownership/occupation; protect IP under the Treaty of Rome; banking), then it should claw back those benefits in tax payments (aka Land Value Tax, taxes on IP income or a Bank Asset Tax).

In a perfect world, every state school would be "excellent" but the situation is inherently unstable. Some schools will always be better than others (vicious and virtuous circles) so people don't all get the same benefit, depending where they live. The good schools increase local land values, so again, LVT will level this playing field.

Most businesses do not get any special treatment, so they should be paying a lot less tax. The tax system should not be biased against employees and productive businesses, who have extra taxes imposed on them (NIC and VAT respectively).
The basic logic applies to everything.

Democracy is good ("a terrible system, but much better than any of the alternatives"), but with First Past The Post, most people live in safe seats so their votes are nigh worthless. So I support some form of PR (such as multi-member constituencies), that way everybody's vote has a similar weight.

A welfare state is part of parcel of what states do. Some people take the piss (see endless stories about people on disability benefits posting photos of themselves in the gym on Facebook) and some are denied welfare (see endless stories about people being persecuted under Universal Credit rules). So I support Universal Basic Income for all.

In the private sector, parties are not always of equal bargaining power and do not have access to the same information. So we need some level of statutory rights for employees to level the playing field between employee/employer and between good employers/bad employers.

But you have to be careful about going too far - that results in bad employees taking the piss; or act as barriers to entry - in relative terms, things like maternity leave (or a bad employee taking the piss) are absolutely no problem for large employers but can be make or break for small employers. If you go too far, the playing field becomes less level again.

Same goes for consumer protection, by and large it works, but as Lola has posted often enough, in some sectors (financial services) it is form filling for the sake of form filling to keep bureaucrats in work. It's a huge burden for small businesses and not such a burden for larger ones (once you've got FSA authorisation, other businesses pay you to use your registration) and of course, no barrier at all to the real fraudsters who don't bother with the forms, or just lie on the forms. The costs of this far outweigh any possible benefits and it's a kind of barrier to entry (unlevels the playing field).

I'm perfectly happy with same-sex marriage, but also I don't see the problem with that cake decorator in Northern Ireland refusing to do the cake for a gay wedding. Marriage is a "state" thing, and there's no reason for gays to be treated as second class citizens; a private business is a private business and they can turn down any customers they like, even for petty and small minded reasons. And the gay couple can shop elsewhere.

As to personal liberty, if something isn't actually or potentially harming a third party, it should be allowed. Taking drugs in your own home or business premises is fine - but not driving under the influence of drugs. Breast feeding in public is fine, as is wearing a burka. Some people (including me) find one or the other (or all) of these things objectionable or offensive. Tough, it's none of our business, we have to live and let live.

And so on and so forth.

Here endeth today's lesson.


mombers said...

That's some inspirational stuff for a Weds

Mark Wadsworth said...

M, thanks. For years I have worried about whether I am left wing or right wing. Actually I'm neither and never have been, that post is basically my whole world view, and it seems internally consistent to me.

ThomasBHall said...

No one has been able to convincingly explain to me what left wing or right wing even mean as political schools of thought. They seem only to exist as tribal identities- with policies sometimes adopted by one or other or both, but never due to any rational method. Obviously, once adopted by the tribe, the explanations as to why it should be supported are found- but it never seems to be driven by a 'left logic' or a 'right logic'. I'm almost at the point where I think the whole left/right divide is a deliberate diversion so people don't think about politics/economics in a more scientific manner. Because if they did, they'd scrap the tribalism and become more Georgists in one sort or another. Ironically- the fact we are not very tribal probably acts against us.

Shiney said...


Good stuff - pretty much sets out my world view as well. You speak German, I think..... there's a word for that isn't there....


Mark Wadsworth said...

TBH, yes, Land Value Taxers agree on one thing and disagree on everything else. Some of them aren't even Georgists. And I suppose I am in a subset of people who just happen to be Georgist as well.

Sh, richtig!

Matt said...

Marriage is a societal thing with the state codifying some parts of it into law. Where the problem lies is that the 96% of society that aren't gay defined it as the union of a man and woman (using sex rather than gender).

The state gave the same benefits to civil union but the (activist) gays weren't happy with that. They wanted to rewrite the definition of the word.

The state shouldn't have meddled here. It wasn't for equality reasons it was to punish the majority of people with identity crap.

mombers said...

@Matt punish how? If you're against gay marriage, don't marry a gay. Otherwise not really anyone's business and completely unnecessary to have different terms for the same thing depending on who the parties to the marriage are

Mark Wadsworth said...

M, "the problem lies is that the 96% of society that aren't gay defined it as the union of a man and woman"


Speak for yourself. I never worried about fancy definitions, AFAIC it's just a bit of paper that two consenting adults* sign which gives them certain legal, administrative and practical advantages, and as any divorced Dad will tell you, massive f***ing disadvantages if it goes wrong.

* Other cultures recognise polygamous marriages, forced marriages and child marriages. Those are repugnant to me, as a liberal westerner, but hey, in this country it's "two consenting adults" and that's the end of that. Not my concern who gets married to whom.

Matt said...

Punish by distorting and demeaning the term is how. There was equivalence in everything but the word and it was taken from people without giving any thought to the consequences. What possible consequences can there be from re-defining words? Keep reading...


Definitions matter a lot. Why? Let's take a term that is currently undergoing a forced transformation:

Woman: Noun, adult human female.

Thought police are against the dictionary definition - https://www.telegraph.co.uk/news/2019/10/14/police-response-transphobic-stickers-branded-extraordinary/

Sure, maybe that's just overreach by rogue officers or a regional force.

So, how about actual harm caused by the change in definition?

Rapey ex-men in women's prison for another example - https://www.bbc.co.uk/news/uk-england-leeds-45825838

Or a woman (as defined above) with a fractured skull in a fight with and ex-man - https://www.theverge.com/2013/3/21/4131174/fallon-fox-mma-science-transgender-fighting-athletes

So coming along and making changes to words and definitions that are clearly understood as having a specific meaning does impact people and in serious ways.

Bayard said...

Matt, everyone has their own idea of what words mean and it's often not the meaning in a dictionary. That is why so many pub arguments deteriorate into an argument about semantics. There has never been an English Academy to mirror the Acadamie Francaise and dictate what words mean and how we use them, so semantic arguments are basically unwinnable. We are all Humpty Dumpty.

As to your point about "rapey ex-men..", the problem is not with choice of words, it's with attitudes. Once we allow people to have a right to "identify" themselves as whatever sex, gender, species, age, etc. etc. they like, then problems like the ones you illustrate are bound to happen. In any situation, given enough people being involved, there will be someone taking the piss. Its the attitude that allows them to do that that's the problem.

mombers said...

@Matt what direct harm does my mate's same sex marriage cause you?

Physiocrat said...

I am less convinced about PR and multi-member constituencies, having seen how it works in Sweden.

Small parties can hold the balance of power. This can lead either to them holding governments to ransom, or to 'grand coalitions' or, as happened after 2018 in Sweden, a government that most people were dissatisfied with remaining in power and continuing with its damaging policies, which are breaking the systems.

L fairfax said...

The terms right and left wing are from the 18th century and refer to views on the monarchy so are bit meaningless.
Mussolini was extreme right - but I wonder how different he was - particularly in the beginning from the far left.

Mark Wadsworth said...

Ph, as opposed to the UK, where DUP, lib Dems or SNP hold balance of power?

LF, whole 'nother topic.

Physiocrat said...

PR always ends up with horse trading between politicians with the leaders of the small parties holding the trump cards. Not a pretty site. Israel is a notorious example. The Haredi parties call the shots.

Bayard said...

"a government that most people were dissatisfied with remaining in power and continuing with its damaging policies, which are breaking the systems."

When was the last time a government was elected in the UK by a majority of the electorate? Most governments, even under FPTP, are elected by a minority and hence come under the definition of "a government that most people were dissatisfied with".

Anyway the problem you cite is not a problem with the electoral system, it is a problem with the party system.

Lola said...

Or, in shot, you (and pretty well everyone else) are either slightly rightie or slightly leftie libertarian. (See the Nolan Chart).

I would disagree that it is the 'state and society' and 'private business'. I think it is the 'state; and 'society and private business'.

The State has two core functions, the defence of the realm and the provision of a system of of justice which stops one member of society coercing another member of society. And those functions are least damagingly financed by LVT (and taxes on 'rents' generally - e.g. a bank asset tax)

Another role might be to apply Pigouvian taxes to externalities. Classically, pollution.

Pretty well everything else is best sorted by 'society', e.g. me and you.

The State is like Topsy. It wants to grow. It has to grow, because that the sole incentive of its functionaries - that's how they increase their stipends.

Me? I am slightly conservative libertarian - I believe in the evolution and preservation of good institutions like the Common Law and that the state needs to run an effective system of defence - in the widest definition. I also think that the very absurdity of the Royal Family is a Good Thing. One its existence denies power to others (President Thatcher or President Blair anyone?) and two its emblamatic of what the UK is. Its a centre. Anyway a lot of people like a soap opera. As to the system of voting, the one advantage of FPTP is that it means we can kick out governments. All other system lead to permanent coalition and an even more secure and unaccountable political class. But I admit it a choice of evils.

Apologies for being late on this thread - been away on business.

Lola said...

Oh, and one other thing. Society always evolves systems of 'information asymmetry adjusters' . You and I are good examples of these. The magazine Whatcar (and similar) is another good example. Or 'Which?'

Bayard said...

"As to the system of voting, the one advantage of FPTP is that it means we can kick out governments."

The problem with the system we have is it is like having two cars, both of which have snags and glitches which are really irritating, but all you can do when the problems with one car start driving you mad, is put it in the garage and start driving the other one until that in its turn starts to make you lose the will to live. What we need is a system that enables us to correct the faults and FPTP aint it.

Physiocrat said...

Bayard - any suggestions, with reference to the ways that the proportional systems in Sweden, Israel, Germany and Italy don't work?

L fairfax said...

When was the last time a government was elected in the UK by a majority of the electorate? "
It is worse than you said - in the 70s two Governments actually had come second in terms of votes.
"any suggestions, with reference to the ways that the proportional systems in Sweden, Israel, Germany and Italy don't work?"
For me the best system has to be the Swiss system because their economy seems to be doing better than everyone else.
In some ways I think the Italian system works better than here because they don't seem to have scandals like Rochdale, Manchester, Birmingham etc. I can't imagine them tolerating them either.
I think because of the second world war, Mafia etc - Italy has a disadvantage compared to the UK - the problem is not just their system.
Israel has religious and racial tensions we don't - so not entirely comparable to us either.

Bayard said...


I am not au fait with "the ways that the proportional systems in Sweden, Israel, Germany and Italy don't work", however the problem of having a coalition where a small, extreme party calls the shots is not a problem with a method of voting that produces no overall majority but the problem with a system that produces small, extreme parties, and that is a problem with the party system.

"For me the best system has to be the Swiss system because their economy seems to be doing better than everyone else."

What we call "democracy" is actually oligarchy. Even the ancient Greeks, who invented the term, would call it oligarchy. The people have no say in the ruling of the state, only in choosing the few who chose the even fewer who actually have executive power. The only European country that has any element of democracy is Switzerland, with its regular referendums. That's probably why their economy seems to be doing better than everyone else, that and staying out of wars.

Lola said...

Bayard. Re cars. Yes. Precisely. That's what's good about FPTP. You can use it to stop government getting above itself. As the recent election has shown, the Voter is pretty savvy at tactical voting. And politicians have feelings. Cars don't. (Actually they do. My Disco Sport will not be hurried. The racer urges me on - "Come on" it says, "put your bloody foot down. I want to get on with this". Mrs L's E Pace is also 'urgent'. It ticks a bit if you are less than precise. My dumper - yes, really - has one speed like a good labourer and at that speed will work all day.)