This post began life as a simple response to a conversation on Facebook, but became long enough that I decided to add it to my blog and use a link to it from Facebook. The original conversation was about the nature of government with most of the people in the exchange recommending big government approaches. I was offered the last word on the topic of conversation, and here it is.
There were a couple of side issues in the original conversation. First, there was the issue of profanity and crudity in some of the political links submitted during the conversation. There isn't any excuse for it. You can be passionate about a subject without offensive language. The second issue was precipitated by my statement that government employees don't "earn" pay. In response, someone asked whether the military earns their pay. Does the military "earn" their pay? Not in the true meaning of earn. The military earns our respect, our admiration, etc. Pay is simply allocated to them from public funds. They can't earn more pay by fighting harder or sacrificing more. There is no connection between their effort and their reward (other than survival). So it is with public sector employees and many private sector corporate employees. All too often it is "this year we're allocated a 3% raise and everyone gets the same". There is generally no reward for excellence. The public sector is worse off because revenue is almost completely disconnected from performance. The government corporation can't work harder to generate more income. They are at the mercy of other people's money through tax revenue. In a truly free economy, individuals can earn more through greater effort, creative efficiency, unique talent, and innovative ideas. Excellence is directly, naturally rewarded.
Should European governments be seen as a model for the U.S.? They should be seen more as a warning than as a model for government because the European Union nations are experiencing a long and inexorable decline. Every few months the media discusses the latest crisis among Europe's nation states. The last was the necessary bailout of Greece. Spain is perceived to be next. Italy and France after that, although the entire facade may collapse before then as the citizens of member nations, notably the Germans, refuse to bear further burdens.
The primary problem with socialist democracies is they depend on a proper balance between the public and private sectors. If everybody works for the government, there mathematically can't be enough tax revenue to pay them (their taxes are less than their pay). Clearly then there is a need for enough private wealth generation to make the public sector viable. We arrive at a tipping point when the size of the public sector exceeds the support provided by the private sector. Unfortunately, the average person or politician doesn't know where the tipping point is. Politicians learn they can gain power by giving people the service people request. The services people ask for are generally good services, so it's very awkward for responsible citizens to object to the growth of government. The responsible ones are seen as people wanting to prevent good, rather than people wanting to prevent collapse.
A second tipping point occurs when there are more people asking for services than there are people cautioning them about the tipping point. The U.S. federal government is currently spending a trillion dollars a year more than they are taking in through taxes, but the majority of people want more services. A cry arises for more revenue, but the only source is the private sector and the high earners in the private sector. "The rich people are the problem; they're not paying their fair share" becomes the cry of the majority. The "rich" get taxed and the tipping point is pushed away for awhile, but politicians keep giving more and more at higher costs. Eventually, these kinds of systems collapse.
This is the future we face unless we get away from 20th century notions about socialist democracy which we now know are a failure. The fundamental problem with government solutions is that they lack natural constraints. People are generally needy and ask for a lot of services. Politicians see the satisfaction of every need as votes gained. As a result, socialist solutions overwhelm their ability to sustain themselves. By comparison, what private enterprise does in a very natural way is limit services to those that people really want as evidenced by their willingness to pay for them.
But what about the poor who can't afford to pay for services? I am not suggesting that we just turn over society to self-interested, for-profit corporations. What I recommend is reliance on community; simple cooperation among people. The example I will offer is private schooling which some suggest is only available to the rich. Our experience in Camden County refutes this because some of the poorest people I know don't send their children to government schools. Our local Christian school, for example, operates like a for-profit business charging tuition to people who attend. However the community of believers in the sponsoring church makes it possible for less privileged children to attend through donations of money and time. We essentially have a for-profit enterprise whose "customers" insist that the enterprise make provision for people who can't afford it. I would suggest that this example of providing services through community cooperation is far more people-friendly than any government solution. There are no church and state separation conflicts, nor resentment from some taxpayers that they are paying for services they don't use, nor is their a likely collapse because services are promised that can't be funded. Please don't get sidetracked into pondering educational issues because I know there are some reading this who have a lot invested in public education. Don't get bigged down in details. Just accept this as an example of how private solutions can address similar issues to those addressed through government.
I am using a church example because I am a Christian and familiar with such things, but any group of people can build similar communities. I would say that belonging to real community is one of the secret yearnings of all people. There is much more that could be said about alternatives to big government, but let's leave it at principles. Social democracies are economic failures. The alternative is not to stand alone. It's to stand with friends and family.
There were a couple of side issues in the original conversation. First, there was the issue of profanity and crudity in some of the political links submitted during the conversation. There isn't any excuse for it. You can be passionate about a subject without offensive language. The second issue was precipitated by my statement that government employees don't "earn" pay. In response, someone asked whether the military earns their pay. Does the military "earn" their pay? Not in the true meaning of earn. The military earns our respect, our admiration, etc. Pay is simply allocated to them from public funds. They can't earn more pay by fighting harder or sacrificing more. There is no connection between their effort and their reward (other than survival). So it is with public sector employees and many private sector corporate employees. All too often it is "this year we're allocated a 3% raise and everyone gets the same". There is generally no reward for excellence. The public sector is worse off because revenue is almost completely disconnected from performance. The government corporation can't work harder to generate more income. They are at the mercy of other people's money through tax revenue. In a truly free economy, individuals can earn more through greater effort, creative efficiency, unique talent, and innovative ideas. Excellence is directly, naturally rewarded.
Should European governments be seen as a model for the U.S.? They should be seen more as a warning than as a model for government because the European Union nations are experiencing a long and inexorable decline. Every few months the media discusses the latest crisis among Europe's nation states. The last was the necessary bailout of Greece. Spain is perceived to be next. Italy and France after that, although the entire facade may collapse before then as the citizens of member nations, notably the Germans, refuse to bear further burdens.
The primary problem with socialist democracies is they depend on a proper balance between the public and private sectors. If everybody works for the government, there mathematically can't be enough tax revenue to pay them (their taxes are less than their pay). Clearly then there is a need for enough private wealth generation to make the public sector viable. We arrive at a tipping point when the size of the public sector exceeds the support provided by the private sector. Unfortunately, the average person or politician doesn't know where the tipping point is. Politicians learn they can gain power by giving people the service people request. The services people ask for are generally good services, so it's very awkward for responsible citizens to object to the growth of government. The responsible ones are seen as people wanting to prevent good, rather than people wanting to prevent collapse.
A second tipping point occurs when there are more people asking for services than there are people cautioning them about the tipping point. The U.S. federal government is currently spending a trillion dollars a year more than they are taking in through taxes, but the majority of people want more services. A cry arises for more revenue, but the only source is the private sector and the high earners in the private sector. "The rich people are the problem; they're not paying their fair share" becomes the cry of the majority. The "rich" get taxed and the tipping point is pushed away for awhile, but politicians keep giving more and more at higher costs. Eventually, these kinds of systems collapse.
This is the future we face unless we get away from 20th century notions about socialist democracy which we now know are a failure. The fundamental problem with government solutions is that they lack natural constraints. People are generally needy and ask for a lot of services. Politicians see the satisfaction of every need as votes gained. As a result, socialist solutions overwhelm their ability to sustain themselves. By comparison, what private enterprise does in a very natural way is limit services to those that people really want as evidenced by their willingness to pay for them.
But what about the poor who can't afford to pay for services? I am not suggesting that we just turn over society to self-interested, for-profit corporations. What I recommend is reliance on community; simple cooperation among people. The example I will offer is private schooling which some suggest is only available to the rich. Our experience in Camden County refutes this because some of the poorest people I know don't send their children to government schools. Our local Christian school, for example, operates like a for-profit business charging tuition to people who attend. However the community of believers in the sponsoring church makes it possible for less privileged children to attend through donations of money and time. We essentially have a for-profit enterprise whose "customers" insist that the enterprise make provision for people who can't afford it. I would suggest that this example of providing services through community cooperation is far more people-friendly than any government solution. There are no church and state separation conflicts, nor resentment from some taxpayers that they are paying for services they don't use, nor is their a likely collapse because services are promised that can't be funded. Please don't get sidetracked into pondering educational issues because I know there are some reading this who have a lot invested in public education. Don't get bigged down in details. Just accept this as an example of how private solutions can address similar issues to those addressed through government.
