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Henderson on State Inefficiency

EconomicsPosted by Lee Waaks Wed, March 01, 2017 22:29:23

The following is a reply by David McDonagh to Robert Henderson's blog post "Public and private confusion (and, yes, there is an alternative)", in particular, section 15 on "Public service inefficiencies and politicians". It was edited by Lee Waaks.

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Robert Henderson believes that the state is inefficient owing to the irresponsible behaviour of politicians rather than to their access to taxation; and that it enables the state to rule, or govern, the people rather than to serve them, as firms set out to do. He believes that the politicians pass too many laws, or that they introduce other measures not requiring legislation, but that demand such action as the meeting of “targets”, which he thinks are simply beyond the state ever meeting. But the Libertarian Alliance [LA] case against the state is that it seeks to rule by flouting our liberty as well as using taxation to be indifferent to efficiency; but, out of the two, it is the flouting of liberty that is mainly illiberal.

There is no real incentive for politics to be efficient. The political projects even have incentives to be inefficient for if they make savings in their allowance, then they usually get less funds as a result the next financial year, so they need to spend what they have been granted every year to maintain their income. Therefore, they are rewarded to stay still and often punished by having less income for their departments for any economising. Firms, by contrast, gain funds for other things by economising. When firms fail to attract customers by serving them, they lose the money they might have earned from the customers. State projects are not automatically affected by any public neglect.

We are told that there are too many laws and he gives tax law as a prime example, as there is just too much of it for anyone to master; even the best experts know only a small part of the law relating to taxation. Many of the laws themselves are not very clear, leaving it open to cogent new innovations of interpretation that can show up bureaucrats at the Inland Revenue as incompetent or unreasonable, and that can be the case at the Customs and Excise Office too. The ordinary bureaucrats are not trained well enough to cope with the obscurely written laws as they stand, says Henderson, and he thinks this is why the state is inefficient. But the reality seems to be that the state (and politics) is fundamentally negative sum in nature and the authority to tax the public leads the state to rule rather than serve the public.

He believes the lack of consideration on the part of politicians in framing laws to be used practically is a problem and many neglected laws that should be repealed are simply left on the books. But those that are used need a great deal of common sense to enforce as literally written or they would not be practical, so they are only partly enforced.

Even then, the gaols are overcrowded owing to politicians being too careless in passing laws and those in charge of the Home Office calling for longer sentences. If they ensured gaol places beforehand, then what the politicians do might be more viable, or at least more acceptable to Henderson. But liberals will ponder that responsibility needs liberty to be fostered, so any time in gaol is highly likely to diminish responsibility, and thus social liberty; so liberals will look for a
limited use of gaol, if they allow any use at all. Weekends in gaol, with the offender remaining in his job during the week and paying for his weekend gaol stays, as well as for some compensation to the victim of his crime, is in the way of liberal thought on crime and punishment. This might allows prisons to pay for themselves or, at least, cost the general public way less. Remaining in work will also foster more responsibility in the offender.

I think Thomas Szasz was basically right in his myth of mental illness thesis. I have seen some criticism from LA members that there might be some mental illness, despite what Szasz said, but in hearing some of this criticism, especially in the talk on Szasz by David Ramsay Steele on YouTube, it did not seem to discount the fact that what Szasz said still seemed to apply to the overwhelming majority of those classified as mentally ill. The recent drive to care for those with mental illness by the political elite, over the last five years or so, is in the direction away from Szasz, and it looks like the sort of kindness that messes lives up. The earlier “care in the community” seemed to be, at least, going the right way. But Henderson seems to think that many should be locked up for life and he regrets that a few have found their way into gaol. But as Szasz repeatedly suggests in his books, that is where some of them were more fitted to than in the asylums.

Henderson gets the Community Charge, that its opponents called the Poll Tax, completely wrong. It was an attempt to foster active local government by making them responsible for the setting of the Community Charge and by competition between such areas to put it up or down as the voters saw fit. It was a long shot, as voters tend to forget to bother much at the voting polls to make an instrumental use of elections and they use them for voter loyalty instead.

Anyway, it was not given the coup de grace by a violent protest in Trafalgar Square, as we were told by Henderson; it fell only after Mrs Thatcher fell; and she fell mainly owing to her opposition to the EU, not owing to the attempt she made to foster an active local instrumental electoral system relating to the Community Charge. That was slowly settling down, after the opposition to it had been largely seen off. It took former MP Michael Heseltine about a week to think it might be good propaganda to repeal it, and then he was eulogised by many Tory MPs, who had forgotten all about it.

To truly cost the medical services in the UK, the National Health Service [NHS] would need to be privatised completely. Only then will the real anarchic price system price things. It is not practical to simulate the price system. That is to say there is no way that the state projects can get realistic prices to rival those set by the price system. Henderson errs badly if he imagines there was a time since 1948 when the NHS was trouble free. It never can deliver what it is supposed to deliver. It will always fall short of that.

Henderson imagines that schools in the UK are more than child minding centres. He believes that the educational aims have only recently been lost.



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