Sorry?

You cannot, for example, make a nurse and (I assume he means \”an\”-Tim) added value supplier by transferring them to the private sector.

Our Ritchie.

Private nurses exist: is he saying they don\’t add value? That people pay them because they don\’t value what they do?

What?

The rest of it is that everything truly valuable is supplied by the State, those things provided by the market mere trinkets.

30 comments on “Sorry?

  1. But if you restricted the supply of their service to large sections of the population as a result (as happens in the US, for example) you can most certainly reduce well being by doing so.

    He does not seem to understand the difference between health care and health insurance.

    Large swaths of the US population are denied access to nurses?

  2. “those things provided by the market mere trinkets.”

    Presumably except taxes…

    Does he really not understand that the public sector nurse has to be paid for by someone? And that someone is ultimately a Tax-Payer in the PRIVATE sector? Fucking Twat.

    Quick note to Richard Murphy or any other socialist cock sockets reading this, obviously public sector employees do pay tax, but as their entire wage is payed for out of tax receipts, this is a mere reduction in their cost, it actually contributes nothing to the original cost of employing them.

    Quick thought experiment for DICK.

    What would happen if we _all_ worked in the public sector?

  3. > What would happen if we _all_ worked in the public sector?

    If we were all extortion funded from each other then productivity would fall to zero over time.

    See soviet union.

  4. Richard is quite the little authoritarian:

    “Further libertarian comments on this and other economic issues will be blocked for good reason – I do not think the discourse you offer any more acceptable to society than that of the BNP

    Your concept of liberty, as is theirs, is one that is deliberately designed to harm – and would

    I will not give it space

    Richard”

    Something tells me that he doesn’t like the light of logic shining on his brand of mysticism.

  5. For what it’s worth, this is what I tried to post on his blog, before it was blocked:

    “Dear Richard,

    You sure did a tremendous job demolishing that straw man you built up over several paragraphs.

    Firstly, Nobody was saying that “public goods” provide no benefit (you call this wealth) to anybody, just that without the private sector, “public goods” could not exist at all. To repeat myself: the public sector only exists due to wealth transfer from the private sector.

    Secondly, to quote you: “a great deal of what we value most is provided by the state”. Sure it is, whether we like it or not! Your argumentation is circular: The state provides [something] therefore only the state can provide [something]. All your examples of “public goods” can be provided by the private sector, and have been historically, either in this country or abroad. In today’s context, why would you expect to see private alternatives to “public goods” when private companies, individuals or co-operatives would have to compete with “free”.

    Thirdly: “That is why we voluntarily pay for it through tax”
    If that is indeed the case, I will withhold next month’s ‘voluntary’ payment as I need a bit of extra cash.

    “Which is why we need a new economics. Which is why I am working on it.”
    “New Mysticism” would be a more appropriate term, if the logic of your blog posts is anything to go by.

    Love,
    PC

    PS: Where are these far-right guys you speak of? Last time I checked, the ‘far right’ were all for nationalisation of ‘key’ industries…. “

  6. “Further libertarian comments on this and other economic issues will be blocked for good reason”

    The “good reason” presumably being that “it makes Richie’s arguents look a bit shite”.

  7. “What would happen if we _all_ worked in the public sector?”

    Just wait a while, and you’ll see, if Gordon has his way…

  8. Our Dickie is the perfect example of why it is dangerous to allow middle-aged men to have too much time on their hands.

    Couldn’t someone convince him to chase young women instead? Everyone would benefit from that scheme… Except for the women.

  9. Jus áskin’, but where is Richie boy getting the dosh to pursue his Tax Research masturbatory fantasies?
    Is it from the invested proceeds from the sale of his accountancy firm? In which case I’d lurve to have a look at his tax returns. I wonder how assiduously he claims allowances?
    Or is he receiving remuneration from the two university posts he claims? If he is, how does he square what seems to be political lobbying with taking public money?

    Tim adds: Would you believe the Ford Foundation? No, really, it’s true….

  10. jus’askin, I believe Murphy is on record on saying that his wife works for the state as a GP (that’s about £110K pa of our taxes + the cost of a copper bottomed pension). Does anyone know if she specialises in treating the mentally ill by chance ?

    Also, for all the thousands and thousands of words he has produced (some of which even make up whole sentences) is there any record of him ever changing just one single person’s outlook on whatever it is he claims to be expert on; be it economics, tax, accounting, banking.

    Everyone I know merely has him down as an incompetent nutter, who is a sandwich short of a picnic.

  11. After a quick peep at the plonker’s home turf I get the impression that the New Economics is only discussable by New Economists. Other views are not welcome.

  12. It really isn’t correct to think that the private sector funds the public sector – i.e. that the private sector does the wealth generation, which the public sector then lives off.

    Obviously, in a wholly state-owned economy, the public sector ‘funds’ itself. If we now imagine introducing a small private sector to this hypothetical economy, say 10% of GDP, we wouldn’t suddenly think that 90% of GDP was ‘funded’ by the 10% – that the huge state sector had gone from being wholly self funding to living off the tiny private sector. That argument extends to when the state accounts for 40% of GDP and private 60%.

    When we have a mixed economy, both the private and the public sectors are busy ‘creating wealth’ and in that sense ‘funding’ each other – don’t be swayed by the idea that the public sector is ‘paid for’ in taxes, think in ‘real’ terms, about the production and exchange of goods and services. Just as private sector workers pay taxes and also spend money in the private sector, public sector employees pay taxes and spend their money in the private sector – money is circulating, and goods and services produced in one sector are being exchanged for goods and services produced in the other sector, the difference being that in the public sector the exchange takes place via confiscatory taxation and ‘free’ (but sometimes rationed) consumption, whereas in the private sector exchange takes place via market transaction.

    The fact that, by virtue of how the exchange takes place, the public sector is able to produce goods and services that might not be sustained if sold via market transaction in the private sector, is both a vice and a virtue. Vice, obviously because it means the state can do stupid wasteful things that don’t benefit anybody, virtue because it means the state can solve public good problems and such forth (there are other virtues too, like being able to avoid some of the dysfunctional aspects of competition in certain goods).

    This isn’t an argument for growing the state, or anything like that, nor that we needn’t worry about how large the state’s getting … merely to point out that arguments sometimes seen on this site, say that growing the public sector places an ‘increasing burden’ on the private sector, are fallacious because they overlook what the public sector produces when in grows. If the public sector grows at the expense of the private sector, and do so by producing unwanted goods and services, or producing goods and services less efficiently than the private sector, then that’s a reason to worry; if it grows via producing good things in an efficient manner, it is not.

  13. Luis, good post and I certainly see where you’re coming from, but I don’t agree with this bit:

    “both the private and the public sectors are busy ‘creating wealth’”

    Now, when market participants exchange goods voluntarily, wealth is created because both participants are better off* as a result (otherwise, no transaction would have occurred in the first place).

    When the state is involved however, the exchange is asymmetric: One participant (the taxpayer) has wealth confiscated whether he wishes or otherwise, and the other receives it. Wealth has been transferred from once place to another, by force, rather than being created.

    *According to each participant of course, for wealth is a subjective thing indeed.

    Tim adds: Yes, what is got for the taxation is of less value to those taxed than what they would have bought themselves: the difference in value is “deadweight cost of taxation”.

  14. Yep, as Obnoxio is fond of putting it, the man is a weapons-grade cock-end.

    Although it seems to me the process of administering an enthusiastic whipping to this particular deceased nag is well into diminishing returns. The poor bugger’s ribs are showing.

  15. @ Luis Enrique
    “Obviously, in a wholly state-owned economy, the public sector ‘funds’ itself….”
    How?
    In a wholly state-owned economy, money as such ceases to exist. Money isn’t a tangible object or quality. It’s an abstraction derived from barter & in a wholly state-owned economy there is by definition no barter going on. Any value ascribed is arbitrary so ‘money’ in such a circumstance is just a book-keeping convenience. Therefore, such an economy cannot be funding itself because there’s no funds to fund with.
    In an economy with a 10/90% public private split there is barter going on so true money has come into existence. However, the enormous distorting effect of the 90% encourages causes disproportionate scarcity valuation of hard to obtain items. Rather than “90% of GDP … ‘funded’ by the 10%” the 10% doesn’t fund any of the 90% because it’s too busy funding itself. Anyone with experience of the former Comecon countries knows how well that worked.
    Does the public sector pay taxes in the same sense as the private? Arguably they do because the price they charge for their labour reflects, for most, the labour market as a whole. Their wages are spent in the wider economy. Essentially we’re all private individuals selling our time to our employers. So, yes the public sector does produce wealth. Apart from anything else it does so by paying wages. And to an extent it holds itself up by its own bootlaces by taxing them.
    Where Richard the Turd goes wrong as do many others in the opposite camp is presuming there’s any difference in the moral value of endeavour. We live in a complex society. We could die without adequate health care. We bloody well would die without food. So we need the checkout girl in Tesco’s as much as we need the hospital receptionist. They’d be no point in shiny hospitals without sick people in them.

  16. I don’t get how intelligent educated people like Richie can believe the things they do – the naivete required is staggering. How can he square his belief that the best way for people to live is in a dictatorship, even a benign one, with the knowledge that all attempts to organise societies that way have lead to loss of all freedoms? He’s the one with a strange idea of liberty.

  17. Ah! Success at last!!
    Richard just deleted my last comment.

    I’ll share it with you lot instead…

    “I’m sorry to disillusion you, Richard, but I can’t recall ever having been made to feel unhappy with my current lot in life by an item of advertising. What an odd concept. Neither do I resent others having that which I do not. Why should I? I didn’t want to have to do what they did to get them Maybe I’m not materialistic enough to grasp this socialism thing.”

  18. jus’askin – “Or is he receiving remuneration from the two university posts he claims?”

    Well, I can’t find much mention of him on the University of Sussex website so I hope they aren’t slipping him too much cash……

  19. PC,

    It’s possible that we’re using the phrase “create wealth” differently – I’m thinking along the lines of wealth being the capacity to consume goods and services. Wealth creation can be defined quite broadly: for example, by defining property rights, helping businesses collect debts and enforce contracts, the court system is a wealth creator (this is why so much research into the determinants of wealth is focussed on economic institutions).

    I agree that when a voluntary market transaction takes place, both parties are better off relative to no transaction taking place (although in some circumstances there may be other exchanges would make people even better off, but do which not take place because of various market failure type problems).

    When an ‘exchange’ takes place via confiscatory taxation (say the state takes taxes, and gives you the court system), the involuntary nature of the exchange means you can’t be sure the parties involved benefit (presumably, people working in the court system are doing so volunarily, so we can say they see themselves better off, but the ‘consumers’ may not) – you just have to think about the specific case and what tax payers are getting for their money.

    To take another example, imagine a private education system, in which by virtue of the voluntary nature of the transaction ensures ‘wealth’ is created, by your way of thinking. Now imagine everything is held constant, the same quality of education is provided to the same people, and exactly the same amount of money is taken off parents, except this time via confiscatory taxation, the amount of ‘wealth’ being created doesn’t suddenly vanish because the means via which payment is arranged switches from market to taxation. (Of course, switching to tax from market has all sorts of other implications that would mean all else would not be held constant – it’s just a thought experiment to try to show that there are various ways of arranging economic exchange, and wealth creation can take place under either system)

    Tim: “what is got for the taxation is of less value to those taxed than what they would have bought themselves” is just plain wrong – the simple models with ‘dead weight loss’ that I think you have in mind address none of the reasons why we might want production to take place in the public sector in the first place. I’m sure you’ve heard of ‘public goods’, for instance. The state needn’t confine itself to public goods either; there are lots of reasons why public provision of certain types of goods & service may be more efficient than private provision, and if so then consumers may get more for their money via tax then they would via the market.

    Jus’askin – a wholly state owned economy may still pay workers in ‘money’, and allow them to spend it as they wish (so long as it’s on state-produced goods and services) – I don’t see that something fundamental happens to the nature of money as soon as you introduce a small private sector. Anyway, I think you’re dodging the weight of that argument – however you carve up the economy between private and state-owned production 90/10, 50/50, it really doesn’t make sense to says that the private is paying for the public.

    Incidently, you may believe that parts of the public sector take our tax money and give us nothing much in return or do things that would be better done in the private sector (and I’m sure that’s right in many cases) but remember there are rentiers in the private sector too.

    Tim adds: “Tim: “what is got for the taxation is of less value to those taxed than what they would have bought themselves” is just plain wrong”

    No, it’s not wrong, just incomplete. If that deadweight cost is 20% of the sum raised (what most textbooks assume) then the State provision of something has to be 20% more efficient than the private provision of the same items in order for wealth to stay constant. I’m entirely happy to agree that there are sectors where this is true: defence, courts and so on. I’m also adamant that there are large areas of current State activity where this is not…..

  20. ‘I don’t see that something fundamental happens to the nature of money as soon as you introduce a small private sector.’

    How do you asses the value of money unless at minimum two individuals are using it as a means of barter? Take a bureaucrat’s word for it?

  21. jus’askin

    ‘value of money’ = quantity of goods and services that can be purchased with unit of currency.

    In a wholly state owned economy, I guess the state sets the prices, sets wages and determines the money supply, no?

    See Milt for more

    in a mixed economy, the ‘value of money’ is jointly determined by the prices set by the state (say, we renationalised the train operators), private producers, and you could also view taxation as a sort of price for govt services.

  22. Luis,

    “It’s possible that we’re using the phrase “create wealth” differently”

    I think this is the case. I’m defining it quite narrowly – that wealth is the psychic benefit to each individual involved in a voluntary exchange (or, perhaps even an interaction?) with another individual). Of course it may very well be hard to measure – how does one measure the benefit that someone like Mother Theresa got from helping out the less fortunate? She may not have been materially “wealthy” to an outsider, but to her she (might have been) the richest woman on earth.

    I think that when wealth is defined any another way it involves the subjective opinion of a party who is not necessarily connected to the exchange itself.

    “the involuntary nature of the exchange means you can’t be sure the parties involved benefit”

    Yes, precisely this.

    PC

  23. @Luis Enrique

    Money = medium of exchange. What you use so you don’t have to cart a sheep down to the shops to buy eggs. Both parties agree that a sheep or an egg is worth so many cowrie shells.

    In an economy 100% in the state sector, money = beer tokens. How many tokens the state says you have to have before they’ll give you a pint of your own beer.
    It ain’t money

  24. PC,

    I’m not sure thinking in solely in terms of an exchange is the right way to think about wealth – if I am a lone subsistence farmer, can’t I create wealth for myself by tending my land, building a water mill etc. without exchanging anything with anyone?

    And besides, there is big difference between saying that we cannot be sure wealth is created via the involuntary exchange of tax and public provision (what I said), and saying that wealth cannot be created in this fashion (what I thought you said).

    jus’askin

    I’m pretty sure money=beer tokens, anyway.

  25. If you are a lone subsistence farmer (or a programmer or anyone working on their own) you can indeed create wealth, but without a medium of exchange you will not be able to realise that wealth or indeed know how much wealth you have created, which is important if you ever want to do anything other than be a lone subsistence farmer, and exchange (that word again!) the wealth you have created with someone who has the type of wealth you now need (eg a business, a house in the city).

  26. Luis,

    Yup of course a lone farmer can improve his situation – so perhaps my definition should be more along the lines of: “Voluntary action taken by man to improve his situation (according to him)”

    “And besides, there is big difference between saying that we cannot be sure wealth is created via the involuntary exchange of tax and public provision (what I said), and saying that wealth cannot be created in this fashion (what I thought you said).”

    I am indeed saying that wealth cannot be created in this fashion. I think an analogy might help here:

    I am walking down the street in the pouring rain without an umbrella, and a mugger comes up to me. He puts a gun in my chest and demands a sum of money. After handing him the cash, he drags me to a store, buys me an umbrella and after pocketing the change lets me continue on my way.

    Now, a third party might have the opinion that my wealth has increased, as I have exchanged (albeit involuntarily) cash for an umbrella and can continue my journey home in the dry.

    I on the other hand have forcibly had my wealth removed and replaced by a ‘good’ that I might not have bought in the first place. That money involuntarily spent on an umbrella can now not be spent on a some donuts, for example. I am less wealthy (according to me) than I started off. Of course, I might very well have bought the umbrella anyway, but then the actions of the thief are completely redundant (not to mention the fact that the thief charged me for his ‘service’).

    PC

  27. Stephen,

    I don’t know why you think a lone farmer cannot know how much wealth he has created. Yes, exchange is necessary is the farmer ever wants to consume more than he is capable of producing himself.

    PC

    “I am indeed saying that wealth cannot be created in this fashion”

    So as you’d have it, the existence of a tax funded legal system cannot be wealth-creating? I think you need to re-think.

  28. “So as you’d have it, the existence of a tax funded legal system cannot be wealth-creating?”

    As an anarcho-capitalist I’d agree with that logical conclusion, yes. Of course, those with a more minarchist position would disagree, which I do understand.

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