When a lane is closed off for repairs, are you that driver who ignores all the “change lane” signs as you zoom past the stationary line of traffic, then cut in at the very last moment? Are you someone who loves to go to the beach or park to enjoy the scenery, eat a picnic, and leave your rubbish strewn behind you? Are you a bank trader taking risks for profit that would be ridiculous – were it not for the fact that your bank is “too big to fail” and the government will have to step in and raid the public treasury to save it if the gamble goes the wrong way? Do you cheat on your taxes? When your country goes to war, are you one of the brave legions of Keyboard Kommandos who tirelessly blogs (and comments on blogs) in support of it, yet wouldn’t even dream of signing up and risking your life to fight for what you believe in? Do you never buy a round of drinks at the pub, or pick up the tab at a restaurant, though you can afford to do so, and enjoy it when others buy for you?
If you answered “Yes” to some of these questions, then you, my friend, are a free rider, and I would like to introduce you to the latest innovation in 21st century politics, brought to you by Prime Minister David Cameron (drum roll please): it’s the Big Society, and it is tailor made just for people like you, Fred! (You don’t mind if I call you Fred, do you? No? Then let’s continue…)
So what’s the Big Society all about, you ask? Well, the media have been having a heck of a time getting a straightforward answer. But Cameron has said it’s “a whole new approach to government and governing”. It’s “the biggest, most dramatic redistribution of power from elites in Whitehall to the man and woman on the street”. It’s about saying that, “we need people to come together and work together – because we’re all in this together.” In fact, “You can call it responsibility.”
Yeah! Down with the elite, fat-cat government bureaucrats and thumbs-up for the man and woman who just alighted the Clapham omnibus! Right, Fred? What’s that you say? You’re not so sure about this “responsibility” and “work together” talk?
Ah, well perhaps you misunderstood. Let me explain. You see, the Big Society is not about Big Government telling you what to do! As Cameron says, “You can call it freedom”. It’s about a “huge culture change” where people “don’t always turn to officials, local authorities or central government for answers to the problems they face, but instead feel both free and powerful enough to help themselves and their own communities.” It’s about “Charities working to rehabilitate offenders.” It’s about unleashing “social action.” It “will depend on the daily decisions of millions of people – on them giving their time, effort, even money, to causes around them.” It’s about “a new culture of voluntarism [and] philanthropy.”
You look relieved! What’s that? You were worried that you personally were going to have to take responsibility for stuff? No, no – Cameron is sure you’ll love the Big Idea behind the Big Society. (Maybe that’s why he gave a speech on Valentine’s Day about it.) Cameron says that part of this is “The idea of communities taking more control, of more volunteerism, more charitable giving, of social enterprises taking on a bigger role, of people establishing public services themselves.” He says that “there are facilities that the state can’t afford to keep open,” and we should be “trying to encourage communities who want to come forward and … run them”.
You agree, you say? You’ve long thought that we all can’t afford the expensive old “public services” – libraries, community centres, rehab programs, transportation, public housing, care for the elderly, and what not – in this Age of Austerity? Better if some people either pick up the cost out of charity, or do all the work themselves and go unpaid? There are volunteers like your cousin Valerie who are always doing good in their community – so they can do all this work too, and they won’t be needing your help?
I thought you’d be enthusiastic, Fred! Yes, this does indeed seem like a way for you to have your cake and eat it: the government won’t make you contribute a thing, but you’ll still be able to use those middle-class public services you love, such as your local library, because people like Valerie will volunteer their time and money to run them for you. What’s more, the volunteers will take care of the criminals and other assorted needy people too. What’s that? You’re a bit concerned that Valerie and associates might not be able to raise enough money for the library’s expensive bills like roof repairs, computers and new books without contributions from others? Well, I suppose that is a bit of a worry. But Cameron says we could loan these volunteer groups all the money left “dormant” in abandoned and unclaimed bank accounts. For that matter, there’s a bunch of money left dormant at the bottom of the fountain in the town square – I’ve seen it myself! That would help them out for a while. What kind of a budget do these public services really need anyway?
What’s that, Fred? You’re not so popular with Valerie, and you’re anxious about whether you’ll still be allowed to use the library? Of course you will be, Fred, the library won’t be privatised. It will be run on a non-profit basis and it’ll still be open to the whole public, because it will still be a public service. Valerie and associates will have to let you in.
Why are you laughing, Fred? Oh, right, I see. I guess Valerie and associates are going to feel like a bunch of idiots when they see people like you coming to use the facilities as usual, while refusing to make any contribution. They will see how smart you are, yes, no doubt. But you shouldn’t be laughing! They could get quite upset about that.
What’s that, Fred? You don’t care about Valerie’s feelings, you only really care about what’s best for you? Oh, but that’s a bit selfish – you should care about them! Well, old habits die hard; I see you’ll never learn empathy at your age. But wait – haven’t you got perfectly selfish reasons for thinking this is no laughing matter? I mean, Valerie and associates are working hard and paying the cost of running the library and all the other services you want the community to have, right? Then you come in and use whatever you want without making any contribution. Won’t they think to themselves: “Hang on a minute, Fred and his friends are just taking advantage of me here. Why should I be paying and working to run the services that Fred – who’s better off than me – gets for nothing?”
What do you think they are going to do then, Fred? Do you think they’ll keep working hard and paying for everything so you and your free riding friends can use it? Don’t you think they’ll start doubting that “we’re all in this together” and lose their “passion” for providing these services when they see what you’re up to? The volunteers will most likely drift away and the library will most likely close down, won’t it Fred?
You look very thoughtful, Fred! You want the library to stay open for at least your use, you say? You’re even willing to volunteer there yourself if that’s what it takes? Oh well, that’s wonderful, and quite unlike you, if you don’t mind my saying so! But I should warn you that you might still have a struggle to keep the library open. After all, you won’t be able to run it and pay for it all on your own. And there are lots of other free riders just like yourself who are surely going to take advantage without contributing. How will you feel about that? And how will the other volunteers feel about it? You’ll be carrying a very heavy and unfair burden. That’s just the down side of the “freedom” the Big Society will give everyone. It’s freedom to free ride! But do you think you can afford the costs when such a small group of you will be paying them? And even if you can, are you going to stay motivated even while many others are taking advantage of you?
What’s that, Fred? You think it would be better if you didn’t have to shoulder an unfair burden? You wonder if there’s some way we could get just about everyone who is able to help, to come together and chip in, and to really take responsibility for services like this? You’re wondering if we could somehow get the whole community involved?
Oh, but there is a way, Fred – there is a highly developed technological solution for exactly this problem. It’s definitely not the most fashionable thing, and some people consider it antiquated, 20th century technology. You hardly ever hear our politicians recommend using this technology in public these days, even though most politicians aren’t averse to quietly using it for many essential purposes. It’s called democratic government, and progressive taxation.
-- Sources of Cameron quotes: http://www.number10.gov.uk/news/speeches-and-transcripts/2010/07/big-society-speech-53572 http://www.number10.gov.uk/news/speeches-and-transcripts/2011/02/pms-speech-on-big-society-60563
Image credits: Photos of mural at Ray-Cam Community Centre, Vancouver from dooq's flickr photostream (CC BY-NC-SA 2.0).
Wonderful article, very witty and well put.
Thank you for a very interesting article!
Your "democratic government" idea does sound intriguing, but surely Valerie knows my community and me better than David Cameron, and so she can do a better job of working out what we need than he can, and will care more about us?
Thank you for the article and the references.
Reading Cameron's speech, I had a vague sense of déjà vu, and then realised that the original draft was written in 1848 :
"When, in the course of development, class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its political character. Political power, properly so called, is merely the organised power of one class for oppressing another. If the proletariat during its contest with the bourgeoisie is compelled, by the force of circumstances, to organise itself as a class, if, by means of a revolution, it makes itself the ruling class, and, as such, sweeps away by force the old conditions of production, then it will, along with these conditions, have swept away the conditions for the existence of class antagonisms and of classes generally, and will thereby have abolished its own supremacy as a class.
In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all."
It is clear that Mr Cameron is in fact un unreconstructed marxist. Could this explain why notions of democratic government and progressive taxation are so missing from his philosophy ?
I enjoyed your blog, but I did rather get the impression that you think that the result of charity and volunteer organisations trying to run things would be the inevitable collapse due to 'free riders' who would take advantage. It's my impression that under the existing system there are already large numbers of 'free riders', workshy benefit scroungers and fraudsters who don't pay taxes now and wouldn't pay the 'progressive' taxes you advocate.
I rather share Basildon man's impression, and his implied scepticism as to whether such a collapse would actually occur. There are plenty of examples of voluntarist approaches working well, notwithstanding the free rider problem. So Cameron is not necessarily being naive in advocating such approaches. Some of us may dislike them because we are angry with free riders, and/or prefer statist solutions for some other reason, but this in itself doesn't mean they can't work.
Thanks for the comments so far. A few responses:
Fred: There's a false opposition between charity work and national government control implicit in your sugestion. Democratic governemnt and progressive taxation can of course take place at a very local level.
Anthony Drinkwater: I've heard that Cameron was inspired by leftist Saul Alinsky's "Rules for Radicals" (a strangely fashionable book among conservatives these days, since the Tea Baggers in the USA claim inspiration from it too). Perhaps that explains the Marxist style without the Marxist thought.
Basildon Man: Under a system of democratic governemnt and progressive taxation, everyone is expected, and to some extent forced, to play by the same rules. Under a charity system, free riders have free rein. I do not claim that there would be no free riders under even the best system of democratic government and progressive taxation. Your implicit suggestion that the current system is no better than a charity system is like claiming that because locked doors don't keep out *all* burglars, we may as well all do away with locks and leave our doors wide open. That would be foolish.
Peter Wicks: What can be acheived by charity and unpaid labour alone is limited, as anyone with experience in the field will tell you. Do you think you could run a first-world system of good schools, hospitals, army, emergency services, prisons, and road building by charity? If not, then the fact that charity can provide some services does not indicate that it can replace any particular government services. In any case, the point of the dialogue was not just about practicality – it was also making a fundamental point about fairness.
Thanks for the response Simon. I take your point that what can be achieved by charity and unpaid labour alone is limited. I think the (empirical) question is really whether they can usefully add to, or at *partially* replace, state-led solutions. Personally I think it's an interesting idea.
Regarding your "fundamental point about fairness", I think it may be helpful to distinguish between two possible concerns: firstly that voluntary approaches introduce "moral hazard" in the sense that they tend to encourage free riders, with obvious detrimental effects for society (although some studies suggest that a limited amount of free-riding can actually increase societal benefit); secondly that they are unfair (and therefore bad) in themselves. As a moral subjectivist with a generally utilitarian outlook on morality I tend to take the first concern more seriously than the second.
Interesting, Peter, that one of Margaret Thatcher's cited heros, Frédéric Bastiat, thought exactly the opposite regarding your concerns of moral hazard : that mutuality and self-help should be encouraged but that state intervention would necessarily lead to "free-riding", and worse.
"….. We will then realise that we will be left with a population which can no longer act for itself …. and whose ideas will be perverted to the point that they will lose all notion of Law, Property, Liberty and Justice."
"Les Harmonies Économiques" – 1850
He was of course not alone, but it was 160 years ago …..
So, Simon, the 52% of GDP that the Government is currently spending is not enough for you, is that right? Picking my way through the analogies and the colourful expressions, your point seems to boil down to an argument that since some people are selfish and disregard the needs of others, we need an elected dictatorship to force everyone to behave better, an odd definition of democracy.
So far as progressive taxation is concerned, I am broadly in favour of it in principle but nervous of unintended consequences and suspicious of the wish to punish success rather than achieve a defined good. If you can demonstrate that you have hit on a structure of progressive taxation that nudges the economy towards growth that all can enjoy, rather than simply equality of misery, then that would be a very worthwhile achievement.
Perhaps the real problem here is either/or thinking: on the one hand we have champions of state intervention, and on the other hand champions of "mutuality and self-help". The reality of course, is that (i) you'll get free-riders in any system, and (ii) history shows that some kind of mix of the three works best. I just don't see why we should be excoriating Cameron for suggesting that mutuality could play an enhanced role in these times of (albeit arguably misguided) austerity as far as state finances are concerned.
Peter: I doubt there's anything I can say to you if you can't see the unfairness in free riding (as in the examples in the first paragraph of the post, for example), irrespective of whether society happens to benefit in aggregate from it in the long run. (Not that such a benefit seems likely in the kind of cases I discussed).
David: You presumably felt the need to construct a straw man because you couldn't find a point of disagreement with my actual argument. I favour liberal democracy, success and happiness. I also think that Government should increase spending to counter cyclical forces in the economy, i.e. during a recession, but as for your figure, I have no idea whether 52% is currently "not enough", or enough, or more than enough. As I have no doctorate in macroeconomics with a specialization in the early 20th century UK economy, having a view on that question would seem rather above my pay grade.
Peter (again): Cameron hasn't been "suggesting that mutuality could play an enhanced role", but actively cutting necessary funding for public services, at the same time as saying that he has a wonderful new idea about how to create freedom, community, shared "responsibility", and free ponies for all. I'm not "either/or thinking", I'm just pointing out that this emperor has no clothes: cutting public services in general *shrinks* communal responsibility, creates *unfair burdens*, and in the longer run *destroys* services (thereby *limiting* freedom, e.g. freedom to use the library) – for reasons that are quite obvious when you read the post (you may wish to also refer to my earlier reply to Basildon Man re: the existence of free riders).
A point that doesn't appear to have been considered is that society's values have undergone a massive transformation in the last forty odd years. In my youth it was always a slightly shameful thing to have to accept charity and equally to have to ask the state for help in the form of dole money or some other benefit and was only done to get through a particularly rough patch. Nowadays state benefits are widely regarded as a right which should be claimed to the absolute maximum and in some circles gaining extra benefits by fraud is considered clever and living on the state has become a lifestyle choice. I also suspect that state agencies have a tendency to maximise their customer base by handing out benefits without proper checks. I do believe that (non state funded) charities would be less likely to give away their money to the undeserving and would be less likely to be seen as a soft touch for the fraudsters.
Basildon man:
1) You're talking about redistributive benefits. Your comment has no relevance to libraries, community centres, rehabilitation programs, etc., which were the topic of the post.
2) If charities were able to replace the state's functions of providing redistributive benefits while maintaining quality, they would need enormous resources to do it. There's no reason to think such large programs would not be just as vulnerable to fraud as state programs are.
3) Settting fraud and "lifestyle choice" aside, thank goodness the days when it was intrinsically shameful to be poor have (at least in most circles) passed. What an odd view you have that anyone ought not to claim, or ought to be ashamed to claim, the state benefits to which they are duly entitled. Do you forgo your pension? Do you donate extra taxes rather than claiming the exemptions to which you are entitled? I, for one, am happy to pay my taxes and national insurance due in order to live in a society that does not expect me or others to live in extreme poverty – or live in shame – if for some reason I cannot earn a sufficient income.
4) You are using concern about a small group of free riders (fraudsters and those who make a "lifestyle choice" to live on benefits) – certainly no more than a single digit percentage of the population – as an argument for a policy which would create a vastly larger group of free riders: those who would not contribute adequate funds through charity to meet the community's needs. Given your bleak view of human nature, I'm surprised this contradiction isn't obvious to you.
I'm sorry if I've strayed off topic, but I thought the topic was the Big Society and I believe that what David Cameron would like to see is more self reliance and community support for the neediest and less state involvement. I certainly don't wish anyone to starve, go without essential medical care or want for a roof over their head, but I have a huge problem with the existing system which at least appears to encourage feckless behaviors. When hardworking but low income families struggle to make ends meet while others can receive levels of 'benefit' which enable them to live to a much higher standard without making any contribution. Yes, I am an unappologetic Daily Mail reader and while some of their stories may represent a tiny proportion of the population they are none the less true. Benefit claimants living in multi million pound houses and running two cars, taking foreign holidays and owning mobile phones and playstations. Surely the benefit system was intended to provide a safety net to prevent, as you say, people living in extreme poverty, it was never intended and should not ever provide anyone with a better standard of living that that achievable on the national minimum wage. And you completely missed the point about being poor. It was never shameful to be poor, lots of people were, but they made the best of what they did have and strove, by hard work, to improve their lot. What was 'slightly shameful' was when they failed, often through no fault of their own, to be able to provide even the basic neccessities for their families and were forced to seek assistance. Nowadays we regularly hear the excuse for unemployment 'I'd like to work but I'd lose my benefits' or 'I'd have to earn £50,00 to make it worthwhile' from people without the skills required to earn even the average wage. I'm afraid these people don't need more support, what they need is a dose of hard reality, a period living on what they can afford, not what they would like.
Basildon Man: 1) “It was never shameful to be poor … What was ‘slightly shameful’ was when they failed, often through no fault of their own, to be able to provide even the basic neccessities for their families and were forced to seek assistance.”
=
It wasn’t shameful to be a fish, it was just slightly shameful to, often through no fault of your own, live in the sea and spend a lot of time swimming around and breathing through your gills.
2) I must repeat myself, since you ignored the point. You are using concern about a small group of free riders as an argument for a policy which would create a vastly larger group of free riders: those who would not contribute adequate funds through charity to meet the community’s needs.
All commenters: I’m not going to allow any more soapboxing about the alleged woes of the welfare state or anything else in this comment thread, so please directly address the argument made in the post if you wish to contribute.
Actually I don't think Basildon man *did* stray off topic. Using public finances, paid for by progressive taxation, to fund libraries etc is a from of restribution of wealth that creates exactly the same kind of free-rider risk as voluntarist approaches. Not more, and not less. And as you said in reply to my first comment on this post, your original argument was "not just about practicality – it was also making a fundamental point about fairness". So quite broad.
More generally I really think we need to separate our position on austerity and public spending from our attitude towards Cameron's Big Society idea. On the latter I agree it's not a particularly new idea, but I also think that it's not as utterly without merit as you seem to. On the former, like you I find the current fashion for austerity regrettable, and not only in a UK context. It's like we've gone from one extreme (an orgy of easy credit) to the other (an orgy of austerity and self-flagellation), and it's causing real suffering. We desperately need to integrate new (behavioural, ecosystem-inspired, systemic) approaches to economics into our approaches to economic policy and regulation.
"Creates exactly the same kind of free-rider risk as voluntarist approaches" – I admitted from the beginning that there will always be free riders. The question is: how many? I don't regard the free rider risks as similar if we are comparing a (democratic government/progressive taxation) community of ~5% free riders, where free riding is *made difficult*, with a community of ~60-90% free riders under a charity system, where free riding is *made trivially easy*.
A good cross-cultura bit of data on this is with funding of public television and radio services. In the UK, you need a licence to watch TV which pays for the BBC, and there's about 95% compliance even though enforcement is very difficult. In the US, PBS public TV and NPR public radio run largely on donations. Fewer than 10% of the regular audience donates anything at all.
Again, you're missing (or deliberately ignoring) the point. Poor people were often proud of their independance and self reliance and it was their perceived failure that caused the shame. It was never a shameful thing for a poor person to behave as a poor person any more than for a fish to behave as a fish.
And, since you insist, I'll address point 2) by asking exactly how you define 'the communities needs' and what sums would be required to meet them? Poverty is a relative term, in this country a family with a single earner on the minimum wage would be considered poor, but compared to starving millions abroad, they are not. 'Needs' are also subjective, beyond the basic needs of food, clothing and shelter and I'll even include education and medical care, you start to come into the area of 'nice to have' rather than needs and public libraries are a case in point. Access to a good public library is an excellent thing to have but hardly an essential. Nobody ever died through lack of access to a library. People in Britain have historically been very generous in giving to charity and the charities are remarkably well organised in their fund raising. Likewise local communities who perceive a need for a particular facility in their area are adept at joining together to provide it, whether though fund raising or by volunteers. This, I believe, is a good thing and to be encouraged and is at the heart of the Big Society idea. Much, much better than higher taxation to enable the state to provide pet projects to politically favoured areas.
You're changing the subject now by talking about what has *caused* shame in the past. I am not denying that people have been caused to feel shame by a failure of self-reliance that was beyond their control. I am denying that that is shameful, i.e. that they *ought* to feel shame for that, that shame is *appropriate*, which is what you said before (though perhaps you didn't mean to say it).
Since it's perfectly possible to free ride on a service irrespective of whether the service meets a "basic [survival] need", your questions about what counts as a need are irrelevant. You perhaps think it would be best if our communities *only* had services provided to them, either through government or charity, that meet "basic needs". I do not agree. Incidentally, your claim that "Nobody ever died through lack of access to a library" is almost certanly false when you think about it. (But I will agree with you that the point of libraries is not to meet survival needs.) Of course, if you are the kind of Fred who simply doesn’t care whether there are libraries in your community, I will have nothing to say that will convince you. But it’s not you I’m trying to convince.
Fred may not be a free rider, Fred may just be too poor to financially contribute and too busy to volunteer. Isn't Fred exactly the sort of person who need public libraries?
I think Adrian is being too kind to Fred. The (fictional) character created by Simon is a selfish person, taking advantage of others while contributing nothing in return. There are people like that, and yes Simon, I do see the unfairness in that.
The question is whether it matters. I think it does, but only to the extent that it reduces overall wellbeing. And that is my opinion, reflecting my own values: it is not an empirical statement, and is therefore not truth-apt.
Simon
In your list of values you missed motherhood and apple pie, or should that be cricket and warm beer? I am sorry if you think I constructed a straw man – my distillation of your argument, while tongue-in-cheek, was genuinely the impression I formed of it.
I am surprised that, without a doctorate in macro-economics, you permit yourself an opinion on whether spending should increase in a recession when those with doctorates are sharply divided, while being too disciplined to take a view on the correct absolute level of spending, which to me is a much easier question, being simple arithmetic. The former question is the one that appears to be above your pay grade, but it is a given in your argument, and the latter, which you do not address, goes by default.
"simple arithmetic". Really! What's the equation?
Agreed. I know this is late in the day, but most of the following are responses to Basildon man, who I think has strayed off topic, but even on his new topic is not quite right about q few things. 2 is the most important:
1) You haven't addressed the core point which is the people that you complain about now (those benefit cheats, etc) are exactly the same people who have a licence to cheat the system when there is no overarching democracy. Plus, there will probably be more of them. Where are your old style societal values going to spring from?
2) Bureaucracy-bashing is a politically motivated, intellectually dishonest manoeuvre designed to shift public attention away from the government. It has been done to little effect all over the world, perhaps most obviously under Reagan in America. There is much more to say here, especially on New Public Management, but I feel that this is the direction that your debate is headed, and it isn't the right one if you want to keep your argument. All the evidence points to the fact that there are certain services that need to be kept under state control.
3) The UK doesn't have that great a record over history for charitable giving. I would concede that it is difficult to assess how much this is due to an already high tax system, but that certainly doesn't prove anything. Furthermore, "too poor to financially contribute" is sketchy – Singer's recent work (the life you can save) outlined how 95% of americans can afford to give up 5% of their wealth without any noticeable difference to their living standards. Would be surprised if the British figure is drastically different. Although Singer's giving was for a better (and more pressing) cause, the point still stands that we might have more available to give than we give ourselves credit for (excuse the language).
I'll try to answer the points you raise Alex. Firstly, I'm not anti benefits, I simply think that they should be much better targeted at the people who really need help. As for the benefit cheats, you are probably correct that we will never completely eradicate them ( any more than we will eradicate criminality) and they may even increase under any system, but we do not have to make it easy for them. Unfortunately I don't envisage a return to old style societal values, but does that mean we are wrong to try? I'd like to see the government have a much more "carrot and stick" approach where 'good' behaviors gain a small reward and 'bad' behaviors are increasingly punished. I, along with many of my generation, am dismayed by stories of criminals with a long history of repeat offending being let off with yet another caution, or the worst car thief off a sink estate being sent on a driving course to 'rehabilitate' him. Just what sort of an example is that to all his peers who do behave and can't afford a driving course? Maybe if a little more common sense returned to our justice system we would see a corresponding resurgence of 'old style' societal values.
I'm not trying to distract attention from the government, I hold them ultimately responsible for the bureaucracy which you accuse me of bashing and I fully agree that there are certain service which need to remain under state control. I'd just like to believe that those services are actually under anyone's 'control'.
I fully agree that most of us could give more to charity than we do, but the response of the public to 'disaster' appeals and big promotions like 'Children in need' is always inspirational.
Finally yet another apology for going off topic, but I do enjoy a good rant – 'Disgusted of Basildon'
reading back – 'overarching democracy' is lazy language I am sorry
Sorry Simon I went away:
Government spends 52% of GDP; Tax Revenues 40% of GDP, public debt 80-100% of GDP depending how you measure it. Increased spending grows structural deficit at >12% GDP per annum until (just maybe) GDP grows enough to eat into it. Commercial lenders view risk premium as high, so at the same time as debt is increasing, the interest rate goes up. Servicing costs then greater than entire NHS budget, indefinitely. Unsustainable.
Not macroeconomics at all, just arithmetic, as I say, plus market forces.
Taxes revenues can be changed by changing tax policy. So, David Shipley's logic proves nothing about what the absolute level of spending should be. QED.
Comments are closed.