8th December 2011
Oops, Tim Harford puts his foot into his mouth
There’s no logical reason why an economy couldn’t be 100 per cent public sector.
I'm afraid after reading this I must downgrade Tim many, MANY notches.
It is true that (a minimal) government provides a service (e.g. defence, police, justice, and appropriate conditions permitting, some infrastructure and a frugal social minimum). Along with Adam Smith I see a role for government. Tim's following comment is therefore true:
That’s a fallacious line of reasoning: it assumes that the public sector workers of yesterday are going to be the same people as the public sector workers of tomorrow, after several years of chipping away at their real incomes. They might not be. I might decide to become a mobile phone salesman instead of an economics teacher.
We are talking about competitive market based remuneration here. Nothing special about it. Working for the public sector need not be a "sacrifice" or charity. So far so good.
But to go from here to the WILD assertion that Tim then makes (above) about there being no theoretical difference between an economy which is 100 per cent public sector-based and a private economy is BEYOND BELIEF.
And to suggest that the public sector can be as innovative (even inventive) as the private sector is a sign of serious economics illiteracy. I hope that Tim has read Terrence Kealey and Timothy Ferris. Such egregious claims of "creativity" in the public sector are false.
This idea that there is no theoretical difference between a private economy and public sector economy is a characteristic of the foolish "discipline" of welfare economics, in which many unworthy Nobel prizes have been awarded. Just because someone gets a "Nobel" prize doesn't make that persons's views sensible from any perspective. In economics, at least half the "Nobel" prizes have gone to confused socialists and Keynesians.
True, Tim does refer to incentives as a variable, but this issue is not about incentives. It is about FREEDOM. It is about our right to live our live our lives without government meddling.
We TOLERATE a modicum of government in order to achieve a level of social services such as security that will let us innovate and produce goods. Yes, public servants are part of the "market", but they are NOT producers (in the typical sense). Big difference.
For anyone to imagine that socialism and capitalism are theoretically equivalent is a sign of a major gap in their economics education. I don't know what's come over Tim, but surely he's put his foot DEEP into his mouth.
Let him take it out and put it back on the ground. Tim, please read Hayek's Constitution of Liberty if what I've said doesn't make obvious sense. If you can't understand what I'm saying your brain must have been destroyed by the "macroeconmics" courses you took which often equate the 'solution' of the 'central planner' with the market's.
Tim, you're a sensible fellow. Do apologise for this ABSURD error. That will help retrieve your reputation from the brink.