Of course these arguments will attract the typical political and socialist response of "if government didn't provide and subsidise these services they wouldn't exist or people couldn't afford them". How then is it that people can afford to buy food from private enterprises, or shoes, or any of the other daily necessities and niceties?
Food and shoes are just a little bit different from roads, and from education, and from disability residential services, and from environmental protection regulation. Governments are not businesses, and those who seek to run them like businesses are on the wrong track completely.
Post-war German recovery under Erhard?
Massive Marshall Plan subvention - check
State road building without tolls - check
Mandatory health insurance - check
State education system - check
Social welfare system - check
Free Market Capitalism? Not really. Smacks of another variation on the successful Social Democracy model tbh.
Free market capitalism has been tried and has succeeded on every single occasion.
Free market capitalism and the greed has got us into the mess that we are now in... Banks wanted no interference from the state, no further state regulation because they were regulated enough already and sure they were all fine if you listened to Seanie and his mates.
Free market capitalism has nothing to do with the sort of kleptocracy that bled Ireland dry in the past decade.
The Government is to blame for the decisions it took with tax amongst others, but the banking system who made billions in profits while recklessly trading and then putting out its hand for help at the very last minute.
Free market capitalism and the greed has got us into the mess that we are now in... Banks wanted no interference from the state, no further state regulation because they were regulated enough already and sure they were all fine if you listened to Seanie and his mates.
This is the mantra at this stage, but you have to ask yourself - "cui bono"? Putting the blame on capitalism and free markets deflects the blame from government and regulators - the main culprits in this mess.
Free market capitalism and the greed has got us into the mess that we are now in... Banks wanted no interference from the state, no further state regulation because they were regulated enough already and sure they were all fine if you listened to Seanie and his mates.
The Government is to blame for the decisions it took with tax amongst others, but the banking system who made billions in profits while recklessly trading and then putting out its hand for help at the very last minute.
I understand where you are coming from, but it is very important to clarify what free market capitalism is and that it cannot be blamed.I probably am contradicting myself a little but the point i'm trying to make is that the banking system was and is regulated for a reason - to ensure that the system operates safely for all stakeholders, which includes the State.
But these were also private corporations run for the benefit of its shareholders who risked everything by investing their own money. The banks were operated by their directors and we now know that they were operated in a wreckless manner and I believe they should have been allowed go to the wall but I dread to think what would have happened if this was the case. The bankers came knocking at the 11th hour on the Governments door crying for help, and we also now know this was after seeking the help of other financial institutions who closed the door in their face.
The banks wanted to be part of the free market and to an extent were allowed with dodgy regulation and oversight but then when the dirt hit the fan they knew they had a get out clause - us!
You seem to be arguing against yourself, Chris, rather than arguing against my position. I've certainly never claimed that " all these services would not exist if it weren't for government", and I haven't seen anyone else around here claiming that either.How so? Food and clothing are some of the most basic human necessities. The socialist argument that all these services would not exist if it weren't for government cannot be backed up by any facts.
Let's take a look at history.
Socialism has been tried and has failed on every single occasion. There is not one success story.
Free market capitalism has been tried and has succeeded on every single occasion. Most notably the industrial revolution, but the most recent success was West Germany after WWII. Erhard told the occupying allies that he was going to put an end to all price controls, abolish the punitive taxes that attempted to redistribute wealth, ended minimum wages, pretty much everything that the SPD said was going to ruin the country. What happened? Within days shops were filled with goods and Germany experienced an "economic miracle". Houses were rebuilt by private individuals and companies, until after a few years the government decided to regulate the residential housing market. This resulted in shortage and lower quality residential housing while commercial real estate, which was not regulated, was flourishing.
Look at what the private sector and capitalism has achieved:
- electric lighting was once reserved for the richest, now ubiquitous
- central heating was once reserved for the richest, now ubiquitous
- high protein and diverse diets were once reserved for the richest, now ubiquitous
- telephony was once reserved for the richest, now ubiquitous
- computers were once reserved for the richest, now ubiquitous
- antibiotics were once reserved for the richest, now ubiquitous
- flat screen TVs were once reserved for the richest, now ubiquitous
- air travel was once reserved for the richest, now ubiquitous
Now let's look at what government monopolies have achieved:
- schools while widely available are bad
- roads while widely available are bad
- health care somewhat available is bad
- the list goes and stretches all its services
How is running government like a business being on the wrong track? Are you seriously suggesting that it is ok for government to waste billions of taxpayer's money?
Government should be restricted from what it can forcefully take from individuals and companies to then dictate what is done with it and monopolies the service.
So what's the alternative? How do ensure the moral hazard and let banks fail without screwing up the economy (even worse than it is already screwed up).Banks were and are regulated more than enough. But they operate in an environment where their creditors know 100% certain that their money is not at risk, because if something goes wrong the government will step in. That is why we are in this mess, not because of free markets that never existed.
Maybe I didn't make my point clear enough. I am not saying that governments haven't done good. What I am saying is that the private sector always does better, because governments do not have the same incentives to use resources efficiently. Therefore, government action of taxing money out of the private sector, and then using that money in a more wasteful way, means a net loss to the economy.You seem to be arguing against yourself, Chris, rather than arguing against my position. I've certainly never claimed that " all these services would not exist if it weren't for government", and I haven't seen anyone else around here claiming that either.
But once again, I'm amazed at your breathtaking liberties in allocating sole credit for many social improvements to the capitalist system, without any evidence to back this up. Perhaps the availability of antibiotics is down to the state-subsidised drug schemes (which is anathema to your perfect capitalist system). Perhaps the improved availability of computers is down to state subsidised education system, and indeed, state supported purchase schemes.
Are you actually saying that health care and education in this country are even remotely decent?And again, you take breathtaking liberties in claiming that everything provided by Govt is 'bad', including healthcare, schools and education. What measures are you using for good and bad?
Yes indeed, letting banks fail is the only way that the financial industry will learn a lesson. Ideally this would coincide with constitutional changes that prohibit government from bailing out any industry. Politicians would have us believe that this would have led to financial armageddon, but we are on our way there anyway and still have the moral hazard looming over the financial industry, who never learn.So what's the alternative? How do ensure the moral hazard and let banks fail without screwing up the economy (even worse than it is already screwed up).
Should the Govt have let AIB and BOI crash two years ago?
Chris, I'm giving up. I just cant debate sensibly with anyone who comes out with "the private sector always does better". This is just factually untrue, from my direct personal experience. Here's a few examples;Maybe I didn't make my point clear enough. I am not saying that governments haven't done good. What I am saying is that the private sector always does better, because governments do not have the same incentives to use resources efficiently. Therefore, government action of taxing money out of the private sector, and then using that money in a more wasteful way, means a net loss to the economy.
I have repeatedly given evidence and the post you replied to had examples. The most obvious evidence is the industrial revolution where the role government was miniscule, there was no welfare system and negligible amounts of taxation. At the same time the western world saw the longest and most sustainable period of economic growth. This was capitalism, not some sort of government steered or led policy.
Medication is cheaper in countries that do not have an Irish style subsidised drug scheme. And where do you think the subsidy comes from in the first place?
Computers are cheap not because of some state subsidies. You can by a cheap computer, brand new from Dell without any subsidy. The education system did not make a difference to the price of computers, neither directly nor indirectly. Some of the greatest leaders in IT dropped out of university. Others like Hewlett and Packard went to a private university. Computers became cheap precisely because the IT industry has little or no regulation and pretty much no barriers to entry.
Sometimes they are, sometimes they aren't. Now back to my question, what measures are you using to value our roads, our health care and our education?Are you actually saying that health care and education in this country are even remotely decent?
Banks aren't shoe shops. Treating them like shoe shops is not going to benefit consumers. If your shoe shop goes bust, you'll manage. If you bank that carries your life savings, the deeds of your house and the money you're going to spend in Tesco tomorrow goes bust, the impact is a bit more serious. We actually already have a large number of local, independent financial services providers already in place - they're called credit unions, and some of them are showing significant risk exposure. I really don't think consumers interests will be well served by a large number of small banks appearing and crashing over time.The other thing that needs to be done is make access to the financial market a lot easier and cheaper. When you have an entire industry so concentrated in a few companies the value of risk increases immensely, even when the probability of risk is very low. An analogy would be shoe shops. Even if a large chain of shoe shops went bust it would not be detrimental, because access to the market is relatively simple and cheap.
OK, so please get more specific about this. You are saying that letting pretty much the entire Irish banking industry crash in Sept 2008 would put us in a STRONGER position today than we are now - right? Have you anything to back this up, beyond your theoretical positions. How on earth could that mess have been unwound? What costs would have been involved? What new banking services would have evolved? Please give some concrete details on your view on how we could have recovered from wiping out the entire banking industry.Yes indeed, letting banks fail is the only way that the financial industry will learn a lesson. Ideally this would coincide with constitutional changes that prohibit government from bailing out any industry. Politicians would have us believe that this would have led to financial armageddon, but we are on our way there anyway and still have the moral hazard looming over the financial industry, who never learn.
I'm truly delighted that you have had some positive experience with the HSE, but I believe this is the exception not the norm.Chris, I'm giving up. I just cant debate sensibly with anyone who comes out with "the private sector always does better". This is just factually untrue, from my direct personal experience. Here's a few examples;
1) My daughter needed some speech therapy. She did an assessment with the HSE at our local health centre, and they had her on the waiting list for services. We were concerned about the impacts of any delay on her development, so we started looking for a private therapist. We had two good contacts within that profession, and we looked for recommendations for a therapist to work with our daughter. We got a few names and contact details. We started calling and email. Some never returned calls. Some got back but couldn't take her for the moment, and couldn't commit to when they would take her. In the meantime, the HSE came back and invited her to join a 'group' session. The group turned out to be two kids, so she got lots of attention from the therapist. The treatment was very effective, and she was signed off at the end of the treatment as not requiring any more. So the public health service was better than the private alternatives.
2) I've spoken to my brother-in-law and a few of his friends about his private secondary school, one of the big name private schools in Dublin. His feedback indicates it was much the same as my public Christian Brother secondary schools in terms of class sizes and teacher quality (most good, some great, one or two terrible). So the very expensive private system wasn't better than the public alternative.
3) My wife was in Holles St quite a lot before the birth of our daughter. Many of her room mates were mums who had been diverted from Mount Carmel because their cases were too risky for Mt Carmel. For those mums, the public system was better than the private system.
Your claim doesn't stand up. Just to be clear, I'm not in any way suggesting the reverse of your claim, i.e. that the public system is always better than private. I've had my share of problems with public service providers, just like I've had my share of problems with private service providers.
Yes they do benefit from the subsidy, as does anyone who receives a subsidy. But there is a giant leap to assume that the taxes taken from the private sector to pay the subsidy are actually paying off.Your claims about Dell don't stand up. Dell of course benefits substantially from public subsidies from your much-criticised IDA. Every job in Dell was subsidised by IDA, as is every job in HP. I'd hazard a guess that the value of goods produced by HP in Leixlip has more to do with the public education provided by the Irish state to their many employees than it has to do with the Harvard education of Messers Hewlett and Packard.
I am using my own experience and the experience of so many that I work with and I hear with such regularity on the radio.Sometimes they are, sometimes they aren't. Now back to my question, what measures are you using to value our roads, our health care and our education?
I'm not going to argue further with you on these issues. Feel free to answer or not. IMHO, your posts are so bounded in theory and so far from reality, there is no point in further debate.
The analogy of the shoe shops was merely to illustrate the idea of value of risk increasing as the amount of competition decreases. I never intended it to compare the two industries in the way you are highlighting. Risk of an entire industry failing increases when the industry is made up of very few players. This has become very evident in the financial crisis.But I would like to explore the banking issue further.
Banks aren't shoe shops. Treating them like shoe shops is not going to benefit consumers. If your shoe shop goes bust, you'll manage. If you bank that carries your life savings, the deeds of your house and the money you're going to spend in Tesco tomorrow goes bust, the impact is a bit more serious. We actually already have a large number of local, independent financial services providers already in place - they're called credit unions, and some of them are showing significant risk exposure. I really don't think consumers interests will be well served by a large number of small banks appearing and crashing over time.
You are buying into the political mantra that banking would have seized to exist or would have been wiped out. When companies become insolvent and administrators are appointed they do not evaporate into thin air (Quinn is a perfect example). What happens is that the functioning part of the company is sold off and the non-functioning part wound down. The one thing that did actually function in the banking industry was personal and branch banking. These would not simply have closed down.OK, so please get more specific about this. You are saying that letting pretty much the entire Irish banking industry crash in Sept 2008 would put us in a STRONGER position today than we are now - right? Have you anything to back this up, beyond your theoretical positions. How on earth could that mess have been unwound? What costs would have been involved? What new banking services would have evolved? Please give some concrete details on your view on how we could have recovered from wiping out the entire banking industry.
I am glad to see that arguements involving direct experiences and stories about friends are acceptable in our debates here. I can't say for sure whether the private sector always does better from my own experience, but I would look to the best services world wide and seek to copy them, rather than Irelands usual method of constantly re-inventing the wheel, badly.Chris, I'm giving up. I just cant debate sensibly with anyone who comes out with "the private sector always does better". This is just factually untrue, from my direct personal experience. Here's a few examples;
You are still using almost exclusively anecdotal evidence as a basis for your proposed policy changes. Your negative experiences and my positive experiences with HSE are pretty irrelevant. What really matters is a set of solid metrics that compares HSE performance and funding against its peers. Compariing the HSE to private hospitals is meaningless. It is easy to have a nice clean lobby and nice clean patients if you get to cherrypick the patients and procedures you take on. The HSE doesn't have that luxury.I'm truly delighted that you have had some positive experience with the HSE, but I believe this is the exception not the norm.
I recently needed an x-ray done on a back injury. The district hospital gave me an appointment 4 weeks later, the regional one 10 days later. the private one the following day.
During my wife's pregnancy we didn't have the luxury of a private maternity hospital, but we did pay to go private. When my wife had complications during labour this more than paid off. The consultant was at hand and was able to deliver the baby naturally. Every midwife told us that had we been public patientys a c-section would have been done immediately.
My wife's cousin spent 2 years going in circles with the HSE who completely missed what was wrong with her. The private hospital immediately diagnosed Crohn's disease, and she is now suffering because of the delay.
A colleague of mine had a fractured arm which required surgery. HSE option was 10 months waiting list, private was 10 days.
Or how about the woman in Cork a few years ago who found a lump in her breast and got an appointment for 2 1/2 years later.
Or the poor 6 year old girl last winter whose meningitis was misdiagnosed as swine flu.
I have heard far far more bad stories about the HSE than good ones.
I could go on all day.
Yes they do benefit from the subsidy, as does anyone who receives a subsidy. But there is a giant leap to assume that the taxes taken from the private sector to pay the subsidy are actually paying off.
And I mentioned technology companies like Dell not in isolation to Ireland. The facts that these companies came into existence in the first place, and that it is still a pretty open industry where access is not hampered by regulations, and where new and great companies like Google come into existence very quickly, and where products are not subsidised or controlled by government, are perfect examples of how well free markets work to make products available to the masses at affordable prices. Mises summarised it well by saying that "capitalism is mass production for the masses".
Misters Hewlett and Packard went to Stanford not Harvard, and many others in the IT industry dropped out of universities or went to private ones; yet they still created some of the best products and companies in the world.
I am using my own experience and the experience of so many that I work with and I hear with such regularity on the radio.
Look at the state of our secondary roads. I have "driven" on roads with craters in them. At the same the the NRA will spend the last of their budget in November on a patchwork of resurfacing work that is not needed. I asked a local councillor about this last year, and he said that was normal and that any left over money cannot be used to improve secondary roads as they have a separate budget. That's some great value for money the taxpayer is getting!
My wife has worked in both the private and public health service, and the differences are truly staggering. One thing she noticed was how many less "clip-boards" (admin staff walking around with no function) there are in the private hospitals.
I have friends who are teachers, but see their function more as damage limitation. One of them left Ireland with his family, because he didn't want his children going through the education system here.
I really do not know how you have so much faith in government services when they have done everything possible to show how wasteful and incompetent they are.
The analogy of the shoe shops was merely to illustrate the idea of value of risk increasing as the amount of competition decreases. I never intended it to compare the two industries in the way you are highlighting. Risk of an entire industry failing increases when the industry is made up of very few players. This has become very evident in the financial crisis.
The credit unions are indeed no replacement for banks, as they do not offer all the services for day to day banking.
You are buying into the political mantra that banking would have seized to exist or would have been wiped out. When companies become insolvent and administrators are appointed they do not evaporate into thin air (Quinn is a perfect example). What happens is that the functioning part of the company is sold off and the non-functioning part wound down. The one thing that did actually function in the banking industry was personal and branch banking. These would not simply have closed down.
Of course you can compare public and private hospitals. Just because a public hospital doesn't get to choose its patients or procedures doesn't excuse the filth in so many of them. Are you really saying that all the reports by media, the public and health care professionals about long waiting lists and lack of equipment and facilities is just anecdotal evidence? When is the last time you heard something positive reported about the HSE that didn't come out of the mouth of a politician?You are still using almost exclusively anecdotal evidence as a basis for your proposed policy changes. Your negative experiences and my positive experiences with HSE are pretty irrelevant. What really matters is a set of solid metrics that compares HSE performance and funding against its peers. Compariing the HSE to private hospitals is meaningless. It is easy to have a nice clean lobby and nice clean patients if you get to cherrypick the patients and procedures you take on. The HSE doesn't have that luxury.
(For the record, a friend's wife nearly died from MRSA picked up in Blackrock Clinic, so the private hospitals ain't so perfect either).
Again, you seem to be mixing up banks with shoe shops. If the bank was insolvent, the entire business was insolvent. You can't cherrypick the bits you like and say that they should continue. The liquidator won't have the assets to support the personal and branch banking - it couldn't be sold off without the asset base to back it up.
Are you seriously suggesting that AIB and BOI should have been let collapse?