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The Forum > Article Comments > A social plimsoll line? > Comments

A social plimsoll line? : Comments

By Eva Cox, published 30/3/2005

Eva Cox asks if there is a point where too much choice in the free market causes societies to 'sink'.

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Yes, our choices in the market balance our risks and desires; this is why societies have traditionally chosen to institutionalise some services, such as defence and health, and not others like the supply of bread.

For example, risk cannot be easily reconciled with healthcare. At my desk, safe from traffic, I would be willing to sacrifice between 5% and 10% of my income for healthcare. About to be run over a bus, I would be willing to part with my entire salary just to stay alive. To balance risk and desire in healthcare, we pool resources.

Imperfect information affects everyone, but exacerbating this, risk is not ‘democratic’, and poorer people are exposed to higher environmental, health and educational risk than more affluent.

This is manifest in Britain as many polls suggest UK voters are do not want tax cuts that lead to reduced services, which in turn has drawn the conservatives back towards the fiscal centre. Despite voters being perpetually dissatisfied with the quality and capacity provided by the National Health Service (a universal system, free at the point of delivery), they are unwilling to see it diminished. They even accepted a tax rise of 1% to pay for it.

This voter-citizen reluctance is also indirectly evident in the difficulty even conservative administrations have in trying to reduce the level of national income taken as tax, despite 20 years of neo-liberal ascendancy.

Politicians who equate dissatisfaction with the quality of public insurance and assurance schemes with a simple lack of choice are ignoring the very drawbacks of the characteristics of the market. Markets thrive on dissatisfaction (we are perpetually dissatisfied with what we have, therefore consume more), yet it is not pilloried as a flawed provider.

Of course people are dissatisfied with public services. They operate in the same scarce world as the private sector, but politicians are afraid to give citizens choice on how well these services are funded, in often a (rhetorical only) race to the ‘tax-bottom’. They assume we demand more choice in how these services are provided. Yet voters have continually supported tax and spend governments.
Posted by andrewb, Wednesday, 30 March 2005 12:35:01 PM
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What does it mean that government expenditure has gone from 25% of GDP in the 1960's when there was more positive feeling about government as provider, to 36% in 2004 when people are increasingly unhappy with the level of services provided by the government. Where is this extra money going or is it that our expectations are increasing faster than the services that are being provided. As Ms Cox says "it is often the relativities between us, and the perceptions we have of these, that influence the way we interpret the world and act within it." We seem to be acting as if we need government to do more and more.

The tone of the article is that government services are being eroded with increasing choice. Perhaps increasing choice gives us the feeling that the government should always do more. If so, it is a good impression for politicians in office to sell. It says "vote for me and I will solve all your problems."
Posted by ericc, Wednesday, 30 March 2005 8:19:58 PM
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I don’t understand what Eva is talking about. We collect $100 billion in personal income tax and spend $80 billion of it on social welfare. While it is not so difficult for a private individual to pay higher rates of tax, than the 30% company rate (and I’m not talking about marginal rates), there has never been a better time for social welfare recipients.

She must either mean that more of it should be provided in services, rather than cash, or more of it should go to women. Perhaps she regrets the growth of individualism through family break ups orchestrated by her sisterhood cohorts. Is it perhaps due to the disinterest of available menfolk, that’s prompting her feelings of social insecurity? What more could the government possibly do? Spend all of income tax, on social services? Force men back into marriage? Enforce extended family relations?
Posted by Seeker, Wednesday, 30 March 2005 9:41:43 PM
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Seeker,totally agree.The likes of Eva Cox feel a bit threatened since their comfort zones may shrink when hard working people in private enterprise realise that that they have become slaves to a social security system out of control.The figures you quoted are only for the Federal Govt.We have also the duplication of the state and councils on top of this.16% of Australians of working age are now being supported full time by the tax payer.700,000 on DSP , 540 000 on the dole and 300,000 single parents.There are only 10 million in the work force and many are casuals who work part time.Who really makes this country function?
The more taxes they collect,the more the bureauracy grows.NSW has 340,000 public servants.They have admitted to their own union that they have 20% too many.This represents 68,000 employees worth a conservative $3.5 billion p.a.Still Bob Carr doesn't have enough money!Combine this with the other areas of waste and we have a NSW disaster.NSW will lead Aust. into our latest recession.It will take 12mnths for us to realise this.NSW is stuffed.

One of the major problems is that the private sector is so busy working to survive, they don't have time to look above the sweat and protest about their predicament.The small business community is both used and abused.
Posted by Arjay, Wednesday, 30 March 2005 11:58:45 PM
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Eva's question - "is there a social plimsoll line, a point of overload that makes societies sink?" - is a valid one, and I suspect the answer is "yes". Unfortunately, in my view she has mistaken the symptoms for the disease, attributing the confusion she observes to "the free market".

I believe that it is far more likely to prove to be the growth of government bureaucracy. We pay ever increasing amounts in direct and indirect taxation, only to see "government services" transform themselves, one after the other, into commercial enterprises.

This inexorable transfer of risk to which she refers should of course be accompanied by a similar reduction in the tax base, so that we consumers can actually exercise our choice in the marketplace.

The UK, that has a government uncannily similar to our own in many respects, is leading the way - there are now more workers in "health administration" over there, than actually work in the hospital system.

Breaking this vicious circle is mighty difficult. No-one will voluntarily vote themselves out of a job, after all. I suspect that this will prove to be Eva's "plimsoll line" - we will simply run out of money with which to fund all these hangers-on, and the entire edifice will collapse in a massive deflationary spiral.
Posted by Pericles, Thursday, 31 March 2005 11:34:01 PM
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I was born and raised in the UK – one of the reasons I wanted to migrate to Australia was the continual interference in individual peoples life choices which was manifest from the sort of socialist regulated society which was the "UK" from the 1950s to the time Dearest Maggie took the reins (she started the modern trend – words like – “There is no such thing as Society. There are individual men and women, and there are families”).

This social interference was a direct result of politcies to ensure the working and maintenance of the “Welfare State”.
Quite honestly, if there is a “plimsole line” and “a point of overload that makes societies sink” it will be found drawn far lower than anyone has experienced in Australia in more than 100 years.

So to finish with another Margaret T favourite “We want a society where people are free to make choices, to make mistakes, to be generous and compassionate. This is what we mean by a moral society; not a society where the state is responsible for everything, and no one is responsible for the state.”

The "state" is never "generous" nor "compassionate", it will make only politically motivate "choices" and will eternally deny its "mistakes".

"Individual People" are, virtually, the opposite.
Posted by Col Rouge, Friday, 1 April 2005 9:19:28 AM
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