It is irrefutable fact that the bigger a country’s public sector, the worse that country will perform economically (see Cuba, Venezuela etc) and that the bigger a country’s private sector, the better their economy will perform (see Hong Kong, Singapore, China etc). So every government in the world should have, as their first priority, the job of making themselves as small as possible. Yet under Gordon Brown the British public sector grew to be 52% of our economy, parasitic on the 48% that was actually generating wealth. No wonder the economy crashed so badly. Now George Osborne says that he is working to reduce this to 38%. It is a start, but really we should be working to achieve half of that.
What do we need a public sector for? As intelligent beings we should be able to provide for all our wants and needs ourselves. Only a very small number of things need to be subcontracted out to a higher authority.
- Infrastructure. Roads, airports, sewage, water, ports, railways, telecomms. For some strange reason the Labour state thought it was best at providing all of these. Luckily Margaret Thatcher came along and proved them wrong and they became far better as a result. Roads being far too ubiquitous to easily privatise. However the government still interferes on a colossal scale. They spent Â£16bn on Crossrail. And are planning HS2, a white elephant vanity project that will probably cost Â£100bn. If these projects were worth doing then the private sector would have done them. Meanwhile they refuse planning permission for the 6 runway airport that Great Britain desperately needs, the absence of which is costing us billions every MONTH. One brilliant thing that the government with Ed Vaizey is doing in government right now is extending broadband to the large areas where it is currently uneconomic. This will benefit Great Britain vastly more than HS2 will.
- Law and Order. Amazingly in Britain this is to quite a large extent already provided by the private sector. Taxpayers pay Â£12.1 billion a year for the police. Yet the members of the British Security Industry trade association have a turnover of Â£4.3 billion and are only a fraction of the industry. And the private security sector isn’t riddled with freemasonry and corruption. Fire services, obviously, should have been handed over to the insurance industry many years ago.
- Defence. The UK has been using large scale mercenaries for many years now.They are called Gurkhas. The recent Somalia piracy problem was largely sorted by private contractors. G4S is the second largest private employer in the world with 625,000 staff and provides “security” in over 125 countries. A big chunk of these people are armed. They provided convoy security in Iraq. Erinys provides armed security around the world with tens of thousands of staff. DynaCorp “soldiers” have fought in many counties, it has a turnover of $3.4bn. Academi (previously Blackwater) is a genuine private army with tens of thousands of troops, aircraft, armoured vehicles etc. I could go on but the point is there, much of what our military has traditionally done can be bought competitively on the market as and when it is needed.
- Health. Our monolithic, Marxist NHS is a disaster and always will be. We need a highly competitive insurance based system with the state providing a safety net. Holland does far better than we do.
- Education. A voucher based system of private schools with parents allowed to top up is the only fair method. The main role of the state should be to keep all religion out of education.
- Social security. A short term safety net as Beveridge intended and support for those who are genuinely disabled. And that’s it. The current system of in work benefits, especially for housing, is a monstrosity. State pensions are an actuarial nuclear warhead. Governments have got us into a horrendous position.
- Ensuring that markets work properly. This is the state’s most important job, markets are at the centre of our society and we need protection. Yet we allow, or don’t prevent, abhorrences like monopolies & oligopolies, cartels, insider dealing, crony capitalism, privileged information and other perversions of proper markets. The state has let us down and should do much more. With proper markets you can buy everything else.
- News media. We have the BBC as an accident coming out of WW2 and the post war consensus. It provides a half of all the total UK news content across all media and very obviously has its own political agendas. This distorts and perverts our public life. The BBC should be broken up and privatised as a matter of urgency.
So it is self evident that we could cut our public sector massively and our quality of life would not go down. It would go up because we would have far more of our own money to spend. We could get rid of income tax!
Which brings us to how we got into this disastrous situation:
- Absolute monarchy. The Plantagenets and Tudors could tax and extort at will, to spend on their own security and pleasure. So they did. A bit like Vladimir Putin today. Henry VIII had over 60Â castles, palaces, large houses, Â hunting lodges, confiscated houses, monastic conversions and defensive fortresses. Putin only has 6 palaces. The kings and queens built large infrastructures around themselves because they could, there was nobody to stop them. Extort and spend.
- Empire. The decline of our absolute monarchs coincided with us conquering a lot of the World’s surface. This took a lot of organising and administering. The size of the task was so enormous that great chunks of it had to be very efficient. 300 million Indians were administered by just 1,000 “Civilians”, self evidently some of the most powerful people in history!
- World Wars. The decline of our empire coincided with two, connected, world wars in quick succession. This is when many of our human rights were stolen from us by the state, never to be returned. The state had to control the minutiaeÂ of every aspect of every single person’s daily existence so as to maximise the war effort. This involved an explosion in the power and authority of the state that has never been rolled back.
- Socialism. Attlee was corrupt, he took the war time powers and authoritarianism and perverted them to the cause of implementing the evil of socialism. He kept the whole population of Britain at starvation level and stole or extorted many of the factors of production, thus crippling the economy. The British public had been subdued by wartime authoritarianism and were utterly supine, even the Conservative party failed us. It was not until Margaret Thatcher that some of our rights and freedoms were restored.
So that is how we got into this silly situation, accidents of history have given us an immense public sector that is not fit for purpose, how do we fix it? The Conservative party should be taking bold action. Zero civil service recruitment. Close whole ministries. Sack all civil servants with surnames starting with alternate letters of the alphabet. Repeal every single act of parliament possible. Privatise absolutely everything, except for the absolute minimum necessary to run the state.
Do this and Great Britain would boom and prosper like never before. We would very quickly become richer than all the other G20 countries. The economics of this are irrefutable. And it is exactly how we achieved such enormous feats in Victorian times.