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Have Governments lost sight of their primary purpose?

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The invention of national government was a great step forward in the organisation of society. Firstly the control of the society was taken from the hands of a single person who was ruling the society as though it were a private fiefdom. Under the feudal system, everyone other than the ruler had to do whatever the ruler wanted right or wrong.

Clearly putting decisions about society as a whole in the hands of a representative assembly properly elected by the people was a major step forward.

Public policy needs to reflect the wishes of the populace or at least a majority of the populace,

In addition to this policy making role, there is a need for some functions which affect the whole of society to be performed by a bureaucracy controlled by the elected assembly. The question arises "What functions should be carried out by this bureaucracy?"

One of the interesting things I learned in my studies of Economics, is that there are natural monopolies which shouldn't be allowed to fall into the hands of individuals. There are also function which must be performed in our society which cannot be properly performed by a self-interested economic entity and which should not therefore be "contracted out". The thesis is that the primary purpose of government is to collect money from all and use these funds to carry out the "public" functions which are best done by the bureaucracy.

These functions include such obvious ones as defence, foreign affairs (i.e. relations with other nations), border protection, law enforcement, the establishment of laws to regulate acceptable public behaviour such as road rules (and many others),

Clearly if any of these functions were carried out by a single individual (or group) there would once again be a monopoly on public policy. For example, if a public road such as the Sydney Harbour Bridge were to be privately owned it would be possible for the owner to extract a toll for the use of a facility which people cold not avoid using. There would be no competitive pressure and no mechanism to control the size of the toll.

There are other functions which are natural monopolies, such as hospitals, telephone services, power and water distribution

There is a good example of the dangers of "privatising" a "public" monopoly. Margaret Thatcher's privatisation of water distribution in Britain resulted in two very destructive phenomena. The cost of water to the consumer increased dramatically to fund the incomes of a new class of "managers" and funding of the maintenance of the distribution system was cut to increase the return to the "shareholders" and the system fell into a catastrophic state of disrepair with the possibility of service disruption for many consumers.

The proper operation of government is to put in place systems whereby the populace at large contribute money jointly to fund the operation of bureaucracies charged with the responsibility of carrying out these "public" functions.

It is clear that most governments today see privatisation as the panacea of all their problems even though the results are often worse that the original "problem". My essay on Keynes and Hayek reflect on this phenomenon.

I see the major problem of our age being the failure of governments to care for all the people. Modern governments seem to expect everyone to support themselves adequately. Those who, through misadventure or lack of opportunity, cannot do so are consigned to poverty in a society where worth is measured only by bank balance. I have clearly identified myself as a "socialist" in an age when "socialist" is a common term of abuse but then I have been a "lefty pinko" ever since my student days.

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Created: 19/5/06 and last revised 4/11/07
Author: Robin Chalmers Copyright in all the material on this site is asserted by the author
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