NZ Herald on private sector

January 11th, 2013 at 1:01 pm by David Farrar

The editorial:

An economy does not work very well, many countries have found, if every worthy service is financed from taxation and none need to put some of their energy into raising independent sustenance. Many a worthy service is provided from the private sector for a profit. But some of those that cannot carry a charge and make profits can offer value to commercial sponsors and capitalise in other ways on their popular appeal, and it is economically healthy that they should rely on those sources as far as possible.

The misconception that any good and essential service deserves a government grant is not confined to those who are not seeking a profit. Commercial firms are no less susceptible to government hand-outs and no less reluctant to present a case for them.

A mixed economy prospers when as many as possible of its goods and services are financed by voluntary trade and the proceeds of taxation are reserved for those that are essential and could not otherwise survive.

Absolutely. I’ll happily donate money to good causes, so they need less taxpayer funding. We have a wonderful volunteer ethos in New Zealand.

The rescue helicopter gives good value to its name-sponsor, Westpac bank, and its well-publicised work is guaranteed to elicit a good response to any appeal for public donations. The same is true of the Starship children’s hospital and of some prestigious state schools that can command high parental donations. Consequent reductions in their public grants are socially and economically justifiable.

Far from complaining that they are being penalised for success, the fortunate should be quietly proud of their reduced dependence on public money. They should be praised and celebrated for the proof of value that voluntary finance provides, and for the public money their fund-raising success has left in the purse for the less fortunate.

I just hope the Herald remembers their own editorial when there is some controversy over government funding!

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17 Responses to “NZ Herald on private sector”

  1. Tom Jackson (2,553 comments) says:

    Whoever wrote that tripe needs an economics class.

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  2. Redbaiter (10,398 comments) says:

    “A mixed economy prospers when as many as possible of its goods and services are financed by voluntary trade and the proceeds of taxation are reserved for those that are essential and could not otherwise survive.”

    Yep, only an economic and general illiterate could write something so incoherent as the above and be unaware of the obvious contradiction.

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  3. RRM (10,099 comments) says:

    Ah the Westpac helicopter – is there still a painting of it on the wall of a certain Pub in downtown Auckland?

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  4. hinamanu (1,068 comments) says:

    Since I’ve seen blatant criticism of the Westpac helicopter I’m convinced even more this country is full of facists

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  5. Grendel (1,013 comments) says:

    Fascists? socialists prepared to use the power of the state to crush their opponents and run the place?

    not sure what disliking of a helicopter could do to annoy fascists other than being an example of the private sector providing charity (which socialists of all stripes dislike as they beleive in the primacy of the state).

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  6. Weihana (4,620 comments) says:

    Redbaiter,

    There isn’t a contradiction in that statement. Note the words “…as many as POSSIBLE…”. The statement assumes that there is a practical limit to the free market and that state involvement in necessary. The point of the statement is to say that that portion of the market which does remain “free” should be maximized… within the limits of practicality.

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  7. krazykiwi (8,040 comments) says:

    I agree with Tom. Literary and economic albatrosses abound in that piece.

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  8. Redbaiter (10,398 comments) says:

    Weihana- maybe you can tell me how an “essential” service cannot survive without “government funding”.

    Surely if its truly essential, then it will attract funding from sources other than government.

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  9. Weihana (4,620 comments) says:

    Redbaiter,

    Surely if its truly essential, then it will attract funding from sources other than government.

    I don’t agree that follows. If private funding is charitable then it does not come directly from those for whom the service is necessary. To say funding will necessarily be provided is an assumption, one based in faith and ideology more than any specific evidence or fact. Alternatively perhaps you are advancing a circular argument wherein something is essential if and only if it attracts private funding.

    In this case, and whilst people may disagree, the author is saying that there is specific evidence to indicate that private funding is sufficient, based on what has already been raised.

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  10. OECD rank 22 kiwi (2,760 comments) says:

    Pure unfettered capitalism is the only way.

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  11. Weihana (4,620 comments) says:

    Define “unfettered”. Ayn Rand unfettered? Murray Rothbard unfettered?

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  12. The Scorned (719 comments) says:

    Pure free market capitalism requires the TOTAL separation of the state from the economy….anything less is at best a mixed economy…..at worst a total Fascist or Communist dictatorship.

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  13. The Scorned (719 comments) says:

    The state has no business at in the economy of any society…its role is rights protection…not bumbeling about in trade matters.Its history of failiure and leading us into debt and disfunction is un-defenderble.

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  14. burt (7,424 comments) says:

    The Scorned

    True, but ‘enough people’ are seduced by other peoples money so these parasite political parties survive. Their hard core voters never seem to stop to think either a) It’s too good to be true OR more importantly; b) Every time it’s tried it ends in tears…

    People continue to vote for more welfare, more ‘free this’ & ‘free that’ all washed down with higher taxes to punish the rich pricks. Then the economy tanks and the socialists sit on the opposition benches for a few years… Rinse & repeat.

    It’s easy to motivate a predominately low wage society against the wealthy, but a society eating it’s own head off is a pretty sick society. The lowest form of political appeal… We’ll give you other peoples money if you vote for us!

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  15. The Scorned (719 comments) says:

    The real core problem is the vote…democracy. While it exists individual rights are imperiled. If people can vote for others money and efforts to be taken from them they will.

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  16. Yoza (1,926 comments) says:

    “The state has no business at in the economy of any society…its role is rights protection…” Without going out on a limb here, I think that I can safely assume the “rights” being spoken of are property rights. Protecting property rights is an example of the state having “… business at in the economy…”. The primary objective of the state in the modern economy is protecting the “rich pricks” from the consequences of their activity.

    As long as we have an economic system designed to extract wealth from the lower tiers of society and concentrate that wealth in the pockets of the few sitting atop the economic heap, the state run protection racket will continue to develop ways and means of ameliorating the effects that that capital harvesting causes.

    “The real core problem is the vote…democracy.” Voting for which group gets to manage the economic prison has become so meaningless that fewer people are bothering to participate at the ballot box. The “real core problem” is allowing the term “democracy’ to be defined by elite interests. Shoehorning the democratic process into a system which, regardless of the electoral outcome, continues to deliver the same systemic disparity is inviting social upheaval.

    The most obvious elite reaction to social upheaval becoming predictable consequence of a state enforced economic paradigm has been the militarisation of the police force and the massive growth of mercenary armies (private security contractors in ‘newspeak’). Another manifestation of the ‘one percent’s’ recognition of massive economic disparities is a PR program promoting marketing campaigns which masquerade as charitable acts of ” voluntary finance”.

    Which begs the question: At what point does charitable ‘voluntary finance’ become part of a cynical marketing campaign? I would argue that once the corporate’s logo appears in association with the ‘public service’ is the point where the charade of “voluntary finance” charity ends and commercial self-interests begins.

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  17. itstricky (2,021 comments) says:

    We’ll give you other peoples money if you vote for us!
    If people can vote for others money and efforts to be taken from them they will.

    What I would term a self-centred misunderstanding of the system.

    Under the system, it’s not your money. It never was. It an acknowlegement that you must pay to the omni-present society. You don’t ever look at the pool of money and go “there’s my bit over there and I want it back because some scum sucker is taking it off me”. You do get to vote for the areas in which you think that pool should go or how it should be gathered – that’s the democracy bit. Sometimes you’ll agree with that, sometimes you won’t. But it was never your (or any other individual’s) money.

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