18 April 2008

State Beneficiaries

Patrick Crozier asked (a week ago), who actually benefits from the state?

He works down the list, from Tony Blair to a welfare junkie, and observes that nobody is doing much better from the state than they would otherwise.

There is a good reason for this: rent-seeking. If any particular position as a tax-eater is excessively profitable, then people will fight over it until the cost of winning it approaches the value of the loot. Hence, becoming an MP, say, and grabbing that lovely 120K/yr, involves a whole lot of hard work and sacrifice, in the same way as getting the best bargains on the opening day of a sale requires camping outside overnight, elbowing and clawing your way to the front of the pack.

The winners of the tournament are making a marginal profit, or else they wouldn't bother, but they're not doing that much better than they would at something else.

The individuals who do actually profit significantly are those who do not have to compete for their position, either because the position is not open to competition (for instance because of nepotism), or because there is a lot of randomness in the selection process.

The waste of the public sector is not really to be seen in the rare government-produced fat cat or welfare cheat. They are unrepresentative. The waste is most visible in the vast hordes who have no plans in life beyond collecting handouts or doing worthless public sector jobs. Most of them could do something like as well in the private sector, but in sheer numbers they make up the most solid statist interest group.

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