What to Do About Government Debt

My last post queried why the capitalist overlords who control most of the economy weren’t publishing a budget to persuade people to keep them in charge. I want to illustrate the oddness of the economic system that results from this by considering a particular issue.

This is an issue that is much worrying the Conservatives at the moment: government debt. The government has huge levels of debt because it’s spending so much more than it can bring in.

You don’t have to be a conservative to see that this is a problem. For the economy to work, the right numbers have to equal the right other numbers. But what would be a sensible response to this?

If I or any organisation I was a part of found that we were in some sense ‘over-spending’, our obvious response would be to prioritise: to ask what things we can stop devoting resources to, what things we need to keep devoting resources to, as well as of course how to avoid waste.

If we found that we were spending resources on something relatively unimportant while vitally important problems were left waiting, we’d be embarassed and shift the resources. And we certainly wouldn’t shift resources away from a vital area while leaving resource flows to less vital areas untrimmed.

Now this is of course what the government is trying to do; to making spending cuts of some kind, whether that’s public spending cuts or cuts in private spending (i.e. taxation). But the rest of our economy is not rationalising in this way – or when it is, it does so in a counter-productive way because it looks at matters only from a sectional point of view (e.g. laying off ‘superfluous’ workers so they can enjoy the dole queues).

Of course the way the government does this is hardly laudable. While millions of children grow up in poverty and hundreds of thousands are homeless, our government pours money into surveillance, corporate subsidies, locking people up for victimless crimes, and warfare. But at least in theory its aim is the overall good of society – I’m looking at it only in this latter respect.

I’m also assuming that it is perfectly competent at everything it does, and setting aside issues about the relative efficiency of centrally-directed top-down provision vs. grassroots control, etc. Because of course, disreputable as it is, its set of priorities is still better than many alternatives. It is the part of society that ensures that people (with correct citizenship status) receive healthcare and benefits, and there are plenty of large economic organisations active that see no need to devote any of society’s resources towards this. Those services are vital ones, in the sense that few things are more valuable to an individual than shelter, health, food, security, etc. They are substantially more vital than the average consumer good.

There’s also the issue of security. The pattern of distribution of goods, and its dynamic over time, can itself produce second-order goods and harms, such as when even most of the people who are materially satisfied must still worry over whether and how they will continue to be so in the future.

So what’s the logical thing for the government, or any other organisation trying to take an overall view of the economy’s health, to do in response to this debt problem, this imbalance between what’s spent and what’s available to spend?

It seems to me that the logical thing to do would be to cut back on resource flows to ‘frivolous’ or less important goods and services, while conserving and preserving resource flows to vital ones. Now that could certainly be done by a general rolling-back of the state’s lethal and confininf functions. But let’s suppose it couldn’t. Most low-priority consumer goods are produced in the private sector by profit-seeking companies. The logical approach would be to redirect resources away from this towards preserving those vital functions like security or housing.

But if this is done too much, those other controllers of the economy, we are told, will actively fight it, by relocating their resources away to another country, or shutting down production. What madness is this? People have a shared problem, and one group’s attempts to resolve it are then actively sabotaged by another group, out of their desire for personal enrichment? That’s hardly very comradely or even very sensible. I wouldn’t want to share a flat with someone like that. I certainly wouldn’t vote for them to be in charge of the washing-up rota.

So it’s hopefully fairly clear what I’m against. What am I for? An economic system where each part seeks to take that whole-society view, tries to collaboratively solve collective problems rather than seek sectional interests. In short, a planned economy. But what exactly does this look like?

Taking this ‘overall’ approach to collective issues isn’t something you just do because you feel like it – individuals trying to improve the economy by donating their personal wealth towards important services won’t be a viable or effective approach. You need a lot of things: you need to be provided with the information that would guide such decisions, you need to be able to deliberate with others committed to the same idea, and then see that your collective actions are able to have an appreciable effect, you need it to be made easy and convenient, an integral and intelligible part of how you ‘do business’. In short – it is not an aspiration, it is an institutional set-up.

Hopefully readers will not be shocked into cardiac arrest when I say that the organisations that would be best suited to this would be federations of directly-democratic workplace and community assemblies, as tend to be set up in the course of popular socialist revolutions. That is, in a stunning twist that was no doubt entirely unexpected, I think communism would be best.

One Response to “What to Do About Government Debt”

  1. Francois Tremblay Says:

    Although I am not a communist, I agree with everything you propose, even the last paragraph (if interpreted vaguely enough). On the other hand, I don’t think we can expect any good from government. The ruling class will keep pursuing its interests until they are all gone and their power is dispersed and exterminated.


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