Russ Roberts hits another home run: Keynes vs Hayek part two

Automated “Shirk”?

Shirk: to evade (work, duty, responsibility, etc.).

“Shirk” in economics has the same definition that appears above. However, one component of shirk studied in the field of economics is shirk appearing in differing organizations of the firm. Collectivist firms suffer multi-stage shirk. Late stage collectivist models suffer from rampant shirk.

What if “shirk” becomes automated within a collectivist model? Automated shirk: data processing systems that automatically set the conditions for shirk. A completely automated and impartial shirk condition producer.

What if shirk goes beyond being embedded within the collectivist organization’s workers. Shirk goes beyond the collectivist organizational structure. What if shirk becomes embedded in the automated systems of the organization? What if data processing technological advances allow for ever increasing “automated shirk”?

Lets take an example. You visit your friendly local public school system. Records are not correct. You want the record to be corrected. What is the first thing you hear? “Well on the system it says……”.  "You see, after two weeks the system....".

Does the problem then languish with you having to produce a mountain of paper work, tons of personal trips, numerous phone calls, speak to eleven different people, and maybe on a good day with the wind behind you solve the problem. That your cost is elevated as you must spend time/resources to overcome automated shirk.

In the example above the “system” creates the condition for shirk which sets off cascading conditions of shirk. Why did the system shirk? It didn’t. It is most likely the data system was merely produced with such central planning parameters its inflexibility creates the condition for shirk.

Hence we have an automated data processing system with design parameters set forth by the members/power purveyors of the collectivist firm. The "system" is designed rigid just like the rigid collectivist firm it serves. The data processing system becomes an integral part of the collective based firm. When a correction is needed the data system's design doesn't easily allow for change. Therefore each error creates a condition for "shirk". The collectivist based firm's members then display shirk regarding correcting the error as the data system has created the conditions for shirk. Blame the system and fail to solve the problem.

Given the condition presented by the rigidity of the automated data system, each member of the collectivist firm then has the opportunity to shirk their responsibility to correct the error as shirk conditions have been created/are present. One member merely shirks to another shirker. That is, as you climb the ladder of the eleven people, member one merely shirks to member two and so on. That is, shirk cascades. All the while you suffer the effects of shirk as the error remains. Automated shirk!

The Components of a Bubble?

“You can’t run the government like you run a business”- Our Dinner Table Blog

From the Our Dinner Table Blog:

"I often hear folks proclaim that you can’t run the government like you run a business.


Next time I hear that I intend to ask, what should you run the government like? Is there a good analogy?

What special circumstances does government face that makes it unattractive to run it like a business? What aspects of running a business is not befitting of the government?"

A most excellent question.


However, is the more basic question/problem what F.A. Hayek described as the arbitrary decision to deliver public goods through a government controlled public sector? Hayek argued that the government levies tax and gathers tax revenue for the choice of public goods taxpayers desire. The arbitrary disconnect occurs after the funds are collected. Why create a public sector to deliver the public goods? Outside of defense and public safety, why have government deliver the public goods? Why?

Hayek’s argument was that public goods would be more efficiently delivered by the private sector with government merely acting as the tax gathering mechanism and ordering the delivery of the public goods that taxpayers desire.

Hence every opportunity exists for government to choose what delivery mechanism it desires. Enter the politico. One must never forget that governments don't think, decide, discuss. Only politicos as the power purveyors of government think, decide, discuss. If the politico creates a public sector to deliver public goods then the politico can expand his/her power. Hence the delivery mechanism is an arbitrary decision finding its basis in decisions by politicos. Therefore we end with a system of politicos through the mechanism of government delivering public goods.

Possibly the answer to the question "What special circumstances does government face that makes it unattractive to run it like a business?" lies in that the delivery of public good is not a business but rather power politics.

“You can’t run the government like you run a business”- Our Dinner Table Blog.
http://ourdinnertable.wordpress.com/2011/04/25/you-cant-run-the-government-like-you-run-a-business/

Mr. Smith Receives $10,000! A Two Minute Course in Public Choice Theory.

Grocery School - Don Boudreaux, George Mason University, department of economics‏

One should consider heading over to the blog Cafe Hayek and read the post Grocery School.

"Suppose that we were supplied with groceries in same way that we are supplied with K-12 education."

http://cafehayek.com/2011/04/grocery-school.html

Government promises?

In the coming debate regarding major reductions in federal spending certain politicos will frame “spending” as “government promises”. That a reduction in spending is somehow a reduction in a promise.



There were never any “government promises“. You see, governments don’t think nor make decisions. Any promises were exactly made by politicos, with other peoples’ money, through the mechanism of government.



The reduction in spending, meaning a reduction in politico promises, creates a basic problem for politicos: they have spent the better part of eight decades spending other peoples' money to build dependent political constituency. They have constructed, maintained, and perpetuated spending as a political constituency building exercise and could care less about the actual outcome of the particular spending. Spending focus by politicos is primarily on the dependency factor to built and maintain constituency. They also grant rent seekers (special interests) benefits (taxpayer money) as a further extension of political constituency building.


The result is: reducing/eliminating other people (politicos) ability to spend other peoples' money (taxpayer) on other people (recipient class) is in fact a threat to politicos’ constructed, maintained, and perpetual political constituency building exercise. Hence reducing spending is a threat to their supporting political constituency (votes, political donations, campaign volunteers, etc.).


Therefore, perpetuating spending is paramount to the politico. Framing the argument that spending equals government promises is an attempt to portray reduced spending as broken promises. The Orwellian phrase “government promises” is merely new speak for “politico promises” as governments don’t think or decide, only politicos think and decide.