On thinking about government spending in a permaculture fashion

My bit for the meaningless drivel forum.

I was having a discussion online about 'essential' services. A person was very upset that government money (at some time in the past) had been spent on singing lessons when his council was having trouble funding health visitors.
S/he saw health visitors as essential and every pound/euro/dollar/bit spent on something else took money away from these kinds of essential services.
I said that this was a false binary, money was clearly available to spend on grouse moors (basically landscape size glorifed chicken pens) and they wrote


But it's not a false binary choice, is it ?
Every pound that the government spends on free singing lessons is a pound that can't be spent on Health Visitors. Similarly, every pound that is spent on Health Visitors is a pound that can't be spent on Teachers' salaries. Etc etc.



But I still maintain that it is a false binary.
There isn't one special pound/ buck/euro/ bit that is spent on either singing or health.
There are many pounds, many choices. Most of our governments choices (worldwide) seem to be concerned with hyper-capitalism, or the use of money to make money, via the shortest route possible.

This is a bit like measuring the rain that falls on the hills and concluding that we only have that amount of water to work with, and the best thing to do is to collect it into a concrete channel and use it to make hydro-electricity.

But if we're smart about it we can slow and sink that water into the landscape, to re-hydrate it, creating springs and streams, growing trees and pasture, winding it through the landscape, allowing it to spill from pond to pond, creating habitat for wildlife and irrigation points for gardens and animals before finally collecting it to make hydro power, a portion of which we could use to pump a proportion of that water back up to a high landscape storage and make it work for us again.

My point is that money invested in say, singing lessons, isn't necessarily wasted. It doesn't disappear. It could bring many benefits to individuals and local economies, it goes around, gets VAT/GST/BTW/ service tax paid on it, gets income tax paid on it, possibly several times. Then again it may not. It all depends on how the system is designed.

It is pretty fair to say though, that much of the money 'invested' in grouse moors is probably just going straight to the top, and getting sucked into the hyper-capitalism game, getting shifted offshore away from taxes, and therefore is, effectively 'disappearing'.

And as for what is 'essential' or not, to paraphrase antoine de saint-exupéry:

'The essential is (often) invisible to the spreadsheet'

If you had talked about private spending, then you might have a point. But government spending is different since it is based on forcing people to pay, which is immoral.

With all the tools available these days there is no reason to use government to fund projects you like, such as singing lessons or health visitors. You can start a kickstarter, a GoFundMe, a Patreon, etc; and those who agree with the idea can support it willingly. And the people who would rather spend their money on guitar lessons for their child or that back surgery they've been needing can use their money for that instead of being forced to support things they think are worse choices. Businesses might use that money to hire more workers or expand.

In addition, when government spends money there is a detachment from the consequences. The bureaucrat that spends the money almost never loses their job or gets other important direct feedback when they spend poorly. To put that in permaculture terms, it is like doing things without observing the results.

Rus Williams wrote:My point is that money invested in say, singing lessons, isn't necessarily wasted. It doesn't disappear. It could bring many benefits to individuals and local economies, it goes around, gets VAT/GST/BTW/ service tax paid on it, gets income tax paid on it, possibly several times. Then again it may not. It all depends on how the system is designed.

This line of reasoning seems fairly close to pro-smashing side in the broken window fallacy.
http://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp

I also wanted to talk a little about the idea of Stasists vs Dynamists. [Not Statist, that's a bit different.]

A stasist is someone who believes that things should be static. They usually assume a fixed pie in economic terms. In ecological terms they usually assume that the current climate is the "correct" one and that the current set of living creatures is also the correct one.

Dynamists understand that economies can grow and shrink. They do not assume that a species should continue to exist just because it currently fills a niche - if that niche disappears then that species might not make sense anymore.

A lot of misthinking I see in the world is a result of stasist thinking.

I loved that Broken Window Pane theory though I heard something similar in a different way regarding credit.

A man from out of state rolls into a small town and is tired and spies a small motel. Walking in he talks to the proprietor and asks how much a room is. The owner says it is $100 a night an so the man lays a $100 bill on the counter and walks upstairs to his room. Well the owner of the hotel got some cleaning supplies from the general store on credit, so he runs over to pay off his bill with the $100 bill. Well that man had some work done on his car so after having the motel owners bill paid off, he runs over to the garage and pays off that owner. The garage owner had some pigs and to feed them had used credit to buy a few bags of grain, so he runs over and pays off the feed store owner. The feed store owner however got divorced a few years ago and gets lonely so he goes to a woman of ill repute. Down on her luck, she has resorted to taking credit from the feed store owner, but has had to use credit to pay for a room at the hotel. She in turns rushes over with the $100 bill to pay off the motel owner. Just as the $100 bill lands at the front desk. the man from out of state, walks down the stairs, disgusted at the room , grabs his $100 bill and blows out of town with it. Yet despite the $100 bill being gone, no one doing anything with it, in a short amount of time, just passing the $100 bill around miraculously made everyone paid off.

That is how money works in the USA now that the US Dollar is not backed by gold, and with credit running rampant. It all worked because everyone was using credit, but had just one person paid with cash, the circle would have stopped and left the motel owner without the $100 to refund the man from out of state.

It is interesting, I strive to live debt free, so if by taking this allegory, and the broken window pane allegory and combining them, I get a different out-come. First I would be able to pocket the $100 anywhere along the chain because I always pay with cash and not credit, BUT while I would have more disposable money to buy other items, I am so conservative I would save it. Yes I need maintenance items on occasion, but that is where interest comes in, so by being frugal maintenance items are paid for automatically. I am not rebuilding the economy I guess, but I am retired at 42 years old.

Bad choices: Get the reward up front and then pay for it over the long term
Good choices: pay for it up front, but reap the reward over the long term

Interestingly, in pre industrial times everyone kept running tallies with everyone else. One or twice a year the whole community would get together to cancel all the tallies out, and make good any shortfalls with barter items. So everybody was working on credit. Only "discreditable" folks, tinkers, soldiers, etc. paid with cash because nobody would trust them. Didn't directly have to do with the OP as such, but with what Travis just posted.

Cash/ currency is a way for governments and middlemen to skim the cream off of transactions; that is what it was invented for.

And modern "credit" works the same way.

If we could all get back to using traditional credit forms, the powers that be would just wither away.

Ok.

Ron- It doesn't really matter where the money comes from. Private or otherwise the money is put to work, in a good way or a bad way. The source doesn't matter. This wasn't about the use of government spending as a good or bad thing. Merely as a thing. And then from there how to think about it a bit better.

John- the broken window fallacy is based on the premise of there being one piece of money available to fix the window. My point was that we've become used to the false binaries that the government present us which make us forget that there is a missing third party that the money could have gone to.
The broken window fallacy is also set up on shaky ground and is of limited use outside of an economic theory. Once you add excessive savings to that little story it's very easy to argue that bringing them into the economy is the right thing.
Also my very clear point was that it all depends how the system is designed.