“A more easily understood criticism of Piketty’s work is his use of income before taxes and transfers, or primary income, to estimate the distribution of income. The distribution of primary income is clearly much more unequal than the distribution after taxes and transfer payments. In Ireland, income before taxes and transfers is more unequally distributed than the EU average but after taxes and transfers, Ireland’s income distribution is less unequal than the EU average. This is because the top 5 per cent of income earners pay 46 per cent of all income tax, while the top 20 per cent pay 79 per cent. Much of this tax revenue is used to fund social welfare payments, which are generous by EU standards.”
Is this not the crux of the issue as far as Ireland is concerned? Piketty’s book is clearly an outstanding achievement of scholarship. But it is not that relevant to Ireland’s situation which is a problem of overall inadequate wealth/capital creation rather than inequitable income distribution.
Sean Byrne: “Piketty’s central argument is that if the rate of return on capital exceeds the growth rate of output, the share of capital income in national income rises without limit.”
That’s not a claim Piketty makes, which is just as well since it ain’t necessarily so. Also, the Lucas quoted early on is Robert, not Thomas.
But all in all that’s a good review. However the most faithful synopsis I’ve seen of the book is by Robert Solow. Those who can’t be bothered to read the book should certainly read this:
I infiltrated the Piketty part of the TASC conference and it was well worth infiltrating (and the conference was very well organized, props to TASC)
If I could capture Piketty in one word it would be “fairness”. He cares very much about it in all its senses. If I had to add in a second one it would be “feisty”.
First impressions:
It should not be surprising for a man focused on inequality but Piketty is self effacing and made sure to mention the contributions of all his collaborators (and his academic antecedents). He did not come across as in any way arrogant or make any claims to having given the final word on the subject of capital and inequality but he is engagingly proud of the book (C21C) and of the larger project (eg: The World Top Income Database.). This is a person who has found their calling.
The talk itself:
Though English is not his first language Piketty talks quickly and with very few slips (I noticed one I think, the usage of “dilapidate” for “dissipate”). The talk was the book – anyone hoping that he might pull some out some newer results or thoughts on recent events would have been disappointed, if you had read the introduction it would all be familiar to you, though he is a good lecturer and charmed the most important points into you. (the parallel but unconnected spreads in waged income and the increasing dominance of income from capital over waged income, the masters of the universe are getting a steadily bigger slice of the income pie but the waged income pie is getting relatively smaller than the returns on the capital cake).
The figure that really stuck for me is the one on trickle up: In the US over the last 30 years 75% of income growth (of any kind) went to the top wealth decile. In terms of relative financial power (and we can take it informal influence on government) economic growth has been making the poor even less well off in the US. Its hard to believe that most Americans really know what it going on.
His graphs on declining public wealth were also interesting, he mentioned privatization as one the causes but how is it, with private wealth now such much greater then public wealth, that its still the state that is expected up the pieces of market failures? There is a bigger question here about the abdication of responsibility in the private sector for things like training and pensions (why is the job of increasingly poor states to train young people in university to meet the needs of increasingly rich multinational corporations?) but he did not delve into it.
He also touched on labour/capital substitution (“Amazon replacing its badly treated human drones with rights free robot ones” as he almost put it) and in a word where capital was so concentrated what would the affects be on people without non-automatable skills or capital. Not good at all. (This seemed like a subtle dig to Kuznet curve fans/development economists keen on globalization without thinking about the likely destinations.)
He had a well formed argument on the usefulness of high marginal rates of taxation for very large incomes (as the US had mid C20). The normal objection to them is that they get comparatively small increases in tax revenues and drive away our beloved entrepreneurs to Galt Gulch. His counterpoint is that there is no social usefulness to people being paid so well so it should be discouraged and also that the concentration of wealth was in itself a bad thing and hence should be limited. One in the eye for Richard Bruton.
Advice:
If I were an economist with broadly right wing politics I would be cautious about the ground I fought Piketty on – he is very much up for a fight and has been training for ten years. For instance in his answer to this sites roving reporter Sarah Carey he gave a rousing and convincing defence of his position on the Irish property tax. He’ll see your incentives to moral hazard and raise you a regressive taxation measure and a misunderstanding about capital ownership (the homeowner with a large mortgage is being taxed on something they do not really own, it would make more sense to tax the bank on the mortgage if you are concerned about excessive leverage.).
Overall this was an enjoyable and heartening talk with a lot of good talking points for class warriors and much to chew on for those who are not yet in the fight.
@DOCM
Is this not the crux of the issue as far as Ireland is concerned? Piketty’s book is clearly an outstanding achievement of scholarship. But it is not that relevant to Ireland’s situation which is a problem of overall inadequate wealth/capital creation rather than inequitable income distribution.
This is a bit like saying that because Ireland is likely to suffer less immediate and sever local effects from global warming than other countries we do not need to concern ourselves with ìt.
If Piketty’s patrimonial capitalism keeps going it will take us down too and in a way it already is. The manner in which creditors have been privileged over debtors in the EU and inflation has been targeted rather than unemployment are just two examples of why the power of capital needs to be confronted.
It is somewhat surprising, in the context of the debate on Piketty, that the recent NESC reports on jobless households has not received more attention.
Thanks very much for that. Unfortunately I couldn’t make it, but well done Sarah for getting a question in: usually worth it to get a good answer.
In the book he certainly does take on the Kuznets curve. If you look at Kuznets’s dates (1901–1985) you can see why the world around him and the available data seemed to be pointing him that way (capitalist countries become first more and then less unequal over time). The point of Piketty is to try to capture a much longer data sequence, ie around 1780 – 2010.
He does also deal with inequality after tax so I don’t understand Sean Byrne’s criticism. I can dig out the page references if necessary.
A thoughtful and generous response from Patrick Honohan.
“….I have to disappoint anyone expecting a “however” at this stage, because (while such an ambitious book will continue to prompt many debates and questions) for me it is a tour de force.”
“Could a one-size-fits-all debt modification scheme be devised to deliver wholesale loan modifications speedily for unaffordable debt? ”
Honohan concludes that such is not possible. However a one size fits all approach could be devised to reverse the benefit to landlords in receipt of of increasing rents, while the State subsidises their tracker mortgages.
The State could introduce a rental levy (off the top line), and allow that levy to be offset in the event that it creates a loss.
@DOCM
“This is because the top 5 per cent of income earners pay 46 per cent of all income tax, while the top 20 per cent pay 79 per cent. ”
I have see such a statistic used on several occasions but cannot accept its validity. I believe, until shown otherwise, that it is a disingenuous statistic.
My reasoning is that ‘all income tax payers’ contains hundreds of thousands of income tax payers with incidental income tax only, who barely make it over the income tax tax threshold.
It is time that particular statistic was subject to a little more scrutiny by statisticians.
@Gavin Kostick
See Sarah’s longer piece on the talk in the other thread.
On Kuznet Piketty was not negative in the talk about him at all and did not mention the “war against communism” subtext to the popularization of this “whig view of capitalist development” view. Other perfectly respectable development economists still hold to Kuznet in a modified form (overlapping Kuznet curves mean that the benefits of one curve can be hidden by the losses of the next one in one location and it is the world wide trend of inequality that is the important one). I think myself that this is just an attempt to attribute benefits from technological progress to benefits from trade but I aint no economist.
C21C is entertaining, I hope I get through it before the summer is out.
@ Joseph Ryan
If you can demonstrate that the statistic quoted is incorrect, I will, of course, accept your point. But is it? Revenue data are among the most reliable.
As a general comment, I would note a tendency about the policy debate in Ireland which is shared by all shades of opinion i.e. to treat Ireland’s case at one remove, so to speak. That is to say to analyse it in terms of everything other than direct observation of the case in hand.
Another recent example (prompted by the remark of the head of the CB) can be found in the recent comments by the MOF on the – receding – possibility of retrospective bank recapitalisation.
As the genie enquires; “D’ont you recognise a fairy story when you hear one?”.
The curious things is that it is my conviction that the vast majority of the electorate do but are waiting for their political representatives to do so before agreeing themselves, usually by saying nothing.
Is the Piketty talk up on the net somewhere?
@docm
The silence about the retrospective recaps question is deafening.
@Thomas Piketty
Well done!
I do intend to read it later on.
@DOCM
From the information highway on this tour de force, I can easily guarantee you that the theoretical and empirical force in time of this work is almost certainly very relevant to Ireland, past/present/future?, and that your almost explicitly biased identification of the nature of the problem, and its proposed odious solution (sic), is rather weakly spun.
Were any political folk there? Not that they would pay a blind bit of notice but…
The carefully worded speech by the CB governor seems also to me to touch all the bases, at least as far as the CB is concerned. Indeed, it may lead to the introduction of a new word into the vocabulary of the debate; “smoothing”.
“The two factors which have transformed what might seem a rather benign valuation blip into a crippling debt crisis are, of course (i) the distribution issue, namely the fact that different households were affected in dramatically different ways, depending mainly on whether they had borrowed to buy over-priced property and (ii) the fact that the Government’s net debt position has also deteriorated by about €150 bn since 2007: a third of it attributable to the bail-out of bank creditors[and the rest resulting from the borrowing undertaken, especially from official sources, in the course of smoothing the transition to restoring budgetary balance.”
The judgement of history will certainly be that the roughness of the sand paper used depended on the sectors impacted.
“There is unequal treatment of public and private sector workers due to the prevalence of DB plans in the public sector and DC plans in the private sector.”
“A new pension scheme for public servants is being slowly phased in and is unlikely to affect a majority of public sector workers for a long time.”
@Shay
So eh, is that yourself then? That note taking paid off very well!
@all
I jumped the gun and put my report on the other thread (linked from Shay’s comment)
Prob best to move discussion here though.
In retrospect I was hard on Honohan I suppose. I do like him, and I suppose he said as much as he could. His point about r -g was well made.
Someone asked about politicians. Apart from Peter Matthews any I saw were either Labour or right-on Independent types. Senators Abbey-theatre guy and Katherine Zappone. Joan Burton. Tommy Broughan. Bearded trade unionists. Jack O’Connor, David Begg (he looks rich; perhaps he can’t help it; perhaps he is; but it’s not a good look for a trade unionist) Think I saw Des Geraghty too. Bit of love-in really. As I said on the other thread for the talk to be effective, I would have preferred to see centrist/right types because the thesis is a slam dunk really.
@DOCM
“If you can demonstrate that the statistic quoted is incorrect, I will, of course, accept your point. But is it? Revenue data are among the most reliable.”
I believe that I have located the revenue report and table that the oft used statistic is based. http://www.revenue.ie/en/about/publications/statistical/archive/2011/income.
Table IDS1
The 2010 figures contained in that table show that approx 22% of “cases” pay 81% of total income tax, but the table itself as constructed is, with respect, a very disingenuous table.
On looking at the total tax “cases” of 2,088,443, one can immediately see that there are 387,175 “cases”, 18.5% of the total, with income from 0-10000 per annum. Persons who in most peoples book should not pay any income tax, and should certainly not be included in any total of “cases” figure for income tax that purports to extract meaningful data by decile.
Included in those 387,175 “cases” are probably several thousand of €25 euros per year dirt interest deducted from the deposit accounts of the grannies that Johnny Giles or Bob Collins has not managed to kill off.
The statistic, IMHO, is so misleading that using it without a fuller explanation of the 18.5% “cases” with income below €10000 per annum, is simply not appropriate.
It is perfectly feasible to posit a stable economy with g=0 and r>0. For example, people save during their working lifetimes and spend their savings during retirement. In fact this is the model the vast majority of us follow. There is no constraint on the value of r in that dynamic.
What Pikkety is getting at is that there will be those at the top who do not spend what they have saved. In fact they earn so much on their capital that they can’t consume all the capital income and so their capital must grow.
The real test is r>g+c where c is consumption. And we must always expect there to be some for whom r>g+c over their whole lifetime. Without inheritance tax this would pass on to the next generation and, at least mathematically, the wealth of these individuals will grow exponentially as a percentage of national income.
@Brian Woods II
The old adage that trickle down would allow the system to function efficiently no longer holds true.
With increasing globalisation wealth is flowing out of the developed countries to the faster growing developing countries. The EZ is a good example of what is happening as the major manufacturing companies increase their activities in the developing world. Germany’s low wage workers are subsidising Chinese peasants flight off the land into manufacturing. This in the country that Tacitus and Agricola described as having unusually equeal incomes and that was devoid of usury. Indeed the ECB is a major enabler by providing the low cost liquidity to Central Banks that immediately leaks abroad.
It is high time that major infrastructure projects were implemented in the high unemployment countries within the EZ. The trickle down of the added activity would benefit Germany enormously. Domestically the use of sand, gravel, cement and underutilised construction labour would not add to inflation and improved water, sewage, road and transit infrastructure would remove bottlenecks to growth in many EZ cities (Dublin included). Europe will soon have its Detroits if it continues on its current path.
America is moving toward third world status and the EZ is following.
@Mr Woods II
I think I would agree with you in broad terms regarding:
“The real test is r>g+c where c is consumption. And we must always expect there to be some for whom r>g+c over their whole lifetime. Without inheritance tax this would pass on to the next generation and, at least mathematically, the wealth of these individuals will grow exponentially as a percentage of national income.”
I don’t want to go into detail here and I don’t know how good Piketty’s grasp of the relevant taxes is, but I will make this general point.
What are referred to as ITs in various states are structured so that the very poor and the very wealthy only need to pay either a very small percentage tax rate, or none. The taxes apply quite a high tax rate to those in the middle, who have their ‘wealth’ tied up in quite mundane assets.
Families with less than, say €2 million in assets tend to be taxed out of the real wealth accumulation game. Amounts significantly in excess of this are comparatively easy to shelter – and usually are sheltered.
This is really very, very relevant to the dynastic acquisition of super-wealth and I doubt Piketty either fully appreciates this of forcefully expresses it, as it could be described as a narrow field of expertise.
I’d say Piketty probably does have an appreciation of the phenomenon you’re describing. See:
Regarding wealth inequality, can we arrange for Michael Lowry to give every citizen his/her own mobile phone license? It would make things fairer and probably be easier for our policy makers to understand.
Punter – ‘What you need to do is make this fairer, you know higher taxes on inheritance/rent seekers/capital gains, in addition to non-recourse mortgages etc’
Politician – ‘I don’t follow’
Punter – ‘What you need to do is make the Galway tent bigger and give everyone a slice’
Politician – ‘Oh, now I understand’
No Ernie, that rather confirms my assumption. It has little to do with ‘tax havens’.
I’m not so sure. Are a good many of the “tax shelters” you refer to not also located in “tax havens”?
@ UFC
I take your point – IT is the obvious answer to the Picketty Pickle but the superwealthy escape.
But when would the superwealthy actually pose a problem?
It would of course be disastrous for the community of Denis O’Brien took it into his head to buy up all the food in Irish supermarkets until his money ran out. I guess that would lead to a calamity of famine proportions.
The fact is that the superwealthy do not really impact the real economy that the rest of us inhabit. They direct their consumption to buying newspaper conglomerates and racehorses. They even add value by allowing us to gape and gossip about them.
A more serious problem would arise if the top 10% were leaving significant inherited wealth. 10% of the population free loading on inheritances and crowding out demand for normal goods or property would be more seriously divisive.
That herring is impressive, but not blue.
Mr Woods II, I don’t think 3, 4 or 10m qualifies as superwealthy – but it is enough to allow the TR to be significantly reduced.
Those with assets of 500k or 1m or 2m usually serve as tax fodder.
@ JR
On the figures you mention, you may well be correct. However, I do not think that they undermine the case that the taxes on income in Ireland are highly progressive.
The debate is to my mind too narrowly focused and will never get anywhere until there is some measure of agreement on the broader context. The issue boils down to creating a tax system which is both equitable and conducive to economic growth. The Scandinavian countries have succeeded in doing this so the objective is clearly achievable.
This is the level of the discussion in Ireland. What is unprecedented with regard to the situation confronting the government and people is that the debt situation of the country is such that the new tide of anaemic economic growth is not capable of lifting the existing system back into place.
@ JR
The IT, in its editorial this morning on the failure to tackle the issue of pensions, rightly condemns the failure to tackle the issue of pensions, a failure that will prove fatal to economic recovery unless it is dealt with.
The same holds true of universal access to health care and education. The taxpayers of the Scandinavian countries are willing to pay a high level of taxes, and their employers also, because they result in certainty with regard to their conditions of living; and lower the level of dispoable income that they require to live comfortably.
P.S. The other IT editorial dealt with the saga of the “discretionary” medical cards where the cabinet appears to have turned itself into an office of the HSE. Both the very concept and the manner in which it has been dealt with would be simply incomprehensible to taxpayers elsewhere in Europe.
@ DOCM: “The issue boils down to creating a tax system which is both equitable and conducive to economic growth …”
What happens when ‘growth’ becomes ‘ungrowth’. And it will. Or maybe it already has. A tax system which is adapted to a perennial decrease in GDP? That will be interesting.
” …the issue of pensions …”
The underlying economic concept of pensions is that you have an exponentially increasing workforce, hence an exponential increase in the amount of waged-labour income to be either taxed or saved: aka. the Permagrowth Economic Paradigm. This paradigm is not sustainable.
No ‘fix’ is possible which does not accept that in the future there will be either no pensions available or there will be pensions, but these will reduce on an annual basis until they fall to zero. Try getting our politicians to ‘sell’ that one to their voters!
@ DOCM
‘The public is also asking for clarification around the legal opinion used by the Government some months ago to reject calls for medical cards to be issued to people on the basis of illness. Did the Attorney General provide a formal opinion on this matter? And if she did, how is it this legal view can now be cast aside with the promised implementation next year of a policy to provide GMS eligibility on the grounds of specific medical conditions?’
That provides a very nice illustration of the limits of legal approaches to political, social and economic problems. The difficulty is now not the issuance of discretionary medical cards, but the circumstances in which they may reasonably be withheld. Applications may well rise significantly.
Given the media focus on the issue, there may be a problem with the willingness of any public official to be identified as responsible for refusal. A Byzantine appeals process, in many cases requiring investment in private medical and legal professional support, will probably ensue.
@ pq
Health care for all is seen as a right in Scandinavian and other European countries, not something to be dealt with at some bureaucrat’s “discretion”. The deplorable handling of the medical cards issue simply demonstrates that none of the political parties – established or otherwise – have grasped this fundamental point. This is clearly because the electorate have seemingly not done so either and certainly not the medical profession (which is sewn up tighter than a drum in terms of protecting the profession’s right to ensure the continuation of the seller’s market for its services). The minister in charge, who did grasp it, is about to lose his job.
My hope is that this inherent contradiction will be brought into sharper focus as both the cabinet and the HSE – or its successor organisation – ties itself in knots trying to reconcile the ethically irreconcilable.
By the way, this discussion is not as far away from the nostrums of Piketty as one would imagine. France has the Scandinavian system, and level of expenditure, but not the right mix of economic and social policies to create the economic activities to continue supporting it. The spirit of Colbert and “dirigisme” is still alive and well.
Checking my references on the Web, I came across this!
The point that it underlines, IMHO, is the importance of the inheritance of cultural ways of behaving. Indeed, this could be taken as the definition of culture itself. The same holds true of Ireland. It is not just that things are not done but that the need to do them is not even recognised.
I wonder how Piketty, and admirers of his approach, would factor the dealings of the US with the French bank BNP!
DOCM,
I am afraid you have been caught spoofing again. No society in Europe gives the right to healthcare without bureaucratic influence that you imagine. Bureaucrats routinely decide on reimbursement for drugs, devices and treatment regimes in every society.
For instance in you beloved Germany, access to leading edge oncology drugs is routinely delayed or denied while the system balances costs and benefits.
But then of course they are German bureaucrats and totally superior to other bureacurats
@DOCM
re: The Chris Johns article:
I accept income taxes in Ireland are progressive, as they should be; highly progressive is very questionable. From my perspective there is a strong element of interest-group think in his point re income tax.
In fairness to Johns, he does bring up employers PRSI, which is low even by UK standards (about 3% less I would say, but the calculations are very quirky). Yet nobody has taken up the cudgel on that one. Better to enhance the profitability of already profitable MNC etc, than touch that!
In addition we throw away about 100M* pa on our own low rate employers PRSI of 8.5%, again often to very profitable companies. This give away is nothing more than a subsidy to employers to take on part-time workers, and a big incentive to keep the weekly wage below €356 per week.
The argument that this helps small business is for the birds. Why a universal scheme to help the minority that are struggling. Is it that we are too lazy or too stupid to get out a calculator; or that a minority of vested interests have managed to secure a universal break, just like the children’s allowance.
*[Based on part-time workers of 450,000 earning average of €10,000 pa, at a differential PRSI subsidy of 2.25%].
@Brian Woods SNR
“The underlying economic concept of pensions is that you have an exponentially increasing workforce, hence an exponential increase in the amount of waged-labour income to be either taxed or saved: aka. the Permagrowth Economic Paradigm. This paradigm is not sustainable. ”
That about sums up the position in relation to pensions. However, the minister is doing his best to keep the paradigm sustainable, by taking from private pensions, to ensure that his own is suitably secured. But you are correct and we can expect a lot more of such actions, to keep insiders on the inside track. The 50% of the population that have no private pension and who will depend of the State in old age, in a much higher cost environment will find themselves in a very difficult position.
The commitment of the State to societal values will be tested. Given the yellow pack approach to PS employees and the willingness to dump 300,000 young people out of the country during this continuing recession, the signs are not good.
@ TMD
As usual, you are mixing up too totally unrelated issues; that of legally based rights – in this instance to universal healthcare – and the bureaucracy associated with implementing them. The latter can be challenged in well-run systems but not the basic right.
The problem in Ireland is that the right is based on levels of income (or at least it was until the fiasco of the medical cards which suggests that it may be based on a pot pourri of health conditions yet to be decided) i.e. it is “two-tier system”. Did you not know?
And still no news on the State’s CGT tax take on Wilbur’s gain of ~€560 million. That would be a nice €165 million into the coffers but I wonder will it land in the coffers, or did ‘Capital’ get home free, again.
I wonder is there any Irish Picketty willing to pick that one up. Its only about 165M. It might make a good case-study.
DOCM,
You are spoofing again. You claim a right not subject to …bureaucratic discretion. Every healthcare system in Europe has a system of reimbursement of procedures,,drugs or.devices which rations access to healthcare.
If you have cancer in many European countries you will not get access to the current standard of care. It is the same with MS. If you need a hip replaced, you will have to wait longer than is medically desired. These rationing regimes are designed and implemented by bureaucracy.
@ TMD
Why not answer the point that I am making instead of pursuing issues which I have never disputed? Show me a health system without faults! The issue is one of equal treatment of all patients in terms of access to medical care. I suggest that you stick to it!
@DOCM
.
@ JR
For all I know, many of the points that you make may well be correct. But the view that I am advancing is that dissecting any one piece of the puzzle will not lead to any consensus on what should be the global solution.
The debate has to start with agreement on a general set of principles e.g. universal access to health care. Another might be that the objective of “creating jobs” be accepted for the nonsense that it is. The objective must be rather to find areas of profitable economic activity which leads to employment. Putting nearly all one’s export eggs into attracting FDI on the basis of low corporation tax, and skimming whatever income may be available in passing, would not qualify IMHO as a durable solution. Having a system of education and social transfers which results in one in five households having no one in gainful employment would also not qualify.
There are many other instances that could be quoted.
Piketty and his magnum opus are largely irrelevant to these issues.
@ DOCM: “The debate has to start with agreement on a general set of principles e.g. universal access to health care.”
That may indeed be so – but whence the ‘principles’ themselves. The provision of the service is certainly desirable in theory, and costs nothing. The practice is another matter entirely. It is income earners, both directly and indirectly who have to contribute. And unfortunately, we now know that not all income earners are equal and that their proportionate contributions seem a tad quirky as well.
I think Reilly was a little short of the mark about his ‘eggs and omelette’ remark. It actually needs a Timogen to blitz the HSE and DoH, then move on to a clear site and start over. But we won’t, will we? Maddening.
@ JR: I have this nasty feeling that in a few decades it may be impossible to fund any pension arrangements at all – neither private nor public. The private investors will have their savings ‘stolen’, again and again until they simply refuse to contribute and keep any surplus income for themselves. The question then will be, “Where be safe”? The public pensions are already a problem. But sure, who’s looking? Who cares? “I’m all right Paddy!”.
Our economy is not recovering, despite the increasing desperate PR strokes to prove otherwise. Its slowly, steadily, insidiously foundering. Like an infection of dry rot. All looks kosher, then abruptly – “NO ONE SAW IT COMING!”. Shudda gone to SpecSavers!
@DOCM
The issue is one of equal treatment of all patients in terms of access to medical care.
That is an issue, but not the issue this post was about which was PIketty’s thesis on the increasing inequality guaranteed by modern capitalism and how it might be targeted.
Incidentally you have followed the time honoured right wing fold on PIketty.
(1) The argument is clearly flawed and unserious.
(2) Though the argument might be true it is not particularly important (of academic interest only, what does it matter to the man on the street, etc)
(3) These are facts of life to which we need to adjust. (No point worrying about what you cannot change, eh?)
(4) Look, over there! Another Topic.
Also seen on the contractionary effects of austerity, the size of fiscal multipliers, the uselessness of fiscal rules and global warming.
@ BWS
Among the countries of Northern Europe, Ireland is the only country, to my knowledge, without a universal health care system. The UK introduced the NHS in the aftermath of the Second World War when the country was effectively bankrupt. Why is Ireland different? I would suggest that it is because of other deficiencies, notably the clientilist nature of Irish politics and the trapping of major sectors of the economy by vested interests. This has resulted in a near total lack of confidence in existing systems. A majority probably wishes to see the effort to get rid of the two-tier system abandoned because of the fear that if it is they will be condemned to the same waiting lists as the unfortunates that cannot buy their way around them.
Such are the issues that confront Ireland, not principally the problem of inequality and growing disparities in wealth as identified by Piketty although the two are linked. The wide-ranging speech by the governor of the Central Bank when commenting on Piketty’s work covered some of them. Unfortunately, in terms of the debate what we have is, as usual, what I would call the inverse law of involvement i.e. the further away the problem and the less relevant it is to Ireland’s situation, the more excited the reaction.
@sarah carey
So eh, is that yourself then? That note taking paid off very well!
I have to deny that as the conference was held under Wayne Manor rules.
hee hee.
So!
The conversation about the revolution will be broadcast this Saturday at 1 o’clock on Talking Point on Newstalk.
Participants are:
Nat O’Connor, Harry Browne and Dan O’Brien.
We’re pre-recording today what I hope will be a lively analysis and if you miss it Saturday you’ll be able to listen back of course on the website. Hope you find it interesting.
Hey, I might actually listen to that.
Here’s a job for an enterprising sociologist: count up the relative representation of right wingers (e.g. Dan O’Brien) and left wingers as guests on Irish radio and television. Similar things have been done with regard to the major US Sunday morning chat shows (“Meet the Press,” etc.)
Of course we know in advance what such a study would show: Dan O’Brien is on the airwaves many multiples of what any lefty could hope for… It’s entirely possible to have a full panel of right wingers. Prime Time does it all the time. It’s impossible to imagine a panel made up exclusively of left wingers.
@Ernie
RTE has a terrible track record when it comes to comedy, what makes you think a panel of left-wingers would be any better?
The author seems to have overlooked the fact that medical insurances costs are in addition to the taxes that most are also paying to fund the public health system. The “Irish” aspect of the matter is that the divide between public and private is being blurred increasingly to the point that the percentage of the population holding medical cards, when combined with “free” GP care, may equate to what would be considered a largely publicly funded system in many countries.
@JF
Dunno, Johnny. Judging by your comment here, I’d say you’re easily amused.
@ DOCM
Speaking of ‘Irish’ aspects, I wonder what proportion of the elective private activity is carried out by consultants who are delegating their public sector responsibilities.
@ DOCM: As my granny was fond of saying, “The paper never refuses the ink!”. Caveate lectores.
I had a good laugh with this;
” …what I would call the inverse law of involvement i.e. the further away the problem and the less relevant it is to Ireland’s situation, the more excited the reaction.”
Someone needs to nail these suckers. Is it really all that difficult to agree why we need some element of taxpayer-funded medical care? And if so, then select those services and procedures which deal with the most common aliments that present themselves at both at GP and hospital levels. This would automatically exclude some treatments and procedures. But would folk agree that taxpayer funded medical care is NOT a right, but a very costly social concession. Probably not.
@Ernie
That’s because Dan is a great performer and really good at explaining stuff. He’s also got what I call the Grand View and can link different subjects together. Not everyone can do it and when you find someone who can it’s a huge relief. I’ve had the experience of inviting someone really smart into studio and then watch as they bore everyone to death. So for every fresh voice we put on (and I think Talking Point is really good at digging out fresh voices) we always make sure we have a good anchor in case someone doesn’t work out.
And of course, since lefties tend to be humourless and sometimes kinda mean (you being a classic example) it’s tough to find one that an audience won’t turn off. Being a good guest requires an appreciation that it is show business, and when discussing tough subjects like economics, a degree of charm and humour is essential. So Dan is a good bet every time.
I’ve found Paul Murphy to be a good left wing guest but usually turn to Harry Browne. American accents are nice on the radio, and Harry is a good debater and doesn’t miss a trick. I can report that Nat, who was on the show for the first time today, was excellent and we even had a couple of laughs. We had a lot of explaining to do, but I think the argument got a good airing. As usual it was getting most interesting towards the end and we hung on very 10 minutes afterwards in studio still talking.
If you want more Socialists on the radio, a trip to charm school would help. Otherwise try Terry Prone.
Anyway, the point of the exercise is to introduce the debate to a wider audience and hopefully it’ll be engaging enough to do that. It’s not easy!
‘But would folk agree that taxpayer funded medical care is NOT a right, but a very costly social concession. Probably not.’
Any right carries a corresponding obligation, which in this case falls on the state. The failure of politicians, and not just in Ireland, in is conceding rights in principle while failing to ensure that same are defined, and delivered in a sustainable way.
The principal/agent and moral hazard problems are sticking out a mile. There are vested interests which profit from promoting healthcare rights, and there are vested interests which profit from raising the costs of delivery. Marketing to providers and public is massive, pervasive and unquestioned.
Provider cartels have a grip on the regulatory system. Expensive patented innovations are made available in the private sector. The ‘indpendent’ regulator is then used to make these procedures the minimum insurable for ‘safe practice’.
Notwithstanding many genuine healthcare benefits along the way, the system as a whole is unsound. It results in wholesale looting, and weakening, of the state. The consequent loss of public confidence in public institutions is accompanied by demoralisation and cynicism among state employees.
Neoliberal attempts to make the system more ‘efficient’ simply attract a higher grade of looter, and the incremental ceding of state power to private regulators. I suppose it all part of the Permagrowth mirage….
@PQ
“Any right carries a corresponding obligation”
I haven’t been following this one too closely, but one of my objections to free healthcare is how people abuse it. People have an obligation to treat their right to healthcare with respect.
When you’re not paying, people go to the doctor when they’re not that sick, wasting everyone’s time. They’re referred for procedures they don’t need and then don’t bother showing up to outpatient appointments. I researched this a couple of years ago and the level of no-shows in everything from dental, to physiotherapy, to x-ray to hospital out-patients appointments was astonishing. In Meath alone one year there were 5000 no-shows for dental. Between 20-40% in some cases for hospital out-patients – I think Crumlin was the worst. If people would simply cancel appointments they no longer need, we’d slash waiting lists. Our local public health nurse wastes more time waiting in her office for people who don’t show up for baby developmental health checks. I’m convinced if people had to pay something they’d respect everyone’s time more. I’m one of those people that defers going to the doctor because it’s €50 (last year that included not bringing the baby when he was sick and we ended up in Crumlin as a result – everyone was fine in the end and actually Crumlin had a day wasted too BUT it was one of those things that could have been serious had it been missed) . I digress, the point is, €50 is too much, but €0 leads to abuse. I think a tenner for everyone is reasonable, maybe €20 for some (I’d pay €20) except the very poor. Even a fiver. Something to say, THIS IS NOT FREE. SOMEONE IS PAYING. And you should have to pay double if you don’t show up without a decent excuse. Like dying.
My in-laws live in N.I and free GP care leads to worse care. The surgeries are packed with people who aren’t sick. You never get to see the same doctor twice, you can be told to wait 2 weeks for an appointment, and so they usually have to go private if they’re really sick.
I get the concept of primary care being easy to access. I don’t think making it free achieves that.
@Sarah
In short, media is “show business” and that fact necessarily advantages right-wingers, especially the sort who are good at pushing emotional buttons. Witness right-wing talk radio in the US, which dwarfs any left-wing presence on the airwaves. And of course the businessmen who own the radio stations are all in favour. Proof, as if any were needed, that: 1) the kind of reasoned debate required for a democracy is basically incompatible with capitalist priorities; 2) Shows like yours aren’t at all interested in doing what they purport to be doing (debating the issues) but are really only interested in entertainment value. If Karl Marx himself were resuscitated and booked on your show, you’d cut across him (“so boring!!!”) to let Dan O’Brien tell the audience one more time that austerity is the only game in town, rich people are “job creators” and what we really need to do is shrink the state so we can drown it in a bathtub.
Meanwhile, you should book Michael Taft (since you like American accents) every time you’re tempted to have Dan O’Brien. If you think lefties are all humourless and mean, my guess is you really haven’t met that many. Certainly not on your show…. Who, though, is really “mean”, the likes of Dan O’Brien who preaches the interests of the 1% or those looking for a more equitable society?
@Ernie
“In short, media is “show business” and that fact necessarily advantages right-wingers,”
Why does that necessarily advantage right wingers? Railing against billionaires, bankers and the Troika is popular, hence the popularity of say, Constantin, Shane Ross, etc. People love that stuff. Actually that’s been the great mystery of the crisis. When you guys had so much material to work with, why voters still plumped for aimless protest candidates rather than a coherent left wing grouping. Of course, there is no coherent left wing group since you guys persist in falling out with each other all the time.
And I shall proudly defend my show. One show-biz type complained to me “when are you going to stop giving tutorials on your show?” i.e. we deliberately discuss ideas and avoid contrived polarised debates. But when you are discussing complex issues (e.g. last week we did Iraq – try explaining that mess to a general audience ) we had a wonderful panel who didn’t waste time doing a Blair is Bad rant, but got down to explaining Shia/Sunni/the various ties with Syria/Iran etc.
Maybe you should listen to the show instead of assuming its awful. We have panellists who ask to go on the show because they say its the only one where they’re allowed to finish a sentence.
@ sarah
You have opened up a can of worms there. The reasons for healthcare DNA (do not attend) are many and complex. People are referred for a
variety of patient-centred, practitioner centred, and prudential reasons, which are not necessarily all explained. Even when they are explained, the client may not necessarily be committed to following through, or life may just get in the way. The middle classes are naturally more orderly in that regard, but are also likely to take control of the referral process, thereby introducing a potentially disorderly dynamic. Waste of resources is not just about the DNAs.
I agree that with rights come obligations, but the capacity to discharge an obligation depends on having some capacity for self-management, as well as some minimal identification with the ordinary values of the counterparty. If you haven’t got that, it is not easily acquired.
I will bet you don’t have time to read Gurdgiev’s blog either, which is a pity. IMHO, he is a class act, and way beyond left/right stuff.
Ms Carey
“We have panellists who ask to go on the show because they say its the only one where they’re allowed to finish a sentence.”
Typical right wing cohort stuff obviously – knee-jerk denial of the usefulness of parole and always wanting longer and longer sentences…
@ Sarah Carey
The problem you mention is easily resolved simply by charging a minimum fee per consultation up to a maximum sum per annum. This is how it is done, for example, in Sweden; regarded by the OECD as having the best health care in the world with, of course, equal access for all.
They spend about the same in comparative terms as Ireland despite the fact that the age profile of the population is very different. The system is funded by central and local taxation under a system of devolved responsibility to local authorities.
I don’t read Cg’s blog, but not as point of principal but often because I forget. I think he’s a brilliant contributor and he’s been on the show too, but tbh, I find him most interesting on issues not directly related to economics, where I think he can give the impression of simplistic solutions. But we did a show a while back on the nation state, and he was outstanding.
On the DNA’s. I like that Swedish solution a lot. That could be it. And you are right that the area is complex – personally I think there is far too much unnecessary referral. Just recently I refused to be referred for a minor developmental thing (lagging behind on speech) for one of my smaller children. I said, I think he’s grand, he’ll catch up” I was told “the waiting list is 8 months long, so you might as well put your name down and then if it rights itself in the meantime, sure so what?”. I said, but that’s WHY the waiting list is 8 months long. My child, whose just behind the curve will be fine, but he’ll take up the place of a down’s syndrome child who actually really needs the appointment”. The nurse was a good person doing her job, and I’m probably a terrible mother, but I see this everywhere.
Anyway as for this”is the capacity to discharge an obligation depends on having some capacity for self-management,”
Well, this leads into a most interesting area. By creating a dependency culture has an entire class of people become infantilised and incapable of self-management? And by not expecting them to make a phone call and cancel an appointment are you consigning them to the dustbin for life AND their children?
People won’t act responsibly unless their expected to – and encouraged financially to. Let’s get the BE guys in here!
IF you can’t make the dental appointment, phone and cancel.
How hard is it?
I don’t think it’s hard. I think it’s disrespect and bad manners.
As Queen Elizabeth said “good manners will get you through a lot”
Go Lizzie 😉
Sarah,
we do have universal health care in Germany. The payments are deducted ( 2 x 7% from the salary, pension)
That includes GP and specialists.
With the arugment that, especially older people, often go to the doctor, without being really sick, ( the average number of visits is 18 per year, erm)
we had until last year a fee of 10 Euro, payable every quarter and for every specialist in addition.
The effect was not as hoped for, in constrast some folks showed up even more often, (“I have paid for it”), so we abandoned those payments.
With my GP, if I show up until 10 am, I get treated the same day, showing up before 7.45 gets me typically through before 9:30, good enough to show up (a little late) for work.
I just called my dentist, no shows are less than 1%, and usual with reason. Waiting time for the last 2 (routine + followup) appointments were 2 weeks and the followup 6 working days. Nobody, not even some asylum seeker, gets worse treatment.
For a while we also had some tuition fees (up to 500 Euro per semester, following the great anglo-american arguments of better service, har.
We abandoned this as well again, now folks have to pay a fee of about 50, basically just checking, that there is still a pulse :- )
@ Sarah Carey
To clarify one point; my reference to Sweden spending about the same as us referred to publicly funded i.e. taxation based expenditure. On the wider total of public plus private, Table 4 in my link has the details. We are in third place!
In short, we have a wildly expensive, inefficient and inequitable system of health care.
@ sarah
Lizzie also said that some things had been done that were better not done. Peter McVerry will tell you what it is like to be reared in an environment of neglect, chaos and abuse. Responsibility cannot reasonably be expected from those who themselves were not treated responsibly.
So lets distinguish between ordinary thoughtlessness and deep personality-level damage. Managing the latter is a very serious business.
@DOCM
In the absence of industrial development, it is hardly surprising that services like law, medicine, banking, and accounting should be prominent in surplus extraction, with a very firm focus on state or state-sponsored channels.
DOCM,
thanks for the very informative link to publicpolicy.
I might add, that if you look at life expactancy numbers at the OECD, it is basically a wash, just that the former easter european countries are a few years behind, and the american countries with uncomplete public health care.
Wasting money, as in US and Ireland, doesn’t pay off in results
Tyler Cowen interviews Ralph Nader, having some nice words about the Paul’s
permanently abusing trade and finance relations for imperialist goals causes predictable backdraft
the latest was that Verizon gets now eliminated from all safety relevant business in Germany
@pq: Missed your am comment. Thanks. What can one say? The biggest crybabies about their entitlements are our politicians. They set the tone. The sheeple follow.
Sarah, DO NOT let that developmental matter lie. As regards the DNAs – again, what can one either say, or even suggest. Two weeks ago I walked into the Eye and Ear with a tiny wood chip lodged beneath eyelid (eye injuries ARE an emergency).
Receptionist: “Have you a doctor’s letter?”
BWS: “No – I came straight in.”
Rec: “Do you have a med card?”
BWS: “Eh, no.”
Rec: “That will be 100 euro. Cash or card?”
BWS: Very sotte voce – [“WHAT THE F*CK”!] “OK, card it is!”
After 45 mins I was examined, treated and discharged. ?????
ps: anyone read (or reading) Seán Ó Riain’s ‘The Rise and Fall of Ireland’s Celtic Tiger’?
I see the Irish “I’m all right Jack” attitude to health care on display here of all places. I am quite familiar with Irish people whining about the ruination of health care that would be caused by the adoption of a universal, single payer system.
“Free” health care does not mean doctor’s offices are inundated with people who are there because they have nothing better to do. Neither does it mean that the “no show” problem must be out of control.
Where I live I can phone my doctor’s office before 0930 and get an appointment by noon the same day. Missed appointments are charged to the client at the same rate that the doctor would have received from the Gov’t.
I have never sat in a doctor’s waiting room for more than an hour, they apologise profusely if they keep you waiting for more than 30 minutes. They do confine you to no more than two issues per visit. The atmosphere is friendly, businesslike, brief and to the point. Everything is computerised including the production of prescriptions. All patients have a magnetic strip card, no form filling. The Pharmacy has a similar (same card) set up to deal with copays and initial amounts to be paid annually before gov’t picks up the tab. You can walk into any Pharmacy they are all on the one gov’t network with your card allowing them access to your account.
If Ireland has an inefficient system it is because of our peculiar attitudes to each other and our service providers. All together for the common good is still a quaint notion that has not penetrated Irish intellects.
I read a few weeks ago about PR campaigns (WW1)conducted by Gov’t that appealed to people’s intellect until Gov’t decided that there were far more people than intellects. Today it is assumed that people are gullible and easily manipulated.
@Mickey
+1
Although I would add to the notion that we have ‘peculiar’ attitudes to each other. I sense that we don’t trust each other. And that lack of trust is a projection – ie we don’t really trust ourselves to behave properly. Hence any discussion about universal access immediately turns into a conversation about how no one will respect a public good and abuse it for all its worth.
@Mickey Hickey
“I see the Irish “I’m all right Jack” attitude to health care on display here of all places.”
Well observed.
It can also be generally observed that calls for a health service to be a basic human right often tend to come from older age groups, who in general terms have a more immediate interest in the health service. The people who pay tend to be the younger generations who are being squeezed every which way to pay towards a better off older generation.
Part of the problem now is that many of the younger generation, those that are working that is, have simply said no and opted out.
A universal health care system is desirable and achievable. Right now we spend approx 12 billion on the health service. A further €2 billion is paid to health insurers to get priority queue boarding access to the €12 billion services being spent.
Something definitely odd about that.
The most interesting aspect is that the current system is collapsing i.e. the government may have no choice but to try something really drastic by way of reform (which might include keeping the current minister in his job?).
The reality is that the level expenditure on salaries and pensions across the public sector and in social transfer payments is more than the economy can carry. This cannot be admitted either by politicians or electorate. The prospect must be for a continuation in the process of acrimonious attrition applied hitherto until a new – lower – equilibrium is reached. In the meantime, academic discussion will continue as if the Irish economy was somehow a normal one with comparisons to be drawn with others that do not suffer from the same distributive distortions.
looking at this pfizer report, 31% without defined health care, eeeek
One central reason to not live in the US, but in Germany is, that there is a defined social minimum, including health care, you can never ever fall below.
One can not fall into a trap of a bankrupt company or a certain private insurer going wild
Risk management
I am no socialist polyanna, but I have a hard time to understand how people can accept a rich country to run without this floor guarantee.
@ BWS
I am making my way through the Riain book, now 54%
What strikes me is that people do not get, that our Current Account was all the time balanced, until around 2005. We basically sold just enough Mercedes cars to pay for our Italy vacations.
Same thing for the exchange rate. That fluctuates around “fair value” which is defined by a small 0.2% inflation delta, relative to the Dollar. I do not only see no unfair advantage, but that to the opposite Germany benefits , somewhat from the stronger Euro since 2004, not surprising, since we are price takers for commodities like oil, metals, but in many areas competitors like Switzerland and Japan had similar overvaluations to the Dollar.
Beyond that, many interesting things to ponder in “The rise and the fall of the Celtic Tiger”
Iraq has already bought Russian fighter jets, “to use in 2 or 3 days”,
and the US cruises weaponized drones over Bagdad without permission of the government
The EU gave Russia a Monday morning ultimatum, just before the bourse in Tokyo opens, or ?
that will be a lovely weekend, time to go fishing : – )
@francis
German system sounds great though at 14% of salary it would want to be. Also fair point on charging resulting in more appointments – I think Kahneman covers this – crèches who charged for late pick ups got an increase in late pick ups. But obviously there is something wrong with our culture and we need to figure it out before free primary care access is widened.
But on the DNA’s I refuse to accept that thousands and thousands of appointments going to waste are the result of people genuinely incapable of managing their affairs. Yes, some people are but not 5000 (on the dental – in Meath alone!!!). This exposes a major flaw in our attitude to public services. When we figure out a way to get people to treat the system with respect then expand the system.
@BWsr
My little fella is coming along grand. I was reared in the agricultural style of benign neglect with requests for medical negligence equated to unnecessary fuss-making. In fact when my Dad was having a heart attack my mother phoned the doctor on call (!!!! First time!) and said “I don’t want to make a fuss but….”. We said later “he was having a heart attack! Youre allowed to make a fuss! But then I had a baby on the bathroom floor be aye when I rang the midwife I didn’t want to make a fuss either and said I was probably just constipated. If there more like us the hospitals would be empty 😉
@ DOCM: “The reality is that the level expenditure on salaries and pensions across the public sector and in social transfer payments is more than the economy can carry.”
In a nutshell! It would be interesting to find out how politicians, their advisors and presumably economists come up with the idea that money comes out of nowhere – eh! It does! And the critters that beget it, claim it as private property and want it back when they lend it out. It has to be lent out to get rent. It would hardly be fun if you begat your moolah ex-niliho and then lent it to yourself! Now would it? So whence the rent? Now, that IS the problem. This is going to get interesting.
@ francis: Thanks for the update. Starting Chapt: 1. Quite a dense and tightly argued narrative. Can be difficult to follow his line of argument.
@ SC: I know exactly what you describe as not being ‘fussy’. We’re some bunch of tulips! Be in touch.
P.S. The PA consultant’s report is a yard by yard treatise of largely incomprehensible management speak!
@ DOCM: Surprised? No. Shocked (again). Yes. The second surest way to waste money is to ‘upgrade your software’. It will cost hundreds of millions and will never be fully operational.
The report will probably be dissed by some vacuous PR spokesmodel. Just locate some minor mistake – there are always a few, then dismiss the whole shebang on this basis. Its pathetic, except that it is costing the taxpayers so much.
Some thoughts in Piketty, ‘Capital in the 21st Century’ and Eric Hobsbawm ‘Age of….’
Unlike Sarah Carey I was not faced myself with the coal black eyes of Thomas Piketty but he stares out from the rear flap of the book against a blurred backdrop of squiggles on a whiteboard suggesting a beautiful mind that has achieved a synthesis and focus through long intellectual exploration. One hopes that the squiggles are a study of how to order an ideal pizza topping but it is hard to say.
Piketty’s prose is clear, simple and remorseless. It strikes me as the prose of the ultra-long distance runner. Piketty is a team man but the work feels like watching an athlete pound out stride after stride, lap after lap maintaining a steady pace throughout until he reaches the finishing line at last where he allows himself to freewheel little more and address the crowd as it were. It is a big book but if you wanted to and had the time you could read it throughout over a weekend or so as it is lucid and sequential. For those blog-readers who are wondering if they might be lost in the economics, particularly on the maths side, I would say, don’t worry. It is simple enough and he nearly always explains further in prose and with clear examples.
Piketty’s arguments themselves are also pretty simple. By looking at the ‘long run’ c1800 – c2010 he shows that return from capital (defined broadly) outperforms return from growth, resulting in a movement towards an increasingly unequal society, the rise of the rentier (think landlords and other asset owners) and generally the rise of a small amount of very wealthy people combining inherited wealth plus the super managers. Within this period the place where this breaks down is 1914 – 1945 when a great deal of capital is destroyed and 1945 – c1975 when the ‘rebound’ embedded in social democracies provided an unprecedented and possibly unique period of sustained, shared growth. Essentially his discussions of the shift via the (Thatcher/Reagan) period, 1980 – 2010 always end with some form of, ‘a level of inequality not seen since 1914’ or a reference to the Ancien Regime or similar. Plenty for Mr Brian woods Snr on the amazing power of exponential functions. Capitalism will not, in and of itself, naturally spread its benefits widely or equally. He has a pretty interesting section of the possible relative sizes of the state which should be looked at in conjunction with ‘FIGURE A: PRIMARY SPENDING, 1970 TO 2018′ from the Irish Fiscal Council reoprt, 2014 a few posts below on the blog.
He is very much worth reading in tandem with Hobsbawm. Readers of Hobsbawm, who deals globally with the similar period c1770 to c1990, will not be at all surprised by this picture. the difference is that Piketty and team have begun to assemble the data to back the narrative on a massive scale (see below).
Piketty has been noted for citing Austen and Balzac in his work but his interest in them is rather thin it has to be said, really they are another source (like the Forbes Rich List) to be mined for relevant data. If you want a fuller discussion of culture through the period then Hobsbawm is your man. Indeed, though mr paul quigley will be delighted that Pierre Bourdieu gets a mention (in a rarefied list) Piketty steer clears of much social analysis. For example, Hobsbawm wrestles mightily with what is class, hegemonic power and observes it changing. Piketty generally looks at the bottom 50%, the next 40%, the top 10% and the very top 1% 9 and even 0.1%). I’m not a big class as culture person (opera goers vs baked bean eaters) but this seems unsatisfactory. In terms of how societies actually function perhaps income/wealth is not satisfactory in itself and, for example, it is still worth looking at the relationship of people/classes with the means of production.
This is not to say that Piketty does not see himself as a political economist: he does, but there is a whiff of a society being seen as a massive game of SIM City where a few tweaks to the programme by suitably intelligent people will gain the results desired. The drive towards equality (or reigning in the increase of inequality) seems to come from (a) a pragmatic sense of fairness, and (b) a fear that this will lead to a revolution. The channels that this revolution might take are not explored and, as he distances himself from Marx, it is seen as a bad outcome. In this sense, even though he does take his fellow economists to task for unconscious class self interest he does, in my opinion, display a touch of the fear of the mob and this, I think, pushes him more towards a tax solution (plus new supra-national democratic bodies) than a more agitating for improved workers’ rights approach.
Worth quoting George Orwell here:
“Foreseeing some dismal Marxian Utopia as the alternative, the educated man prefers to keep things as they are. Possibly he does not like his fellow-rich very much, but he supposes that even the vulgarest of them are less inimical to his pleasures, more his kind of people, than the poor, and that he had better stand by them. It is this fear of a supposedly dangerous mob that makes nearly all intelligent people conservative in their opinions.
“Fear of the mob is a superstitious fear. It is based on the idea that there is some mysterious, fundamental difference between rich and poor. But in reality there is no such difference. The mass of the rich and the poor are differentiated by their incomes and nothing else, and the average millionaire is only the average dishwasher dressed in a new suit. Change places, and handy dandy, which is the justice, which is the thief?”
– Down and Out and Paris and London
Even so, he has been accused and indeed invokes it himself, of being Utopian.
“A map of the world that does not include Utopia is not worth even glancing at, for it leaves out the one country at which Humanity is always landing. And when Humanity lands there, it looks out, and, seeing a better country, sets sail. Progress is the realisation of Utopias.” – Oscar Wilde.
That is to say, I think Piketty is right to lay out his ideal solution as at least it provides a direction of travel, a place on the map to aim at, and lets us step out for a change from the daily wrangling which can have a hamster-wheel quality to it. Or put it another way, pragmatism demands that we at least discuss which the ideal, or at least preferable situation might be.
He is pretty interesting of the variety of roles tax can play. For example he thinks that the relatively low-taxed super-managers, with the ability effectively to set their own wages, leads to higher and higher wages because the bosses get to keep a good chunk of them. A tax of, say 90%, over a certain level would be to deliberately discourage very high wages and thus unequal returns – which in his take are as much a matter of luck as anything. The pay rises would stop as they wouldn’t be worth taking: it’s not about what the tax would raise. In my take, super-managers see around them very rich individuals and, through wishing for the same lifestyle, ‘require’ incomes that allow them to exist in the same sphere (see Hilary Clinton believing as a millionaire she is not that well off), but the difference may be moot and the solution the same.
I have taken up a lot of space here, just to note that, of course there has been a lot of criticisms of the book, to which I would note:
* He has got his databases out in public view and he (and his team) are looking for ways to improve them.
* He does discuss the increase in global wealth in the last 30/40 years
* He does discuss wealth, income etc., before and after tax (re)distribution
* Ireland, unfortunately gets a look in only as a smaller country that is engaged with an understandable race-to-the-bottom on corpo tax. But he doesn’t necessarily think we should be stuffed out of it straight away.
* He does discuss differences in various countries, eg USA.
* He does reference the USSR as perhaps encouraging more equality in the West as at least providing (a not very attractive) alternative to raw free-markets.
* He does have an interesting discussion of the Euro towards the end.
First, the system ‘should’ equate risk with reward – a ‘risk premium’ is appropriate to risk taking. If enough people do, or are perceived to (pension funds, houses, bank deposits), have capital at risk then the lobbying power of capital increases and politics acts to skew the game against losses.
Second, capital allocators and risk taking investors really made bad decisions about a decade ago which ‘should’ have evened things up. The point above then came into play. However, the current Nirp, Zirp and QE monetary policy, ironically favoured by left-leaning economists, has also boosted the value of invested capital by suppressing yields and pulled up the draw-bridge for the existing rentier class and super-wealthy. Some prominent left-leaning economists seem unable to understand this – instead trying to argue that long tern low interests are the opposite of what rentiers want, missing the point that they are already invested.
It is genuinely ironic that it is generally right-leaning economists and financial analysts who oppose official policy to virtually outlaw losses to capital.
s/b
“instead trying to argue that long tern low interest rates are the opposite of what rentiers want, missing the point that they are already invested.”
@Gavin
“He does discuss the increase in global wealth in the last 30/40 years”
What else is there to discuss? Life expectancy, quality of life, living standards across the world are increasing all the time. These have somehow become footnotes when they are in fact the whole point behind the economy in the first place. For some reason we are no longer satisfied with the incredible progress that capitalism has brought, we have to nitpick about equality of outcome. Haven’t we tried that already? It sucks. Solzhenitsyn would be a more useful Summer read for those who seem to have forgotten how these experiments in social engineering end. I feel like I’ve transported back to the Trinity College students union of the 80s where everyone was browbeaten into standing to attention at the end of the night while the Nicaraguan national anthem was played.
@ JF,
nicaraguan anthem ….. harmless
Here it was a benefiz concert to pay for “weapons for El Salvador”, despite a standing majority rule, that all supra-university political statements had to be voted upon by the standing council .
That was the last thing these folks ever organized, before I gave them a taste of direct democracy
@ Gavin
what did piketty say about the USSR? The way you describe it, it sounds like he is stuck in the early 1960ties
Eddie Hobbs should really give it a rest. Here’s a claim that is a non-sequitur intended to snow the uninformed:
“Ireland also runs the most progressive income tax system in Europe, where the top 5 per cent pay nearly half the total take, with the top 20 per cent accounting for about four-fifths of all income tax.”
Responses:
1) It is irrelevant what share of the total tax take is paid by various quintiles, etc. unless we also know what share of the income they have. If the top 20 percent have more than four-fifths of all the income (I don’t imagine they do, but they might) then there’s nothing progressive about them paying [b]only[/b] four-fifths of all income tax.
2) Piketty’s point is largely about the 1% and, as far as they are concerned, Ireland’s tax system is hardly progressive at all. From the merely well-off to the superrich, the tax take flattens out.
“The progressivity of the Irish income tax system internationally contrasts with the country’s low overall burden of tax and income tax by European comparison. According to Eurostat (2013), total tax revenue as a proportion of gross domestic product (GDP) was 28.9% for Ireland compared with
38.8% for the EU27 and 39.5% for the euro zone in 2011; in regard to the implicit tax rate on labour, Eurostat records the rate of 28% for Ireland, compared with 35.8% and 37.7% for the EU27 and euro zone respectively in that year. Addressing the discrepancy between GDP and GNP (gross national
product) in Ireland, Callan et al. (2013) develop a hybrid measure of GDP and GNP for Ireland and find that it continues to emerge as a low overall income tax country (2011) but that marginal tax rates faced by higher earners in Ireland are among the highest in the EU15. Concerning the
possibility of a new higher top marginal tax rate (48%) on incomes above €100,000, Callan et al. (2013), while not seeking to provide a comprehensive assessment of the costs and benefits of such a proposal, nevertheless find that there is “limited scope for tax increases on such high incomes to
contribute to a substantial upward shift in the ratio of tax to national income” (p. 13) and conclude that “if Irish income taxes were to approach European levels, it is likely that marginal tax rates in low to middle income range would have to rise” (p. 21).”
Anyone with experience of being able to contrast living conditions in the different countries will know the above to be true.
Piketty is undoubtedly correct that the gap between rich and poor is growing but it is not a problem which impacts Ireland in particular. The real problems lie elsewhere and Hobbs does a good job of identifying them. More importantly, he has an audience, especially in relation to the reluctance to pay a higher level of tax until there are improvements in both delivery and equity of public services and a more realistic view taken of the level and nature of social transfers i.e. tying them to economic growth.
One wonders if Piketty would approve! Rich and poor tend to sleep in hotels; of highly unequal quality.
“More importantly, he has an audience, especially in relation to the reluctance to pay a higher level of tax until there are improvements in both delivery and equity of public services”
Here we go again:
010 Slash public spending
020 Decry poor public service
030 Goto 010
It is a fact that Ireland has never funded its public services at anything near Scandinavian levels in part because it has been unwilling to raise taxes commensurately. And this is because people have a lot of very stupid ideas about tax (e.g., the number of people who apparently don’t know the difference between a marginal rate and an overall tax rate is staggering).
If you’re unwilling to fund public services at anything near Scandinavian levels, with what right do you complain that they’re not there yet?
@ DOCM
“There are even plans to improve the quality of service.”
What the article also mentions, is a well known problem of France, they have the highest number of visitors, but they dont stay that long and spend their money. Many, especially asians, just fly into Paris, sightseeing, shopping often in the duty free area at the airport, no or just one night.
You gotta lure them into the countryside, attract them to stay, spend money in rural areas, pubs, sports, restaurants. Come again.
In Dresden we have 2 dozen city employees specifically catering to our valued Russian guests over Christmas, menues in kyrillic, a memorial for the glorious 5th motorized Russian Guard Division in pristine condition, Russian churches, the whole nine yards.
@Ernie
Simply not true, as you well know. For example, the Irish health system is lavishly funded once you take the demographic profile of the country into account. For a country as young as ours we spend ridiculous and unsustainable amounts of public money on health. When we finally age like the rest of the OECD we are screwed.
And for all that public money, plus the out of pocket fees, and the insane levels of private health insurance support, the health service is very average, even for the wealthiest in the country.
The funny thing is, the monster that is the HSE was created to satisfy the need of people like you for “accountability.” Turns out measuring the “efficiency” of large, complex organisations makes them less efficient.
So, revising my original programme:
010 Demand “accountability”
020 Create bureaucratic Leviathan
030 Decry poor public service
040 Slash spending
050 Goto 030
The HSE is just the old Health Boards with extra staff. There is no real accountability and it is the least efficient organisation you can imagine.
Agreed. But its purpose is to “manage” the people doing the real work. Those people are accountable to the HSE while the HSE is accountable to no one. The monster was created when we attempted to import private-sector style management into organisations where it was totally inappropriate. And we did that because people were complaining, wrongly, that the entire public service was inefficient (as opposed to underfunded).
Is there a health service you admire?
I ask because there is no health service on the planet that does not value efficiency and accountability.
I am somewhat amused about the shameless catering to very different audiences
@ JF
“What else is there to discuss? Life expectancy, quality of life, living standards across the world are increasing all the time.”
Is that going to continue forever , Johnny?
Smithers has an interesting article here about productivity increases (on which growth depends) and incentives. Plutocracy has a tendency to self destruct.
the “poor” productivity in US/UK just means that the excessive pay for socially useless banking / finance / property peddling jobs came down to somewhat more reasonable levels.
More to go : – )
There you go, Johnny:don’t ask for whom the HSE works. It works for you. Because you demanded it!
101 replies on “Piketty in Ireland”
The RTE link seems to be banjaxed. Maybe better to go here:
http://www.rte.ie/news/primetime/2014/0618/624760-prime-time-thomas-piketty-french-economist/
From the excellent review by Sean Byrne.
“A more easily understood criticism of Piketty’s work is his use of income before taxes and transfers, or primary income, to estimate the distribution of income. The distribution of primary income is clearly much more unequal than the distribution after taxes and transfer payments. In Ireland, income before taxes and transfers is more unequally distributed than the EU average but after taxes and transfers, Ireland’s income distribution is less unequal than the EU average. This is because the top 5 per cent of income earners pay 46 per cent of all income tax, while the top 20 per cent pay 79 per cent. Much of this tax revenue is used to fund social welfare payments, which are generous by EU standards.”
Is this not the crux of the issue as far as Ireland is concerned? Piketty’s book is clearly an outstanding achievement of scholarship. But it is not that relevant to Ireland’s situation which is a problem of overall inadequate wealth/capital creation rather than inequitable income distribution.
Sean Byrne: “Piketty’s central argument is that if the rate of return on capital exceeds the growth rate of output, the share of capital income in national income rises without limit.”
That’s not a claim Piketty makes, which is just as well since it ain’t necessarily so. Also, the Lucas quoted early on is Robert, not Thomas.
But all in all that’s a good review. However the most faithful synopsis I’ve seen of the book is by Robert Solow. Those who can’t be bothered to read the book should certainly read this:
http://www.newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed
This is a long ‘un folks.
I infiltrated the Piketty part of the TASC conference and it was well worth infiltrating (and the conference was very well organized, props to TASC)
If I could capture Piketty in one word it would be “fairness”. He cares very much about it in all its senses. If I had to add in a second one it would be “feisty”.
First impressions:
It should not be surprising for a man focused on inequality but Piketty is self effacing and made sure to mention the contributions of all his collaborators (and his academic antecedents). He did not come across as in any way arrogant or make any claims to having given the final word on the subject of capital and inequality but he is engagingly proud of the book (C21C) and of the larger project (eg: The World Top Income Database.). This is a person who has found their calling.
The talk itself:
Though English is not his first language Piketty talks quickly and with very few slips (I noticed one I think, the usage of “dilapidate” for “dissipate”). The talk was the book – anyone hoping that he might pull some out some newer results or thoughts on recent events would have been disappointed, if you had read the introduction it would all be familiar to you, though he is a good lecturer and charmed the most important points into you. (the parallel but unconnected spreads in waged income and the increasing dominance of income from capital over waged income, the masters of the universe are getting a steadily bigger slice of the income pie but the waged income pie is getting relatively smaller than the returns on the capital cake).
The figure that really stuck for me is the one on trickle up: In the US over the last 30 years 75% of income growth (of any kind) went to the top wealth decile. In terms of relative financial power (and we can take it informal influence on government) economic growth has been making the poor even less well off in the US. Its hard to believe that most Americans really know what it going on.
His graphs on declining public wealth were also interesting, he mentioned privatization as one the causes but how is it, with private wealth now such much greater then public wealth, that its still the state that is expected up the pieces of market failures? There is a bigger question here about the abdication of responsibility in the private sector for things like training and pensions (why is the job of increasingly poor states to train young people in university to meet the needs of increasingly rich multinational corporations?) but he did not delve into it.
He also touched on labour/capital substitution (“Amazon replacing its badly treated human drones with rights free robot ones” as he almost put it) and in a word where capital was so concentrated what would the affects be on people without non-automatable skills or capital. Not good at all. (This seemed like a subtle dig to Kuznet curve fans/development economists keen on globalization without thinking about the likely destinations.)
He had a well formed argument on the usefulness of high marginal rates of taxation for very large incomes (as the US had mid C20). The normal objection to them is that they get comparatively small increases in tax revenues and drive away our beloved entrepreneurs to Galt Gulch. His counterpoint is that there is no social usefulness to people being paid so well so it should be discouraged and also that the concentration of wealth was in itself a bad thing and hence should be limited. One in the eye for Richard Bruton.
Advice:
If I were an economist with broadly right wing politics I would be cautious about the ground I fought Piketty on – he is very much up for a fight and has been training for ten years. For instance in his answer to this sites roving reporter Sarah Carey he gave a rousing and convincing defence of his position on the Irish property tax. He’ll see your incentives to moral hazard and raise you a regressive taxation measure and a misunderstanding about capital ownership (the homeowner with a large mortgage is being taxed on something they do not really own, it would make more sense to tax the bank on the mortgage if you are concerned about excessive leverage.).
Overall this was an enjoyable and heartening talk with a lot of good talking points for class warriors and much to chew on for those who are not yet in the fight.
@DOCM
This is a bit like saying that because Ireland is likely to suffer less immediate and sever local effects from global warming than other countries we do not need to concern ourselves with ìt.
If Piketty’s patrimonial capitalism keeps going it will take us down too and in a way it already is. The manner in which creditors have been privileged over debtors in the EU and inflation has been targeted rather than unemployment are just two examples of why the power of capital needs to be confronted.
It is somewhat surprising, in the context of the debate on Piketty, that the recent NESC reports on jobless households has not received more attention.
http://www.nesc.ie/en/publications/publications/nesc-reports/jobless-households-an-exploration-of-the-issues/
@ Shay
Thanks very much for that. Unfortunately I couldn’t make it, but well done Sarah for getting a question in: usually worth it to get a good answer.
In the book he certainly does take on the Kuznets curve. If you look at Kuznets’s dates (1901–1985) you can see why the world around him and the available data seemed to be pointing him that way (capitalist countries become first more and then less unequal over time). The point of Piketty is to try to capture a much longer data sequence, ie around 1780 – 2010.
He does also deal with inequality after tax so I don’t understand Sean Byrne’s criticism. I can dig out the page references if necessary.
A thoughtful and generous response from Patrick Honohan.
“….I have to disappoint anyone expecting a “however” at this stage, because (while such an ambitious book will continue to prompt many debates and questions) for me it is a tour de force.”
“Could a one-size-fits-all debt modification scheme be devised to deliver wholesale loan modifications speedily for unaffordable debt? ”
Honohan concludes that such is not possible. However a one size fits all approach could be devised to reverse the benefit to landlords in receipt of of increasing rents, while the State subsidises their tracker mortgages.
The State could introduce a rental levy (off the top line), and allow that levy to be offset in the event that it creates a loss.
@DOCM
“This is because the top 5 per cent of income earners pay 46 per cent of all income tax, while the top 20 per cent pay 79 per cent. ”
I have see such a statistic used on several occasions but cannot accept its validity. I believe, until shown otherwise, that it is a disingenuous statistic.
My reasoning is that ‘all income tax payers’ contains hundreds of thousands of income tax payers with incidental income tax only, who barely make it over the income tax tax threshold.
It is time that particular statistic was subject to a little more scrutiny by statisticians.
@Gavin Kostick
See Sarah’s longer piece on the talk in the other thread.
On Kuznet Piketty was not negative in the talk about him at all and did not mention the “war against communism” subtext to the popularization of this “whig view of capitalist development” view. Other perfectly respectable development economists still hold to Kuznet in a modified form (overlapping Kuznet curves mean that the benefits of one curve can be hidden by the losses of the next one in one location and it is the world wide trend of inequality that is the important one). I think myself that this is just an attempt to attribute benefits from technological progress to benefits from trade but I aint no economist.
C21C is entertaining, I hope I get through it before the summer is out.
@ Joseph Ryan
If you can demonstrate that the statistic quoted is incorrect, I will, of course, accept your point. But is it? Revenue data are among the most reliable.
As a general comment, I would note a tendency about the policy debate in Ireland which is shared by all shades of opinion i.e. to treat Ireland’s case at one remove, so to speak. That is to say to analyse it in terms of everything other than direct observation of the case in hand.
Another recent example (prompted by the remark of the head of the CB) can be found in the recent comments by the MOF on the – receding – possibility of retrospective bank recapitalisation.
http://www.independent.ie/irish-news/politics/noonan-signals-ireland-unlikely-to-get-eu-help-with-bank-debt-30367057.html
Martyn Turner cuts to the chase in his usual incisive manner.
https://www.irishtimes.com/debate/martyn-turner-1.1835618
As the genie enquires; “D’ont you recognise a fairy story when you hear one?”.
The curious things is that it is my conviction that the vast majority of the electorate do but are waiting for their political representatives to do so before agreeing themselves, usually by saying nothing.
Is the Piketty talk up on the net somewhere?
@docm
The silence about the retrospective recaps question is deafening.
@Thomas Piketty
Well done!
I do intend to read it later on.
@DOCM
From the information highway on this tour de force, I can easily guarantee you that the theoretical and empirical force in time of this work is almost certainly very relevant to Ireland, past/present/future?, and that your almost explicitly biased identification of the nature of the problem, and its proposed odious solution (sic), is rather weakly spun.
Were any political folk there? Not that they would pay a blind bit of notice but…
The carefully worded speech by the CB governor seems also to me to touch all the bases, at least as far as the CB is concerned. Indeed, it may lead to the introduction of a new word into the vocabulary of the debate; “smoothing”.
“The two factors which have transformed what might seem a rather benign valuation blip into a crippling debt crisis are, of course (i) the distribution issue, namely the fact that different households were affected in dramatically different ways, depending mainly on whether they had borrowed to buy over-priced property and (ii) the fact that the Government’s net debt position has also deteriorated by about €150 bn since 2007: a third of it attributable to the bail-out of bank creditors[and the rest resulting from the borrowing undertaken, especially from official sources, in the course of smoothing the transition to restoring budgetary balance.”
The judgement of history will certainly be that the roughness of the sand paper used depended on the sectors impacted.
cf.
http://www.oecd.org/els/public-pensions/OECD2013ReviewOfTheIrishPensionSystemPreliminaryVersion22April.pdf
“There is unequal treatment of public and private sector workers due to the prevalence of DB plans in the public sector and DC plans in the private sector.”
“A new pension scheme for public servants is being slowly phased in and is unlikely to affect a majority of public sector workers for a long time.”
@Shay
So eh, is that yourself then? That note taking paid off very well!
@all
I jumped the gun and put my report on the other thread (linked from Shay’s comment)
Prob best to move discussion here though.
In retrospect I was hard on Honohan I suppose. I do like him, and I suppose he said as much as he could. His point about r -g was well made.
Someone asked about politicians. Apart from Peter Matthews any I saw were either Labour or right-on Independent types. Senators Abbey-theatre guy and Katherine Zappone. Joan Burton. Tommy Broughan. Bearded trade unionists. Jack O’Connor, David Begg (he looks rich; perhaps he can’t help it; perhaps he is; but it’s not a good look for a trade unionist) Think I saw Des Geraghty too. Bit of love-in really. As I said on the other thread for the talk to be effective, I would have preferred to see centrist/right types because the thesis is a slam dunk really.
@DOCM
“If you can demonstrate that the statistic quoted is incorrect, I will, of course, accept your point. But is it? Revenue data are among the most reliable.”
I believe that I have located the revenue report and table that the oft used statistic is based.
http://www.revenue.ie/en/about/publications/statistical/archive/2011/income.
Table IDS1
The 2010 figures contained in that table show that approx 22% of “cases” pay 81% of total income tax, but the table itself as constructed is, with respect, a very disingenuous table.
On looking at the total tax “cases” of 2,088,443, one can immediately see that there are 387,175 “cases”, 18.5% of the total, with income from 0-10000 per annum. Persons who in most peoples book should not pay any income tax, and should certainly not be included in any total of “cases” figure for income tax that purports to extract meaningful data by decile.
Included in those 387,175 “cases” are probably several thousand of €25 euros per year dirt interest deducted from the deposit accounts of the grannies that Johnny Giles or Bob Collins has not managed to kill off.
The statistic, IMHO, is so misleading that using it without a fuller explanation of the 18.5% “cases” with income below €10000 per annum, is simply not appropriate.
It is perfectly feasible to posit a stable economy with g=0 and r>0. For example, people save during their working lifetimes and spend their savings during retirement. In fact this is the model the vast majority of us follow. There is no constraint on the value of r in that dynamic.
What Pikkety is getting at is that there will be those at the top who do not spend what they have saved. In fact they earn so much on their capital that they can’t consume all the capital income and so their capital must grow.
The real test is r>g+c where c is consumption. And we must always expect there to be some for whom r>g+c over their whole lifetime. Without inheritance tax this would pass on to the next generation and, at least mathematically, the wealth of these individuals will grow exponentially as a percentage of national income.
@Brian Woods II
The old adage that trickle down would allow the system to function efficiently no longer holds true.
With increasing globalisation wealth is flowing out of the developed countries to the faster growing developing countries. The EZ is a good example of what is happening as the major manufacturing companies increase their activities in the developing world. Germany’s low wage workers are subsidising Chinese peasants flight off the land into manufacturing. This in the country that Tacitus and Agricola described as having unusually equeal incomes and that was devoid of usury. Indeed the ECB is a major enabler by providing the low cost liquidity to Central Banks that immediately leaks abroad.
It is high time that major infrastructure projects were implemented in the high unemployment countries within the EZ. The trickle down of the added activity would benefit Germany enormously. Domestically the use of sand, gravel, cement and underutilised construction labour would not add to inflation and improved water, sewage, road and transit infrastructure would remove bottlenecks to growth in many EZ cities (Dublin included). Europe will soon have its Detroits if it continues on its current path.
America is moving toward third world status and the EZ is following.
@Mr Woods II
I think I would agree with you in broad terms regarding:
“The real test is r>g+c where c is consumption. And we must always expect there to be some for whom r>g+c over their whole lifetime. Without inheritance tax this would pass on to the next generation and, at least mathematically, the wealth of these individuals will grow exponentially as a percentage of national income.”
I don’t want to go into detail here and I don’t know how good Piketty’s grasp of the relevant taxes is, but I will make this general point.
What are referred to as ITs in various states are structured so that the very poor and the very wealthy only need to pay either a very small percentage tax rate, or none. The taxes apply quite a high tax rate to those in the middle, who have their ‘wealth’ tied up in quite mundane assets.
Families with less than, say €2 million in assets tend to be taxed out of the real wealth accumulation game. Amounts significantly in excess of this are comparatively easy to shelter – and usually are sheltered.
This is really very, very relevant to the dynastic acquisition of super-wealth and I doubt Piketty either fully appreciates this of forcefully expresses it, as it could be described as a narrow field of expertise.
I’d say Piketty probably does have an appreciation of the phenomenon you’re describing. See:
http://www.nytimes.com/2014/06/16/opinion/a-piketty-proteges-theory-on-tax-havens.html?smid=fb-share&_r=2
@ Ernie Ball
Thanks for the link.
@ All
Regarding wealth inequality, can we arrange for Michael Lowry to give every citizen his/her own mobile phone license? It would make things fairer and probably be easier for our policy makers to understand.
Punter – ‘What you need to do is make this fairer, you know higher taxes on inheritance/rent seekers/capital gains, in addition to non-recourse mortgages etc’
Politician – ‘I don’t follow’
Punter – ‘What you need to do is make the Galway tent bigger and give everyone a slice’
Politician – ‘Oh, now I understand’
No Ernie, that rather confirms my assumption. It has little to do with ‘tax havens’.
I’m not so sure. Are a good many of the “tax shelters” you refer to not also located in “tax havens”?
@ UFC
I take your point – IT is the obvious answer to the Picketty Pickle but the superwealthy escape.
But when would the superwealthy actually pose a problem?
It would of course be disastrous for the community of Denis O’Brien took it into his head to buy up all the food in Irish supermarkets until his money ran out. I guess that would lead to a calamity of famine proportions.
The fact is that the superwealthy do not really impact the real economy that the rest of us inhabit. They direct their consumption to buying newspaper conglomerates and racehorses. They even add value by allowing us to gape and gossip about them.
A more serious problem would arise if the top 10% were leaving significant inherited wealth. 10% of the population free loading on inheritances and crowding out demand for normal goods or property would be more seriously divisive.
That herring is impressive, but not blue.
Mr Woods II, I don’t think 3, 4 or 10m qualifies as superwealthy – but it is enough to allow the TR to be significantly reduced.
Those with assets of 500k or 1m or 2m usually serve as tax fodder.
@ JR
On the figures you mention, you may well be correct. However, I do not think that they undermine the case that the taxes on income in Ireland are highly progressive.
The debate is to my mind too narrowly focused and will never get anywhere until there is some measure of agreement on the broader context. The issue boils down to creating a tax system which is both equitable and conducive to economic growth. The Scandinavian countries have succeeded in doing this so the objective is clearly achievable.
FYI
https://www.irishtimes.com/business/economy/our-average-earners-have-low-tax-burden-1.1838660
https://www.irishtimes.com/debate/letters/tax-burden-and-average-earners-1.1840186
This is the level of the discussion in Ireland. What is unprecedented with regard to the situation confronting the government and people is that the debt situation of the country is such that the new tide of anaemic economic growth is not capable of lifting the existing system back into place.
@ JR
The IT, in its editorial this morning on the failure to tackle the issue of pensions, rightly condemns the failure to tackle the issue of pensions, a failure that will prove fatal to economic recovery unless it is dealt with.
https://www.irishtimes.com/debate/editorial/reforming-pensions-1.1841721
The same holds true of universal access to health care and education. The taxpayers of the Scandinavian countries are willing to pay a high level of taxes, and their employers also, because they result in certainty with regard to their conditions of living; and lower the level of dispoable income that they require to live comfortably.
P.S. The other IT editorial dealt with the saga of the “discretionary” medical cards where the cabinet appears to have turned itself into an office of the HSE. Both the very concept and the manner in which it has been dealt with would be simply incomprehensible to taxpayers elsewhere in Europe.
@ DOCM: “The issue boils down to creating a tax system which is both equitable and conducive to economic growth …”
What happens when ‘growth’ becomes ‘ungrowth’. And it will. Or maybe it already has. A tax system which is adapted to a perennial decrease in GDP? That will be interesting.
” …the issue of pensions …”
The underlying economic concept of pensions is that you have an exponentially increasing workforce, hence an exponential increase in the amount of waged-labour income to be either taxed or saved: aka. the Permagrowth Economic Paradigm. This paradigm is not sustainable.
No ‘fix’ is possible which does not accept that in the future there will be either no pensions available or there will be pensions, but these will reduce on an annual basis until they fall to zero. Try getting our politicians to ‘sell’ that one to their voters!
@ DOCM
‘The public is also asking for clarification around the legal opinion used by the Government some months ago to reject calls for medical cards to be issued to people on the basis of illness. Did the Attorney General provide a formal opinion on this matter? And if she did, how is it this legal view can now be cast aside with the promised implementation next year of a policy to provide GMS eligibility on the grounds of specific medical conditions?’
That provides a very nice illustration of the limits of legal approaches to political, social and economic problems. The difficulty is now not the issuance of discretionary medical cards, but the circumstances in which they may reasonably be withheld. Applications may well rise significantly.
Given the media focus on the issue, there may be a problem with the willingness of any public official to be identified as responsible for refusal. A Byzantine appeals process, in many cases requiring investment in private medical and legal professional support, will probably ensue.
@ pq
Health care for all is seen as a right in Scandinavian and other European countries, not something to be dealt with at some bureaucrat’s “discretion”. The deplorable handling of the medical cards issue simply demonstrates that none of the political parties – established or otherwise – have grasped this fundamental point. This is clearly because the electorate have seemingly not done so either and certainly not the medical profession (which is sewn up tighter than a drum in terms of protecting the profession’s right to ensure the continuation of the seller’s market for its services). The minister in charge, who did grasp it, is about to lose his job.
My hope is that this inherent contradiction will be brought into sharper focus as both the cabinet and the HSE – or its successor organisation – ties itself in knots trying to reconcile the ethically irreconcilable.
By the way, this discussion is not as far away from the nostrums of Piketty as one would imagine. France has the Scandinavian system, and level of expenditure, but not the right mix of economic and social policies to create the economic activities to continue supporting it. The spirit of Colbert and “dirigisme” is still alive and well.
Checking my references on the Web, I came across this!
http://business.financialpost.com/2014/06/11/dirigisme-is-still-alive-and-well-in-quebec/
The point that it underlines, IMHO, is the importance of the inheritance of cultural ways of behaving. Indeed, this could be taken as the definition of culture itself. The same holds true of Ireland. It is not just that things are not done but that the need to do them is not even recognised.
@ pq
FYI
http://www.ft.com/intl/cms/s/0/e01505d6-faee-11e3-a9cd-00144feab7de.html#axzz35CwJPDRx
I wonder how Piketty, and admirers of his approach, would factor the dealings of the US with the French bank BNP!
DOCM,
I am afraid you have been caught spoofing again. No society in Europe gives the right to healthcare without bureaucratic influence that you imagine. Bureaucrats routinely decide on reimbursement for drugs, devices and treatment regimes in every society.
For instance in you beloved Germany, access to leading edge oncology drugs is routinely delayed or denied while the system balances costs and benefits.
But then of course they are German bureaucrats and totally superior to other bureacurats
@DOCM
re: The Chris Johns article:
I accept income taxes in Ireland are progressive, as they should be; highly progressive is very questionable. From my perspective there is a strong element of interest-group think in his point re income tax.
In fairness to Johns, he does bring up employers PRSI, which is low even by UK standards (about 3% less I would say, but the calculations are very quirky). Yet nobody has taken up the cudgel on that one. Better to enhance the profitability of already profitable MNC etc, than touch that!
In addition we throw away about 100M* pa on our own low rate employers PRSI of 8.5%, again often to very profitable companies. This give away is nothing more than a subsidy to employers to take on part-time workers, and a big incentive to keep the weekly wage below €356 per week.
The argument that this helps small business is for the birds. Why a universal scheme to help the minority that are struggling. Is it that we are too lazy or too stupid to get out a calculator; or that a minority of vested interests have managed to secure a universal break, just like the children’s allowance.
*[Based on part-time workers of 450,000 earning average of €10,000 pa, at a differential PRSI subsidy of 2.25%].
@Brian Woods SNR
“The underlying economic concept of pensions is that you have an exponentially increasing workforce, hence an exponential increase in the amount of waged-labour income to be either taxed or saved: aka. the Permagrowth Economic Paradigm. This paradigm is not sustainable. ”
That about sums up the position in relation to pensions. However, the minister is doing his best to keep the paradigm sustainable, by taking from private pensions, to ensure that his own is suitably secured. But you are correct and we can expect a lot more of such actions, to keep insiders on the inside track. The 50% of the population that have no private pension and who will depend of the State in old age, in a much higher cost environment will find themselves in a very difficult position.
The commitment of the State to societal values will be tested. Given the yellow pack approach to PS employees and the willingness to dump 300,000 young people out of the country during this continuing recession, the signs are not good.
@ TMD
As usual, you are mixing up too totally unrelated issues; that of legally based rights – in this instance to universal healthcare – and the bureaucracy associated with implementing them. The latter can be challenged in well-run systems but not the basic right.
The problem in Ireland is that the right is based on levels of income (or at least it was until the fiasco of the medical cards which suggests that it may be based on a pot pourri of health conditions yet to be decided) i.e. it is “two-tier system”. Did you not know?
And still no news on the State’s CGT tax take on Wilbur’s gain of ~€560 million. That would be a nice €165 million into the coffers but I wonder will it land in the coffers, or did ‘Capital’ get home free, again.
I wonder is there any Irish Picketty willing to pick that one up. Its only about 165M. It might make a good case-study.
DOCM,
You are spoofing again. You claim a right not subject to …bureaucratic discretion. Every healthcare system in Europe has a system of reimbursement of procedures,,drugs or.devices which rations access to healthcare.
If you have cancer in many European countries you will not get access to the current standard of care. It is the same with MS. If you need a hip replaced, you will have to wait longer than is medically desired. These rationing regimes are designed and implemented by bureaucracy.
@ TMD
Why not answer the point that I am making instead of pursuing issues which I have never disputed? Show me a health system without faults! The issue is one of equal treatment of all patients in terms of access to medical care. I suggest that you stick to it!
@DOCM
.
@ JR
For all I know, many of the points that you make may well be correct. But the view that I am advancing is that dissecting any one piece of the puzzle will not lead to any consensus on what should be the global solution.
The debate has to start with agreement on a general set of principles e.g. universal access to health care. Another might be that the objective of “creating jobs” be accepted for the nonsense that it is. The objective must be rather to find areas of profitable economic activity which leads to employment. Putting nearly all one’s export eggs into attracting FDI on the basis of low corporation tax, and skimming whatever income may be available in passing, would not qualify IMHO as a durable solution. Having a system of education and social transfers which results in one in five households having no one in gainful employment would also not qualify.
There are many other instances that could be quoted.
Piketty and his magnum opus are largely irrelevant to these issues.
@ DOCM: “The debate has to start with agreement on a general set of principles e.g. universal access to health care.”
That may indeed be so – but whence the ‘principles’ themselves. The provision of the service is certainly desirable in theory, and costs nothing. The practice is another matter entirely. It is income earners, both directly and indirectly who have to contribute. And unfortunately, we now know that not all income earners are equal and that their proportionate contributions seem a tad quirky as well.
I think Reilly was a little short of the mark about his ‘eggs and omelette’ remark. It actually needs a Timogen to blitz the HSE and DoH, then move on to a clear site and start over. But we won’t, will we? Maddening.
@ JR: I have this nasty feeling that in a few decades it may be impossible to fund any pension arrangements at all – neither private nor public. The private investors will have their savings ‘stolen’, again and again until they simply refuse to contribute and keep any surplus income for themselves. The question then will be, “Where be safe”? The public pensions are already a problem. But sure, who’s looking? Who cares? “I’m all right Paddy!”.
Our economy is not recovering, despite the increasing desperate PR strokes to prove otherwise. Its slowly, steadily, insidiously foundering. Like an infection of dry rot. All looks kosher, then abruptly – “NO ONE SAW IT COMING!”. Shudda gone to SpecSavers!
@DOCM
The issue is one of equal treatment of all patients in terms of access to medical care.
That is an issue, but not the issue this post was about which was PIketty’s thesis on the increasing inequality guaranteed by modern capitalism and how it might be targeted.
Incidentally you have followed the time honoured right wing fold on PIketty.
(1) The argument is clearly flawed and unserious.
(2) Though the argument might be true it is not particularly important (of academic interest only, what does it matter to the man on the street, etc)
(3) These are facts of life to which we need to adjust. (No point worrying about what you cannot change, eh?)
(4) Look, over there! Another Topic.
Also seen on the contractionary effects of austerity, the size of fiscal multipliers, the uselessness of fiscal rules and global warming.
@ BWS
Among the countries of Northern Europe, Ireland is the only country, to my knowledge, without a universal health care system. The UK introduced the NHS in the aftermath of the Second World War when the country was effectively bankrupt. Why is Ireland different? I would suggest that it is because of other deficiencies, notably the clientilist nature of Irish politics and the trapping of major sectors of the economy by vested interests. This has resulted in a near total lack of confidence in existing systems. A majority probably wishes to see the effort to get rid of the two-tier system abandoned because of the fear that if it is they will be condemned to the same waiting lists as the unfortunates that cannot buy their way around them.
Such are the issues that confront Ireland, not principally the problem of inequality and growing disparities in wealth as identified by Piketty although the two are linked. The wide-ranging speech by the governor of the Central Bank when commenting on Piketty’s work covered some of them. Unfortunately, in terms of the debate what we have is, as usual, what I would call the inverse law of involvement i.e. the further away the problem and the less relevant it is to Ireland’s situation, the more excited the reaction.
@sarah carey
I have to deny that as the conference was held under Wayne Manor rules.
hee hee.
So!
The conversation about the revolution will be broadcast this Saturday at 1 o’clock on Talking Point on Newstalk.
Participants are:
Nat O’Connor, Harry Browne and Dan O’Brien.
We’re pre-recording today what I hope will be a lively analysis and if you miss it Saturday you’ll be able to listen back of course on the website. Hope you find it interesting.
Hey, I might actually listen to that.
Here’s a job for an enterprising sociologist: count up the relative representation of right wingers (e.g. Dan O’Brien) and left wingers as guests on Irish radio and television. Similar things have been done with regard to the major US Sunday morning chat shows (“Meet the Press,” etc.)
Of course we know in advance what such a study would show: Dan O’Brien is on the airwaves many multiples of what any lefty could hope for… It’s entirely possible to have a full panel of right wingers. Prime Time does it all the time. It’s impossible to imagine a panel made up exclusively of left wingers.
@Ernie
RTE has a terrible track record when it comes to comedy, what makes you think a panel of left-wingers would be any better?
@ BWS
I came across this letter in yesterday’s IT.
https://www.irishtimes.com/debate/letters/healthcare-and-medical-cards-1.1842562
The author seems to have overlooked the fact that medical insurances costs are in addition to the taxes that most are also paying to fund the public health system. The “Irish” aspect of the matter is that the divide between public and private is being blurred increasingly to the point that the percentage of the population holding medical cards, when combined with “free” GP care, may equate to what would be considered a largely publicly funded system in many countries.
@JF
Dunno, Johnny. Judging by your comment here, I’d say you’re easily amused.
@ DOCM
Speaking of ‘Irish’ aspects, I wonder what proportion of the elective private activity is carried out by consultants who are delegating their public sector responsibilities.
@ DOCM: As my granny was fond of saying, “The paper never refuses the ink!”. Caveate lectores.
I had a good laugh with this;
” …what I would call the inverse law of involvement i.e. the further away the problem and the less relevant it is to Ireland’s situation, the more excited the reaction.”
Someone needs to nail these suckers. Is it really all that difficult to agree why we need some element of taxpayer-funded medical care? And if so, then select those services and procedures which deal with the most common aliments that present themselves at both at GP and hospital levels. This would automatically exclude some treatments and procedures. But would folk agree that taxpayer funded medical care is NOT a right, but a very costly social concession. Probably not.
@Ernie
That’s because Dan is a great performer and really good at explaining stuff. He’s also got what I call the Grand View and can link different subjects together. Not everyone can do it and when you find someone who can it’s a huge relief. I’ve had the experience of inviting someone really smart into studio and then watch as they bore everyone to death. So for every fresh voice we put on (and I think Talking Point is really good at digging out fresh voices) we always make sure we have a good anchor in case someone doesn’t work out.
And of course, since lefties tend to be humourless and sometimes kinda mean (you being a classic example) it’s tough to find one that an audience won’t turn off. Being a good guest requires an appreciation that it is show business, and when discussing tough subjects like economics, a degree of charm and humour is essential. So Dan is a good bet every time.
I’ve found Paul Murphy to be a good left wing guest but usually turn to Harry Browne. American accents are nice on the radio, and Harry is a good debater and doesn’t miss a trick. I can report that Nat, who was on the show for the first time today, was excellent and we even had a couple of laughs. We had a lot of explaining to do, but I think the argument got a good airing. As usual it was getting most interesting towards the end and we hung on very 10 minutes afterwards in studio still talking.
If you want more Socialists on the radio, a trip to charm school would help. Otherwise try Terry Prone.
Anyway, the point of the exercise is to introduce the debate to a wider audience and hopefully it’ll be engaging enough to do that. It’s not easy!
@ BWS
FYI
http://www.thejournal.ie/pre-budget-kite-flying-1535352-Jun2014/
From small acorns great oaks grow! Perhaps!
Maybe Dan O’Brien has an opinion.
@ BWS
‘But would folk agree that taxpayer funded medical care is NOT a right, but a very costly social concession. Probably not.’
Any right carries a corresponding obligation, which in this case falls on the state. The failure of politicians, and not just in Ireland, in is conceding rights in principle while failing to ensure that same are defined, and delivered in a sustainable way.
The principal/agent and moral hazard problems are sticking out a mile. There are vested interests which profit from promoting healthcare rights, and there are vested interests which profit from raising the costs of delivery. Marketing to providers and public is massive, pervasive and unquestioned.
Provider cartels have a grip on the regulatory system. Expensive patented innovations are made available in the private sector. The ‘indpendent’ regulator is then used to make these procedures the minimum insurable for ‘safe practice’.
Notwithstanding many genuine healthcare benefits along the way, the system as a whole is unsound. It results in wholesale looting, and weakening, of the state. The consequent loss of public confidence in public institutions is accompanied by demoralisation and cynicism among state employees.
Neoliberal attempts to make the system more ‘efficient’ simply attract a higher grade of looter, and the incremental ceding of state power to private regulators. I suppose it all part of the Permagrowth mirage….
@PQ
“Any right carries a corresponding obligation”
I haven’t been following this one too closely, but one of my objections to free healthcare is how people abuse it. People have an obligation to treat their right to healthcare with respect.
When you’re not paying, people go to the doctor when they’re not that sick, wasting everyone’s time. They’re referred for procedures they don’t need and then don’t bother showing up to outpatient appointments. I researched this a couple of years ago and the level of no-shows in everything from dental, to physiotherapy, to x-ray to hospital out-patients appointments was astonishing. In Meath alone one year there were 5000 no-shows for dental. Between 20-40% in some cases for hospital out-patients – I think Crumlin was the worst. If people would simply cancel appointments they no longer need, we’d slash waiting lists. Our local public health nurse wastes more time waiting in her office for people who don’t show up for baby developmental health checks. I’m convinced if people had to pay something they’d respect everyone’s time more. I’m one of those people that defers going to the doctor because it’s €50 (last year that included not bringing the baby when he was sick and we ended up in Crumlin as a result – everyone was fine in the end and actually Crumlin had a day wasted too BUT it was one of those things that could have been serious had it been missed) . I digress, the point is, €50 is too much, but €0 leads to abuse. I think a tenner for everyone is reasonable, maybe €20 for some (I’d pay €20) except the very poor. Even a fiver. Something to say, THIS IS NOT FREE. SOMEONE IS PAYING. And you should have to pay double if you don’t show up without a decent excuse. Like dying.
My in-laws live in N.I and free GP care leads to worse care. The surgeries are packed with people who aren’t sick. You never get to see the same doctor twice, you can be told to wait 2 weeks for an appointment, and so they usually have to go private if they’re really sick.
I get the concept of primary care being easy to access. I don’t think making it free achieves that.
@Sarah
In short, media is “show business” and that fact necessarily advantages right-wingers, especially the sort who are good at pushing emotional buttons. Witness right-wing talk radio in the US, which dwarfs any left-wing presence on the airwaves. And of course the businessmen who own the radio stations are all in favour. Proof, as if any were needed, that: 1) the kind of reasoned debate required for a democracy is basically incompatible with capitalist priorities; 2) Shows like yours aren’t at all interested in doing what they purport to be doing (debating the issues) but are really only interested in entertainment value. If Karl Marx himself were resuscitated and booked on your show, you’d cut across him (“so boring!!!”) to let Dan O’Brien tell the audience one more time that austerity is the only game in town, rich people are “job creators” and what we really need to do is shrink the state so we can drown it in a bathtub.
Meanwhile, you should book Michael Taft (since you like American accents) every time you’re tempted to have Dan O’Brien. If you think lefties are all humourless and mean, my guess is you really haven’t met that many. Certainly not on your show…. Who, though, is really “mean”, the likes of Dan O’Brien who preaches the interests of the 1% or those looking for a more equitable society?
@Ernie
“In short, media is “show business” and that fact necessarily advantages right-wingers,”
Why does that necessarily advantage right wingers? Railing against billionaires, bankers and the Troika is popular, hence the popularity of say, Constantin, Shane Ross, etc. People love that stuff. Actually that’s been the great mystery of the crisis. When you guys had so much material to work with, why voters still plumped for aimless protest candidates rather than a coherent left wing grouping. Of course, there is no coherent left wing group since you guys persist in falling out with each other all the time.
And I shall proudly defend my show. One show-biz type complained to me “when are you going to stop giving tutorials on your show?” i.e. we deliberately discuss ideas and avoid contrived polarised debates. But when you are discussing complex issues (e.g. last week we did Iraq – try explaining that mess to a general audience ) we had a wonderful panel who didn’t waste time doing a Blair is Bad rant, but got down to explaining Shia/Sunni/the various ties with Syria/Iran etc.
Maybe you should listen to the show instead of assuming its awful. We have panellists who ask to go on the show because they say its the only one where they’re allowed to finish a sentence.
@ sarah
You have opened up a can of worms there. The reasons for healthcare DNA (do not attend) are many and complex. People are referred for a
variety of patient-centred, practitioner centred, and prudential reasons, which are not necessarily all explained. Even when they are explained, the client may not necessarily be committed to following through, or life may just get in the way. The middle classes are naturally more orderly in that regard, but are also likely to take control of the referral process, thereby introducing a potentially disorderly dynamic. Waste of resources is not just about the DNAs.
I agree that with rights come obligations, but the capacity to discharge an obligation depends on having some capacity for self-management, as well as some minimal identification with the ordinary values of the counterparty. If you haven’t got that, it is not easily acquired.
I will bet you don’t have time to read Gurdgiev’s blog either, which is a pity. IMHO, he is a class act, and way beyond left/right stuff.
Ms Carey
“We have panellists who ask to go on the show because they say its the only one where they’re allowed to finish a sentence.”
Typical right wing cohort stuff obviously – knee-jerk denial of the usefulness of parole and always wanting longer and longer sentences…
@ Sarah Carey
The problem you mention is easily resolved simply by charging a minimum fee per consultation up to a maximum sum per annum. This is how it is done, for example, in Sweden; regarded by the OECD as having the best health care in the world with, of course, equal access for all.
They spend about the same in comparative terms as Ireland despite the fact that the age profile of the population is very different. The system is funded by central and local taxation under a system of devolved responsibility to local authorities.
http://www.publicpolicy.ie/expenditure-and-outputs-in-the-irish-health-system-a-cross-country-comparison/
The high cost of the Dutch approach may be noted.
@Paul
I don’t read Cg’s blog, but not as point of principal but often because I forget. I think he’s a brilliant contributor and he’s been on the show too, but tbh, I find him most interesting on issues not directly related to economics, where I think he can give the impression of simplistic solutions. But we did a show a while back on the nation state, and he was outstanding.
On the DNA’s. I like that Swedish solution a lot. That could be it. And you are right that the area is complex – personally I think there is far too much unnecessary referral. Just recently I refused to be referred for a minor developmental thing (lagging behind on speech) for one of my smaller children. I said, I think he’s grand, he’ll catch up” I was told “the waiting list is 8 months long, so you might as well put your name down and then if it rights itself in the meantime, sure so what?”. I said, but that’s WHY the waiting list is 8 months long. My child, whose just behind the curve will be fine, but he’ll take up the place of a down’s syndrome child who actually really needs the appointment”. The nurse was a good person doing her job, and I’m probably a terrible mother, but I see this everywhere.
Anyway as for this”is the capacity to discharge an obligation depends on having some capacity for self-management,”
Well, this leads into a most interesting area. By creating a dependency culture has an entire class of people become infantilised and incapable of self-management? And by not expecting them to make a phone call and cancel an appointment are you consigning them to the dustbin for life AND their children?
People won’t act responsibly unless their expected to – and encouraged financially to. Let’s get the BE guys in here!
IF you can’t make the dental appointment, phone and cancel.
How hard is it?
I don’t think it’s hard. I think it’s disrespect and bad manners.
As Queen Elizabeth said “good manners will get you through a lot”
Go Lizzie 😉
Sarah,
we do have universal health care in Germany. The payments are deducted ( 2 x 7% from the salary, pension)
That includes GP and specialists.
With the arugment that, especially older people, often go to the doctor, without being really sick, ( the average number of visits is 18 per year, erm)
we had until last year a fee of 10 Euro, payable every quarter and for every specialist in addition.
The effect was not as hoped for, in constrast some folks showed up even more often, (“I have paid for it”), so we abandoned those payments.
With my GP, if I show up until 10 am, I get treated the same day, showing up before 7.45 gets me typically through before 9:30, good enough to show up (a little late) for work.
I just called my dentist, no shows are less than 1%, and usual with reason. Waiting time for the last 2 (routine + followup) appointments were 2 weeks and the followup 6 working days. Nobody, not even some asylum seeker, gets worse treatment.
For a while we also had some tuition fees (up to 500 Euro per semester, following the great anglo-american arguments of better service, har.
We abandoned this as well again, now folks have to pay a fee of about 50, basically just checking, that there is still a pulse :- )
@ Sarah Carey
To clarify one point; my reference to Sweden spending about the same as us referred to publicly funded i.e. taxation based expenditure. On the wider total of public plus private, Table 4 in my link has the details. We are in third place!
In short, we have a wildly expensive, inefficient and inequitable system of health care.
@ sarah
Lizzie also said that some things had been done that were better not done. Peter McVerry will tell you what it is like to be reared in an environment of neglect, chaos and abuse. Responsibility cannot reasonably be expected from those who themselves were not treated responsibly.
So lets distinguish between ordinary thoughtlessness and deep personality-level damage. Managing the latter is a very serious business.
@DOCM
In the absence of industrial development, it is hardly surprising that services like law, medicine, banking, and accounting should be prominent in surplus extraction, with a very firm focus on state or state-sponsored channels.
DOCM,
thanks for the very informative link to publicpolicy.
I might add, that if you look at life expactancy numbers at the OECD, it is basically a wash, just that the former easter european countries are a few years behind, and the american countries with uncomplete public health care.
Wasting money, as in US and Ireland, doesn’t pay off in results
Tyler Cowen interviews Ralph Nader, having some nice words about the Paul’s
http://www.the-american-interest.com/articles/2014/06/24/a-conversation-with-ralph-nader/
“US business groups attack Russia sanctions”
http://www.ft.com/intl/cms/s/0/e76ed66a-fcbd-11e3-81f5-00144feab7de.html?siteedition=intl#axzz35JBWxz00
permanently abusing trade and finance relations for imperialist goals causes predictable backdraft
the latest was that Verizon gets now eliminated from all safety relevant business in Germany
@pq: Missed your am comment. Thanks. What can one say? The biggest crybabies about their entitlements are our politicians. They set the tone. The sheeple follow.
Sarah, DO NOT let that developmental matter lie. As regards the DNAs – again, what can one either say, or even suggest. Two weeks ago I walked into the Eye and Ear with a tiny wood chip lodged beneath eyelid (eye injuries ARE an emergency).
Receptionist: “Have you a doctor’s letter?”
BWS: “No – I came straight in.”
Rec: “Do you have a med card?”
BWS: “Eh, no.”
Rec: “That will be 100 euro. Cash or card?”
BWS: Very sotte voce – [“WHAT THE F*CK”!] “OK, card it is!”
After 45 mins I was examined, treated and discharged. ?????
ps: anyone read (or reading) Seán Ó Riain’s ‘The Rise and Fall of Ireland’s Celtic Tiger’?
I see the Irish “I’m all right Jack” attitude to health care on display here of all places. I am quite familiar with Irish people whining about the ruination of health care that would be caused by the adoption of a universal, single payer system.
“Free” health care does not mean doctor’s offices are inundated with people who are there because they have nothing better to do. Neither does it mean that the “no show” problem must be out of control.
Where I live I can phone my doctor’s office before 0930 and get an appointment by noon the same day. Missed appointments are charged to the client at the same rate that the doctor would have received from the Gov’t.
I have never sat in a doctor’s waiting room for more than an hour, they apologise profusely if they keep you waiting for more than 30 minutes. They do confine you to no more than two issues per visit. The atmosphere is friendly, businesslike, brief and to the point. Everything is computerised including the production of prescriptions. All patients have a magnetic strip card, no form filling. The Pharmacy has a similar (same card) set up to deal with copays and initial amounts to be paid annually before gov’t picks up the tab. You can walk into any Pharmacy they are all on the one gov’t network with your card allowing them access to your account.
If Ireland has an inefficient system it is because of our peculiar attitudes to each other and our service providers. All together for the common good is still a quaint notion that has not penetrated Irish intellects.
I read a few weeks ago about PR campaigns (WW1)conducted by Gov’t that appealed to people’s intellect until Gov’t decided that there were far more people than intellects. Today it is assumed that people are gullible and easily manipulated.
@Mickey
+1
Although I would add to the notion that we have ‘peculiar’ attitudes to each other. I sense that we don’t trust each other. And that lack of trust is a projection – ie we don’t really trust ourselves to behave properly. Hence any discussion about universal access immediately turns into a conversation about how no one will respect a public good and abuse it for all its worth.
@Mickey Hickey
“I see the Irish “I’m all right Jack” attitude to health care on display here of all places.”
Well observed.
It can also be generally observed that calls for a health service to be a basic human right often tend to come from older age groups, who in general terms have a more immediate interest in the health service. The people who pay tend to be the younger generations who are being squeezed every which way to pay towards a better off older generation.
Part of the problem now is that many of the younger generation, those that are working that is, have simply said no and opted out.
A universal health care system is desirable and achievable. Right now we spend approx 12 billion on the health service. A further €2 billion is paid to health insurers to get priority queue boarding access to the €12 billion services being spent.
Something definitely odd about that.
@ BWS et al
FYI
http://www.pfizer.ie/UserFiles/file/Pfizer_Health_Index_Reports/Pfizer-Health-Index-2014.pdf
The most interesting aspect is that the current system is collapsing i.e. the government may have no choice but to try something really drastic by way of reform (which might include keeping the current minister in his job?).
The reality is that the level expenditure on salaries and pensions across the public sector and in social transfer payments is more than the economy can carry. This cannot be admitted either by politicians or electorate. The prospect must be for a continuation in the process of acrimonious attrition applied hitherto until a new – lower – equilibrium is reached. In the meantime, academic discussion will continue as if the Irish economy was somehow a normal one with comparisons to be drawn with others that do not suffer from the same distributive distortions.
looking at this pfizer report, 31% without defined health care, eeeek
One central reason to not live in the US, but in Germany is, that there is a defined social minimum, including health care, you can never ever fall below.
One can not fall into a trap of a bankrupt company or a certain private insurer going wild
Risk management
I am no socialist polyanna, but I have a hard time to understand how people can accept a rich country to run without this floor guarantee.
Something which also came to my mind here:
http://commons.wikimedia.org/wiki/File:Inglehart_Values_Map.svg
There is more to that at the “World Value Survey”
@ BWS
I am making my way through the Riain book, now 54%
What strikes me is that people do not get, that our Current Account was all the time balanced, until around 2005. We basically sold just enough Mercedes cars to pay for our Italy vacations.
Same thing for the exchange rate. That fluctuates around “fair value” which is defined by a small 0.2% inflation delta, relative to the Dollar. I do not only see no unfair advantage, but that to the opposite Germany benefits , somewhat from the stronger Euro since 2004, not surprising, since we are price takers for commodities like oil, metals, but in many areas competitors like Switzerland and Japan had similar overvaluations to the Dollar.
Beyond that, many interesting things to ponder in “The rise and the fall of the Celtic Tiger”
DOCM,
an interesting view into the german pirate party:
http://www.handelsblatt.com/politik/deutschland/piratenpartei-in-schwerer-krise-sie-haben-sich-das-gesicht-vom-schaedel-gekratzt-seite-all/10118798-all.html
Iraq has already bought Russian fighter jets, “to use in 2 or 3 days”,
and the US cruises weaponized drones over Bagdad without permission of the government
http://www.handelsblatt.com/politik/international/drohnen-ueber-bagdad-usa-weiten-militaerhilfe-im-irak-aus/10119242.html
The EU gave Russia a Monday morning ultimatum, just before the bourse in Tokyo opens, or ?
that will be a lovely weekend, time to go fishing : – )
@francis
German system sounds great though at 14% of salary it would want to be. Also fair point on charging resulting in more appointments – I think Kahneman covers this – crèches who charged for late pick ups got an increase in late pick ups. But obviously there is something wrong with our culture and we need to figure it out before free primary care access is widened.
But on the DNA’s I refuse to accept that thousands and thousands of appointments going to waste are the result of people genuinely incapable of managing their affairs. Yes, some people are but not 5000 (on the dental – in Meath alone!!!). This exposes a major flaw in our attitude to public services. When we figure out a way to get people to treat the system with respect then expand the system.
@BWsr
My little fella is coming along grand. I was reared in the agricultural style of benign neglect with requests for medical negligence equated to unnecessary fuss-making. In fact when my Dad was having a heart attack my mother phoned the doctor on call (!!!! First time!) and said “I don’t want to make a fuss but….”. We said later “he was having a heart attack! Youre allowed to make a fuss! But then I had a baby on the bathroom floor be aye when I rang the midwife I didn’t want to make a fuss either and said I was probably just constipated. If there more like us the hospitals would be empty 😉
@ DOCM: “The reality is that the level expenditure on salaries and pensions across the public sector and in social transfer payments is more than the economy can carry.”
In a nutshell! It would be interesting to find out how politicians, their advisors and presumably economists come up with the idea that money comes out of nowhere – eh! It does! And the critters that beget it, claim it as private property and want it back when they lend it out. It has to be lent out to get rent. It would hardly be fun if you begat your moolah ex-niliho and then lent it to yourself! Now would it? So whence the rent? Now, that IS the problem. This is going to get interesting.
@ francis: Thanks for the update. Starting Chapt: 1. Quite a dense and tightly argued narrative. Can be difficult to follow his line of argument.
@ SC: I know exactly what you describe as not being ‘fussy’. We’re some bunch of tulips! Be in touch.
@ BWS et al
More grist to the mill!
http://www.irishexaminer.com/ireland/financial-software-at-hse-in-need-of-overhaul-reilly-273492.html
P.S. The PA consultant’s report is a yard by yard treatise of largely incomprehensible management speak!
@ DOCM: Surprised? No. Shocked (again). Yes. The second surest way to waste money is to ‘upgrade your software’. It will cost hundreds of millions and will never be fully operational.
The report will probably be dissed by some vacuous PR spokesmodel. Just locate some minor mistake – there are always a few, then dismiss the whole shebang on this basis. Its pathetic, except that it is costing the taxpayers so much.
Some thoughts in Piketty, ‘Capital in the 21st Century’ and Eric Hobsbawm ‘Age of….’
Unlike Sarah Carey I was not faced myself with the coal black eyes of Thomas Piketty but he stares out from the rear flap of the book against a blurred backdrop of squiggles on a whiteboard suggesting a beautiful mind that has achieved a synthesis and focus through long intellectual exploration. One hopes that the squiggles are a study of how to order an ideal pizza topping but it is hard to say.
Piketty’s prose is clear, simple and remorseless. It strikes me as the prose of the ultra-long distance runner. Piketty is a team man but the work feels like watching an athlete pound out stride after stride, lap after lap maintaining a steady pace throughout until he reaches the finishing line at last where he allows himself to freewheel little more and address the crowd as it were. It is a big book but if you wanted to and had the time you could read it throughout over a weekend or so as it is lucid and sequential. For those blog-readers who are wondering if they might be lost in the economics, particularly on the maths side, I would say, don’t worry. It is simple enough and he nearly always explains further in prose and with clear examples.
Piketty’s arguments themselves are also pretty simple. By looking at the ‘long run’ c1800 – c2010 he shows that return from capital (defined broadly) outperforms return from growth, resulting in a movement towards an increasingly unequal society, the rise of the rentier (think landlords and other asset owners) and generally the rise of a small amount of very wealthy people combining inherited wealth plus the super managers. Within this period the place where this breaks down is 1914 – 1945 when a great deal of capital is destroyed and 1945 – c1975 when the ‘rebound’ embedded in social democracies provided an unprecedented and possibly unique period of sustained, shared growth. Essentially his discussions of the shift via the (Thatcher/Reagan) period, 1980 – 2010 always end with some form of, ‘a level of inequality not seen since 1914’ or a reference to the Ancien Regime or similar. Plenty for Mr Brian woods Snr on the amazing power of exponential functions. Capitalism will not, in and of itself, naturally spread its benefits widely or equally. He has a pretty interesting section of the possible relative sizes of the state which should be looked at in conjunction with ‘FIGURE A: PRIMARY SPENDING, 1970 TO 2018′ from the Irish Fiscal Council reoprt, 2014 a few posts below on the blog.
He is very much worth reading in tandem with Hobsbawm. Readers of Hobsbawm, who deals globally with the similar period c1770 to c1990, will not be at all surprised by this picture. the difference is that Piketty and team have begun to assemble the data to back the narrative on a massive scale (see below).
Piketty has been noted for citing Austen and Balzac in his work but his interest in them is rather thin it has to be said, really they are another source (like the Forbes Rich List) to be mined for relevant data. If you want a fuller discussion of culture through the period then Hobsbawm is your man. Indeed, though mr paul quigley will be delighted that Pierre Bourdieu gets a mention (in a rarefied list) Piketty steer clears of much social analysis. For example, Hobsbawm wrestles mightily with what is class, hegemonic power and observes it changing. Piketty generally looks at the bottom 50%, the next 40%, the top 10% and the very top 1% 9 and even 0.1%). I’m not a big class as culture person (opera goers vs baked bean eaters) but this seems unsatisfactory. In terms of how societies actually function perhaps income/wealth is not satisfactory in itself and, for example, it is still worth looking at the relationship of people/classes with the means of production.
This is not to say that Piketty does not see himself as a political economist: he does, but there is a whiff of a society being seen as a massive game of SIM City where a few tweaks to the programme by suitably intelligent people will gain the results desired. The drive towards equality (or reigning in the increase of inequality) seems to come from (a) a pragmatic sense of fairness, and (b) a fear that this will lead to a revolution. The channels that this revolution might take are not explored and, as he distances himself from Marx, it is seen as a bad outcome. In this sense, even though he does take his fellow economists to task for unconscious class self interest he does, in my opinion, display a touch of the fear of the mob and this, I think, pushes him more towards a tax solution (plus new supra-national democratic bodies) than a more agitating for improved workers’ rights approach.
Worth quoting George Orwell here:
“Foreseeing some dismal Marxian Utopia as the alternative, the educated man prefers to keep things as they are. Possibly he does not like his fellow-rich very much, but he supposes that even the vulgarest of them are less inimical to his pleasures, more his kind of people, than the poor, and that he had better stand by them. It is this fear of a supposedly dangerous mob that makes nearly all intelligent people conservative in their opinions.
“Fear of the mob is a superstitious fear. It is based on the idea that there is some mysterious, fundamental difference between rich and poor. But in reality there is no such difference. The mass of the rich and the poor are differentiated by their incomes and nothing else, and the average millionaire is only the average dishwasher dressed in a new suit. Change places, and handy dandy, which is the justice, which is the thief?”
– Down and Out and Paris and London
Even so, he has been accused and indeed invokes it himself, of being Utopian.
“A map of the world that does not include Utopia is not worth even glancing at, for it leaves out the one country at which Humanity is always landing. And when Humanity lands there, it looks out, and, seeing a better country, sets sail. Progress is the realisation of Utopias.” – Oscar Wilde.
That is to say, I think Piketty is right to lay out his ideal solution as at least it provides a direction of travel, a place on the map to aim at, and lets us step out for a change from the daily wrangling which can have a hamster-wheel quality to it. Or put it another way, pragmatism demands that we at least discuss which the ideal, or at least preferable situation might be.
He is pretty interesting of the variety of roles tax can play. For example he thinks that the relatively low-taxed super-managers, with the ability effectively to set their own wages, leads to higher and higher wages because the bosses get to keep a good chunk of them. A tax of, say 90%, over a certain level would be to deliberately discourage very high wages and thus unequal returns – which in his take are as much a matter of luck as anything. The pay rises would stop as they wouldn’t be worth taking: it’s not about what the tax would raise. In my take, super-managers see around them very rich individuals and, through wishing for the same lifestyle, ‘require’ incomes that allow them to exist in the same sphere (see Hilary Clinton believing as a millionaire she is not that well off), but the difference may be moot and the solution the same.
I have taken up a lot of space here, just to note that, of course there has been a lot of criticisms of the book, to which I would note:
* He has got his databases out in public view and he (and his team) are looking for ways to improve them.
* He does discuss the increase in global wealth in the last 30/40 years
* He does discuss wealth, income etc., before and after tax (re)distribution
* Ireland, unfortunately gets a look in only as a smaller country that is engaged with an understandable race-to-the-bottom on corpo tax. But he doesn’t necessarily think we should be stuffed out of it straight away.
* He does discuss differences in various countries, eg USA.
* He does reference the USSR as perhaps encouraging more equality in the West as at least providing (a not very attractive) alternative to raw free-markets.
* He does have an interesting discussion of the Euro towards the end.
http://topincomes.g-mond.parisschoolofeconomics.eu/#Home:
@ Mr Kostick
Nicely done.
A couple of brief additions.
First, the system ‘should’ equate risk with reward – a ‘risk premium’ is appropriate to risk taking. If enough people do, or are perceived to (pension funds, houses, bank deposits), have capital at risk then the lobbying power of capital increases and politics acts to skew the game against losses.
Second, capital allocators and risk taking investors really made bad decisions about a decade ago which ‘should’ have evened things up. The point above then came into play. However, the current Nirp, Zirp and QE monetary policy, ironically favoured by left-leaning economists, has also boosted the value of invested capital by suppressing yields and pulled up the draw-bridge for the existing rentier class and super-wealthy. Some prominent left-leaning economists seem unable to understand this – instead trying to argue that long tern low interests are the opposite of what rentiers want, missing the point that they are already invested.
It is genuinely ironic that it is generally right-leaning economists and financial analysts who oppose official policy to virtually outlaw losses to capital.
s/b
“instead trying to argue that long tern low interest rates are the opposite of what rentiers want, missing the point that they are already invested.”
@Gavin
“He does discuss the increase in global wealth in the last 30/40 years”
What else is there to discuss? Life expectancy, quality of life, living standards across the world are increasing all the time. These have somehow become footnotes when they are in fact the whole point behind the economy in the first place. For some reason we are no longer satisfied with the incredible progress that capitalism has brought, we have to nitpick about equality of outcome. Haven’t we tried that already? It sucks. Solzhenitsyn would be a more useful Summer read for those who seem to have forgotten how these experiments in social engineering end. I feel like I’ve transported back to the Trinity College students union of the 80s where everyone was browbeaten into standing to attention at the end of the night while the Nicaraguan national anthem was played.
@ JF,
nicaraguan anthem ….. harmless
Here it was a benefiz concert to pay for “weapons for El Salvador”, despite a standing majority rule, that all supra-university political statements had to be voted upon by the standing council .
That was the last thing these folks ever organized, before I gave them a taste of direct democracy
@ Gavin
what did piketty say about the USSR? The way you describe it, it sounds like he is stuck in the early 1960ties
And he needs a solid dose of Maggie Thatcher http://www.youtube.com/watch?v=okHGCz6xxiw : – )
One more case of people being dizzy in their head, the present terror regime in egypt
http://www.theguardian.com/world/2014/jun/28/egypt-military-aids-cure-device-backtrack
@ All
FYI a “Hobbesian” view!
http://www.independent.ie/opinion/comment/left-wing-tax-grab-is-not-the-answer-to-economic-problem-30392018.html
Eddie Hobbs should really give it a rest. Here’s a claim that is a non-sequitur intended to snow the uninformed:
“Ireland also runs the most progressive income tax system in Europe, where the top 5 per cent pay nearly half the total take, with the top 20 per cent accounting for about four-fifths of all income tax.”
Responses:
1) It is irrelevant what share of the total tax take is paid by various quintiles, etc. unless we also know what share of the income they have. If the top 20 percent have more than four-fifths of all the income (I don’t imagine they do, but they might) then there’s nothing progressive about them paying [b]only[/b] four-fifths of all income tax.
2) Piketty’s point is largely about the 1% and, as far as they are concerned, Ireland’s tax system is hardly progressive at all. From the merely well-off to the superrich, the tax take flattens out.
Good point Ernie about the need to compare income and income tax inequalities (see http://www.ssisi.ie/Pat_McCloughan_SSISI_draft_230813.pdf for some research on this).
@ PMc
From your link.
“The progressivity of the Irish income tax system internationally contrasts with the country’s low overall burden of tax and income tax by European comparison. According to Eurostat (2013), total tax revenue as a proportion of gross domestic product (GDP) was 28.9% for Ireland compared with
38.8% for the EU27 and 39.5% for the euro zone in 2011; in regard to the implicit tax rate on labour, Eurostat records the rate of 28% for Ireland, compared with 35.8% and 37.7% for the EU27 and euro zone respectively in that year. Addressing the discrepancy between GDP and GNP (gross national
product) in Ireland, Callan et al. (2013) develop a hybrid measure of GDP and GNP for Ireland and find that it continues to emerge as a low overall income tax country (2011) but that marginal tax rates faced by higher earners in Ireland are among the highest in the EU15. Concerning the
possibility of a new higher top marginal tax rate (48%) on incomes above €100,000, Callan et al. (2013), while not seeking to provide a comprehensive assessment of the costs and benefits of such a proposal, nevertheless find that there is “limited scope for tax increases on such high incomes to
contribute to a substantial upward shift in the ratio of tax to national income” (p. 13) and conclude that “if Irish income taxes were to approach European levels, it is likely that marginal tax rates in low to middle income range would have to rise” (p. 21).”
Anyone with experience of being able to contrast living conditions in the different countries will know the above to be true.
Piketty is undoubtedly correct that the gap between rich and poor is growing but it is not a problem which impacts Ireland in particular. The real problems lie elsewhere and Hobbs does a good job of identifying them. More importantly, he has an audience, especially in relation to the reluctance to pay a higher level of tax until there are improvements in both delivery and equity of public services and a more realistic view taken of the level and nature of social transfers i.e. tying them to economic growth.
@ All
FYI
http://www.ft.com/intl/cms/s/0/a3b71378-ffa7-11e3-9a4a-00144feab7de.html#axzz35xpLRdkV
One wonders if Piketty would approve! Rich and poor tend to sleep in hotels; of highly unequal quality.
“More importantly, he has an audience, especially in relation to the reluctance to pay a higher level of tax until there are improvements in both delivery and equity of public services”
Here we go again:
010 Slash public spending
020 Decry poor public service
030 Goto 010
It is a fact that Ireland has never funded its public services at anything near Scandinavian levels in part because it has been unwilling to raise taxes commensurately. And this is because people have a lot of very stupid ideas about tax (e.g., the number of people who apparently don’t know the difference between a marginal rate and an overall tax rate is staggering).
If you’re unwilling to fund public services at anything near Scandinavian levels, with what right do you complain that they’re not there yet?
@ DOCM
“There are even plans to improve the quality of service.”
What the article also mentions, is a well known problem of France, they have the highest number of visitors, but they dont stay that long and spend their money. Many, especially asians, just fly into Paris, sightseeing, shopping often in the duty free area at the airport, no or just one night.
You gotta lure them into the countryside, attract them to stay, spend money in rural areas, pubs, sports, restaurants. Come again.
In Dresden we have 2 dozen city employees specifically catering to our valued Russian guests over Christmas, menues in kyrillic, a memorial for the glorious 5th motorized Russian Guard Division in pristine condition, Russian churches, the whole nine yards.
@Ernie
Simply not true, as you well know. For example, the Irish health system is lavishly funded once you take the demographic profile of the country into account. For a country as young as ours we spend ridiculous and unsustainable amounts of public money on health. When we finally age like the rest of the OECD we are screwed.
And for all that public money, plus the out of pocket fees, and the insane levels of private health insurance support, the health service is very average, even for the wealthiest in the country.
The funny thing is, the monster that is the HSE was created to satisfy the need of people like you for “accountability.” Turns out measuring the “efficiency” of large, complex organisations makes them less efficient.
So, revising my original programme:
010 Demand “accountability”
020 Create bureaucratic Leviathan
030 Decry poor public service
040 Slash spending
050 Goto 030
The HSE is just the old Health Boards with extra staff. There is no real accountability and it is the least efficient organisation you can imagine.
Agreed. But its purpose is to “manage” the people doing the real work. Those people are accountable to the HSE while the HSE is accountable to no one. The monster was created when we attempted to import private-sector style management into organisations where it was totally inappropriate. And we did that because people were complaining, wrongly, that the entire public service was inefficient (as opposed to underfunded).
Is there a health service you admire?
I ask because there is no health service on the planet that does not value efficiency and accountability.
1. DOCMs public policy link above puts
http://www.spiegel.de/wirtschaft/service/oecd-bericht-ausgaben-fuer-gesundheit-in-deutschland-sehr-hoch-a-978411.html
in a very different light.
2. When you read Baron Münchausen in the FT (like today) and in his German utterings , propagating a Brexit
http://www.spiegel.de/wirtschaft/europa-und-grossbritannien-warum-ein-austritt-vorteile-haette-a-978302.html
I am somewhat amused about the shameless catering to very different audiences
@ JF
“What else is there to discuss? Life expectancy, quality of life, living standards across the world are increasing all the time.”
Is that going to continue forever , Johnny?
Smithers has an interesting article here about productivity increases (on which growth depends) and incentives. Plutocracy has a tendency to self destruct.
http://blogs.ft.com/andrew-smithers/2014/06/poor-productivity-is-no-puzzle-3/?
@ seafoid
the “poor” productivity in US/UK just means that the excessive pay for socially useless banking / finance / property peddling jobs came down to somewhat more reasonable levels.
More to go : – )
There you go, Johnny:don’t ask for whom the HSE works. It works for you. Because you demanded it!