Wednesday, 28 November 2012

infrastructure (with rant on the evils of government)

infrastructure in a capitalist system is usually provided by quite a circuitous process.  people and companies are taxed to pay for inefficient, bloated government services.  a government babu / elected politician decides a piece of infrastructure is a good idea.  the government plods its way through the planning stages usually via the use of expensive consultants who, after decades of working in the government, come to the conclusion that doing the same job as an external consultant is far more lucrative for them.  after many revisions, they come to an acceptable plan, and lurch into the tendering process.

tendering is just as ridiculous as the planning stage, with revisions, scope changes, political interference, all wasting more and more tax payer money on the bureaucratic nightmare that is modern day government.  eventually, the process is finally completed, private companies submit their tenders, and a committee of government babus decree that company x provides the best value for money (hopefully company x is politically acceptable to the politicians, otherwise a sh!tfight starts about now).  the honourable politician announces the decision with extensive press coverage and abundant fake smiles.

company x and government then begin their intricate dance of pretending to follow the tender / contract to the letter, while trying to maximise their profitability (for company x) and maximise value for money / government prestige (with different departments and different politicians often working at cross-purposes for internal reasons, making it all the more laughable).  there are frequent revisions to the tender / contract at this stage.  finally, infrastructure is produced, frequently late, over budget, and with contractual disputes about quality.  the infrastructure may be owned by the government, in which case the tax payer pays, or it may be privately owned, in which case the tax payer pays (only when using it, this time).  government is a beautiful thing.

just in case i have accidentally portrayed government workers as competent in the above, all work they do (in any department, at every level) is invariably less efficient than a private counterpart.  government workers see no need to work overtime, find ways to have extensive coffee breaks, lots of staff meetings, lots of union meetings, work is stopped to watch sporting events, not only do they have no need to minimise costs to make a profit, they frequently maximise spending to ensure their budgetary allocation isn't taken away, their work is frequently interrupted by random ministerial queries and ministerial directives that reverse the directive from the week before, and work often gets shuffled around and re-done to accommodate the high levels of government workers that inexplicably take fully paid stress leave.  all of this is topped off by an air of superiority because government workers think they keep the country running (clearly my opinion here has departed from objective analysis, and i have assumed that my limited experience in government is reflective of government workers everywhere).

slight diversion there as i waxed lyrical on the joys of government workers and bureaucracy, but it is relevant into how infrastructure is provided in the capitalist system (and also demonstrates why communism will never work, there being no private sector this level of dysfunction would be present in all economic activity throughout the country).  i don't think anyone pretends that the current system is efficient or even good, but how can you improve it?  how do i envisage it happening under an 'ample' economic system?

going back to the key events that have to happen - there is a need or want, there are adequate resources to provide this need or want, and it is then built.  everything else is just the currently accepted mythology in how we get things done, and same as we used to sacrifice virgins and worship zeus, it is largely unnecessary.

in the ample system, all needs and wants can be found in a centralised website / online market-place, something similar to ebay.  new products and services can be added to gauge consumer interest, consumers can purchase existing products and services by spending their 'hours' earnt.  given there is no tax, no hoarded savings, and no debt in this system i am imagining, how can large scale projects and infrastructure occur?

anyone can add a new product or service to the market-place website, whether it is a haircut, an electronic widget, or a housing development (housing would be rented, not owned as per the previous post, nobody / nothing would own any land, it could just be temporarily used).  people and businesses are then free to 'bid' on it as either a buyer or a seller in the defacto currency of hours. a seller would put together a business plan for the provision of the product or service demonstrating how they could provide it, what inputs would be needed, whether those inputs are available and at what cost in 'hours', what employees would be required, whether they are available and at what cost in 'hours'.  small scale products or services can start running their business prior to receiving certification from an auditor, effectively as a sole trader in the current capitalist system (ie personally spending their 'hours' to buy materials, receiving 'hours' in payment for the product or service).  as they can't go into negative 'hours' personally, they effectively would need to make a profit in 'hours' to continue, and to provide any incentive to continue (if it is profitable enough, they may not need to work their quota of hours as they get more than enough from their mini-business.  this would of course attract other people to provide the good / service, bringing the price down to equitable levels).

once an auditor has certified the business, i consider this as equivalent to incorporation in the capitalist system.  the business is effectively a separate legal entity, purchases materials in its own right, has employees that can work their minimum quota of hours at the business, has income from customers spending their 'hours' to purchase the good or service.  importantly, and different to capitalism, the business does not need to make a profit, it can spend more 'hours' than it receives.  the key criteria for the continuation of the business is firstly demonstrated continuing demand for the product or service (as evidenced by the online market-place showing a pipeline of customers wanting the product or service, note that this is a free market where customers can bid whatever hours they want to purchase the good/service), and secondly, by maximising efficiency.  auditors would need to regularly review all businesses and cull the bottom 5%-10%-30%.  there is therefore incentive to maximise efficiency (to avoid the cull), while also providing products or services that are in demand.

for larger scale projects (road, bridge, harbour), i envisage a supplier would write up a proposal / prospectus that would need to be certified by an auditor as being realistic and possible, but would leave it up to the citizens in the market to determine whether it was desirable.  the project would then be placed in the online marketplace in a special category, where there can be only one supplier (other suppliers can have simultaneous mutually exclusive projects competing in the market place, probably with a special link between the pages to notify citizens they are mutually exclusive), and citizens can allocate 'hours' to any project that they want.  citizens can allocate as many hours as they want, bearing in mind that they then can't spend these hours on luxuries or other projects etc.  The project would need to reach the threshold hours required as per the audited business plan for the project to be built, and would need to reach the threshold first in a situation where there are competing mutually exclusive plans.  hours allocated by citizens would be 'refunded' in a situation where the project doesn't meet the threshold by a key date specified in the business plan.

why would citizens allocate their hours to projects?  bear in mind, in capitalism we are compelled to allocate circa 30% of our hours (depending on country and income level) to government in the form of taxation, which as i have never signed a contract saying i wish to do so, and have little to no say on how those taxes are spent, i consider theft. so it would be nice to actually have some control over infrastructure expenditure in my local area.  secondly, if there is an infrastructure need (eg roads are really congested, wish we had a new freeway here; the closest airport is 3 hours away; i have to wait 5 hours to see a doctor), the citizens can directly influence the priorities of infrastructure expenditure as it affects their life.  this is much more closely aligned to democratic ideals in that only projects that can attract adequate public support will get done, whereas bridges to nowhere are less likely to occur as citizens are less likely to allocate their hours to projects that they don't think will improve their life, they will allocate their hours to further their own goals, whether that be luxury food, booze, education, art for the wall, a new car, or a new hospital or airport.

obviously, there is still the potential for corruption, for example a politician publicly endorsing his brother's project x, and sheep from his party toeing the party line and allocating hours as instructed.  but no more than with capitalism and if people choose to allocate hours as per political party instructions or as per any influential member of society, that is their choice.  you can't stop stupid from being stupid, and at least it is democratically stupid and they could choose an alternative if they so wished.  however there are no companies making massive profits on infrastructure, it is more difficult to get projects going unless citizens put value in it and allocate hours accordingly.

its an interesting idea, as to whether it would work as i envisage - no idea, but nothing ever goes to plan.  i need to go further into detail on land usage and how it would be determined (eg project x involves building a highway through the house you currently live in, or project y involves locating hazardous materials next to a kindergarten, or just more housing is being demanded in desirable suburb z, where does it get built).  but next i want to go into research and innovation, as i think this is an area where capitalism puts unnecessary artificial constraints on human aspiration.

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