How Workfare trapped charities into offering free labour


8:55 am - March 2nd 2012

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contribution by Gayan Samarasinghe

When the Big Society was conceived, supporters and critics alike believed it would be volunteer organisations to which the government would turn to, for contracting out work. But it did not work out like that.

In reality, private companies are frequently the successful bidders for government contracts. The National Council for Voluntary Organisations expressed concerns in October 2011 that almost 90% of contracts had gone to private firms.

Late last year, A4e – the government’s key Workfare contractor, called on comrades from the volunteering sector to work with them. After several refugee and asylum charities were asked to work for A4e without payment, Farrukh Husain, director of the Migrants Resource Centre, described the practice as “gross exploitation of the voluntary sector”.

Volunteering England complained that volunteering centres had been approached to provide training to job seekers which A4e were paid by the Government to deliver.

Job seekers could be referred to many volunteering organisations anonymously – volunteers often had no way of knowing whether they were doing a private contractor’s work for free.

In February 2011, Margaret Hodge, Chair of the Public Accounts Committee, asked Andrew Dutton, Chief Executive of A4e, what value was added when they took £400 from the government for every job seeker taken on under the Work Programme, only to be referred to a charity called Lifeline for £300.

“I cannot for the life of me see any value you add at all for that £100″ she said. Dutton defended the practice by describing the £100 it pocketed as a “management fee”.

If winning bidders such as A4e decide to subcontract out work, they have a large pool of small charities to choose from and inevitably were in a far stronger bargaining position when setting the terms.

One rising super-charity in particular – FSI ( the Foundation for Social Improvement) shows a suprising number of connections to A4e.

FSI’s chair trustee is Emma Harrison. Four of FSI’s eight eleven trustees are key players from A4e and include A4e’s Group CEO, it’s Executive Chairman, and it’s Director of Marketing and Public Relations. A4e is FSI’s main donor. A4e and FSI even share the same address, FSI’s premises generously paid for by A4e.

It appears in this case no thanks are necessary – it’s all part of the Big Society.

—-
Gayan is a London based writer, and a paralegal at a human rights law firm

Update: FSI have been in touch to say that they do not put charities in touch with workfare providers such as A4E, as previously stated in the article. They also say they have eleven trustees, not eight. We are happy to set the record straight.

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Reader comments


Sounds a bit like the ‘reconstruction’ scam that was pulled in Iraq. Subcontractors all the way down.

So the BIG society was really all about trying to get away with legalized slave labour. So much for Cameron’s BIG society.

The BIG society = Putting down the lower classes and vulnerable.

3. Matt Wardman

You won’t find me agreeing with the political campaign being run, but FSI looks like a classical fake charity.

Of course,the government/corporate axis in such areas is utterly corrupt and is always pernicious. Emma Harrison is clearly an obnoxious trougher and I hope she ends up in Holloway.

Though she won’t.

But then closer analysis would probably find that, as well as supporting Harrison’s lifestyle, the state was also funding most of the “voluntary organisations” and “charities” mentioned in the OP. So let’s not assume altruistic motives on that side either.

The real question, and the one that never seems to be asked, is whether any value to any individual’s job search is added by any of these bureaucratic programmes. If not, are not the resources spent on government employment schemes entirely wasted?

A moment’s rational thought will tell you that they are.

Pagar @ 4

The real question, and the one that never seems to be asked, is whether any value to any individual’s job search is added by any of these bureaucratic programmes. If not, are not the resources spent on government employment schemes entirely wasted?

I totally agree with you here. On this, if nothing else, we are completely on the same page.

A4E is rather typical of these types of groups that appear to have sprung up all over the shop. The Tory/New Labour hegemony seems to promote this type of ‘enterprise’ and seem to be in thrall to these people. This is why I think politics in this Country is broken. There is no way a rational person can look at these ‘companies’ and genuinely believe that they have anything of value to society, the unemployed or even the Government.

A4E et al have simply funnelled money from the taxpayer into their own pockets without adding a single piece of value to anyone. Be it ingeous, A4E, Atos, workfare, pathways to work or anything else, is a fucking huge waste of time and money.

Surely to Christ there is ONE MP, civil servant or junior minister for paper clips can see that whether or not an individual gets a job has nothing to do with the with one of these schemes, it has to do with the Labour market.

You may as well replace these people with furnished porto cabins and colouring in books for all the good they do.

Is not the problem here the fact that if there are charities which can do this work cheaper, they cannot access the contracts because they do not have the capacity to do so? Basically, without being a ‘super-charity’ (probably a misuse of the superlative; I’d prefer ‘gross charity’), an effective charity is unlikely to have the resource to bid for a large government contract.

So the solution is simple – small, local, contracts, perhaps decided at a local level (so we can have answerability), which may or may not favour the A4e’s or the small charities, but would not require large capital backing to bid for. The problem here is not the notion of putting this form of contract out to tender; the problem is that the system as set up favours those with capital behind them – so the established components of the capitalist system. This suits central government (greater central control; easier relationships; no local autonomy) but is not good. And, for me a key point, it denies a proper free market to all companies, charities, individuals etc through imposing effective entry requirements.

This is a classic example of how big government is bad for the people it is trying to help, bad for most companies that could offer services and bad for voters. Even if A4e are doing the best job in the world (ignoring the corrupt individuals anyway…), by having more contracts and more approaches, we will find better results, as good practice spreads and is rewarded. And this can be done without fattening the bank balances of a few millionaires and venture capitalists.

Is it really surprising with a govt of mult millionaires, and born with a silver spoon arsewipes that slave labour would become the norm?

Cameron does not even pay for his horse, so why pay for the staff. ” we’re all in this together” means. We’re all in a slave camp together.

Sally,

Cameron does not even pay for his horse

Wrong end of the stick there I think…

Watchman @ 6

This is a classic example of how big government is bad for the people it is trying to help, bad for most companies that could offer services and bad for voters.

This is not about ‘big’ government; this is about corrupt and stupid government. The ‘size’ of government is not relevant here. When you engage a company or charity to offer a solution to a social problem (real or imagined) you need to at least have the decency to attempt to understand the problem.

Bankrolling A4E is a failure because the government of the day are unable to accept the fundamental problem with the unemployed is that there too many people chasing too few jobs. Given that the Tories are ideologically blinded to the basic facts, no one should be surprised to find that they have forked out millions of quid to people who have not fixed the problem.

There are hundreds of people applying for every low skilled job that appears, A4E, Igneous the charity sector and every other rent seeker cannot change that. You cannot pad out a CV or fix that by calling forced labour ‘work experience’ and rectify that. Unskilled labour is increasing at a time when the demand for unskilled labour has all but disappeared.

Demonising the unemployed and the disabled has actually made thing worse because it gives credence to the idea that that these people are lazy and failures. This has meant that employers are reluctant to employ people and the general public are unwilling to support measures that would actually help the unemployed. So far, the schemes that have been invented are designed to look like ‘punishments’ for the unemployed and thinly dressed as ‘helping’.

This workfare is the most obvious example. We have major employers using these schemes as cheap labour, simply because they can, there is simply no incentive to create jobs in that atmosphere.

10. Planeshift

“that there too many people chasing too few jobs.”

The tories essentially view this as the market being unable to clear because benefits and the min wage prevent wages falling to a clearing price. So challenging this is the best way forward.

11. Gayan Samarasinghe

Watchman – there might be a case for this type of work being the kind that is inappropriate for tendering in the first place. There is a danger that the costs of administering a vast number of small contracts will wipe out any efficiency benefits from competitive tendering

On the other hand, as you say, a few large contracts which only a few contractors can bid for removes the competittion from competitive tendering and encourages all the sleazy, collusive relationships between government and workfare contractors we’ve seen.

12. Gayan Samarasinghe

Jim – yes, that’s the real problem with much of the scheme and explains why people on workfare are found doing unpaid internships cleaning other people’s homes

Gayan,

I’m happy to admit there may be a case for seeing this sort of work as requiring to be done within government, although my inclination is to doubt this (obviously I couldn’t dismiss this without seeing the case being made…). I would say though that focus on cost is not necessarily helpful, as the benefits of a free-market approach are clear. Indeed, we could even scrap the tendering entirely and let the benefit claimant chose directly – thus reducing costs considerably and opening up the market to all sizes of competitor (OK – there would have to be a certain amount of regulation which has costs, but I suspect less than a tendering process).

Jim,

Big government is much more likely to be corrupt – small government has less resources, therefore there is less incentive for someone to corrupt it. What causes corruption is basically that governments have the power to bestow money on others at the whim of government (or of civil servants, which is even worse as they are not elected). The more people with the power there are, the fewer the opportunities for effective corruption for big companies.

And big government is stupid – it can only try one idea, not pick from several. That is not smart – as the A4e saga is showing. This does not make it wrong (I can see an argument that it makes it right), but you have to accept the nature of big government – cumbersome and unable to innovate – is pretty much the definition of stupid.

14. Gayan Samarasinghe

Watchman – I think it would be a cold day in hell before the government puts a benefit claimant in charge of the workfare provider that is meant to be surveilling and threatening him with sanctions… but I would be all for it!

Gayan,

Watchman – I think it would be a cold day in hell before the government puts a benefit claimant in charge of the workfare provider that is meant to be surveilling and threatening him with sanctions… but I would be all for it!

It seems no different from chosing your own school or hospital, so I suspect that this might actually be something that could happen. This could even be an area the left in general could use to try and steal a march (and voters) from the government – acknowledging the unemployed are still their own agents (and not ‘clients’, as the right-wing troll will allege) and that they may know what is best for them.

Letting those who need help select their own help seems sensible anyway – I presume the objections would be that they would chose the easiest option or whatever, but presumably there would be ways of imposing a minimum standard. To be honest, even with possible problems it sounds better than what we have today.

Watchman @ 13

Big government is much more likely to be corrupt

Self serving nonsense! Corruption is rife in every type of Country, irrespective of the size of government. Some of the poorest Countries in the World have the most corrupt governments.

small government has less resources, therefore there is less incentive for someone to corrupt it.

Not true either. The amount of money being squandered for political patronage is not relevant, corrupt MPs can be corrupted for a fiver, just as easy as 8.7 million.

And big government is stupid – it can only try one idea, not pick from several.

‘not pick from several’, what kind of ideological crap is that? The only solution for anything is ‘privatise it’. If only being able to pick from one idea is stupid, then picking from one solution, i.e. ‘privatisation’ is surely it. small government is just as stupid, look at George W Bush. An exponent of small government, each policy a worse failure than the last one.

Being able to choose from a number of arsehole ideas does not make for better solutions, it just means the you have different ways of fucking up.

What you need is a full recognition of the available data and facts and then tailor your solution around the facts. What ‘small government’ does is start of with the premise that the problem is ‘large Government’ and the answer is ‘small government’.

That is EXACTLY what is wrong with A4E debacle. The small government solution, pay a ‘private firm’ a few quid to solve a problem that small government has no ability to understand, let alone solve and then deny the existence of any problems because that would entail ‘intervention’ and represent ‘big government’.

A4E is the embodiment of small government failure. This is not ‘private enterprise’ solving a problem that big government cannot. This is small government absolving itself from providing a solution to an issue that it is idealistically opposed to understanding.

A4E are like those parasitic tics that are so specialised that they can only live of a given species of host. In this case, small government looking for a simple solution to complex issues. They have become bloated by sucking the lifeblood from a host that can ill to lose. To the tune of 122 million quid and a personal fortune of 8.7 million. A figure that is 8.674 million above the welfare cap.

Watchman @ 15

Letting those who need help select their own help seems sensible anyway – I presume the objections would be that they would chose the easiest option or whatever, but presumably there would be ways of imposing a minimum standard. To be honest, even with possible problems it sounds better than what we have today.

There are tens of thousands of people on benefits who are too old, too sick, too unskilled and, yep too stupid to have any reasonable chance of ever working again. The best solution (from the point of view of the taxpayer) for these people is to be left alone on benefits and never bothered.

That might not be nice to say and it might not be palatable for others, but not everyone’s problems can be solved and the best we can do is let people wither away as quietly and as humanely possible.

18. Planeshift

“if there are charities which can do this work cheaper, they cannot access the contracts because they do not have the capacity to do so?”

Not just small charities, but virtually all small firms have major problems winning contracts. There is massive problem with public sector procurement.

Jim,

Self serving nonsense! Corruption is rife in every type of Country, irrespective of the size of government. Some of the poorest Countries in the World have the most corrupt governments.

Yes – because those governments have huge (relatively) resources at their finger tips. Corruption in poor countries goes down when aid does not get chanelled through governments – because there is less incentive to control government for your own gain.

small government has less resources, therefore there is less incentive for someone to corrupt it.

Not true either. The amount of money being squandered for political patronage is not relevant, corrupt MPs can be corrupted for a fiver, just as easy as 8.7 million.

I doubt it somehow. The more money involved, the more likely people are to be corrupted – unless you happen to have some evidence to show otherwise?

And big government is stupid – it can only try one idea, not pick from several.

‘not pick from several’, what kind of ideological crap is that? The only solution for anything is ‘privatise it’. If only being able to pick from one idea is stupid, then picking from one solution, i.e. ‘privatisation’ is surely it. small government is just as stupid, look at George W Bush. An exponent of small government, each policy a worse failure than the last one.

Privitisation is a big government policy – it can only do the one thing, so it privatises. Small government would allow for experimentation, not the binary choice between public and private, as the choice would be at the local level. I think you are confusing small government with big, corporate, government here – big government is equally a problem if it is right-wing you know.

Being able to choose from a number of arsehole ideas does not make for better solutions, it just means the you have different ways of fucking up.

What you need is a full recognition of the available data and facts and then tailor your solution around the facts. What ‘small government’ does is start of with the premise that the problem is ‘large Government’ and the answer is ‘small government’.

Ah – the argument that with the appropriate data we can come to the right answer. Tell me, why has that never worked – and why do so many on the left hanker for this sort of big government control of things despite the fact it does not work, it concentrates power in the hands of a few ‘experts’ (unelected) and it is not even the logical outcome of thinking on texts such as Marx?

That is EXACTLY what is wrong with A4E debacle. The small government solution, pay a ‘private firm’ a few quid to solve a problem that small government has no ability to understand, let alone solve and then deny the existence of any problems because that would entail ‘intervention’ and represent ‘big government’.

Odd – I have been arguing A4e is a big government problem, because they used a single contract for the whole country – which is big government writ large. You somehow see this excessive centralism as being small government though? Not sure about that.

A4E is the embodiment of small government failure. This is not ‘private enterprise’ solving a problem that big government cannot. This is small government absolving itself from providing a solution to an issue that it is idealistically opposed to understanding.

A4E are like those parasitic tics that are so specialised that they can only live of a given species of host. In this case, small government looking for a simple solution to complex issues. They have become bloated by sucking the lifeblood from a host that can ill to lose. To the tune of 122 million quid and a personal fortune of 8.7 million. A figure that is 8.674 million above the welfare cap.

Not the only one either. Personally I would require any company or charity bidding for government contracts to have contracts/income from outside government greater than any existing contracts to stop this creation of parasitic companies.

I am struggling to see where our differences are – what you are railing against (privitisation, parasitic companies) are actually big government issues – small government is more local, and allows more local choices to be made, contracts to be bid for by smaller organisations and basically avoids the centralisation of power into a small number of hands that creates corruption.

Jim,

There are tens of thousands of people on benefits who are too old, too sick, too unskilled and, yep too stupid to have any reasonable chance of ever working again. The best solution (from the point of view of the taxpayer) for these people is to be left alone on benefits and never bothered.

That might not be nice to say and it might not be palatable for others, but not everyone’s problems can be solved and the best we can do is let people wither away as quietly and as humanely possible.

If they can’t work they should indeed be treated as such. However, too old, too unskilled and too stupid are not categories that should ever stop someone from working – unless you want to write people off for no good reason. I don’t think there are many stupid people or people who can’t learn skills (there are those who don’t want to, but that is a different matter), and old people are certainly not useless.

I doubt you mean it this way, but you do realise that your second paragraph sounds like the start of a path to forced euthanasia – we let them wither away; then we help them wither away… I seriously doubt you think that to be a good idea, but can just leaving people to rot away be good for them, for their families or for us all? People are valuable and good – we should not deliberately foresake them simply because it seems difficult. We certainly should never consider anyone too stupid or unskilled to amount to anything.

And why does this conversation seem wrong – why am I (the non-religous right-winger) arguing for making an effort to help those in need, whilst you are arguing we have to accept them as write-offs and let them fade into the background and be ignored. I know my position is consistent; yours just doesn’t seem to fit with what I know of your beliefs?

Watchman @ 19

I am struggling to see where our differences are

The problem is that you are looking at this through ideological eyes. You are against ‘Big Government’ at an ideological level, therefore you ascribe corruption, (for example) to big government. I am suggesting that corruption is about corrupt people rather than merely the size of the government.

Small government would allow for experimentation, not the binary choice between public and private,

What has this to do with the size of government? Surely, a bigger government can do this as well. If you are a smaller government, you will have less ability to experimentation? Can you explain why you think a big government is intrinsically worse than a smaller government when it comes to examining and rectifying a given problem?

Ah – the argument that with the appropriate data we can come to the right answer.

Yes, isn’t that obvious? Surely, you would accept that if you want to solve a problem you need to know the relevant facts. If I propose a question to you: ‘A car travels from Edinburgh to Glasgow, how long will it take?’ You would want to know the average speed of the car for example, or you might want to know the distance between the two cities, the road conditions etc.

In short, we have to understand the inputs. We need to know what we are dealing with and we need to know how we measure success.

Tell me, why has that never worked

That is a rather glib statement is not? Big Government has never worked? What? Never won a war, had full employment, greated the big wall of China or the Pyramids? Landed a man on the moon?

Big Government has ‘worked’, Watchman. I am not suggesting that is always worked or that it works without private business or that private business cannot work, but big government has worked.

The problem is not that these contracts are issued to the wrong people, but these contracts are issued at all.

The problem of mass unemployment is not going to be solved with work placements and CVs being spruced up, it is more fundimental than that.

Jim,

The problem is that you are looking at this through ideological eyes. You are against ‘Big Government’ at an ideological level, therefore you ascribe corruption, (for example) to big government. I am suggesting that corruption is about corrupt people rather than merely the size of the government.

My opposition to Big Government is hardly ideological – it is practical. I am not a libertarian (I see a role for government). And if corruption is always present, it is much easier where power is centralised, which is Big Government.

What has this to do with the size of government? Surely, a bigger government can do this as well. If you are a smaller government, you will have less ability to experimentation? Can you explain why you think a big government is intrinsically worse than a smaller government when it comes to examining and rectifying a given problem?

Simple – it can only have one policy affecting far more people. Small government devolves the decision to local level, allowing far more policies.

Yes, isn’t that obvious? Surely, you would accept that if you want to solve a problem you need to know the relevant facts. If I propose a question to you: ‘A car travels from Edinburgh to Glasgow, how long will it take?’ You would want to know the average speed of the car for example, or you might want to know the distance between the two cities, the road conditions etc.

In short, we have to understand the inputs. We need to know what we are dealing with and we need to know how we measure success.

Assuming we want to base our policies on evidence (no sign of that in most recent governments…) then this makes sense. Apart from the fact that this is real life, not the school room, so there is no single correct answer to any set of data. And as for measuring success, that is always a political decision – and therefore very open to corruption.

That is a rather glib statement is not? Big Government has never worked? What? Never won a war, had full employment, greated the big wall of China or the Pyramids? Landed a man on the moon?

Big Government has ‘worked’, Watchman. I am not suggesting that is always worked or that it works without private business or that private business cannot work, but big government has worked.

No – in its pure forms (totalitarianism) it has never worked. In adultured forms where there is some devolution of power it just normally performs badly. Yes, it may be the best way to win a war (but is that what we want government for – to win us wars?) or do some other impressive task like building a king’s tomb, but do we want that level of government now?

The problem is not that these contracts are issued to the wrong people, but these contracts are issued at all.

Maybe, but your solution of just letting people rot away is a lot worse.

The problem of mass unemployment is not going to be solved with work placements and CVs being spruced up, it is more fundimental than that.

Then what is the answer. Because clearly the Big Goverment we have does not seem to have it – so maybe something different is needed. Giving up is the worst option – and that of the coward who defends the mechanism which is failing to deliver over the needs of those being failed.

Watchman @ 20

However, too old, too unskilled and too stupid are not categories that should ever stop someone from working – unless you want to write people off for no good reason. I don’t think there are many stupid people or people who can’t learn skills (there are those who don’t want to, but that is a different matter), and old people are certainly not useless.

There is a surplus of labour, Watchman. Not only that, but the surplus of labour has a surplus of labour on top of it. When we advertise for a low paid, low skill job, we get dozens of replies, in some case hundreds. Anecdotal evidence from my peers and friends report the same around the region. Shop work, factory work, temping, part time, you name it, there are thousands looking for every low paid job.

Full employment or anything like it is gone for the foreseeable future. Not only that, but the position is getting worse, not better. Lower skilled jobs are becoming scarcer and rarer, but the labour supply is continually increasing. Depending on how you count it, unemployment, together with those on disability amounts to somewhere in the region of between five and six million.

There are simply no jobs for the majority of those people. It doesn’t really matter if they could, would, should work, you are NEVER going to create a net total of six million extra jobs within a single or even two Parliaments.

If you were being honest, Watchman, you know that as much as I do.

Once we get that concept round our heads, we need to make reasonable contingency plans. If you think you can solve the fundamental problems regarding structural unemployment with sprucing up CVs and workfare, then you would be a total idiot. IF I seriously believed that you seriously believed the fundamental problem is laziness, then I would consider you an idiot. You do not believe that we can create six million jobs any more than I do; you are not an idiot.

You are a free marketeer and know that the free market will reject people for even minor reasons, age, sex, illness etc.

Watchman, you know that, I know that and you know that I know that you know that, so why pretend otherwise?

People are valuable and good – we should not deliberately foresake them simply because it seems difficult. We certainly should never consider anyone too stupid or unskilled to amount to anything.

I don’t, but the free market does and that is the problem. I believe that every human, save the odd scumbag, has value to society, but we are not talking about society, we are talking about the free market.

If the free market totally reject these people and we know that it does, what else can we do? We know that the free market baulk at the idea of quotas for the over fifties, wheelchair users and the sick. Christ try and force some to open a creche and a disabled toilet and see how far you get.

If there are four to five million people who the free market has no use for, how can we change that?

24. Richard W

There is no real correlation between the size of government and corruption. If anything one could argue that some of the states in the world that have the biggest government are the least corrupt. I would not argue that because I don’t believe the size and intrusiveness of government is the key factor. Corruption comes down to culture and the effectiveness of civil and political institutions.

http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

Watchman @ 22

Then what is the answer.

Does there always necessarily an answer? We have been offshoring, downsizising, automating, liberalising and ‘efficiency saving’ for a generation or so, is it really all that surprising that we would reach a point where we have more labour than we comfortably know what to do with? Unemployment has always been part of our economic system, between the wars unemployment reached endemic proportions. Full employment (despite what some people think) was a relatively short period of our history, post the Second World War. Now we have removed the main drivers of that time; Nationalised industry and National service, is it any wonder that unemployment has reached the same heights as it did before the start of the war?

Because clearly the Big Goverment we have does not seem to have it – so maybe something different is needed.

We need Europe to created around fifty millions jobs and we need them quickly as well. Post War the Northern European Countries created millions of jobs, via public spending and billions of dollors were spent in the process, to the extent that our Prime Minister said ‘We had never had it so good’ to describe the Post War settlement.

Big Governments across Europe transformed our continent from a war ravaged husk into the most advanced Countries on the planet.

Giving up is the worst option

Why? What difference will it make? The free market has no need for these people and you can do nothing to foisted them onto the free market, surely attempting to force people onto an already overcrowded labour market will end up being a waste of money, money we cannot afford?

Let us imagine someone with a long term illness that renders them completely unemployable under the current market conditions. What good is it to force him to apply for jobs he has a fucking snowball’s chance in hell of getting, never mind holding down? Why spend hundreds of pounds on this guy, teaching him interview skills, for example, when he will never use them? Why offer him to an employer as free labour? Why humiliate him in pointing out his labour has no market value, what so ever?

and that of the coward who defends the mechanism which is failing to deliver over the needs of those being failed.

The coward is the person who fails to accept the evidence staring him in the face. Full employment is gone and it is not coming back. For most of us, we will have to live with it, but for a good proportion of us, unemployment is going to be a fact of life those with least skills are surplus to requirement. There are at least four million people in this Country alone that the free market have no need for.

Get used to it.

The real question, and the one that never seems to be asked, is whether any value to any individual’s job search is added by any of these bureaucratic programmes. If not, are not the resources spent on government employment schemes entirely wasted?

I made the point early on this thread- that there is no helpful role for government in matching those in need of a job with the jobs that are available. But it is depressing that we seem to be so locked into the mindset that government has the ultimate authority and responsibility to take charge of our lives that we can only discuss how best they can do it.

Sure, they can create that kind of paternalistic environment, but the notion that they can succeed is a stultifying illusion.

Pagar @ 26

But it is depressing that we seem to be so locked into the mindset that government has the ultimate authority and responsibility to take charge of our lives that we can only discuss how best they can do it.

Unemployment has been around the 3 million mark a few times in our history. Full employment was achieved by governments: the 1910s and the 1930 we had wars and the 1940s we saw the biggest rise in Government spending we have ever seen.

During the 1980s the Government of the day bribed Japanese and Amerian companies to build factories in this island as well as two million people shifted from the dole onto incapacity benefit . The 1990s saw Tony Blair employ a million public sector workers to bring unemployment below one and a half million.
When the bribes dried up, the factories were promptly closed.

If private enterprise is going to create jobs, then they better get a fucking move on. Given that the bastards conducted a mass Exodus over the last twenty years, I cannot see that changing anytime soon.

If the free market wont create the jobs, who will?

It’s taken me a long while to build the bigger picture, and the combined efforts of the Guardian, Sky and Channel 4 News have helped. Although I suspected a4e’s purpose from the start was not wholesome, I thought it was just to rip off the tax payer and line Dave’s mate’s pockets, I know realise, thanks to Operation Wheeting and the Levenson inquiry that it all builds a much more chilling picture.

Truth is I thought the Coalition were a bit bungling but it never crossed my they were doing much of what they were doing, and what they were planning. Murdoch has done a good job of hypnotizing us all for many years I feel.

I actually think the several recent quantitative easing by the Bank of England is very telling, as was this unusual ‘retrospective’ closure of a tax loophole thus Barclays coughing up £500m is significant as well. I feel this ‘Government’ is spinning into total self implode now. I’ve seen Nick Clegg looking virtually apoplectic with fear as he knows it’s coming out into the open… Horsegate is doing a grand job but the X-Factor fans are saying to me “Why shouldn’t he ride his friend’s horse?” *sigh*

Wouldn’t it be lovely if this nest of vipers disappeared overnight? Perhaps vanishing in a Murdoch style smoke and mirrors act..

@ Jim

During the 1980s the Government of the day bribed Japanese and Amerian companies to build factories in this island as well as two million people shifted from the dole onto incapacity benefit . The 1990s saw Tony Blair employ a million public sector workers to bring unemployment below one and a half million.
When the bribes dried up, the factories were promptly closed.

As you said above, we do, remarkably, seem to be on the same page on this one.

You are correct that the jobs created by subsidy or public sector expansion are not real jobs and are therefore worthless in terms of adding value to our national economy.

If the free market wont create the jobs, who will?

Indeed. Nobody else can.

What is preventing job creation is the skewing of the market by state intervention. As has been pointed out, A4e do not add any value to the process whatever.

They are parasites, as are the politicians.

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31. So Much For Subtlety

24. Richard W

There is no real correlation between the size of government and corruption. If anything one could argue that some of the states in the world that have the biggest government are the least corrupt. I would not argue that because I don’t believe the size and intrusiveness of government is the key factor. Corruption comes down to culture and the effectiveness of civil and political institutions.

That depends on how you define corruption. A British politician said that before the Great Reform Act you bribed voters, after it you had to bribe classes. In the same sense, before big government you bribed officials, after big government, you have to bribe governments. There is an inherent corrupt network of businesses, lobbyists, Trade Union officials and politicians. There has to be. No business can allow government to make law without their input. They would be out of business pretty quickly if they did. So every company has to have their head quarters in London (or more so Paris or Berlin or wherever) because they need to wine and dine politicians. So does every Trade Union.

I would call this corrupt. But of course because our ruling class benefits they don’t. Big government is inherently corrupt.

32. So Much For Subtlety

25. Jim

We have been offshoring, downsizising, automating, liberalising and ‘efficiency saving’ for a generation or so, is it really all that surprising that we would reach a point where we have more labour than we comfortably know what to do with?

Yes. It would be. Throughout history labour savings have resulted in more employment – invariably in better jobs. It would be exceptional if that was not happening now as well.

Full employment (despite what some people think) was a relatively short period of our history, post the Second World War. Now we have removed the main drivers of that time; Nationalised industry and National service, is it any wonder that unemployment has reached the same heights as it did before the start of the war?

No. Full employment is what we normally had before we allowed the government to take over management of unemployment. Unemployment is simply what we have if we pay people to be idle. Apart from some short term fluctuations in the marketplace. This is self inflicted and would disappear if we stopped paying for it.

We need Europe to created around fifty millions jobs and we need them quickly as well.

We could send some illegals home. We have more than 50 million of those. Or we could simply stop paying people not to work. Preferably by removing the impediments to employing them at the same time.

Let us imagine someone with a long term illness that renders them completely unemployable under the current market conditions. What good is it to force him to apply for jobs he has a fucking snowball’s chance in hell of getting, never mind holding down? Why spend hundreds of pounds on this guy, teaching him interview skills, for example, when he will never use them? Why offer him to an employer as free labour? Why humiliate him in pointing out his labour has no market value, what so ever?

Why not? The number of people with genuine medical conditions that mean they will never work is tiny. We can ignore them. The rest have a variety of conditions that would respond well to work. Why not require them to work? But even if someone is unemployable, work gets him out of the house, helps him meet new people. It is a win-win. There is just no down side.

Full employment is gone and it is not coming back. For most of us, we will have to live with it, but for a good proportion of us, unemployment is going to be a fact of life those with least skills are surplus to requirement. There are at least four million people in this Country alone that the free market have no need for.

This is simply delusional. Full employment will be back the minute we stop paying people to do nothing. There is no such thing as someone who is surplus to requirement. Remember that most of the jobs created recently have gone to people with little English, often little education, but they do have a work ethic. And that’s the problem. There are at least four million people who prefer to be on the dole than work. Not that there are no jobs for them.

Get used to it.

On the contrary. We cannot afford such parasitism any more. They will have to be bullied and coerced back into work. Get used to that.

I tend to agree with Jim, unemployment under capitalism did/will remain high despite the best efforts of the state over the last hundred years or so. The odd war here and there managed to pare down the population and create more jobs, but that’s not likely to be an option any time soon.

The only way we can move away from boom and bust and high unemployment levels is to share work and plan for essential goods and services. We have reached a point where a certain proportion of the population is working harder and longer and at the same time we have millions of people with so much time on their hands, and this number is likely to grow. Inequality has a much greater impact than the massive difference in wealth, we are, in effect, creating another society with no stake in the values of the majority.

The economic system is failing badly and the state has nothing left to prop it up, despite what free-market supporters argue, the state has served to legitimize the system for over a century and there’s nothing left . It really is time for change.

Pagar @ 29

You are correct that the jobs created by subsidy or public sector expansion are not real jobs and are therefore worthless in terms of adding value to our national economy.

That cannot possibly be true, Pagar. Teachers add tremendous value to the national economy. What kind of economy would we have without an educated populace? What kind of economy would we have without old people’s homes or firefighters? What kind of economy would we have if we never had a health service or a Navy? What kind of economy would we have had without the ‘jobs for life’ of the fifties and sixties?

This is the one of the biggest bugbears I have with the Libertarian movement. They appear, on the face of it, to assume that our European culture just happened along and spontaneously morphed into existence in 1952 or whatever, then the State was somehow bolted onto it at a later date.

How can you possibly assume that every aspect of the economy would have occurred anyway had the State took a complete back seat? You cannot simply get to, say, 1975 without national coal, National Steel and the creation of seven million council houses and glibly announce that all those houses would have been built anyway, had the Tory government not built quarter of a million houses a year.

So building quarter of a million houses didn’t generate a single penny in the private sector? Not a single brick was bought, not a pane of glass, a sheet of wood, planed, not a single pint bought or mortgage taken out, holiday taken, tin of beans bought at the end of it all. No nurse ever spent money on a skirt, nor a Morris Minor bought by a GP? No policeman ever bought a TV, nor a shipbuilder, or coalman ever bought a radio or a three piece suite. None of those jobs created a single piece of economic activity?

Then again, I am dealing with someone whose ideology allows them to ignore the laws of physics, so ignoring the history of the last eighty years must be a piece of piss.

Nonsense, Pagar.

35. Richard W

@ 31. So Much For Subtlety

The problem is generic terms such as ‘ big government and ‘ small government ‘ have become empty meaningless slogans that can mean anything the user wants them to mean. Just like when the Left use neo-liberalism to mean anything they do not like. I am sure one day they will describe bad weather as neo-liberal weather. We need clear definitions of what is meant when one is describing something. Otherwise, how do we know who is big and who is small government?

So what is meant by big government? Is it the share of the economy attributable to public spending? The marginal tax rates? The extent of the social safety net? The intrusiveness of regulation of private sector firms? The level of state ownership of firms competing with firms who are under private ownership? The absence of an independent judiciary? Tariffs and protectionism? All those things could be variously described as big government depending on the point that the user wants to make.

Is the 19th century U.S. economy with extensive tariffs and protectionism an example of big government and the 21st century with fewer tariffs, small government? China is controlled by the Communist Party and Sweden is not. Sweden has an extensive social safety net and China has almost no social safety net. Is Sweden big government and communist China small government? In communist China you pretty much have to save for your own pension. In Singapore, they have forced saving. Which one is small government and which one is big government? Moreover, which system do you think is generally the most corrupt?

In China there are a significant amount of firms operating that could be described as state-backed enterprises. However, the government allows them to pretty much operate unregulated with regards to working conditions and environmental standards. In Singapore, state-backed enterprises are a significant part of the economy and are heavily regulated. Again, are we saying that communist China is small government and Singapore big government? No one with any knowledge of the two systems would describe Singapore as more corrupt than China. Moreover, Singapore is often cited as an example of economic freedom and small government. For all its faults the U.S. is not as corrupt as Central America. Yet, public spending as a share of the economy is higher in the U.S. than in C.A.

So, the Nirvana fundamentalists would say, OK, there are no current examples of our ideal system Nirvana. However, with clear definitions of what is meant by small and big government we should be able to examine systems relative to each other. Without those clear definitions all we are hearing are slogans for ideological point scoring. As I previously said, corruption in its various guises is not so much about the size of government, as culture and institutions. I doubt while I am alive that Denmark will ever be more corrupt than Paraguay, even if the Danish government doubles in size. I think your implicit point is a good one that the bigger government gets the more they will be subjected to lobbying, as a consequence the potential for corruption increases.

@ Jim

Nonsense, Pagar.

I thought it was all going too well!!!!

37. So Much For Subtlety

35. Richard W

The problem is generic terms such as ‘ big government and ‘ small government ‘ have become empty meaningless slogans that can mean anything the user wants them to mean.

Well I am not sure that is true. When a government takes 40 to 50 pence in every pound, we are clearly in the realm of big government. I find it hard to believe that we would argue about that.

So what is meant by big government? Is it the share of the economy attributable to public spending? The marginal tax rates? The extent of the social safety net? The intrusiveness of regulation of private sector firms? The level of state ownership of firms competing with firms who are under private ownership? The absence of an independent judiciary? Tariffs and protectionism? All those things could be variously described as big government depending on the point that the user wants to make.

I disagree. While I would agree that it would be lunacy to say a government that took 50% of GDP was a small government, the absence of an independent judiciary is another matter. I don’t know anyone who would describe any government as big on that basis alone.

Is the 19th century U.S. economy with extensive tariffs and protectionism an example of big government and the 21st century with fewer tariffs, small government?

Obviously not. Nor do I think any sensible person would think so. Although when the US government exercised a powerful level of control over a small sector of the economy – tariffs – it naturally led to high levels of corruption.

China is controlled by the Communist Party and Sweden is not. Sweden has an extensive social safety net and China has almost no social safety net. Is Sweden big government and communist China small government?

The Chinese government is limited by available cash. It cannot control as it would like to or as it proclaims it should. So there may be an issue here about actual and theoretical levels of government. The Communist Party simply admits to nothing that it should not control. That makes it different from almost any other system of government in the world. That they cannot do it makes it complicated.

Moreover, Singapore is often cited as an example of economic freedom and small government. For all its faults the U.S. is not as corrupt as Central America. Yet, public spending as a share of the economy is higher in the U.S. than in C.A.

Anyone who cites Singapore as an example of small government is living in an interesting world. Using various measures of corruption, the US is not as corrupt as Central America. But given the enormous control of the US Federal system on the economy, most businesses have to engage in legalised corruption. It is not too bad at the moment – as we can see by how cheap the American election is. But do not underestimate the real level of corruption in the West.

Without those clear definitions all we are hearing are slogans for ideological point scoring.

But we have to avoid the other problem which is petty quibbling over insignificant differences as a way of avoiding actual substantive discussion.

As I previously said, corruption in its various guises is not so much about the size of government, as culture and institutions.

And I disagree. The well run Western states simply manage to retain the benefits of corruption for the ruling elite while Third World governments cannot stop their officials getting in on the act. Corruption in the West means money or favours offered to anyone except the ruling parties. You can see this in something as trivial as mobile phones. Why did mobiles take off in Europe and not in the US? America had competition and less regulation. European countries had monopolies and often political monopolies – in places like Austria you needed some link to one of the main parties to get a new phone. Everyone paid higher costs for it.

I doubt while I am alive that Denmark will ever be more corrupt than Paraguay, even if the Danish government doubles in size. I think your implicit point is a good one that the bigger government gets the more they will be subjected to lobbying, as a consequence the potential for corruption increases.

Lobbying is corruption more or less. Denmark could hardly double the size of its government. It would take over 90% of GDP. But how corrupt is it now? If you want to open a business in Denmark can you? You need to lobby someone. No one does anything for nothing. It is just that they don’t call that corruption.

38. Richard W

“…the absence of an independent judiciary is another matter. I don’t know anyone who would describe any government as big on that basis alone. ”

I use that as an example to show that commonly used terms like big government/small limited government can be meaningless without clear definitions. Especially if one is using the terms to say anything we want to say. Take a society with zero tax rates and no social safety net. We could say that they were a small limited government system. However, if the government has the power to order my arrest and detention for saying something that upset the government, they are hardly small limited government from my perspective in prison. Think some gulf states.

The Swedish system could be described as big government. However, they will not shoot or hang you for annoying the government, Other systems who are considered smaller government will do just that. If a public official was putting a noose around my neck, that is pretty big government to me.

” Anyone who cites Singapore as an example of small government is living in an interesting world. ”

Heritage place their system 2nd in the world in terms of economic freedom. Not that I am saying the Heritage Index are an authority on the subject. However, it tends to show what I mean in terms of subjectively rating highly the things that we personally think are important.
http://www.heritage.org/index/default

I am not saying that there are not systems that are big government and others which are smaller and more limited. Nor am I saying that corruption does not exist everywhere. The UK Left often clutch their pearls at the idea of British firms paying bribes overseas. They have no idea how business is routinely conducted in large parts of the world. Pretty much nothing happens for outsiders in Central America and lots of South America unless they pay bribes. It is corruption but the people taking part do not see it as corruption. The way we in this country tip people for a service is how such behaviour is often viewed. What I am saying is the size of government as typically defined is not a useful predictor of corruption.
http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

Most of the least corrupt systems are in Europe, which have on average bigger government sectors. That is why I say that culture, civil and political institutions are more important than labels like ‘ big government and small government.’

39. Just Visiting

SMFS 37

> But given the enormous control of the US Federal system on the economy, most businesses have to engage in legalised corruption.

Phew – any definition of what ‘legalised corruption’ could possible mean?

And any facts, from a reputable 3rd party source, that use the exact same definition, and that supports with meaningful statistics your ‘most businesses’ claim ?


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