Anyone know what makes a free enterprise economy work?

[531colin]

Ah yes, Local Authority housing.......how is that allocated again? "To each according to need....." ..I read somewhere.
Over the road from me is a Local Authority 3 bedroom house.
In the house live a couple, they are younger than me (I'm 65).
Both work, no children have ever lived permanently in the house since this couple moved in ...they run a car each, both their cars are newer than mine.
When they first moved in 2 or 3 years back (time flies!) their son used to make the odd appearance at weekends, so then there were 3 cars outside.
When the Local Authority had a surplus of funds a year or so back, they re-roofed all the Authority-owned houses in the street...in each case the other half of the semi. is privately owned, so now they all have a join down their roofs.
A year or two ago I spent 3 months repairing my own roof...the scaffolding alone cost me £700...I was over 60 then.
I'm just mildly curious why I am subsidising this couple's housing?
My daughter's best mate (I'll call her Sue) married and moved to her husband's town. He left her with a baby, a mortgage she couldn't afford for a house in a town she doesn't want to live in, and a heap of other debt. Sue moved back to this town to live near her mum....can she get a Local Authority flat? NO CHANCE.
So I'm subsidising somebody's housing who has more disposable income than I do, and Sue who through no fault of her own could really use a bit of help, can't get proper housing.

Theres an old joke along the lines that if the Government really ran the show, then instead of a vaccine against Polio, we would by now have a really super-dooper Iron Lung.

[reohn2]

Well, it doesn't work does it?
It lurches from boom to bust because that is inherent in it's nature.
At it's heart is an ideology that believes human nature is fundamentally selfish and greedy.
It is based on the value of profit - therefore anything that makes a profit must be 'right' regardless of quality or ethics. Hence all the arms sales to dubious nations, huge economic disasters, pollution and let's not even get started on the system of rewards for bankers that is just flawed economically in anything but the very very short term.
The utilities went out to the 'free market' as did the railways and soon to be the schools and the health service. Are they any better left to compete in the market? Of course not, they are far worse.
When people realise that transport, health, education and basic utilities need to be publicly owned in order to safeguard greedy share owners then that will be a good thing.

Spot on!

[Sooper8]

The utilities went out to the 'free market' as did the railways and soon to be the schools and the health service. Are they any better left to compete in the market? Of course not, they are far worse.
When people realise that transport, health, education and basic utilities need to be publicly owned in order to safeguard greedy share owners then that will be a good thing.

Very +1.

And raise you public/council/LA housing.

and raise you banks too

[Sooper8]

Ah yes, Local Authority housing.......how is that allocated again? "To each according to need....." ..I read somewhere.
Over the road from me is a Local Authority 3 bedroom house.
In the house live a couple, they are younger than me (I'm 65).
Both work, no children have ever lived permanently in the house since this couple moved in ...they run a car each, both their cars are newer than mine.
When they first moved in 2 or 3 years back (time flies!) their son used to make the odd appearance at weekends, so then there were 3 cars outside.
When the Local Authority had a surplus of funds a year or so back, they re-roofed all the Authority-owned houses in the street...in each case the other half of the semi. is privately owned, so now they all have a join down their roofs.
A year or two ago I spent 3 months repairing my own roof...the scaffolding alone cost me £700...I was over 60 then.
I'm just mildly curious why I am subsidising this couple's housing?
My daughter's best mate (I'll call her Sue) married and moved to her husband's town. He left her with a baby, a mortgage she couldn't afford for a house in a town she doesn't want to live in, and a heap of other debt. Sue moved back to this town to live near her mum....can she get a Local Authority flat? NO CHANCE.
So I'm subsidising somebody's housing who has more disposable income than I do, and Sue who through no fault of her own could really use a bit of help, can't get proper housing.

Theres an old joke along the lines that if the Government really ran the show, then instead of a vaccine against Polio, we would by now have a really super-dooper Iron Lung.

When Northern Rock went under, the whole nation bailed out them out (ie subsidised them) to the tune of £millions if not billions, for the sake of the banking industry and ultimately the countries economy.
So, somebody across the road ain't going to bother me unduly.
Not that many years ago ,J K Rowling, single mum on benefits, struggling to pay the bills- 'subsidised' by the state to survive, now more than made up for that with her tax and income generation for a multitude of other industries.
Osbourne wants people to turn on themselves as opposed to looking at the minority who have the vast majority of the wealth in this country.

[mrjemm]

Ah yes, Local Authority housing.......how is that allocated again? "To each according to need....." ..I read somewhere.
Over the road from me is a Local Authority 3 bedroom house.
In the house live a couple, they are younger than me (I'm 65).
Both work, no children have ever lived permanently in the house since this couple moved in ...they run a car each, both their cars are newer than mine.
When they first moved in 2 or 3 years back (time flies!) their son used to make the odd appearance at weekends, so then there were 3 cars outside.
When the Local Authority had a surplus of funds a year or so back, they re-roofed all the Authority-owned houses in the street...in each case the other half of the semi. is privately owned, so now they all have a join down their roofs.
A year or two ago I spent 3 months repairing my own roof...the scaffolding alone cost me £700...I was over 60 then.
I'm just mildly curious why I am subsidising this couple's housing?
My daughter's best mate (I'll call her Sue) married and moved to her husband's town. He left her with a baby, a mortgage she couldn't afford for a house in a town she doesn't want to live in, and a heap of other debt. Sue moved back to this town to live near her mum....can she get a Local Authority flat? NO CHANCE.
So I'm subsidising somebody's housing who has more disposable income than I do, and Sue who through no fault of her own could really use a bit of help, can't get proper housing.

Theres an old joke along the lines that if the Government really ran the show, then instead of a vaccine against Polio, we would by now have a really super-dooper Iron Lung.

I won't try to answer that. What is the answer? It certainly wasn't fast buck in the 80s (i.e. the TT (That' Tory, one step right of the SS, ahem) Govt playing dirty games of many forms- hey, let's show that the 'working class' are as capitilist as us), and the knock-on effects that has resulted in. Private rental? B&Bs? More building of flimsy 'low-cost' housing and requiring more and more charities to do the work.

[Sooper8]

Re: local authority flats- people can't get one because successive gov'ts want private companies or private individual to rent out houses/flats.
Do these landlords want to invest and build flats? No, they are not in it as a public service, they want to get rich. That is what the free market encourages.
If the Gov't of any political persuasion wanted to, it could instigate a national building programme of affordable rented housing.(boosting the economy in doing so.) Only trouble with that is , Thatcher had her back room hatchet team of advisors realise that very few people on a council housing estate vote Tory.
Solution- sell off council housing and never build them again. Simple but effective.

And one last point. The economy deficit after WW2 was 8 times larger than these last few years of 'austerity'. What did the Gov't do to get out of that hole? Build the NHS and plenty of decent affordable housing.
No wonder that everyone tells you that the 50's were great times. The 1950's had the narrowest gap between the least well off and the rich. Less crime because of that amongst other factors.

[mrjemm]

Re: local authority flats- people can't get one because successive gov'ts want private companies or private individual to rent out houses/flats.
Do these landlords want to invest and build flats? No, they are not in it as a public service, they want to get rich. That is what the free market encourages.
If the Gov't of any political persuasion wanted to, it could instigate a national building programme of affordable rented housing.(boosting the economy in doing so.) [*1] Only trouble with that is , Thatcher had her back room hatchet team of advisors realise that very few people on a council housing estate vote Tory. Solution- sell off council housing[*2] and never build them again. Simple but effective.

And one last point. The economy deficit after WW2 was 8 times larger than these last few years of 'austerity'. What did the Gov't do to get out of that hole? Build the NHS and plenty of decent affordable housing.
No wonder that everyone tells you that the 50's were great times. The 1950's had the narrowest gap between the least well off and the rich. Less crime because of that amongst other factors.

1) Not such a great idea, IMO. For a start, should never have been necessary, but thanks to above, too late. 2ndly, what would be built, with what, and where? Flimsy tat, using money otherwise required for the same sector, in green, rather than brown sites most likely.

2) Exactly. Amongst other reasoning of equally low moral content.

[Mike Sales]

......... what makes a free enterprise economy work is government subsidy.

Where does the money come from for the Government subsidy?
Doesn't it come from taxation raised from the aforementioned free enterprise economy?
(or maybe they just print it?)

In the real world things are not so simple. Free enterprise cannot exist without government. Business works in the legal, social, physical and financial framework set up by the state.
In the last few years we have seen the financial world rescued from one of its periodic busts by government money, some of it printed. Lehman Brothers precipitated a crisis which enveloped many banks whose "irrational euphoria" was plunging the West into a huge depression. We are all paying the price of bailing out these banks, all of us except Fred the Shred and other top bankers whose incompetence got us into this mess. They seem to get out with their huge pensions intact. The advantage of limited liability I suppose.
The ideologists of free enterprise and the "hidden hand of the market" now have the cheek to tell us the problem which led to this recession is a failure of regulation.
I read that General Motors was rescued with government money.
There is a place for private enterprise, but it needs government regulation. All our public services, privatised for private profit, have their Of... A4E and G4S show the capacity of the private enterprise to mess up, and charge the bill to the state.
Starbucks no doubt expected the police to protect their cafes from the rioters, in spite of their clever tax dodging. The cars made by private enterprise require publc roads to run on.
Our own car firms have needed government bail out, but the businessmen who took over Rover asset stripped the company and made vast personal profits.

Western governments insist the developing countries open their economies to the free market. Whilst the West was developing its industries they took good care to protect them behind tariff walls. This hypocrisy is reponsible for much poverty. China did not reach its present position by allowing free trade, and its Government made sure to direct investment and free enterprise.
American and EU agriculture enjoy high subsidies and tariff protection. This does not help the agriculture of developing countries.

A "libertarian" friend of mine told me the only moral purpose of taxation was to run the police and the army. I put "libertarian" in inverted commas because it seems to me a strange name for a belief which only allows the state instruments of coercion.
The technological might of the USA is funded by government money, and private enterprise makes profits on its back. The internet itself was developed by the US Government DARPA, a blue skies defence research body and by Tim Berners Lee, working at CERN, another government funded body. The rocketry which puts up the satellites began with the V weapons of the Nazis, and continued by NASA, this side of the Iron Curtain. GPS is run by the US Government, and continues to generate profit for private enterprise. The magnetron was invented in the development of RADAR by our own government, and used in microwave ovens.
The idea that only private enterprise is good, and government bad is a superstition of the Tea Party types. I always want to tell them that if they hate government so much they should boogie off to Somalia, there is no government there.

Theres an old joke along the lines that if the Government really ran the show, then instead of a vaccine against Polio, we would by now have a really super-dooper Iron Lung.

I think I have shown what a poor joke this is.

I see others have demolished your antipathy to council housing. Did you know that Thatcher's ideological spite refused to allow councils to spend the receipts from council house sales on building new council houses?

I am now reading Ben Goldacre's "Bad Science". Drug companies have developed some useful drugs (though penicillin, that marvel of medicine is another government development) but you should read what Goldacre reveals about the misdeeds of private enterprise drug companies in seeking profit. The drug firms clearly need more goverment regulation.
I don't want to hold up Cuba as a paragon, but there is something very wrong when it has a better infant death rate than its giant neighbour to the north.

[531colin]

Ah yes, Local Authority housing.......how is that allocated again? "To each according to need....."

I won't try to answer that. What is the answer? It certainly wasn't fast buck in the 80s (i.e. the TT (That' Tory, one step right of the SS, ahem) Govt playing dirty games of many forms- hey, let's show that the 'working class' are as capitilist as us), and the knock-on effects that has resulted in. Private rental? B&Bs? More building of flimsy 'low-cost' housing and requiring more and more charities to do the work.

Local Authority housing, or any other subsidised housing, should be allocated according to need, shouldn't it?
It should be there as a safety net for people in need, but only for the duration of their time of need....I think the couple with no dependents who are both working should be gently but firmly eased out of subsidised housing....but that of course would be political suicide.
What gets in the way is political parties "buying" votes.
The socialists buy the votes of the feckless or idle by promising to keep them housed and fed until the day they die, wether they choose to work or not.
The tories buy the votes of the well-off with tax relief for private schools, and all those other games.
Thatcher flogging off the council houses at half price to existing tenants was in my opinion breathtakingly stupid...she failed to convert them into good Tories, and decimated the stock of social housing just to save a few bob.....not that the housing was available, it was full of long term tenents with guaranteed tenure....thats the greatest absurdity, in my view, along with the ability to "inherit" the tenancy of your parents council house.

[Mike Sales]

It should be there as a safety net for people in need, but only for the duration of their time of need.

Why? The market has not filled the gap, has it?

[531colin]

.............When Northern Rock went under, the whole nation bailed out them out (ie subsidised them) to the tune of £millions if not billions, for the sake of the banking industry and ultimately the countries economy................
Not that many years ago ,J K Rowling, single mum on benefits, struggling to pay the bills- 'subsidised' by the state to survive, now more than made up for that with her tax and income generation for a multitude of other industries.
Osbourne wants people to turn on themselves as opposed to looking at the minority who have the vast majority of the wealth in this country.

Actually many ordinary people had savings in Northern Rock....would you have preferred them to lose their money?
JK Rowling would be to me an illustration of how a safety net benefit system should work...there to support in time of need, not as an alternative to working.
I have no idea what Osbourne wants and, if I'm honest, very little interest....no idea what that sentence means, either.
I would like people to rely on themselves and make a life for themselves....its really quite comfortable these days, things which most people take for granted now used to be a luxury...a car, central heating, foreign holidays, hand-built bicycles. Yes, you can find somebody who has more money than they can spend....get over it!

[mrjemm]

Ah yes, Local Authority housing.......how is that allocated again? "To each according to need....."

I won't try to answer that. What is the answer? It certainly wasn't fast buck in the 80s (i.e. the TT (That' Tory, one step right of the SS, ahem) Govt playing dirty games of many forms- hey, let's show that the 'working class' are as capitilist as us), and the knock-on effects that has resulted in. Private rental? B&Bs? More building of flimsy 'low-cost' housing and requiring more and more charities to do the work.

Local Authority housing, or any other subsidised housing, should be allocated according to need, shouldn't it?
It should be there as a safety net for people in need, but only for the duration of their time of need....I think the couple with no dependents who are both working should be gently but firmly eased out of subsidised housing....but that of course would be political suicide.
What gets in the way is political parties "buying" votes.
The socialists buy the votes of the feckless or idle by promising to keep them housed and fed until the day they die, wether they choose to work or not.
The tories buy the votes of the well-off with tax relief for private schools, and all those other games.
Thatcher flogging off the council houses at half price to existing tenants was in my opinion breathtakingly stupid...she failed to convert them into good Tories, and decimated the stock of social housing just to save a few bob.....not that the housing was available, it was full of long term tenents with guaranteed tenure....thats the greatest absurdity, in my view, along with the ability to "inherit" the tenancy of your parents council house.

Agreed.

But bad management of resources and stupid policy decisions should not be an argument against public (LA etc.) housing.

If you swallow a suppository, you can't say the medicine's no good when it doesn't work.

[Mike Sales]

531colin wrote

Actually many ordinary people had savings in Northern Rock....would you have preferred them to lose their money?

Are you trying to make an argument in favour of the Government subsidising the failure of free enterprise?

[Vorpal]

Iceland let the banks and their big investors go bust. They protected the interests of the people who had deposited money in those banks. They pushed the losses onto the bondholders instead of the taxpayers. They expanded the social 'safety net'. Then they restructured the banks.

And their economic recovery has been strong.

[Mike Sales]

Theres an old joke along the lines that if the Government really ran the show, then instead of a vaccine against Polio, we would by now have a really super-dooper Iron Lung.

I have just looked up Salk's discovery of the polio vaccine. He worked in a not for profit and tax exempt foundation. Not really a triumph for market economics, and partly aided by the government.