Sunday, June 2, 2013


One of the things that is easy to forget is just how interconnected everything is in the modern economy.  Consider this discussion of public employee conferences versus private industry conferences:

When much more lavish conferences are held by private sector US corporations or professional associations (including academic associations, if your university doesn’t pay for it), they cost the US government lots of money too. Within various rules and strictures, they’re considered legitimate tax deductible expenses which people and (as best as I understand it) businesses can declare against earnings. You can make the case, obviously, that these conferences and events are mostly useless boondoggles. You can equally well make the case, if you want to, that they’re useful opportunities for social networking, building up esprit de corps and all of that good stuff. What you can’t make the case for, unless there’s some very subtle argument which escapes me, is a distinction under which conferences (for government employees) that cost the US government lots of money are obvious cases of abuse and waste, while more lavish conferences (for non-government employees) that cost the US government lots of money, are perfectly legitimate business expenses that we shouldn’t be bothering our pretty little heads with.
While this argument does gloss over some important distinctions (in theory, corporations can do all sorts of sub-optimal things if their owners agree), it does point out that the modern economy is deeply interconnected and all sorts of demarcation points miss just how interconnected it is.  It is true that we see a difference between reducing a bill and giving money.  But if charitable deductions are tax deductible then we have made the decision to subsidize things that people who give money value.  This may be a completely sane and wise decision -- I am not going to take a side on that point -- but it is a reduction of government revenue under the current social structure that we have. 

This sort of thing is common in all sorts of ways -- governments are also customers and act as important service providers in a number of contexts (I think it is reasonably non-controversial that purely private armies has tended to result in sub-optimal outcomes whenever it has been tried). 

As for the conference piece -- it is a big country and personal relationships improve the operation of any organization.  It seems to me that we pay a lot for government and it makes sense to have it run smoothly.

No comments:

Post a Comment