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Sustainable Public Servitude

November 10, 2010

There is a sustainable maximum percentage of the population that society can afford to maintain as “public servants”, beyond this sustainable level lies indebtedness, and failure.  When the public demands services beyond the sustainable level, it is the responsibility of the leadership to prioritize and downsize to the sustainable level.  In this article we will endeavor to establish where the sustainable maximum level might lie, and offer suggestions for current leadership to help their jurisdiction to get there.

Consider a village with a population of 100 men, women and children on an island.  They get together and establish certain functions that are to be accomplished by “public servants”.  The tasks to be performed are the delivery of water, the removal of sewage, trash disposal, law enforcement, and fire fighting. For simplification in this example, let us assume that all “citizens” agree to behave according to the “Golden Rule”, and the “Ten Commandments” as a basis for the law.

The “public servants” that provide these services will not be required to perform any other tasks, and will be compensated for their services by collecting taxes from the rest of the citizenry.  Let’s further assume that there are two public servants in each of the required “departments”; five departments with two workers in each to get a total of ten “public servants”.

There is a stream on this island that provides an unlimited amount of fresh water.  Every day, (well, except Sunday, remember commandment #3?) the two water department workers haul a cart up the hill, fill buckets of water, and deliver them to each of the 100 citizens of the island.  This means that if they deliver 17 units of water each day, they can cut out early on Saturday, and all their “customers” will be happy.

Similarly, the two trash department workers must haul 17 units of trash away each day, to satisfy their customers.  Let’s assume that the two sewage workers use their time to dig a new latrine, and build a shelter over it just in time that the old one must be abandoned and buried.  They too work six days a week.

Law enforcement and fire fighting are a little different, in that they are “on call” so they work seven days, but only as required. Perhaps they offer free consultations during their down time.

The other 90 people occupy themselves by providing the essentials of life, like food, shelter, transportation, gasoline, electricity, big screen teevees and internet access. Everything that anyone needs and most of what anyone wants.  These are exchanged through mutually agreeable (free trade) terms.

The guy that grows wheat trades it for products and services, like having a home built or a new pair of shoes, trousers and a shirt. He also contributes 10/100 (10%) of his crop to pay the public servants. Likewise for the shoemaker, the tailor, the baker, the builder, and the rest of the private economy. Everything is operating just fine.

Now do you see any challenges in this rosy picture?  Some of the citizens will generate more trash than others.  This might require the addition of more trash department workers.  But how do we “pay” for the additional public servants, do we raise everyone’s taxes? If we add 1 trash worker, everyone must pay 11/100 (11%) of their output and this effectively reduces the output of products and services available by 1%.

It being a dry year, the farmers start using additional water to irrigate their crops. This places an additional demand on the water department. They need two more workers. Taxes must go up to cover the cost.  Now 13/100 of all products and services must go to the “public sector” to pay the public servants.  Only 87% of the “economy” is now engaged in making things, and providing for essentials.

Wouldn’t it be nice to have a public servant that can efficiently determine what level of taxation is appropriate? Maybe that would require three people, skilled in mathematics, so they could work out a “fair” system of allocating taxes, because the butcher has been “making a killing” and become very wealthy, and that is just not fair.  The butcher of course, disagrees, but as a whole the group decides to hire three math wizards, and the economy shrinks from 87 to 84% of productive people. Taxes go up.

Of course, to be able to maintain the same standard of living the 84 people whose taxes continue to rise, must work longer hours to keep the same amount of their own fruit, the fruit of their labors. They have not spent any time to analyze why they must work more, but they do notice that they seem to have to work harder and longer than the “public servants”.  They (not being dummies) start looking for an opportunity to get on the gravy train, as the “public servants” are now part of a unionized work force, and have established a retirement plan that is guaranteed by fiat. (It is not part of the 10 commandments, but it is fair.)

Do you see where this is going?  Hire another public servant, and force the public to work harder, longer, maybe take a second job, just extract more product and service from them, to pay for the cost of the public servants.  Where does this all end?

Fast forward this hypothetical island community several decades. How has this community changed?  Did all the people take jobs as public servants, and now everyone works for the government?  Did they privatize most of those public services and minimize the loss of their fruit?

Can we establish, for this simple example, where the “tipping point” might be?  If our cute little island community had evolved to having 50% public servants, could the private sector supply everyone?  That would mean giving up half of everything produced, just to pay for services.  What happens when the tipping point is exceeded?

As an alternative, is it possible for our community to keep the fruit of their labor, and arrange by private contract for the delivery of those services through a private source?  Could the water be delivered privately? Sewage removal? Trash? Could private police and fire fighting services be arranged?  If they were, might there be cost savings, which would allow for the expansion of new products and services?

I think so.  I think many sources of products, and services, is preferred over one, and that competition allows each consumer to fine tune his needs and wants based on his or her own best judgement.  One-size-fits-all government services need to be replaced, and that will require downsizing. Right-sizing will provide current public servants the opportunity to prosper, and “grow their business”.

And allow the taxpayers to smile.

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