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November 24, 2005


Andrew Duffin

Keynes may also not have predicted that by 2005 we would have 7 million people working for the state.

Such an overhead would not be possible without the huge increase in productivity of the wealth-creating sector.

Seems we can't do that AND provided decent pensions. Yet.


"So what went wrong? Why are we now talking about working longer?"

Time is scarce - the economic problem will always exist

Jim Bliss

There is no pensions crisis.

The time-bomb of which everyone speaks is predicated upon life-expectancy increasing. Or at the very least, remaining roughly where it is now.

But the recent increases in human life-expectancy can be attributed to several factors, some of which are no longer in effect. And once again the media is simply failing to join up the dots.

Mark my words, this week the news may be filled with scare stories about the future pensions crisis... but next week it'll be the obesity epidemic amongst 5-year-olds.

We started living longer because of a combination of good nutrition and advances in medical science. But the medical advances alone are not enough. Starting with my generation (the first raised largely on processed food and other junk) and accelerating into the next, we're going to see far more overweight people dying from heart-attacks in their mid-fifties. More than enough (I predict) to offset any increase in individual life-expectancy that may be available to diet-conscious folks with access to decent health-care.

It's also my belief that modern medicine will be very badly hit by escalating oil prices... but that's another argument altogether.

Just remember next time there's a news story about how 40% of 10-year-olds are clinically obese... a huge proportion of those kids won't make it to retirement age.

John East

Keynes was touchingly naive. He was correct in thinking that increasing productivity could have resulted in perhaps a 20 hour week for all, but what he and other commentators failed to anticipate was an alternative scenario. The productive sector could do very nicely thank you with a fraction of the earlier work force. The resulting unemployment merely exacerbated the situation to the extent that if one wasn't prepared to work 40, or 50 hours per week there was always someone else willing to step forward.

I believe that mushrooming government employment is not in itself an additional burden on pensions. This is because the growth of the state sector is a clumsy attempt by politicians to soak up the ongoing unemployment from the productive sector, and whether one is a government bureaucrat, or the unemployed alternative, equally contributes nothing to future pensions.

Still, there is no going back. Globalisation and exporting even more jobs can only result in a growing pension crisis. Maybe people should stop crying to politicians that more should be extorted from the remaining productive workers, and focus their minds on providing for their own futures. Self reliance, now there's an old concept not heard much these days.

I like the take on this from Jim Bliss above, but with the exception of the underclass who seem to do what they want, personal freedom for most of us is rapidly losing out to compulsory health and safety. Increasing numbers of people are voting for 85+ years of being told how to run their lives, rather than for a shorter span of more hedonistic freedom.


Well, total public sector employment according to the ONS is around 5.7 million, of which around 2 million are in the health service and other social care services, around half a million in the police and armed forces, and around 1.5 million in education. Leaving only a fraction as pure "bureaucrats".

Call all those activites unproductive if you like, but its a funny way of looking at the world. Would education and health suddenly be "productive" activities if they were privatised and the became part of private sector employment, even though the fundamental nature of the activity changed not a bit?

Dinosaur economics.

John East

You rather miss the point. I wasn't arguing for privatisation of anything, or for curing the inefficiencies of the bloated public sector by sacking everybody who works there. However, I like your phrase, "Leaving only a fraction as pure "bureaucrats". 1/32 and 31/32 are fractions. I'll vote for the former.

As you've raised privatisation, it's worth pointing out that the market for gay and lesbian outreach workers and ethnic diversity officers (two examples of many) might be somewhat curtailed if they worked in a system where customers paid for the services directly rather than indirectly via Gordon Brown.

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