My initial response was that “what the state does” is not a “given” in this way. Legal aid still exists but it is restricted in scope: has “what the state does” changed? Depends why you ask. Or let us take it as given that “the state does health”: does that necessarily mean that the state pays for fertility treatment for otherwise healthy couples (e.g. gay people?), or vaccinations for foreign travel, or paracetamol for rich people’s headaches? Wren-Lewis accepts that point in principle but considers it marginal.
But I think there is a more fundamental point. Even assuming that the scope of “what the state does” remains wholly unchanged, there can be good reason to shrink the state to a material extent. Let me give 5 examples.
1. Health. There is (plausibly) a popular desire to see resources sent to ‘frontline’ staff such as doctors and nurses rather than to administrative staff. But it is also plausible that resources would be better allocated to administrative staff so as (a) to reduce the paperwork burden on frontline staff and (b) to enable them to deploy frontline staff more efficiently. Without changing the scope of the medical services provided by the state, it is therefore plausible to imagine that there could be reason for a cut in, say, very expensive senior frontline staff (with some compensating increases in lower-paid administrative staff).
2. Fire services. A change in the products used or stored in people’s houses, building materials, smoke alarms etc makes it plausible to think that the main jobs for fire services nowadays are to respond to traffic accidents rather than town fires. That plausibly means that expensive inner city fire station sites can be cut and indeed the fire service manpower reduced overall, without there being any reduction in the overall fire service ‘offering’ made by the state (in terms of time to respond to fires, number of properly equipped fire service personnel attending a fire).
3. Education. Smaller class sizes are politically salient and, anecdotally, a reason why many parents choose private education. But, as I understand the situation (Sam Freedman might know better), the extra resources in private education, including smaller class sizes, do not achieve any better outcomes per pupil than state education, i.e. private schools get better results purely because they select pupils who are better at passing exams. Again, I don’t know whether this is in fact true but it is plausibly true. (It certainly seems true of the extra resources private schools spend on, e.g., world class sports facilities or professional standard theatres, which are expensive but wasted on most children and unlikely to help with academic performance, but which appear to be popular with parents.) The state could have reason to reduce education spending, allowing class sizes to rise, without reducing its ‘output’ in terms of GCSEs achieved per pupil who has such and such SATs results etc.
4. Defence. It is plausible that there is a public preference for an independent nuclear deterrent and it is also plausible that having nuclear weapons in this way reduces the overall safety of the residents of the UK (if only by reason of the risk of accidents).
5. IT. The UK state doesn’t have a great reputation for carrying out big IT implementation projects. But it’s not impossible to imagine that effective use of IT could allow cuts in the state without affecting “what the state does”. To take a mundane example, local libraries do not need to employ as many librarians when users can find books using an online catalogue and check them out and return them electronically. The same books can be made available to the same (or even more) borrowers on the same terms at lower cost.
In each case I have, I hope, set out a plausible example of where there is a public preference for taxpayers’ money to be spent in a particular additional way (on high street fire stations or nuclear weapons, say) but where there is reason to think that the overall outcomes also desired by the public (protection from fires, defence of the realm) are not served by such spending. To put it another way, without changing what we mean by “health” or “defence”, there can be reason to shrink the state, in particular to shrink that manner of spending money which is favoured by public opinion but which is a waste of money.
3. Education. Smaller class sizes are politically salient and, anecdotally, a reason why many parents choose private education. But, as I understand the situation (Sam Freedman might know better), the extra resources in private education, including smaller class sizes, do not achieve any better outcomes per pupil than state education, i.e. private schools get better results purely because they select pupils who are better at passing exams. Again, I don’t know whether this is in fact true but it is plausibly true. (It certainly seems true of the extra resources private schools spend on, e.g., world class sports facilities or professional standard theatres, which are expensive but wasted on most children and unlikely to help with academic performance, but which appear to be popular with parents.) The state could have reason to reduce education spending, allowing class sizes to rise, without reducing its ‘output’ in terms of GCSEs achieved per pupil who has such and such SATs results etc.
4. Defence. It is plausible that there is a public preference for an independent nuclear deterrent and it is also plausible that having nuclear weapons in this way reduces the overall safety of the residents of the UK (if only by reason of the risk of accidents).
5. IT. The UK state doesn’t have a great reputation for carrying out big IT implementation projects. But it’s not impossible to imagine that effective use of IT could allow cuts in the state without affecting “what the state does”. To take a mundane example, local libraries do not need to employ as many librarians when users can find books using an online catalogue and check them out and return them electronically. The same books can be made available to the same (or even more) borrowers on the same terms at lower cost.
In each case I have, I hope, set out a plausible example of where there is a public preference for taxpayers’ money to be spent in a particular additional way (on high street fire stations or nuclear weapons, say) but where there is reason to think that the overall outcomes also desired by the public (protection from fires, defence of the realm) are not served by such spending. To put it another way, without changing what we mean by “health” or “defence”, there can be reason to shrink the state, in particular to shrink that manner of spending money which is favoured by public opinion but which is a waste of money.
I think it’s worth making this point at length for this reason. There is an idea out there that “cuts” mean either “the state not doing something it did before” or “the state doing something in a more cheap, shoddy or rubbishy way than it did before”. Sometimes that’s true. And it’s not necessarily a bad thing when it is true: the state can be right to get out of some businesses; some services could be provided by the state in an excessively lavish manner.
But, for the reasons I have set out above, it’s not always true that a “cut” means a reduction in services or service levels. And because it’s not always true that means that we cannot use a mental shortcut to attack “cuts” for being reductions in services: each “cut” must be judged on its own merits. Wren-Lewis refers to the private sector and he is right to do so: agriculture, for example, has suffered massive “cuts” over the centuries and now employs very few people – but much more and better food is produced; cars are higher quality than ever but made by fewer people; the private sector does not provide chimney sweeps in the way it used to – that “service” has been effectively “cut” – but it still provides heat and light in people’s living rooms. It is at least plausible to think that similar “cuts” can be made in the public sector without affecting “what the state does”.
But, for the reasons I have set out above, it’s not always true that a “cut” means a reduction in services or service levels. And because it’s not always true that means that we cannot use a mental shortcut to attack “cuts” for being reductions in services: each “cut” must be judged on its own merits. Wren-Lewis refers to the private sector and he is right to do so: agriculture, for example, has suffered massive “cuts” over the centuries and now employs very few people – but much more and better food is produced; cars are higher quality than ever but made by fewer people; the private sector does not provide chimney sweeps in the way it used to – that “service” has been effectively “cut” – but it still provides heat and light in people’s living rooms. It is at least plausible to think that similar “cuts” can be made in the public sector without affecting “what the state does”.
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