Rubber Chicken, Small Government (18)

By George von Gernet
Published: 06.07.2012 13:23

Photo: Wikimedia Commons

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Once at a rubber chicken dinner, one of those events where you pay too much for a plate of terribly average food for an audience with a public official, I got the chance to ask a question of Andrus Ansip about county governments. I wondered why he wanted to ax them.

He answered with a litany of their sins, including duplication of local government functions and boondoggles where certain county officials had been caught wasting public money in exotic locations.

Recently Justice Minister Kristen Michal raised the topic again, or poured gasoline on the fire, depending on your perspective.

But whether cuts are at the county-level or not, there is certainly merit to the idea that government in Estonia must shrink. As Forbes.com writer Daniel Mitchell pointed out on the recent occasion of the Krugman-Ilves Tweet-off, "…government is still far too big in Estonia. The public sector consumes about 39 percent of economic output, almost double the burden of government spending in Hong Kong and Singapore."

I'm not expert enough to know the best place to cut, but I recently spent two hours sitting in the corridor at my city district (linnaosavalitsus) government office. What I witnessed was an endless coffee break, a parade of officials entering and leaving their offices, locking their doors just to walk to the bathroom, going down the hall to wash their hands, chat with their colleagues. Nowhere present was the hum of work, that feeling you get in a place where the wheels of industry are being churned. I couldn't help but imagine the pleasure of "transitioning" those people to the private sector.

Some worry that the absence of government in the countryside will contribute to the absence of life in the countryside. As a serious birder, I visit the countryside several nights a week where I sit in silence and watch and listen for, among others, Acrocephalus palustris, the Marsh Warbler. In addition to the birds, I have also observed village life over the past ten years. There's no question it's dying.

It's perhaps callous to observe that fewer people make more room for birds, but that's how I feel. If there's no living to be made in the countryside, then we must move to the city. There may be a solution, but it certainly isn't government. If we have to, let's all move to Tallinn for jobs. And let's scrap as much government as possible, including as much as possible on Toompea.

I understand the bigger issue isn't making the cutbacks - they've eventually got to happen - but rather the timing. Smaller government, and the lower taxes that go with it, can mean trouble for a broader economy, and shrinking a government in a weak economy is delicate surgery.

But Estonians are tougher than their western sissy counterparts. As they've told the foreign press countless times: We've lived through worse. So I think I'd take out the ax and just start chopping. Starting with any district government employee who locks his door to visit the bathroom more than once in any given hour.

George von Gernet is a freelance writer. He admits to having voted for Ronald Reagan at least twice.

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Comments (18)

  • Government Institutions

    06.07.2012 14:04

    What's up with all of the pseudonyms at English ERR? I get the feeling that the people running this site are getting paid -- by the government -- to entertain their friends and "play newspaper". Stop using pseudonyms when authoring articles. If too few people want to write for ERR, than the readership is probably likewise too small to justify its existence. So as "George von Gernet" advocates, why not start the budget-cutting with English ERR?

  • out to get you

    06.07.2012 20:03

    What's with the pseudonyms in the comments section, and also, interesting paranoia. I remember reading something similar about the death of print journalism from George F. Will, who is really the same person as Buckley. Only Hitchens is real. Is.

  • john

    07.07.2012 08:43

    Hmm...someone is upset over not getting that ERR internship.

  • ameeriklane

    07.07.2012 15:39

    The point is a good one and I've said this for a while now. Get rid of all local governments except for the 5 largest cities in the country. For all other places, everything will be handled at the county level. So if you live in a place like Abja (a village of 3,000 people... with its own local government), then now you need to Viljandi to get things taken care of. I think the politicians know this reform is necessary, but are hesitant to do so as it will drive up unemployment.

  • Canadian in Estonia

    07.07.2012 17:41

    @ Government Institutions I'm not sure if you were joking but if you were serious, I disagree with your comment. I'm still learning Estonian and I NEED English ERR! Long live English ERR!

  • avatar

    Karu87

    08.07.2012 12:31

    The way the country side is set up and funded is very inefficient and change needs to happen, but the goal should not be small government but efficient government. Small government does not equate with efficient. Its all about what and how the government does and what your goals are not how big the government is.

  • Martha

    09.07.2012 13:09

    Estonia has more than enough countryside for people and birds. I live on Saaremaa and I DON'T WANT to see people having to move into Kuressaare or Tallinn to work and live . We need to stop the murder of rural areas. We need job creation programs in rural areas; to stop the closure of rural schools; and we need to have effective and affordable public transportation in rural areas. Maybe those people taking so many bathroom breaks could just get busy solving local problems. But it isn't country governments that are trying to destroy our school system.

  • avatar

    knut_albers

    09.07.2012 14:05

    The task of the government is not to be eifficient. Let's say to increase tax revenue as efficient as possible, for instance. The task of the government is to create wealth and prosperity for its people. Big government can't provide this by default, as they are just consuming excessive taxes from other parts of the economy. Same with regualtion that, in most cases, just redestributes wealth, but does not create any. In most cases, the best thing government can do is to just step aside.

  • avatar

    knut_albers

    09.07.2012 15:39

    "Maybe those people taking so many bathroom breaks could just get busy solving local problems. But it isn't country governments that are trying to destroy our school system." What about declaration of independents and organize yourselves? Does a village of, say, 500 inhabitants really need all the governmental institutions provided today? Can't the folks in place, where everyone knows each other, make their own deicisions on remote? I think about sort of liquid democracy here.

  • avatar

    Karu87

    09.07.2012 16:11

    @knut "The task of the government is not to be eifficient. Let's say to increase tax revenue as efficient as possible, for instance" What does that mean? For me it's not about how big or small my government is, its about what it does with the money it takes away from us. Efficiency is not the primary goal of a government, but governments are notoriously wasteful, so its high on my list. What the primary goal of a state or government is, is a question for the elections. @Martha It's not the government who is killing the school system, its the low birth rate the past 20 years. We are way to poor to keep all the schools 1/2 full. Some of them just have to go.

  • avatar

    knut_albers

    09.07.2012 18:00

    "For me it's not about how big or small my government is, its about what it does with the money it takes away from us." Governments are notoriously wasteful, because they're just to big. The higher the level of public spending in a given country, the lower its growth rate tends to be. When people talk about "the public interest," what they really mean is that some members of the public want something, and they want it at the expense of others. That is why it is all about the size of government in the first place, as any expansion in the size of government (beyond what is minimally necessary to protect the individual lives, rights, and property of its citizens), necessarily diminishes those citizens’ rights to individual liberty and personal freedom. As Marcus Tullius Cicero (Ancient Roman Lawyer, Writer and Statesman) already stated during the period of the Roman Empire: "When a government becomes powerful it is destructive, extravagant and violent; it is an usurer which takes bread from innocent mouths and deprives honorable men of their substance, for votes with which to perpetuate itself." And he was proven right, as the Roman Empire failed due to their destructive, extravagant and violent "Roman Decadence" you may review through your history school book (if its taught in Estonian schools, I hope).

  • avatar

    Karu87

    09.07.2012 22:30

    Oki, i see your point. That said, how do you explain the counter examples like Scandinavia, a great majority is willing to take the high taxes for public goods and they are still one of the most competitive economies in Europe. And on the other side it's Singapore. People are willing to take less public goods and have a laissez faire society and they are still competitive. The government can be a overhang on the economy if its corrupt and wasteful and bends to cheap populism, but if you get the necessary investments done, it seems that it does not really matter how big the government is. Bough models work and bough have their up and downsides. It's just a question which up/downsides one is willing to live with. Thats how i tend to see it.

  • avatar

    knut_albers

    10.07.2012 10:39

    Hong Kong, Singapore, Ireland, and Australia were all rated as "more free," according to the Heritage Index of Economic Freedom. Furthermore, Scandinavian nations are not nearly as socialist as leftists claim they are. Scandinavian nations are more free in several decisive areas and have greater business freedom, monetary freedom, investment freedom, financial freedom, freedom from corruption, and labor freedom while having comparable property rights and trade freedom scores in compare to the so called "laissez faire societies." The problems the Scandinavians have are all related to failure of specific welfarist policies. In short, America has a medium-size welfare state and the Nordic nations have large welfare states. That explains why the U.S. economy generally still outperforms the Nordic Model (even with all the mess they have created recently). According to Daniel J. Mitchell, the "bigger burden of government hurts Nordic competitiveness, both because government spending consumes resources that could be more efficiently allocated by market forces and because the accompanying high tax rates discourage productive behavior. A smaller state sector is one reason why the United States is more prosperous" and according to a KPMG study (details may be reviewed in NYT's article "We're Rich, You're Not. End of Story." by Bruce Bawer), Scandinavians are the poorest people in Western Europe once income is adjusted for taxes and the cost of living (without the new EU members certainly). Of course it is true that Norwegians are richt for instance, compared with their grandparents (who lived before the discovery of North Sea oil), or still compared with Estonia that arised just twenty years ago from the ruins of half of a decade of Communism. But they are not that rich when comparing with states with a smaller government, simply because of the fact that economic growth is not brought by fiscally punishing productive citizens, nor by collective impoverishment and social welfare cuts, but by cutting taxe rates and bureaucracy. The less bureaucracy and the less of assets is locked away in the system of the treasury, the more is left to the citiziens they can use to work with that allow for a growth - something governments can not provide by design, as they just redistribute wealth and never create any.

  • avatar

    Karu87

    10.07.2012 14:34

    Whether Scandinavia is capitalist or not is not question. They clearly are. Are average Scandinavians on poorer then others with similar gdp/per capita countries, yes they are, but they are willing to live with this downside when they get the public goods. US does not have a smaller state participation in the economy then Scandinavia. Add the tax deductions to the mix and US government size to gdp is similar to them. Mentioning US in a small government size discussion is always bad. They have the most socialist investment policy around the world. DOD, NASA and DARPA have given us most of the modern technology. It is hard to overstate this when you know what DARPA has done. What matters are the polices and how the money gets spent i.e investments into the future, not the size of the government. It is possible that with a small state the private sector makes all the necessary investments but it works the other way around as well, so the discussion on the size is largely mute and irrelevant. That said, small states like Estonia should not waste money on major r&d projects like the US does. We don't have enough mass behind us to get anywhere. Estonia and Singapore can't have their own DARPA's. In that sense smaller countries should have smaller governments.

  • avatar

    knut_albers

    10.07.2012 18:51

    The difference between the state and the private sector is that the private sector is profit oriented, and therefore more efficient in compare to the state that does need to take care about efficiency, as they are dealing with someone's else money. The size of government simply matters because the more they occupy from the economy, the less is room for the people to gain wealth and prosperity through profits. Hence, it doesn't really matter if the government spends huge amounts into DOD, NASA, DARPA or whatever program if there is no gain of wealth that would allow them to make us of the benefits of such projects. Big government projects, no matter how well intent and how much innovation they potentially may create, tend to be more expensive in compare to the private sector and on top of that, it just burns money down without a financial profit to anyone. NASA is the best example, a government run program that did not lead to the situation for affordable space trips for oridnary people, but Virgin as a private company is on its way to provide that at a fraction of costs the U.S. government spent so far for the NASA program (and we weren't even on the moon for decades, and currently, NASA does not even have a functioning spaceship anymore). It is also not true, that government programs have given us "most of the modern technology." The car is a private invention, but the Finnish government, for instance, uses this invention for addtional import tax collection through market protective measurements (in which they largely failed already until the seventies and was not a rich country back then), which leads not only to higher prices on cars for consumers in Finland, but also that the people there are running down their engines until DUD and potentially leads to higher security risks on the streets. Another example would be the band-aid (one of the most important hygenical inventions), that was found by a private doctor in Hamburg, Germany, to find a solution to a problem, and later on was distributed around the world bythe private company Beiersdorf. But the main reason why government fails but individuals succeed is because free people accomplish wonderful things, all without charging taxpayers a penny.

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