Monday 30 December 2013

Flood victims reap what they have sown.


Last Friday David Cameron visited the village of Yalding in Kent to sympathise with, or console, victims of the floods. He received a torrent of criticism.

        "We were literally abandoned. We had no rescuers, nothing for the whole day."

        "[All the council] decided to go on holiday."

        "The  Environment agency said it was up to the council and when I did get through to the council  they          said  if you need sandbags get your own."

        "The people [Cameron] is talking to , the Environment Agency and so on,  They weren't here. .               There  was no one here on Christmas Day and Boxing Day."

Well, it just so happens that in the 2010 General Election the Tories won every single seat in Kent.  The BBC reported a "wipe out" for the other parties.

It may well be, of course, that the burgesses of Yalding are atypical and the village itself  recorded a massive majority for the Greens, Liberal Democrats or other party that believes in the public sector.

But if they are typical, and voted for the party that routinely denigrates the public services, starves them of funds in order to cut taxes, farms profitable functions out to the private sector, cuts regulations so that builders are enabled to build on superficially attractive flood planes, and believes that the state must be reduced in size, they must not be surprised that, when they need it, the public sector isn't there to help them.

For those interested in the jargon of economics, flood defences are a good example of a "public good" in that they are non-rival and non-excludable .  "Non-rival" means that their use by one person does not prevent another's using the same good or service: non-excludable means that someone who has not contributed (ie paid for) the use of the good or service cannot be excluded from benefiting from it.  Street lighting is the standard example, in that one person benefiting from it does not exclude others, and anyone who has not contributed to providing it cannot be excluded from benefiting.

Hence a market is not possible for public goods, and they can be provided only by a public authority: normally local or national government or, in some cases (early lighthouses?) a charity.

PS (Added  30th January )  A friend has pointed out to me that on "Mainly Macro" Simon Wren-Lewis  provides the evidence that the Tories cut spending on flood defences from  2011.  He does not particularly attribute  the present floods to that, but chides the government for not taking advantage of low interest rates and surplus labour to increase the spending, thus helping to avoid  tribulations such as have been experienced in the past week. And which would, of course, have provided a much needed Keynesian stimulus to the economy.

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