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Welfare spending is the most important infrastructure investment we can make
At the Autumn Statement we were told that the Chancellor is increasing spending on infrastructure whilst cutting spending on welfare. Such statements are confusing “infrastructure” for “lumps of rock”.
There are two reasons that you would increase spending on infrastructure. The first is that you believe that the spending itself will be good for the economy: the money will create jobs, the newly employed people will buy new things, shops will employ more people, etc.
The second reason might be that you believe that the underlying framework of your system could be more efficient. The classic example would be that late trains cost people time working, so you invest in better train lines.
However, in practice, I see very little notable difference between what Osborne sees as ‘welfare’ and what he sees as ‘infrastructure’ – other than who it is for. What the Chancellor calls infrastructure, I could call corporate welfare.
Let’s take a specific example: the Treasury is going to pay to upgrade our broadband network. They are doing it so that businesses can have access to faster internet. If the state didn’t pay for this, then these companies, if they really need it, would eventually arrange it themselves. So this is just a whacking great subsidy to them.
And you say “welfare”, I say “social infrastructure”.
More: http://liberalconspiracy.org/2012/12/07/…spiracy%29
2012-12-08 15:43:05
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