Thursday, August 23, 2018

Bill Mitchell – Public infrastructure investment must privilege public well-being over profit

One of the principle ways in which so-called progressive political parties (particularly those in the social democratic tradition) seek to differentiate themselves from conservatives is to advocate large-scale public infrastructure investment as a way of advancing public good. You can see evidence of that in most nations. Nation-building initiatives tend to be popular and also are less sensitive to the usual attacks that are made on public spending when income support and other welfare-type programs are debated. Capital worked out long ago that public spending on infrastructure provided untold benefits by way of profits and influence. In the neoliberal era, the bias towards ‘competitive tendering’ and public-private partnerships has meant that private profit tends to dictate where and what public infrastructure is built. The problem is that large-scale projects tend to become objects of capture for the top-end-of-town. Research shows that these ‘megaprojects’ typically deliver massive cost overruns and significantly lower benefits than are first estimated when decisions are being made about what large projects to fund. Further, evidence suggests that this is due to corrupt and incompetent behaviour by private project managers (representing their companies) and empire-building public officials. They lie about the costs and benefits so as to distort the decision-making processes in their favour. Any progressive government thus must be mindful of these tendencies and behaviours. A progressive policy agenda needs to be more than just outlining a whole lot of nice sounding public infrastructure projects that the government will pursue. The whole machinery of public procurement that has emerged in this neoliberal era needs to be abandoned and replaced with decision-making processes and rules that privilege the advancement of public well-being over profit.
Bill Mitchell – billy blog
Public infrastructure investment must privilege public well-being over profit
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Matt Franko said...

“ in the case of road building projects, they were keen to use the state-of-the-art techniques that they had learned as part of their degree studies, which, of course, were highly capital intensive.
The task at hand though was to use the road building to hire as many people per km of road built to ensure material living standards were improved for as many as possible.
That required labour intensive techniques – people bashing rocks into the ground.“

Sung to the tune of Bobby Fuller ‘I fought the Law”

Breaking rocks in the hot sun
I fought the Art Degree person
and the Art Dgree person won
I fought the Art Degree person
and the Art Dgree person won

da da dah...

Matt Franko said...

Maybe the Civil Engineering departments are all part of the vast “neoliberal conspiracy!!!”

Andrew Anderson said...

Good point, Franko.

With a Citizen's Dividend and/or land reform people's time need not be wasted "bashing rocks into the ground" when bulldozers and modern equipment could be used instead.

The same problem exists with programs to maximize jobs instead of meaningful work accomplished. Why waste a person's time when whatever else she/he might do with adequate resources such as an income and land to work with and on are at least meaningful to her/him?