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Diary of a B+ Grade Polymath ([personal profile] tcpip) wrote2003-05-28 08:30 am

The "Elite" of the Fourth World

The Ministerial retreat was a great success. Luminaries included the Nobel Peace Prize winning Minister (of course), former President of the United Nations Security Council Mr. Jose Luis Jesus and Australian filmmaker David Bradbury.

I think it's opportune to remind gentle readers of this journal that the Ministry staff are the "elite" of the country. The best educated (literate and invariably speaking 3+ languages), with the best jobs (indeed, they have a job) and the most highly paid - and this is a country where the prices of most goods and services - including food - is actually significantly more expensive than those of "advanced industrial nations".

Just to get this into perspective, here are some facts on their budget.

Total Ministerial budget: $1.1 million ($.85million on managing overseas embassies)
Total Staff: 74 full-time (including overseas embassies)
Total Wages Cost: $159K USD.
Mean Annual Wage: $2148 USD.
Mean Monthly Wages: $179 USD (or $265 AUD).

Now, if these people are the best paid (and most of them are supporting their extended family on these "wages"), I think it's worthwhile to ponder on how others in this country and in similar countries live. We all "hear" about what it is like, we "see" it on TV, but believe me, until you've directly experienced people scraping a meagre existence you have no real idea what it is like.

OK, enough said. More on the retreat.

Held at the Metinaro army training camp and conducted over two and a half days. Initial session by the Senior Minister was way off-topic and was orientated on trivial things such as staff not wearing ties to work and taking days off. A few people have had a quiet word in his ear that the "carrot" may be a better means to motivate staff than the "stick" since then. Achievements report from each Division indicated the remarkable progress the Ministry has undergone in the first year of nationhood. All were thoroughly charmed by my use of the local language in giving the report for IT developments.

Key presentation was an excellent draft white paper on foreign policy by the senior advisor to the Ministry, a Malaysian ambassador. The paper was especially good on matters concerning multilateral relations and agencies. A couple of comments I made to improve the consistency of the document on matters concerning self-determination for people in the region were extremely well-received as were my suggestions on the very difficult issue of foreign policy for the Korean peninsula.

I was particularly pleased that my comments were widely considered and approved whereas the obsequious stumbling remarks of the former Yugoslav ambassador - a career diplomat who betrayed his own nation, one of the laziest people I've ever met and prone to lie with alarming regularity - were utterly ignored.

(Yes, there is a side of me that genuinely doesn't like some people - but only with grounded reasons. Apologies to those who thought I was friendly to everyone.)

Later sessions dealt with role of the diplomatic corp and future directions and development of the Ministry, including the budgeting process. Extremely worthwhile sessions for the new staff.

The final sessions were on national security concerns. The senior army officer (I forget his name) provided an excellent summary of the nation's ability to prevent invasion (i.e, none at all, 1500 troops total) and thus the requirement of the Ministry of Foreign Affairs to be primarily responsible for national security. Following this a step-by-step analysis of the border disputes that arose after independence. Numerous disputes, covering hundreds of miles and requiring analysis of maps from former colonial powers.

The final event was a soccer match between the Ministry and the army. We were soundly thrashed (4-0) but that was to be expected. The ground was complete treachery as well, a microcosm of the national landscape. Mind you, we do have some excellent players and I suspect with the exception of the defense forces our Ministry would do well in any Ministry-Ministry matches.

All in all, an excellent weekend. Not much of a jungle (more like open woodland), and rather than a crocodile I managed to meet a nice deer with a very impressive set of antlers.

Re: An auction

[identity profile] tcpip.livejournal.com 2003-05-28 02:20 am (UTC)(link)

A number of very good points Eruidito, as always.

There are three general theories of how to pay public officials.

One (used by the US Supreme Court) is that they should be paid so much as to be beyond bribery. I have doubts about this because obviously there is no limit to the amount of financial capital that one can own and still want more.

Another (used by the Cubans) is that a parliamentarian should receive the pay of the average worker. Putting aside debates over the relative existence or non-existence of Cuban democracy, I quite like this one. At least parliamentarians would have some feel of how common people live.

A third, espoused in Plato in 'The Republic' is that public officials should receive no pay at all, have no property at all, live in communual barracks but also have all their needs catered for free ("the keys to the city", as it were). I'm not too sure about this one either.

A fourth is to pay them the equivalent rates of whatever they would receive in the free market. It may be my interpretation but this is putting the horse before the cart. "Laissez-faire" doesn't mean, as so many economists I have met believe "leave-alone", it means "make free" i.e., government must ensure the axioms of a free market are satisfied before it can exist.

Hmm.. I bet that last sentence surprises you coming from me!

With regard to the various "European" models for "environmental IMF", "labour rules IMF" etc I think it is very important to point out the critical difference of these models committees is that they are formed by with a sense of representive democracy, whereas the IMF operates more like a joint-stock company. The more money you put in, the greater your vote.

Just as a relevant aside, this li'll country has refused point-blank to take out any IMF loans. They are simply refusing to go into any level of debt. Sure, it means that they'll be poor until the oil money comes in and then they'll be only marginally better off, but it's better than being poor and in debt.

It's driving the IMF repreentatives here and abroad mad - and not just crazy either, I'm led to believe that some are furious!

Still, maybe the best protection against corruption is not to have the means of bribery in the first place. What is Iain Bank's comment from the Culture series? "Money is a sign of poverty"

Re: An auction

[identity profile] erudito.livejournal.com 2003-05-28 05:16 pm (UTC)(link)
Thank you!

And yes, it is rare to see someone who understands what 'laissez faire' actually refers to! Well done that man.

The Swiss only pay their parliamentarians meeting fees. Switzerland is a very well governed country in lots of ways. (That their parliamentarians are not insulated from the results of their laws may have something to do with this.)

Yes, I am aware of the difference between the IMF model and the others. The only problem is that difference works in favour of the IMF, not against it, as far as accountability goes.

The IMF does have something close to an effective 'owner' -- the US Treasury. So it has a body it is vaguely accountable to. On the 'one state one vote' model, accountability is completely screwed.

And the other beasts are no sort of representative democracy -- no one elects the representatives. Having a representative appointed by someone (Cabinet/Minister) elected/appointed by someone (governing party) elected by actual voters is 'representation' so far removed from popular accountability, it cannot be said to count as such.

Re: An auction

[identity profile] tcpip.livejournal.com 2003-05-28 08:19 pm (UTC)(link)
Although I have an ideological conviction which is possibly best described as "anarcho-communism" I do understand the functional necessity of state intervention and free markets. It's derived from Engels idea of the "withering away of the state" (not that many so-called communists ever put that in practise) or even Lenin's (from Saint-Simon) "from the administration of people to the administration of things" (nota bene: this doesn't mean you administrate people as things, it means that you leave people alone and just look after the physical resources of society).

It would have been good if Lenin had paid attention to his own literature on the subject, although I suspect he never really had much of chance given the circumstances and his own state of health post-1921.

Switzerland has always interested me because of it's genuine federal structure and citizen control. As much as I respect the advantages of scale that come from centralized organization of economic resources, politics is different to economics and the rule of thumb (a la Thomas Jefferson) is decentralize, decentralize, decentralize.

Re: An auction

[identity profile] erudito.livejournal.com 2003-05-28 09:16 pm (UTC)(link)
Oh yes. There are some things where national is better, but an awful lot where its not.

A couple of examples: in Geneva, primary school teachers are paid about $A100,000 pa. Why? Because the local Commune hires the teachers and sets the salary. Cuts out the middle persons and imposes accountability.

Another example: a Brookings Institute researcher rang up the Catholic Education Office in New York, which covers thousands and thousands of students. Having had awful problem finding out how many people worked in the central office of the state education office (something like 1,500 to 2,500 from memory), he wanted to compare and contrast. 'How many people work in your head office?' he asked. 'Gee, I don't know' said the voice at the other end. 'Can you guess?,' asked the researcher with sinking feeling (you can't FOI the Catholic Church). 'Hold on, I'll count them' was the response.

Re: An auction

[identity profile] erudito.livejournal.com 2003-05-28 05:24 pm (UTC)(link)
Still, maybe the best protection against corruption is not to have the means of bribery in the first place. What is Iain Bank's comment from the Culture series? "Money is a sign of poverty"

Yes, and barter societies are so rich and so free from corruption, strife, oppression etc.

The ultimate source of bribery & corruptioon are (1) wants and (2) self-interest. Abolish them abolishes society. It is a permanent issue, though how different countries cope with it varies greatly. A recent cross-country survey found that:

Only one Briton and two Americans said they had experienced corruption from a government official during the time period of the 2000 survey sweep. These figures are substantially smaller than the 13 Frenchmen, 11 Austrians, nine Belgians and eight Dutchmen who had experienced corruption, most often from customs officials.


Re: An auction

[identity profile] tcpip.livejournal.com 2003-05-28 08:07 pm (UTC)(link)
You're quite right of course, Iain Banks' comment was more about the "transcendence" of money - i.e, a society so wealthy and so productive that it was no longer worth even the administrative cost to calculate how much of item 'x' is worth.

Of course, that is a concern I have with advanced nations - that the administrative cost of a good ("reflexive labour") actually causes inefficiency and unnecessary expense. Not something I've investigated in detail, but in theory it's easy to see how it is quite possible.

Re: An auction

[identity profile] erudito.livejournal.com 2003-05-28 09:10 pm (UTC)(link)
I think I might agree with you on the 'reflexive labour', but I am not sure what you are saying.

(As for 'abolishing scarcity', that's always been case of 'dream on'. With all the matter and energy possible in any arrangement one likes, there would still be 'positional goods' [status, power, etc] to compete over.)

I think you might be talking about what economists call 'transaction costs'. Now, it is certainly true that developed economies are so because their transaction costs are much lower. It is also true that they are sufficiently wealthy, they can begin to get sloppy on transactions costs, with deleterious effects.

Friends of mine run a small educational business. On one hand, they find schools are awful payers (slow, that is) causing them serious cash-flow problems. On the other hand, they find that the state (both Federal & State) seems to really want to punish people for employing people -- in state-imposed transaction cost terms, it is much better to employ 30 people at 8 hours a week each than 6 people at 40 hours a week each or 12 people at 20 hours a week each.

Re: An auction

[identity profile] tcpip.livejournal.com 2003-05-29 04:21 am (UTC)(link)

I think this is very close to "transaction costs".

"Reflexive labour" is labour not directly engaged in the act of production itself, but labour which is orientated towards making direct productive labour more efficient (e.g., management, administration, and all other white collar labour).

It excludes the arts which are more about societal motivation that direct efficiency per se. They're in another entirely different field altogether.

The problem is that it can never replace production itself. The more we try to increase the efficiency of production the greater the costs incurred and at a certain point it becomes positively dangerous - and enhances in the unstable divergence between use-value and exchange-value (i.e., money becomes a commodity rather than a representation of commodity value).

Re: An auction

[identity profile] erudito.livejournal.com 2003-05-29 05:15 am (UTC)(link)
Right, not transaction costs per se but something that certainly feeds into it.

This sounds a bit like Coasian theory of the firm, which is based on transaction costs. The question is, what is the sensible boundary of the firm? Put it another way, how do you make the decision to produce inside (thereby coming within the ambit of 'reflexive labour') or outside (as in a market transaction). Transaction costs determine the answer: if they are higher for market transactions, produce internally. If they are higher internally, go for market transactions.

If the search for internal 'cost' efficiency becomes economically inefficient, then the balance becomes tipped back towards market transactions. One of the reasons why firm structures have become so unstable is that the IT revolution is changing transaction costs in sudden and unpredictable ways.

Money has always been a commodity in some sense -- it is a store of value. Which is why you have markets in money. (There are extra issues when what money is made of is also a commodity, such as gold.)

The issue is not effects on money, the issue is sudden shifts in transaction costs.

Re: An auction

[identity profile] erudito.livejournal.com 2003-05-28 05:41 pm (UTC)(link)
Just as a relevant aside, this li'll country has refused point-blank to take out any IMF loans. They are simply refusing to go into any level of debt. Sure, it means that they'll be poor until the oil money comes in and then they'll be only marginally better off, but it's better than being poor and in debt.

Best piece of news I have heard for quite a while. Well done them!

It is not so much that debt is inherently a bad thing -- there are times when it is sensible to have debt -- it is that most states, most of the time are bad agents for debt (since the debt is actually an obligation on their taxpayers, so the pollies only act as the intermediaries, which explains a lot of public policy perversity).