Monday 23 October 2017

Stephen Kinsella: It's business as usual as the State keeps doling out sweeties

Euro Currency: Wad of 20 euro banknotes, close-up
Euro Currency: Wad of 20 euro banknotes, close-up
Stephen Kinsella

Stephen Kinsella

Who wants sweeties? Imagine the State as a sweetie distribution mechanism. Within the system, if you do the right things and be nice to the right people, sweeties will be yours. Better still, the number of sweeties you will get will be higher, on average, than the sweeties in other sectors. But there's a problem with sweeties: after a while, they rot your teeth.

Economists have a term for the extractive, sweeties-grabbing activity we see going on here. It is called "rent seeking", where the return to the individual is far in excess of what they give up to get the rent, or get by going elsewhere. Rent seeking uses the State and regulations to compete instead of the usual competitive mechanisms in the private sector.

So, would the former Chief Executive of the Central Remedial Clinic receive an additional salary of almost €117,000, as well as an allowance of €19,000, on top of his HSE-funded pay of €106,000, somewhere else? Highly doubtful, but we can see by checking his labour market performance after his tenure as chief executive.

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