6 ms·

I read an article once, that claimed when a Scandinavian country joined the EU, they expected significant job distortion as a result of free trade. So they lite

by ep103 7y ago

I read an article once, that claimed when a Scandinavian country joined the EU, they expected significant job distortion as a result of free trade. So they literally moved government agencies from their current locations, to locations that they expected would be hardest hit. The end result was the shifting of thousands of government jobs from one location to another. Highly trained people in the old government centers were still in really competitive markets with significant government opportunities. But those communities that were about to be devastated by free trade (usually smaller backwater communities) suddenly saw federal agencies appear that required thousands of jobs overnight, and whom had a mandate to hire those affected by free trade, thereby saving the economy for those workers in the area. My point is that creative solutions are possible, if we dispense with the notion that the only solution possible is the free market.

aeternum 7y ago
This seems like a great idea. It ensures that even if government efficiency is low, it is providing positive value. I'm surprised this concept isn't more widespread.
- wahern 7y ago
  Until the 1990s (at the latest) the U.S. had a policy of widely distributing government agency offices throughout the country. This 1) kept power (agencies, lobbyists, workers) from centralizing in D.C., and 2) spread government expenditures. There were other reasons for doing this, especially before the telecommunication era. But for the middle part of the 20th century this pattern held strong even as transportation and telecommunication exploded. But there's always the risk of a pathological co-dependency on government employment. You can see this in many developing countries. So for partly legitimate reasons, the Civil Service has long been the boogeyman of Republican politics. Specifically, that civil servants are reliable "big government", Democratic voters. Better to 1) pack their voting power and 2) prefer private out-sourcing. This is one major reason (if not the major reason) why government agency activity and policy have migrated to D.C., and why the headquarters of so many corporations have moved to the D.C. metro area.
- repolfx 7y ago
  Usually it just means gutting the department that moves. The UK has been trying this with the BBC, forcibly relocating the organisation to the north of the country. It encodes a basic assumption that in government, skilled and experienced people are so unimportant you can just lose all of them (as very few people want to relocate to a place chosen specifically because it's fallen behind). Says a lot, really.
  - bigfudge 7y ago
    The bbc move seems successful though.not just Manchester either... also to Wales
  - aeternum 7y ago
    Many governmental organizations do not need to have the most skilled or experienced. Different people bring different ideas, in government especially diversity is important. Moving the department seems like a great way to do this. Those that choose not to move can leverage their experience in private industry.
bryanlarsen 7y ago
Such a strategy failed utterly in Canada. They moved a government department from Ottawa to Miramichi, New Brunswick for similar reasons. All the skilled bureaucrats used their reputations to get transfers to a different department so they wouldn't have to uproot their family, and the department was rebuilt around a core of incompetents. I'm sure the locals they hired weren't so incompetent, but rot starts from the top. That move caused the failure of the long-gun registry and a waste of $2B. After the long gun registry was cancelled they used the same department to rewrite the pay system (code name Phoenix) and have managed to waste about $5B so far, and growing. That's about $50 million wasted per job.
- ska 7y ago
  I'm not sure about the long gun registry, but the core issues around the failure of the Phoenix pay system are much more complicated that the above suggests.
  - bryanlarsen 7y ago
    That's true; but that's where the problems started, IMO. For example, IBM deserves a rich share of the blame, but who hired and oversaw IBM?
- ep103 7y ago
  All good plans can be executed badly, the devil is always in the details : D I was not proposing the above example as a foolproof plan applicable to every situation, so much as an example of a type of plan that has worked in some scenarios in the past. I should also point out that part of the plan for the Scandinavian plan wasn't the replacement of government workers with locals, as much as the expectation that by moving so many jobs into such small areas, they were guaranteed to majorly shift the local economies. Numerous jobs opened up overnight supporting all these well paid government employees moving into the area. Nonetheless, I am happy to learn about the counter-example, thank you!
  - distances 7y ago
    It would be nice if you could name the country and bureaucracy of the success story. I know of one such move; the experts made it known they'd rather resign and find new jobs than move to the periphery with their families. The move was cancelled as it was pointless without the experts.
abakker 7y ago
I like this - and, critically, there really is no reason why free market solutions can’t be creative or innovative. A challenge is that many solutions to problems like unemployment have difficult to quantify primary effects - e.g. actual jobs created - while they have easy to quantify opportunity costs - expected return of investing capital in ETFs, or something. My point is not the details, or to say that creative solutions can’t return more to the community or country than the financial costs of creative solutions - merely that those in the positions to propose these solutions are frequently unable to adequately model the return. In another post a few months ago, there was a discussion that the government shouldn’t have to propose an ROI (in the context of building new infrastructure)- but it was pointed out that frequently these projects are financed with debt, and that lenders dictate a return. If we want to move away from ROI calculations, and worrying about unquantifiable primary effects, a critical component IMO is that we can’t really pay for them with debt. If you pay with debt, you are beholden to a real, quantifiable cost of capital. If you fund with cash, or equity, it gives you the freedom to pursue preference over return, or theory ahead of evidence. Startup funding works this way for a reason. Creative solutions require freedoms not always afforded by a time-bounded and certain cost of capital.
- pas 7y ago
  Cash or credit. Doesn't matter there's always opportunity/alternative cost. If you have a bag of resources you have to decide what to do with it, and for that usually you need to evaluate a bunch of possibilities. This is the same as ranking them by utility. ROI is just one kind of utility function, but converting everything to said resource-equivalent works pretty well. It's always a nasty burden to decide between hospitals and roads, but it's a neccesity also, because building just hospitals without roads doesn't help much, because ambulances can't get to them. And vice versa. Sure, ROI in itself is a bad metric, and the problem is that developed nations are frequently get caught in an overly simplistic financial modelling situation. Because politically a more complex model is very hard to defend and the simple model gives simple answers, which are usually not optimal. As you said, creative solutions are what's needed, but they are harder to quantify.

by ep103 7y ago

aeternum 7y ago

This seems like a great idea. It ensures that even if government efficiency is low, it is providing positive value. I'm surprised this concept isn't more widespread.

wahern 7y ago
Until the 1990s (at the latest) the U.S. had a policy of widely distributing government agency offices throughout the country. This 1) kept power (agencies, lobbyists, workers) from centralizing in D.C., and 2) spread government expenditures. There were other reasons for doing this, especially before the telecommunication era. But for the middle part of the 20th century this pattern held strong even as transportation and telecommunication exploded. But there's always the risk of a pathological co-dependency on government employment. You can see this in many developing countries. So for partly legitimate reasons, the Civil Service has long been the boogeyman of Republican politics. Specifically, that civil servants are reliable "big government", Democratic voters. Better to 1) pack their voting power and 2) prefer private out-sourcing. This is one major reason (if not the major reason) why government agency activity and policy have migrated to D.C., and why the headquarters of so many corporations have moved to the D.C. metro area.
repolfx 7y ago
Usually it just means gutting the department that moves. The UK has been trying this with the BBC, forcibly relocating the organisation to the north of the country. It encodes a basic assumption that in government, skilled and experienced people are so unimportant you can just lose all of them (as very few people want to relocate to a place chosen specifically because it's fallen behind). Says a lot, really.
- bigfudge 7y ago
  The bbc move seems successful though.not just Manchester either... also to Wales
- aeternum 7y ago
  Many governmental organizations do not need to have the most skilled or experienced. Different people bring different ideas, in government especially diversity is important. Moving the department seems like a great way to do this. Those that choose not to move can leverage their experience in private industry.

bryanlarsen 7y ago

Such a strategy failed utterly in Canada. They moved a government department from Ottawa to Miramichi, New Brunswick for similar reasons. All the skilled bureaucrats used their reputations to get transfers to a different department so they wouldn't have to uproot their family, and the department was rebuilt around a core of incompetents. I'm sure the locals they hired weren't so incompetent, but rot starts from the top. That move caused the failure of the long-gun registry and a waste of $2B. After the long gun registry was cancelled they used the same department to rewrite the pay system (code name Phoenix) and have managed to waste about $5B so far, and growing. That's about $50 million wasted per job.

ska 7y ago
I'm not sure about the long gun registry, but the core issues around the failure of the Phoenix pay system are much more complicated that the above suggests.
- bryanlarsen 7y ago
  That's true; but that's where the problems started, IMO. For example, IBM deserves a rich share of the blame, but who hired and oversaw IBM?
ep103 7y ago
All good plans can be executed badly, the devil is always in the details : D I was not proposing the above example as a foolproof plan applicable to every situation, so much as an example of a type of plan that has worked in some scenarios in the past. I should also point out that part of the plan for the Scandinavian plan wasn't the replacement of government workers with locals, as much as the expectation that by moving so many jobs into such small areas, they were guaranteed to majorly shift the local economies. Numerous jobs opened up overnight supporting all these well paid government employees moving into the area. Nonetheless, I am happy to learn about the counter-example, thank you!
- distances 7y ago
  It would be nice if you could name the country and bureaucracy of the success story. I know of one such move; the experts made it known they'd rather resign and find new jobs than move to the periphery with their families. The move was cancelled as it was pointless without the experts.

abakker 7y ago

I like this - and, critically, there really is no reason why free market solutions can’t be creative or innovative. A challenge is that many solutions to problems like unemployment have difficult to quantify primary effects - e.g. actual jobs created - while they have easy to quantify opportunity costs - expected return of investing capital in ETFs, or something. My point is not the details, or to say that creative solutions can’t return more to the community or country than the financial costs of creative solutions - merely that those in the positions to propose these solutions are frequently unable to adequately model the return. In another post a few months ago, there was a discussion that the government shouldn’t have to propose an ROI (in the context of building new infrastructure)- but it was pointed out that frequently these projects are financed with debt, and that lenders dictate a return. If we want to move away from ROI calculations, and worrying about unquantifiable primary effects, a critical component IMO is that we can’t really pay for them with debt. If you pay with debt, you are beholden to a real, quantifiable cost of capital. If you fund with cash, or equity, it gives you the freedom to pursue preference over return, or theory ahead of evidence. Startup funding works this way for a reason. Creative solutions require freedoms not always afforded by a time-bounded and certain cost of capital.

pas 7y ago
Cash or credit. Doesn't matter there's always opportunity/alternative cost. If you have a bag of resources you have to decide what to do with it, and for that usually you need to evaluate a bunch of possibilities. This is the same as ranking them by utility. ROI is just one kind of utility function, but converting everything to said resource-equivalent works pretty well. It's always a nasty burden to decide between hospitals and roads, but it's a neccesity also, because building just hospitals without roads doesn't help much, because ambulances can't get to them. And vice versa. Sure, ROI in itself is a bad metric, and the problem is that developed nations are frequently get caught in an overly simplistic financial modelling situation. Because politically a more complex model is very hard to defend and the simple model gives simple answers, which are usually not optimal. As you said, creative solutions are what's needed, but they are harder to quantify.