Thursday, December 5, 2019

Budgets in Public Enterprise

Imagine a world where public enterprise, ie government, constantly consulted we the people to determine our needs and how effectively those needs are being met by both private and public enterprise.  For each of these needs to be met, we require application of various resources.  Each of those resources bears a cost that can be measured in monetary value.  This will result in two required expenditures, capital expenses and operating expenses.  Capital expenses might be defined as future expenses as the resulting capital resources are used up in delivery of service beyond the current fiscal year.  Operating expenses represent resources used up during the current fiscal year.

Seems pretty straightforward.

Now as a democratic society we the people elect, or hire, people to manage the accumulation and delivery of resources.  This accumulation will almost certainly entail taxation of ourselves.  It might also include monetary assets that creation bestowed upon us, some of which are re-bestowed perhaps annually, some of which are used up then are gone forever. 

Okay, this is a broad picture of our situation. 

Some electees will be more capable, as in more effective, than others and that’s why we have elections.  No matter who the electees are we have a right to expect a careful identification and measure of need and a careful application, budgeting, of resources to meet that need.  The resources will be a combination of items - buildings, tools and the like, and human capacity in the form of trained and knowledgeable folks.

We always expect effectiveness, the needs must be met or there is no point in the expenditure of resources at all.  Efficiency is therefore not simply a measure of cost, it is a measure of cost while successfully and responsibly meeting needs.  Greater efficiency is achieved by using fewer resources while continuing to adequately meet need.  Greater efficiency is not achieved by simply using fewer resources. 

When both the determination of need and the determination of application of resources to meet that need are done transparently to we the people, we can then make knowledgeable decisions about both the urgency of the need and our electoral choice in whom we wish to govern the application of resources.

When these determinations are not made transparently, we are left guessing what’s going on.  Then we can only infer through past association with the electees whether the stories they tell about both the character and size of need and the application of resources to meet it, that the process of making these determinations have been made in some manner we can judge to be satisfactory. 

If the electees one day announce that steadily fewer and fewer resources, per person, are required to meet need, we really need to see and understand how that determination was made.  If that’s not forthcoming we must wonder if some other agenda than ours is at play. 

Why so?  Well if fewer resources are budgeted for, that must mean someone has found a way to deliver the required service more efficiently, of course while continuing to be effective.  The alternative must be that the electees have decided to not meet our needs effectively.

If less human capacity, ie fewer people, is budgeted for, that must mean those people work with a new delivery model that enables them to serve more people within the same human hours.  Thus some part of the management of the service of human capacity will be able to explain and describe the details of those improvements. 

In both cases without these analyses being available to we the people, we might suspect the resources of things were not being applied effectively with a portion being wasted.  We might also suspect the human capacity was over delivering.  If that cannot be demonstrated clearly, then what was the purpose of the reduction in application of resources of things and human capacity?

Perhaps our electees have decided that we the people do not understand our own needs and are overstating those needs.  Yet we know only each of us can define what quality we expect for our respective lives.  Not only that, a team of dedicated researchers at McGill conclusively proved this is so.  Thus to reduce our access to the resources before our needs are met is the exact opposite of effective government. 

We the people require a needs determination infrastructure that we can use to express our needs as they arise.  We require this infrastructure as it can enable us to hold people accountable, including ourselves, as we determine the degree of success achieved in meeting our needs.  Needs will then be transparently defined, leaving no one out, while clearly and understandably presenting those needs to all those who would wish to help us meet them.

We then require effective needs meeting service to be enabled and delivered and to have that done efficiently.  We need to identify and describe organisation and structure of service delivery to determine when agendas other than our own are being served. 

In conclusion, we must get real and voice our needs for politicians and others to meaningfully respond.  Then we must have our politicians get real, listen to us and serve our respective needs agendas, no one else’s.

Mike Klein December 9, 2019