As an adjunct to other discussions, here's some views on the economic
perspective itself.

Its my feeling that the economic picture is a good starting point, it's
just that too often this picture misses out on important intangibles,
and some very idiotic policies are the result. People refuse to see the
importance of those intangibles - perhaps deliberately and awareness,
perhaps blinded by ideology.

Further, pure economic notions, while useful insights, are not statements
about the way the world actually is. It's these economic notions which are
used to justify dogmatic notions like competition policy and economic
rationalism, where the principles are claimed to have more reality than
they in fact do.

For me, it's a tragedy.  It gives the "enlightened economic framework" a
bad name.  I consider economics to be useful, if you keep its limits in
mind.  Max, however, is somewhat more harsh :

> My ideas are aimed at a society I would like to have.  So much of time
> is spent on what happened in the past, and about economics and money and
> cash flow, we see every day a share market indicator on how rich or
> unrich one has become, but nowhere do I see a Happiness indicator on how
> happy we all are, or how well our communities are going.

> The System of government I would like is based on the community I live
> in and I am very lucky to be able to live here and be able to partake in
> its future.  I feel not many people have such an opportunity so do not
> understand why I am building a system from my community up.

An example of this sort of disagreement was when I suggested that 
increasing the area encompassed by a given council would reduce a subsidy
to that region, and Max asked how this might be. I replied :

> Its the old fixed vs.  variable costs approximation.  Adding another
> area should increase the variable costs proportionate to the population
> but add a smaller quantity to the fixed costs, so resulting in a smaller
> subsidy per capita (or indeed, a shift from subsidy to self sufficient,
> if the numbers are right).

> If this approximation is correct or not in a given case depends on the
> circumstances.  Certainly, its not a notion to be dismissed out of hand.

> You could look at the distance to centres of power/accessibility of
> government as a non-economic "cost" of the different situations.  You
> could consider than a larger geographic range means that variable costs
> (eg.  fuel for vehicles) mean that the variable costs are more than
> proportionate to population increases.

> But ...  for example, and this is only an example Max.  No doubt you'll
> say that things are not done this way, but the issue is then : are you
> sure you can think of no circumstance where something similar will
> apply.

> Assume you fix roads, and have two councils have identical equipment,
> and the road crews are employed half or less of the year.  If the two
> units amalgamate, you have one piece of equipment needed, and fewer
> people performing the operation.  The new fixed+variable cost sum is
> less than the sum of the two council's fixed+variable costs.

And Max writes in reply :

> Variable costs, fixed costs, a shift from subsidy to self sufficient, it
> will not matter how you shift the boundaries, subsidising those
> individuals will still be there.

> The Berrigan Shire is only returned 62% of the monies it pays in taxes,
> compared with 208% to some Shires.  The point is that there is some
> variation in "fiscal equality"; I'm not trying to "special plead" for
> Berrigan.

> A couple of years ago Harry Woods minister for local government came up
> with the same example of road graders, so F division, which is 13
> councils in my area, which is nearly the size of Tasmania, go onto the
> job and found we had 43 road graders, the one big problem was they all
> worked full time and there was a need for more.  Yes there are examples
> of sharing, we have one road sealing plant between four shires, which
> keeps it in pretty constant use.  We do share office staff, as we have
> joint fire control officers and a joint heritage officer with other
> shires.  We are setting a joint deal with libraries with the Jerilderie
> Shire.

In this case, it seems Max is thinking of a Council/Shire providing some
notional layer of democratic supervision, and separating out democratic
supervision from the economies of scale of business operations.

It seems to me that when you have different groups "sharing" a resource,
there have to be "frictional" losses. But Max's point relates to the 
possibility that the saving achieved through sharing may exceed the
"frictional" losses, so that the "cost" of a separate layer of democratic
scrutiny at council level is minimal.

This does not show that Max's approach is the best of all possible 
approaches, but he does make a point the "cost" of this democratic layer
may be less than people (like myself ?) have claimed.