Unfortunately for their idealistic proponents, the above-mentioned effects are more strongly operating the more productive the individuals: with lower future taxation, the labour incomes of the very productive individuals will be much higher, clearly reducing their will to work less and to devote more time for free. Of course, also the less productive individuals will still prefer to increase their labour income for their families, rather than reduce it and give more of it for free. Probably, only the very scarcely productive individuals will find their labour incomes increase so little that they will keep volunteering almost as they are doing now. Anyway, basic economics predicts that none of them will work more for free.
Overall, we can conclude that, under the most optimistic assumptions about the long-term effects of the budget cuts undertaken by the Coalition Government in the next few years, standard economic theory predicts that the voluntary provision of “good things” will be on average reduced. Society will not compensate communities for the lower provision of public services by the central and local government agencies: there will be less civic engagement, less voluntary health care, less litter patrols et al.
Of course, so far I have maintained the rosy assumptions that the planned budget cuts will successfully manage to restore confidence in the banking sector, to fix the finances of the economy in general, thereby encouraging investment activities and restoring international competitiveness, to make the firms hire more labour than is laid off from the public sector, and restore full employment. Only under these conditions would tax rates eventually decrease and net labour incomes increase. This is what we economists and the government advisors strongly hope for.
However, if this dream comes true soon enough to save the coalition from an electoral catastrophe, I am afraid that the dismal science of economics logically predicts that Big Society will be sacrificed, leaving people more selfishly involved in getting richer rather than in providing public services. Economics may cuddle one sweet dream, but not two.