Festive Meanderings on Public v Private Sectors

I could subtitle this ‘why the public sector is better’, for both basic infrastructure and the environment, and ‘how could anyone ever believe it isn’t’. I expect I’ll come back to parts of this topic as I learn more about it (I solemnly swear I will seek education instead of just mouthing off in 2015), but here are, well, some meanderings, in time for the New Year.

It is a mantra of our times that the public sector is inefficient and wasteful, while the private sector is the driving force of all that is good in the world (i.e. growth, greed, globalism… you can see where I’m coming from). I can give you a couple of simple theoretical examples that prove why in fact the public sector will always trump private for both efficient basic services and less waste, which benefits the environment (very obvious examples, yet it seems that there is a need to prove the obvious). We do actually know this on some level – it is why private companies are so eager to demolish what they call ‘state monopolies’. They know that they can’t actually compete.

The first, unsurprisingly if you look back through my posts a little, is libraries. Imagine you have 10 families in a row of houses all with a child, all buying books to teach and nurture that child. Perhaps they’ll all buy 10 books. Some of those books will be identical. They will not all be being read at the same time. In just one year’s time those books will no longer be appropriate and will have to be thrown away and another 10 bought. It is not rocket science to imagine instead that the 10 families pool their resources, buying 100 books for the same price. Each child now has access to 100 different volumes, not 10. Even if you assume they are still being thrown at the end of the year that is still a significant bonus. In fact they won’t be thrown until they’re worn out as someone else will most probably find a use for them so there is less waste. In addition an eleventh family in the row with a child, who cannot afford books for themselves, can now use that library to nurture their child on a par with the other 10 as well.

Another example: playparks. In Belgium, for some mysterious reason, the authorities are very reluctant to provide play parks for children on the scale that the UK does. If you walk down one of their smaller playpark-less towns or villages you will observe that the well-to-do with children and gardens all have extensive play equipment in those gardens. Most of the year that equipment goes unused. Much of it is quite pricey – those modular wooden sets that start with swings and slides and can be built up in all sorts of exciting ways. Needless to say if all the resources spent on this equipment were combined you could end up with a fantastic adventure playground for each village, to be used and maintained by all however economically rewarded the parents are, and one that will out-last (with a little maintenance) the few years use one child would take from it.

I really do struggle to understand why the Belgians don’t see this, or why other rich nations are busy dismantling their collective assets as fast as they can. Incidentally, if you despise my simplicity, you can find plenty of other more sophisticated reports on the practice as well as the theory. Here’s one on the well-worn triad of railways, healthcare and care homes. Perhaps I should have just left them to explain it, but what-the-hell.

So let’s have a look why.

Back in the 1980’s when, whatever else you may think of them (and I can think some pretty nasty thoughts), the UK had some leading politicians on both sides who actually had some real-life experience of how their countries worked at the lower-if-not-quite-bottom end, it was of course the grocer’s daughter Margaret Thatcher leading the charge. Her famous belief that “there is no society, only individuals” was incredibly naive and easily disprovable from the viewpoint of human evolution. I will have to hit that nail on the head in a later post I think. But leaving that aside many do seem to genuinely believe she was doing something good.

Her, and others’, major reason seems to have been that eternal question of the rich “why should I carry you”. Why should that eleventh family, having contributed nothing to the library, be allowed to borrow books from it for that child (or indeed the other 20 families in that same row who can’t afford them either). Why should the children of families who couldn’t afford parts for the playpark be allowed to use it. Why indeed. Would it help if I remind you that the disparity in wealth is because the richer ones are the owner of the mine in which the poorer ones work (I’m being simplistic again)? Or perhaps, if you prefer, those poorer ones are the descendants of the mine workers, who never had the chance to amass and pass on wealth the way the owners did. Perhaps they are the underpaid nurses running around doing all the work the great-and-good declared needs doing. The richer families are not richer because they work harder (they generally don’t), deserve it more (how?) or because of some god-given right (there is not now and never has been any evidence for god). People doing the work at the bottom are never paid less than those who work at the top because the work is less needed. It’s because it is less valued, yes, but not less needed. So, bluntly, rich people, you should carry us because you damn well owe us. And yes, more on this and the ridiculously aggressive middle-class defence-of-the-indefensible reactions can come in later posts.

Once again other people put this in a rather more sophisticated fashion. Ha-Joon Chang in his 2014 “Economics: the user’s guide” defines capitalism as “an economy in which production is organized in pursuit of profit” (p. 33) and continues with “Profit is the difference between what you can earn by selling something in the market…and the costs of all the inputs that have gone into the production of it.” (p. 34). It’s therefore easy to see that capitalism requires large-scale exploitation of the masses of poor workers, who provide the labour input, by the owners of the means of production. Many people have said this so many times, but as I said we seem to be living in a time that needs the obvious re-stated.

Another reason for the rich to carry the poor a little would be that ultimately it will benefit the carriers. Education is an obvious example of that: educate the child of the poorer family who will grow up to nurse your well-off children back to health. “The Spirit Level” by Richard Wilkinson and Kate Pickett has the sophisticated and expansive reasons along those lines, read it if you haven’t already.

However Thatcher and her colleagues did have other problems with the public sector that were rather more defensible. Oliver Letwin I think put their concerns particularly well in a memo on education – “The provider decided what the customer ought to have, largely ignoring what the customer actually wants.”

We have to face it, that was a valid criticism of the public sector of the time. David Marquand (2004) in “Decline of the Public” points out that it was elitist and condescending, “saturated with pre-democratic, essentially monarchic assumptions and values” (pg. 5), often lacking in accountability. Anyone running into one of the older public servants still surviving in the 90’s could sometimes still see these attitudes. But was this any reason to throw out the baby with the bathwater?

Their solution marked the start of ‘choice politics’, the idea that people should be able to choose which services to use – private or public – because they are responsible for their choices, and the corresponding end of the idea that local services should all be as good as possible. I hate choice politics. It’s very easy to show that the people – the only people – who have choice, and therefore responsibility for it, are those who have the opportunity to take it, whether because they were better educated and informed (what about those with learning difficulties or bad childhoods?), because they are richer and can afford to buy the posh house in the posh area with the posh school (thereby ensuring their offspring stay educated at everyone else’s expense), because they have a private car (despite a constant assumption of it car ownership is not universal) and therefore can actually travel to the better hospital 30 miles away. The poor (in whatever department they are poor) have no choice but to take the dregs, which progressively get worse under a system which finances only the top performers.

Following these lines of thought also resulted in the hypocrisy that central control is necessary to make local councils ‘accountable’. So nowadays we end up with the situation where MPs apparently think that they alone, in a country that calls itself ‘democratic’, have any knowledge suited to making decisions.

A reinvigorated public sector could go, indeed needs to go, hand-in-hand with reinvigorated local democracy. Not the ridiculous target-based centralised controls that resulted in chaos under Tony Blair (and now used as an excuse for further cuts). But real local devolution where every local voice is welcome, where all “citizens collectively define what the public interest is to be, through struggle, argument, debate and negotiation” (Marquand 2004 “Decline of the Public” pg 33).

Because we desperately need the improved efficiency of the public sector. We need to pool our resources for the good of all again, instead of increasing inequality. The plight of the poor and vulnerable, starving in the midst of plenty, can be ignored no longer in the 6th largest economy of the world. Equally we no longer have the luxury of wasting resources left, right or down the political centres. We cannot afford to keep manufacturing ever more plastic tat and shipping it 3 times around the world for the elite rich in the name of some mythological pursuit of never ending growth. The environmental debt we owe is too huge and is about to be called in.

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