Archive for July 15th, 2009

Public Vs Private Part Six Billion

In the real world, the public sector must pay | Camilla Cavendish – Times Online

The outrage rather misses the point. There is no money. The private sector pays the public sector’s wages, and you can only stiff the private sector for so much. There is no sympathy among private sector workers, a third of whom have already swallowed pay freezes, for bureaucrats who have trussed them up for years with red tape. Reading of the secret pay deals handed to police chiefs who are supposed to uphold the law, of the huge pension pots of BBC executives who tell us what to think, of the NHS chief executives who have given themselves pay increases that in percentage terms are twice those they gave their staff, it is hard not to conclude that many public sector executives have sought to grab private sector packages without any of the risks. Last year, I was collared by an eminent mandarin who said that permanent secretaries should earn the same as FTSE 100 chief executives. Let him try running M&S.

The rhetoric here is near identical to that disgorged in Irish media day in day out, and the third sentence encapsulates the stance perfectly. Yet if one can say that the private sector pays the public sector’s wages, then the public sector also pays the private sector’s wages, since public sector workers buy food, cars, houses etc. and public sector workers also pay the public sector’s wages, most obviously through the taxation in their monthly pay packet.

It is hard not to get sick of the rancid appeals, in the newspapers of rich men, to solidarity on behalf of private sector workers in these effusions, as though private sector workers in toto were the proletariat -the chairman of a multinational corporation and the woman who cleans his toilets are both on the same side, both equally at risk of being driven into poverty by the despotic social workers and teaching assistants and their evil unions.

The idea that the private sector -is the domain of the adventurous risk takers, in this context, goes back at least as far as Hayek, who wrote in the Road To Serfdom about how ‘our young men’ preferred ‘the safe, salaried position to the risk of enterprise after they have heard from their earliest youth the former described as the superior, more unselfish and disinterested occupation’. It was on the basis of this, and similar convictions, that successive Conservative and Labour governments in Britain sought to privatise public services, and, where they could not privatise, introduce metriculated service performance targets that would function as an incentive, whereby public servants need not be expected to serve through benevolence but from their regard to their own interest. Their own interest would be defined in terms of their service performance targets, as defined by profit-seeking corporations and partnerships out to maintain a steady line of revenue from providing services to government departments. It all worked spiffingly. Not.

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July 2009