The Myth of the Public Sector

Take a look at our public hospitals. Public is a nice sounding term because it sounds like "ours", as opposed to some greedy shareholder who only wants to rip us all off...right?

But take a step closer. That public hospital pays people who take home a private wage, pays private contractors to maintain the basic infrastructure, and supply and maintain all the equipment. Sure that hospital may be tax-payer funded, but behind the impression of "public" lies an enterprise that might as well be described as private, nearly as much any other.

The people who run and supply a public hospital are as driven by personal interest as much as you and I. In fact I would argue that calling a hospital public is pretty much just a PR thing. At the heart of it, everything in the for-profit world is private.

To be practical, I think the best way to describe the public sector would be "the protectionist sector", because the moment competitive pressures are removed everything starts to get political and commercially twisted. The (so-called) public sector begins to write their own cheques - because they can. They win for the wrong reasons.

From here, the private interests in the public operation can and will find the rationale to be paid more than what a competitive market would normally allow, while believing that they deserve it and more. People won't usually know how privileged they are, after spending their working lives on the inside of a protected bubble. And hey, everybody deserves at least $100,000 a year, right, especially if they're doing God's work?

So how is it that, so often, gross over-payment for comparative under-performance can happen in the public sector? Why is it tolerated? Crony capitalism, of course. When the public sector unionises it becomes politically powerful, and in turn it inherits the capacity to fund and influence politicians. And so naturally, elected officials will then make private decisions - not public decisions - at the point where it makes political sense to do so. It's the unions job to make sure it makes sense - that is what their members pay them to do.

So this is what protectionism is about. At base, it's about screwing the wider society because you can. Though, of course, it's all poetically rationalised to the wider society. PR is extremely important for the public sector. A public backlash that could swing the polls to an anti-protectionist political party is the greatest terror, of course. Hence the public always need to be reminded of how incredibly important doctors, nurses and teachers are, etc.

In New Zealand the process is so transparent that Labour, the union-leftist party, has openly sold itself to key New Zealand unions within the public and private sectors. The select unions now have direct official influence over the governing Labour party (observe). You heard me right. New Zealand is now run by crony capitalism officially. Lucky for Labour almost no-one will read this article. Alas, the mass-ignorance in the Western world today has become almost dangerous.

The best solution to protectionism--in fact the only solution--is to openly privatise our establishments, as much as practical and possible. The waste, false privilege, and lost opportunities in innovation is almost depressing in the public (protectionist) sector. The public sector sees innovation more like a threat than an opportunity. It's the private sector that has no choice but to innovate, to maintain market share.

There is of course a place for state run services in highly specific areas, but that absolutely does not include areas such as health, where the focus on efficiency and performance should be paramount. These guys should be whipped hardest by commercial discipline, more than anyone else. Having an under-performing and over-paid health system, hostile to innovation, is obviously not in the public interest. [link of interest]

Of course we can look at tax-payer funding for the poorest of people, but the funding should go to private enterprises - not protectionist enterprises.

Really, all we have to do is bust that self-interested big-money-driven delusion that there's such thing as a public sector. There isn't. It's a very private world made up of very private interests, irrespective of the political cosmetics. And we've got 200 if not 2,000 years of hard evidence, demonstrating that nothing delivers for people better than the natural controls provided by free and accountable markets. In the free market world, no one gets unless they equally give.

                                                   -Andrew Atkin