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3 September 2009 | Paul Gostick Blog
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Worlds Apart
This week Paul looks at the public sector and asks what do all the public sector managers and bureaucrats actually do?...

  Paul Gostick

Parasitism is a type of symbiotic relationship between two different organisms where one organism, the parasite, benefits at the expense of the host. Parasites reduce host fitness and increase their fitness by exploiting hosts for food, habitat and dispersal.

Historically, Britain has always been the epitome of liberty. However, with every passing day, news of yet another ridiculous initiative to remove our freedoms adorns the pages of our media. Have you had your collar felt by the bin police yet? We seem to be sliding inexorably into a culture of control which would have been very familiar to the KGB or the Stasi. Sadly, in what is still a democracy, the public sector has forgotten the cardinal rule – they are public servants, they work for us, we don’t work for them.

The other day I was enjoying a pint at the local when I was asked, what is the difference between the public and private sectors? As the memory of MEP Daniel Hannan’s speech flashed through my mind, I thought how long have you got?

In short, we pay for the public sector whether we like it or not. They get their money regardless because it is principally based on taxation of the productive part of the economy ie the private sector. The public sector equates to gold plated pensions that we pay for. The private sector is based on profit. It is the man in the street putting his money and his sanity on the line to try to make a living. The private sector equates to small pensions as the government (sorry Gordon) taxed them to fund the public spending excesses – remember the great pension robbery at the turn of the century? When the government invades and interferes in other sectors of society eg manufacturing, commerce, education, healthcare etc, the result tends to be bureaucracy, inefficiency, waste and a failure to apply common sense.

Over the last 18 months, employment in the private sector has declined by millions of jobs. Over the same period, central and local government employment has steadily risen, increasing the burden on the productive part of the economy to support the unproductive part.

The real question is, what do all the public sector managers and bureaucrats do? They certainly aren’t productive and they certainly don’t create wealth. Far from being just inconvenient, these layers of bureaucracy have a negative effect on valuable frontline services – where the real worthwhile work is done. As David Craig highlights in his book 'Squandered', the build up of the client state and the rise of management and management consultants in key public services to enforce the targets culture has led to cuts in frontline services. This has come about as managers and bureaucrats have chosen to save their own jobs when budgets are squeezed, rather than safeguard those who deliver frontline services.

The bureaucratic system of management in public services has a fundamental flaw. With its numerous tiers, those managers who send good news up the line are considered to do a better job than those who present a more balanced view. The bearers of good news are retained and promoted. The result is that at every level in the hierarchy, bad news is filtered out and the good news is passed upwards. At the end of the process, those at the top of the hierarchy sit in their deluded rose tinted world, believing all is well in the garden. Consequently, ministers make statements they believe to be true but which those at the grass roots and in the real world know to be downright misleading. The whole process is rather like a sycophant’s paradise. A bit like The Emporer’s New Clothes!

With a prolonged recession now in full swing it is important to realise that the public sector gravy train steams on regardless, adding government jobs at a time when it was clear to the rest of the country that the economic bubble had burst. The state continues to advertise for unproductive and pointless jobs in the public sector (refer to the Guardian for an up-to-date list). Of course, politicians will warn of disaster if taxes are not increased to facilitate the continued egorgement of the bloated and self-serving public sector. They will claim that getting rid of government employees will somehow hinder an economic recovery. IMHO, quite the contrary would be the case… getting rid of some government employees, the unbelievably stupid programmes they devise and support and thereby streamlining the public sector would be good for the long-term health of the economy.

A government employee is inherently parasitic because without the host (taxpayers) to live off of, their job probably would not exist. The degree to which a government employee’s work benefits society is subject to debate, but the fact remains that productive individuals and businesses are taxed to pay for government jobs and, therefore, any benefit comes at a cost to the economy. Unfortunately, nowadays, it has become quite commonplace to hear intelligent people embrace the notion of increasing government employment during a recession to compensate for job losses in the private sector. The government loves to think it can spend its way out of recession. The fact is that an economic resurgence will not be fuelled by increasing the government parasite to host ratio.

In the end, the best way to see free markets flourish is to let the free markets work without government interference. There are no exceptions in economics and funnily enough there is absolutely no mention of government in Adam Smith's theories.

The other day I discovered the following quote. Although self evidently true is was the date of publication that really surprised me:

"The budget should be balanced and the Treasury should be refilled.
Public debt should be reduced and the arrogance of officialdom should be tempered and controlled.
The assistance to foreign lands should be curtailed, lest Rome become bankrupt.
People must again learn to work, instead of living on public assistance."
Cicero - 55 BC
It would appear that we haven't learn much have we?  In effect we are still making the same mistakes 2,064 years later.  Quite amazing...

This year has shone a bright light on what many of us have known and been saying for decades about the public sector. However, it has taken the current run of 21st century fiascos under Gordon Brown to bring the blindingly obvious into clear focus and get the general public’s attention. The real question is, is forewarned forearmed and will we begin do something about it? It really is time for a change.

Any feedback and comments are always welcome!! 

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