Shout it from the rooftops… the public debate on the national finances is built on misrepresentation. September 10, 2008
Posted by WorldbyStorm in Economy.trackback
I’m not Fintan O’Toole’s biggest fan but in a column yesterday he made one basic point that should be shouted from the rooftops.
IN WHAT passes for public debate around the pay talks and the crisis in government finances, two truths are universally acknowledged. One is that, as Enda Kenny put it at the weekend, the public sector is “bloated” and “inefficient”. The other is that wages generally are too high and are rising faster than those of our competitors. As usual, when truths are universally acknowledged, they are not really true at all.
And…
The notion of the “bloated” public service is typical of those things that people “know” to be true, regardless of the evidence. It simply doesn’t matter that the Organisation for Economic Co-operation and Development pointed out earlier this year that public spending is actually lower in proportion to the size of the economy than it was a decade ago, and that “government policy therefore has actually decreased the total number of public sector employees as a percentage of the labour force and decreased the overall public sector wage bill as a percentage of GDP”.
The public service is inefficient, not because it’s too big, but because it’s so badly run. And it’s badly run largely because of a political leadership with a myopic approach to long-term thinking, a love of “catch-all” policies that try to give something to everyone in the audience, poor standards of accountability and an addiction to half-baked schemes like decentralisation and the Health Service Executive that make bad systems worse. Since solving those problems requires a profound change in the political culture, it’s easier to spout nonsense about the “bloated” public sector.
The second cliche is that we’ve lost the run of ourselves altogether when it comes to wages. Again, this is a useful belief insofar as it implies that the problems of the economy were caused by ordinary workers and can thus be solved by them. And again, it doesn’t hold much water. Almost a fifth of all employees earn less than €10 an hour, and half of all employees earn between €10 and €20. Anyone who has to live on those wages knows that the first group is barely getting by and the second is doing okay but with little to spare. The problem, of course, is that the vast bulk of people who get to pontificate about wage levels in newspapers, in the Dáil or on the airwaves are not in this half of the workforce.
And Michael Taft has some very useful thoughts on precisely this in his continuing and very impressive deconstruction of the current recessionary ‘crisis’.
But look, what use is it me linking to both those commentators, or those commentators writing this entirely correct analysis? The reality is that there is no formation that I can think of at the political level (although kudos today for Eamon Gilmore pointing out that for the last fifteen years there was damn all talk of ’sharing’ the wealth while now we all apparently have to ’share’ the pain) which is seriously contesting the myths and half-truths that are being circulated by a pliant, if not indeed collaborative, media, politicians all too keen to find the easiest and least complaining scapegoat (that’s us, the Irish people), a business and commercial sector keen to keep the goodies it has accrued in recent years and deny any social responsibility whatsoever and a political spectrum that from furthest left to economic hard right seems simply to unable to articulate basic demands, that defaults to a faux ‘pragmatism’ that evades engaging with reality or worse again cynically allows embedded and self-defined class interests to continue to maintain or extend an inequitable societal structure.
Easterhouse once sung ‘…Where is the man (sic) who’s speaking out for me?’
He or she ain’t there.
Well, hurrah for pretty much all of that. It could be added that one thing about the piuvblic sector which is enitrely unappreciated by tye people in the private sector who attack it, is that it does things that the private sector won’t. Because they’re complicated and difficult and cost more money than they’re worth. Yes, productivity is lower in the public sector than the the private, in so far as comparisons can be made, which is not all that far. The public sector has problems which are specific to that sector. But it clears up the messes that the private sector won’t, and often messes that he private sector has made.
One of the problems with having a social system based on success and the worship of success is that it creates a permanent ideology of kicking whoever is not successful, and whoever does not make money. They must, always, be the problem. And of course the successful can never see that they might have contributed to any problems that exist.
Exactly, couldn’t put it better. You’re right, the lack of perspective of those involved is amazing.
And on a related tagent do you see Cameron lauding the voluntary/charity sector when any of us know the limitations of same? It really is a weak point in their platform and one the left has yet to exploit.
“Yes, productivity is lower in the public sector than the the private,”
Is it? I don’t know what metrics you could use to make the comparison, but one that springs to mind is the amount of money wasted on IT projects. There was a big hooplah in the meeja about the failure rate of public sector IT projects last year. The figures were actually more than twice as good as the private sector where failure rates have never fallen below 60%.
The overwhelmingly vast majority of public debate is based upon misrepresentation.
A couple of other points ignored by pro-business commentators in their daily mantra about pay freezes and bloated public services:
Public service workers pay tax (they have no choice) and are consumers. It’s ridiculously simplistic to see them as a drag on the ‘productive’ side of the economy. Indeed anyone making the distinction that baldly is a propagandist, not an analyst.
Many of the ‘productive’ businesses that boosted our tax revenue in the awash-with-money tears produced nothing; they were just putting their profits through brass plate setups to avoid paying tax incurred elsewhere.
There are no overmanned schools, hospitals, or garda stations.
Above all, there are no public servants sitting on fortunes made during the boom years. Wherever all the money went, the nurses, teachers, postmen haven’t got it. Start looking at the guys who bought blocks of flats off the plans,in country towns; the guys who took helicopters to Clifden for a round of golf; the guys who bought racehorses they never saw that died uninsured on the gallops.
Fintan O’Toole is annoying, but he does the occasional great article that points out the facts, in the face of spin from the business lobby, including his own paper’s ‘political correspondent’.
For ‘tears’, read ‘years’. Sorry, Dr Freud.
The important points made by O’Toole and Taft need to be stressed and reiterated.
In pre-Tiger days welfare expenditures were blamed for Ireland’s backward economy. Those with least power do not cause society’s ills, they just get the blame.
As for public expenditure, ‘free enterprise’ could not function without it. Infrastructural investment, and this includes social as well as physical infrastructure, is key in increasing productivity.
The work of James Heckman shows that public expenditure on education has the highest rate of return of any expenditure-and the earlier in the child’s life the expenditure is made the greater is the rate of return.
Gilmore’s proposal before the last election for complete funding of pre-school programs makes excellent economic sense and is also essential for women to participate fully in all areas of life. (Incidentally, a Kerry peasant and NYC city council member named MIke Quill proposed such a measure in the 1950s: it didn’t pass.)
As for public health, Toyota gave as its reason for moving some of its plants from the U.S to Canada, the fact that Canada has socialized medicine and the U.S. does not.
Putting a crack-pot, ‘free-market’ ideologue, Harney, in charge of health in Ireland is a main cause of the health-care debacle.
So let’s beat the drum for socialization: it makes excellent economic sense.
“Wherever all the money went, the nurses, teachers, postmen haven’t got it.”
Talk about successive Irish Governments not saving anything for the
proverbial rainy day.
Good point by O’Toole (and tying in with CL’s point on the benefits of early investment in education) about how universal ‘catch-all’ schemes can be a total mess. Why do Fianna Fail give 1,000e to children under six for preschool when Labour proposed to provide pre-school for all and for less. Where’s the efficiency in that?
Why did we spend 32m euros on ongoing rent payments to those builders who put the prefabs up in our shoddy schools? Why not build new schools for 32m?
In a way Ian I guess it’s because they can, and they did and no-one called time on it or enquired as to how it could be done properly. And of course the idea that the state engaging in capital investment and upgrading is a big no no except when done at the behest of commerce.