Some matters are best left to business, others to government. This is what makes a ‘mixed economy’ and defines most democratic nations. The only debate seems to be ‘how much government is good?’ or ‘does this particular thing need to be run by government?’.
Private schools sit alongside (sometimes next door to) public schools. So too public and private hospitals and doctors. Police and prisons probably fit inside the government sector, but in some countries there has even been an outsourcing of prisoner transfers (often with poor results). Roads are mainly provided by government, albeit with some toll rolls appearing. Public transport is mainly subsidised and provided through the public purse (30c in every $1 is paid for by the traveller in Perth, the rest paid for by the taxpayer). Roads and defence are obvious public goods, but what about utilities like water or electricity? In some countries these are provided by the government, a mix or are in private hands. Unemployment and social security (including care for disabilities) are in the public sector, as are parliaments, law courts and libraries.
The debate is usually around the middle ground – whether a particular service can be best provided by the market (which will tend to drive prices down and eke out efficiencies) or government (to ensure there is fair coverage for all that require it). Western Power is currently in public hands in Western Australia, but will be privatised if the current Liberal government wins reelection in 2017. Labor will keep it public.
If we privatised all roads, the ‘well-to-do’ might sweep along 8-lane highways at high speeds, with the rest of us congested on the double carriage congested ‘car parks’ which would make do for a ‘freeway’.
As we know, nothing is free. Not least a freeway. Provide more and more services through government, and more and more money needs to be raised through taxes. Cut government spending and leave it more to the private market, and we pay less tax but have less secure ‘free’ services as a result.
Sometimes things are simply best done by government. We can’t have all roads, defence, law courts, health care, police and schools in private hands. The market for such things is imperfect, and the public sector has to step in. As someone once said, if you want to look at the real strength of a country, look at how the poorest are treated. The strongest look after their own.
Analysing the effective and efficient use of public money means the sector has to be careful to spend every cent wisely. Woe betide the new public sector project which runs over time and over budget, only to be denigrated by the mass media. With a hungry 24/7 news cycle keen to publish bad news to gee up their audience and attract an ever diminishing advertising dollar, the “what a waste of tax payer money” line is reliable fodder. Shock horror, scream the headlines, nit picking the down trodden public sector which is thus forced to spend more and more time and money on governance, steering committees, oversight and documentation, becoming ever more lumbering and wasteful. The private sector might have just got on with it. Equally, they might have stuffed it up too.
I heard State Treasurer Mike Nahan the other week bemoan some sectors of his public service for their unwillingness to change. “You know the best sector that has been more responsive to change?” he rhetorically asked the audience, “The police.”
This is a very tricky area, and I have no answers.
It reminds me of the story of the failed 1988 Presidential bid of Michael Dukakis. A known campaigner against capital punishment, he was asked the galling question in the debate – “If your wife had been raped and murdered, would you not want the death penalty for the killer?” to which Dukakis calmly replied “I have been against capital punishment all my life.” This cold reply only seemed to add to his detached nature and people did not warm to him. His poll numbers fell from 49% to 42% overnight. He regrets his answer to this day.
Perhaps the answer may have thus:
“Yes, with every bone in my body I would want that murdering killer put to death. I would want him to suffer a ghastly, slow death, … but that’s because I would be too enraged and emotional to think clearly, and far too involved in the case. That’s precisely the reason why I should not be involved. This is why we have the rule of law, courts, juries, police, evidence, and governments. They take the higher view. They decide. They look to see if countries with the death penalty have lower crime and murder rates. Guess what, in the United States, 33,000 die of gun violence a year. The death penalty does not seem to deter killers. Perhaps we should have better gun control.
“Governments take the ultimate higher view, the longer term, broader picture. That’s why we have them. That’s why we elect them. Long may it remain so.”
Could, and should, the public sector be as efficient, nimble and agile as the private sector? Of course it should. For a good example, look at Singapore. Just because it’s in the public sector, does not inherently mean we should accept waste, inefficiency and lower standards. In fact, we should hold the same candle the shareholders might to a private business.
Should everything be left to the private sector? No way. Not everything can be run for profit.
It’s a mix, and the balance is always up for debate in a democratic nation. Power to the people.
