A common charge against publicly owned companies is that they are overmanned and consequently inefficient. From personal observation, this is far from invariably true. In the late 1960s and early 1970s I worked for  SWEB, the (state-owned) South Western Electricity Board, as a driver and ditch-digger: it was a summer holiday job in my last year at school and then at university. I saw no evidence of over-manning, nor of any more waste than was inherent in the business, e.g. picking up a load of tarmac; using as much as we needed, or as much as we could before it went cold; then dumping the remainder (legally!). There may have been overmanning elsewhere, but there certainly wasn't in the bit I worked for. 

Of course, mine is only one anecdote, and from long ago, but it is typical of a large class of anecdotes which indicate that state-owned industries were and probably are nothing like as bad as they are painted. In other words, the bad reputation of the public sector, so carefully propagated by a vocal minority, may often be a matter of belief or even indoctrination rather than a matter of personal experience.

The other class of anecdote, it's true, tells of a couple of days' work (or less) being spread across a week, but that is by no means confined to the public sector. Frances can tell stories of gross personal under-employment in least three of the companies for which she worked, in the USA and the UK. These were temporary jobs, for which an agency was taking a large share of what the employers paid; and the employers were wasting their money. She also saw how little some of the permanent employees worked. 

For the sake of argument, though, let's assume that the public sector was and is as overmanned as its detractors argue. What of it? Where does the money go? The answer is simple. It goes to the employees who work for it, even if this is for a given value of "work". They have jobs; they spend or save their money; they are a vital part of the economy.

Now privatize the same company. Money has to be found to pay the shareholders, who are rentiers: those who live by rents. In this sense, "rent" includes both literal rents for accommodation and the subtler "rents" that accrue from other investments. This money is found by increased "efficiency", which normally means either mechanization (which reduces demand for labour) or by squeezing more work out of those who actually earn the money; or of course by a combination of the two. The number of workers is reduced further and further, and those who remain are made to work harder and harder. Meanwhile, more and more money goes to the rentiers who do little or nothing. 

At this point, some will try to argue that the rentier is living off his past work. Anyone who believes that this is always the case should read another piece on this site about the fine old Marxist cliché of the wicked rentier class.

Next, under the goad of this illusion of "efficiency", even true public servants such as HMRC (Her Majesty's Revenue and Customs) are overworked to the point where the quality of what they deliver cannot be maintained. At this point they are cursed for inefficiency, often by the pettiest of petty rentiers. 

Now, which is better: to put money into the pockets of people who actually work, even if they don't work very hard, or to put money into the pockets of people who don't work at all, or who work very little? 

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Words and picture copyright (c) Roger Hicks 2016