Is the private business really more efficient?

DaSilva

A argument that I hear often is that private business should be put in charge of some projects as they are more efficient. Private business will run the same service for a lower cost and/or provide a better service.

I'm challenging this idea because I have never seen any strong evidence support of this claim, not because I am a socialist or communist (I'm neither), and just as a disclaimer, I work in the private sector.

I figure the basis' of this conclusion are:

1) Incentive: Private business has an interest in the success of the service as they will receive more money.
Does paying someone more really make them work better? Don't people face a similar ladder to climb in the public sector and don't public sector workers have a similar interest in the success of the project?

2) Business acumen: Private business will run the project more efficiently because it is populated with people with business skills.
Well I have yet to discover non vague answers as to what really are the skills the make a great business person, so that makes this difficult to analyse. Isn't politics filled with business people? My field of work is filled with people who have little interest, skill or will to improve their craft.

I really am trying to understand this argument, yet I can't find anything other than anecdotal evidence in it's support.

dunsandin

Mcdonalds. Ryanair. Primark. Beacon Clinic. Need any more proof? I could go on.

Atlantic Dawn

Well in my dealings with the public service the only service I have ever dealt with that I received what I could call any level of efficiency was online motor tax, this is all automatically generated and required little or no human interaction on the public service employees end. I'd imagine this system in the private sector would have reduced staff in the motor taxation office by 30 or 40%.

DaSilva

dunsandin wrote: »

Mcdonalds. Ryanair. Primark. Beacon Clinic. Need any more proof? I could go on.

Yes, some proof would be nice, you haven't provided any. Here's a list of companies gone into liquidation. http://www.odce.ie/GetAttachment.aspx?id=a441b73f-46a1-4bc4-b9e9-bac8f357ddc7

amacachi

Even if private industry isn't always particularly efficient the benefit is that it doesn't (or at least, shouldn't, but look at how that work) cost people money unless they choose for it to.

tommyboy2222

If a private company delivered a project a couple of million overbudget they could go out of business.

If a branch of the public sector delivered a project a couple of million overbudget the taxpayer would bear the cost.

Who do you think would be under most pressure to deliver the project for a lower cost and a better service ?

dunsandin

DaSilva wrote: »

Yes, some proof would be nice, you haven't provided any. Here's a list of companies gone into liquidation. http://www.odce.ie/GetAttachment.aspx?id=a441b73f-46a1-4bc4-b9e9-bac8f357ddc7

The whole PS should be in liquidation at the mo to be frank, cos its beyond bust.
If you want proof, head into Miccy D's and order a burger, bet you dont fill out one form, wait even one hour, or have to consult your local TD to get served. Companies going into liquidation shows the efficency of the Private sector - become innefficent, and you're gone. PS, become innefficent, and you are just fitting in.

DaSilva

amacachi wrote: »

Even if private industry isn't always particularly efficient the benefit is that it doesn't (or at least, shouldn't, but look at how that work) cost people money unless they choose for it to.

That's a good argument for a private company running a particular service, but it doesn't really suggest that private companies are therefore more efficient.

tommyboy2222 wrote: »

If a private company delivered a project a couple of million overbudget they could go out of business.

If a branch of the public sector delivered a project a couple of million overbudget the taxpayer would bear the cost.

Who do you think would be under most pressure to deliver the project for a lower cost and a better service ?

I can see your point of view on this one, and it feels like it has some weight. I still wonder though, does this pressure really result in less chance of going over budget?

smellslikeshoes

The tendering process used when a state procures a private company to run something should also be taken into account. The competition of a few companies bidding on the one contract can drive prices down.

A private business also doesn't have as much hurdles to when it wants to reduce wages, make staff redundant etc.

DublinWriter

DaSilva wrote: »

I really am trying to understand this argument, yet I can't find anything other than anecdotal evidence in it's support.

Yes, it really worked a treat in the coal industry in the UK in the early 80's.

I find that the Ryanairs are the exception to the rule. Having worked in both sectors waste and cronyism is a lot more rife in the big multinational private sector companies than most would admit to.

dunsandin

DublinWriter wrote: »

Yes, it really worked a treat in the coal industry in the UK in the early 80's.

I find that the Ryanairs are the exception to the rule. Having worked in both sectors waste and cronyism is a lot more rife in the big multinational private sector companies than most would admit to.

The cronyism bit is accurate enough, but the coal example is not. The coal industry was rampantly innefficent, where private companies took over productive pits, output soared and costs fell dramatically. The unproductive pits simply remained closed. As the demand for fuel rises, this may well be reversed.

cyclopath2001

amacachi wrote: »

Even if private industry isn't always particularly efficient the benefit is that it doesn't (or at least, shouldn't, but look at how that work) cost people money unless they choose for it to.

Most of us were not Anglo-Irish customers and it's costing us all money.

amacachi

cyclopath2001 wrote: »

Most of us were not Anglo-Irish customers and it's costing us all money.

Seems those brackets I used worked really well because you completely ignored what was in them.

ressem

The OPs starting argument is too general...
http://www.don-lindsay-archive.org/skeptic/arguments.html#generalize

There are private companies that seem to exist just to milk money from grants or VCs rather than producing a product/service.

There's a bit of selective observation involved but the view would be that competently run private businesses are more efficient. Best in class can in some areas deliver half a million dollars in turnover or added company value per employee.
Less well run companies should eventually go out of business, unless propped up for other reasons.

I wouldn't agree that the OPs two arguments are the bases for this belief.

I'd suggest the arguments...
1) competent private sector companies might be better at measuring and removing bottlenecks that have built up over decades. The Six Sigma quality measurement etc (which I think a number of public sector areas do partake in).

2) Private sector companies typically have employment contracts for their staff which make it clear during induction that failure to follow work procedure can result in senior staff discussing whether they should be laid off.

3) Following 2. Changes in procedure can be demanded from staff. Interminable discussion by representitives shouldn't be useable as a permanent block on change.

4) The politicians would not be incentivised to increase the private sector management's pay, as it would not directly result in an increase to their own pay.

But that ignores the question of who the customer would be. If a private sector management was dumped on top of the public sector, the customer would still likely remain the politicians rather than the public.

Since the ministers seem content to act as PR departments / fallguys for the failings of the departments, I don't think anything would change.

(rant follows... instead of what they should be i.e. the citizens chosen opposition to the department heads, calling them in for regular compulsary public hearings, without the " cannot comment on individual cases" mantra )

amacachi

ressem wrote: »

The OPs starting argument is too general...
http://www.don-lindsay-archive.org/skeptic/arguments.html#generalize

There are private companies that seem to exist just to milk money from grants or VCs rather than producing a product/service.

True, though I don't think a lot of them should be called private companies. For example in my college, though supposedly "private", the fees are paid by the government and in various departments we've been told of people not being replaced when they're retiring because of the government cutbacks. In a supposedly independent institution I don't see why that's relevant, though I have a feeling they may be embellishing the truth somewhat to help students lean a particular way politically, but I'd like to be wrong about that.

Scofflaw

My experience as a small business is that large organisations are inefficient in more or less exactly the same way. The public sector is more likely to spend money on doing something completely pointless just for the sake of ticking the boxes - and know that that's what they're doing - whereas in the large private sector the same completely pointless activity will be dressed up with some notional ROI that nobody ever checks. In both cases it will happen because it's fashionable and someone higher up the chain heard about it and liked the idea.

Small businesses are efficient only because the people who work for them tend to put more effort into any given piece of work - there's no room, or very little, for people who just clock in and clock out - and a company that contains more than a couple of them will die the death. In a five person company, you can't afford to support 1 employee who doesn't do their job, because that's 20% of the workforce, and everybody knows who's not pulling their weight.

Unfortunately, that willingness to put in the effort only comes about because you're a member of a small and close team, and your effort has a nearly immediate impact on the bottom line that stands between you (and your colleagues) and the dole queue. The 'rules' are informal, and can be rewritten very quickly or ditched when necessary - something that's both a strength and a weakness. Attempts to institutionalise that in larger organisations are almost invariably successful, so larger organisations have to accept a greater proportion of jobsworths and less flexible adherence to the rules.

In general, the civil service has money to throw at a project, but lacks skilled people resources, whereas the private sector has the skilled people, but usually under-budgets. Both of those cause overruns, but the civil service overruns on the cash, whereas private companies tend to overrun on the people commitment and either under-deliver or overrun on time.

Public-private partnerships can be a match made in heaven, where the right amount of cash meets the right commitment of skilled people, or a match made in hell, where the overspend from the civil service meets over-commitment of personnel in the large private partner, resulting in the project taking longer and costing more and under-delivering.

Unfortunately, the public need for accountability from the civil service has resulted in procurement and oversight demands that most small businesses simply can't meet. If real accountability is required, you need a company that can afford to spend a decent amount of its money on internal documentation and formal processes, whereas small companies are like black boxes - we do the work, and you get the result, but we don't have the time or resources to annotate every step of that process, which is in any case highly informal - so if the result is bad, there's no accountability trail, and no point of blame bar the decision to hire the small company in the first place. The lesson most civil servants and large company employees learn, then, is "nobody ever got fired for hiring IBM" - or PWC these days - and small companies only get projects involving small amounts of money, because nobody's ass is on the line. Unfortunately, that means we often miss out on public contracts that we could perform alone, because the civil service has overbudgeted, and on contracts where we could perform as a consortium because we still don't have the resources to do the paper trail, even though we would be more efficient.

And so it goes. Small businesses are efficient, but we're unreliable and unaccountable - big companies and the public sector are the opposite. It seems to be an inherent tradeoff.

cordially,
Scofflaw

twowheelsonly

DaSilva wrote: »

Yes, some proof would be nice, you haven't provided any. Here's a list of companies gone into liquidation. http://www.odce.ie/GetAttachment.aspx?id=a441b73f-46a1-4bc4-b9e9-bac8f357ddc7

That list is from 2002 - that just makes it worse as it was at the height of the mythical tiger years. I'd imagine that the lists for the past couple of years are horrific.
Having said that , a large number of companies do tend to fail in their first two years. It's not as easy as everyone thinks!! Add that to the fact that everybody that ever picked up a hammer fancied themselves as a developer and the problems are multiplied. We would have been better off if we had 6 big developers in the country instead of 2006. 6 would have dictated what way the market went and would have been cute enough not to overexpand IMO

Amhran Nua

Depends on the business culture. China is basically one gargantuan public sector, and nobody could call them inefficient.

Sleepy

That's an excellent summation Scofflaw. Documentation and strict adherence to procedure do seem to go out the window on many successful projects.

The biggest difference between the two sectors that's noticeable to me is average working hours. I'm pretty strictly a family person and make a huge effort to be leave the office at half five but I still end up doing a lot of unpaid overtime, both in terms of travelling to and from client sites and just staying late to get things done. This is something I see far less of in the public sector, the notion of spending 6 hours of your day driving to and from somewhere to do a full day's work there without being paid for it is something that couldn't be allowed to happen in the PS. The unions would go crazy and arguably, rightly so.

It's the reality those of us in small firms live with though and the type of thing that meant benchmarking was always a farce. Yes, there are plenty of people in the public sector who are qualified to do my job (in terms of paper qualifications, real life experience and the "intelligence" required) to do my job, we may even have the same job title. However, if I'm spending 20 hours a week or so more on the job than they are, my salary should be higher than theirs. Especially when other factors such as pension entitlements, job security and other working conditions (availability of flexi-time, job-sharing opportunities, etc.) are taken into consideration.

The end result is that, at my salary, I'm a profitable hire for my company to employ as I contribute more to the bottom line than they pay me. Should I cease to be so, they'll reduce my salary or my position will be made redundant. My Public Sector counterpart, who can't be measured in such terms, doesn't have a similar metric to perform to and, so, in *general* won't perform as if they did and management (i.e. the Government) not having this metric find it harder to justify lay-offs or salary cuts.

Lu Tze

Sleepy wrote: »

The biggest difference between the two sectors that's noticeable to me is average working hours. I'm pretty strictly a family person and make a huge effort to be leave the office at half five but I still end up doing a lot of unpaid overtime, both in terms of travelling to and from client sites and just staying late to get things done. This is something I see far less of in the public sector, the notion of spending 6 hours of your day driving to and from somewhere to do a full day's work there without being paid for it is something that couldn't be allowed to happen in the PS. The unions would go crazy and arguably, rightly so.

As a generalisation i would agree with this - having worked as part of a client/consultant team in the PS for about 8 months. Our day was half an hour longer than the PS, but would often be there much later in the evening.

The exception being there were two salaried professionals in the PS on the same floor as me (i.e. non flexitime) who were consistently in as late or later than me, and doing so for no extra benefit in pay or time in lieu etc.

To be honest if i was in that work environment i would have found it hard to keep that level of commmitment, at least with my company it may help down the line with regards to promotion etc. in years to come.

padrepio

As anyone who has ever worked in any private sector company will tell you - poor customer service, downright laziness, double jobbing, corruption and cover ups are not necessarily the sole domain of the public sector. Have people already forgotten wonderfully efficient companies like AIB, Anglo, RBS, Enron - etc etc

Cant believe people are swallowing the line pushed by right wing media types like the Sindo whose advertising revenues are hugely down that the public sector is at fault for our mess. People point to the HSE and saying scrap it but recent EU reports that compare public health systems has it climbing the ladder each year and ahead of the NHS in 2009. That report pointed to the establishment of the HSE being crucial and that the Irish health systems suffered from an internal marketing problem. Bertie Ahern gave a blanket guarantee when the HSE was formed that noone could lose their job - Brendan Drumm pointed to this as a huge issue to progress when leaving the HSE.

Sure the public sector can be reformed, we need a state wide public sector ICT policy for a start seeking huge consolidation of admin and management across the board. But that wont happen without investment. Without investment, there will be no increase in national growth either.

ei.sdraob

Amhran Nua wrote: »

Depends on the business culture. China is basically one gargantuan public sector, and nobody could call them inefficient.

Oh really :rolleyes:

ei.sdraob wrote: »

http://www.time.com/time/photogallery/0,29307,1975397_2094492,00.html

if you thought ghost estates in Leitrim are bad, how about ghost cities in Inner Mongolia :eek:

Just because you fantasize and admire the iron grip authoritarianism (and the resultant lack of rights to citizens) doesn't mean there is waste, especially in a culture where "saving face" is the norm alongside with bureaucracy and corruption which go back in time a long time.

Permabear

This post has been deleted.

20Cent

donegalfella wrote: »

This post has been deleted.

Really?
Anglo,
AIB
BOI etc
Goldman Sachs.
Farming industry
Ryanair
etc etc ................

The car industry in the US.
Oil industry is subsidised.
The whole military industrial complex in the US.
The Financial sector.
Steel

Amhran Nua

ei.sdraob wrote: »

Oh really :rolleyes:

Yes, that's one of the reasons the manufacturing is all being sent there.

ei.sdraob wrote: »

Just because you fantasize and admire the iron grip authoritarianism (and the resultant lack of rights to citizens)

I'm trying to come up with a way that you could fail any more with your strawman/ad hominem combo, but its just not happening. Its particularly ironic coming from the far right wing.

Permabear

This post has been deleted.

20Cent

donegalfella wrote: »

This post has been deleted.

And that definition covers just about all the private sector.

My point being that this idea of private sector companies operating in a self sufficient vacuum does not exist and never has existed. We are all tied in together one can't operate without the other.

Permabear

This post has been deleted.

20Cent

donegalfella wrote: »

This post has been deleted.

Name a company which the state does not directly or indirectly intervene to subsidize them, nationalize them, bail them out, or otherwise prop them up?

Scofflaw

20Cent wrote: »

Name a company which the state does not directly or indirectly intervene to subsidize them, nationalize them, bail them out, or otherwise prop them up?

Mine, for a start.

cordially,
Scofflaw

limklad

Atlantic Dawn wrote: »

Well in my dealings with the public service the only service I have ever dealt with that I received what I could call any level of efficiency was online motor tax, this is all automatically generated and required little or no human interaction on the public service employees end. I'd imagine this system in the private sector would have reduced staff in the motor taxation office by 30 or 40%.

Do not forget the Revenue, They are always efficient taking Taxes from you.
No seriously, the online Tax forms are handy too There is no one to wait to find the paper work since it all computerised.

20Cent

Scofflaw wrote: »

Mine, for a start.

cordially,
Scofflaw

So you don't use bank accounts in your business?

Scofflaw

20Cent wrote: »

So you don't use bank accounts in your business?

I do - and I can see what your next point is, but making the definition as wide as that makes the argument irrelevant. Nor do you need to go as far as the banks, since I could in theory do without them - the government enforces all kinds of laws that make it possible for me to do business, and governments have done for centuries.

Most people would call that creating an appropriate business environment rather than saying that the government is 'propping up' or 'bailing out' my business specifically - but I guess your use of 'indirectly' covers all the bases short of governments hunting down businesses. So your point is technically correct, while being so broad as not to be a point at all - well, except to really diehard libertarians, of course.

amused,
Scofflaw

rumour

Scofflaw wrote: »

Unfortunately, the public need for accountability from the civil service has resulted in procurement and oversight demands that most small businesses simply can't meet. If real accountability is required, you need a company that can afford to spend a decent amount of its money on internal documentation and formal processes, whereas small companies are like black boxes - we do the work, and you get the result, but we don't have the time or resources to annotate every step of that process, which is in any case highly informal - so if the result is bad, there's no accountability trail, and no point of blame bar the decision to hire the small company in the first place. The lesson most civil servants and large company employees learn, then, is "nobody ever got fired for hiring IBM" - or PWC these days - and small companies only get projects involving small amounts of money, because nobody's ass is on the line. Unfortunately, that means we often miss out on public contracts that we could perform alone, because the civil service has overbudgeted, and on contracts where we could perform as a consortium because we still don't have the resources to do the paper trail, even though we would be more efficient.

And so it goes. Small businesses are efficient, but we're unreliable and unaccountable - big companies and the public sector are the opposite. It seems to be an inherent tradeoff.

cordially,
Scofflaw

The procurement procedures to which you refere are a direct result of an EU directive on public procurement.Couldn't resist that!!!
However i fully understand the reasoning behind it. Perhaps it is time to lobby for an update of this legislation.
I think it is reasonable to argue that while it has its merits it does show that one size does not fit all.
One example of how this has manifested itselfin Ireland. A tendancy to sub-contract responsibility. For example Cowen says he acted on the best advice. That is legally what was procured within the law.How has he done wrong?

20Cent

Scofflaw wrote: »

I do - and I can see what your next point is, but making the definition as wide as that makes the argument irrelevant. Nor do you need to go as far as the banks, since I could in theory do without them - the government enforces all kinds of laws that make it possible for me to do business, and governments have done for centuries.

Most people would call that creating an appropriate business environment rather than saying that the government is 'propping up' or 'bailing out' my business specifically - but I guess your use of 'indirectly' covers all the bases short of governments hunting down businesses. So your point is technically correct, while being so broad as not to be a point at all - well, except to really diehard libertarians, of course.

amused,
Scofflaw

In fairness the point was being made to a diehard "libertarian" so thats why it is so silly.

Regarding the op the private sector is probably more efficient than the public in lots of areas. There are just some that I think should have a public element. Vital services such as education, energy, transport and health. We've seen abuses of the public in the hands of private sector such as Enron making false power shortages in California for profit and Bectal with water in Bolivia.

Sleepy

Direct contrast from the day I just had at work with a PS client:

Left house at 7, arrived on-site at 9:45 (having arranged to be there for 10), worked through lunch, got asked if I was ready to leave so my contact could go home at 5:35, drove home for 8:20.

My contact: arrived at 10, took tea at 11:30 for 20 minutes, commented that I was mad not taking my "full hour" for his lunch (because "I'm not paid for it"), took another 20 minutes for tea at 3 and was pushing me out the door because if I stayed late he'd have to as well.

My Day: 12 hours (subtracting an hour, twenty for my usual commute)

My Contact's: 5 hours 50 minutes.

My contact has longer holidays, incredible job-security and earns more than I do. I've worked with colleagues of his that have stayed on until 2am when it was necessary to bring a project in on-time. The big difference as I'd see it would be that the person I worked with today would be the first on the chopping block when a round of redundancies came around in a recession (assuming they weren't let go for lack of performance before that).

dunsandin

20Cent wrote: »

Really?
Anglo,
AIB
BOI etc
Goldman Sachs.
Farming industry
Ryanair
etc etc ................

The car industry in the US.
Oil industry is subsidised.
The whole military industrial complex in the US.
The Financial sector.
Steel

Hack,hack,cough, sticks in my throat to say it, but fair point.

dunsandin

20Cent wrote: »

Name a company which the state does not directly or indirectly intervene to subsidize them, nationalize them, bail them out, or otherwise prop them up?

And mine. Never got a red cent.

round tower huntsman

at the lower end of the scale the public sector is not over paid or under worked. the problem lies in the middle to upper levels. people on massive salaries doing fcuk all. ut their wages, no one in the ps should be on more then 80 grand,anyone over that should be cut.. dont like it, then fcuk off?
i bet not one would leave the ps.

round tower huntsman

mods please move this post to the post on ps cut backs. thanks.

dunsandin

yes baass.

Tigger

i run a couple of private businesses

one day i realised my driving lisence was going to be out of date soon so iwentr to the local driving lisence place.
I got there when they opened
it was a motor tax office, there were 4 windows marked motor tax with 4 people sitting at then
there was a window marked lisences with no people sitting at it
there were 5 more people wandering round drinking coffee i could see them behind the glass
there were no other non staff there except me
i went to the window beside the lisence window and as ked the lady about the lisence window and its lack of personel
she expla ined that the lady due to man that window had not yet arrived
i explained that i was hoping that someone else could take the 20 euro and proecss my application
she ensured me that the lady entrusted with the lisence window would soon appear to deal with me

at 9;45 three quaters of an hour after i had started waiting; remember that no non staff had been in and that 4 windows marked motor tax were manned i approached the lady i had chatted to half and hour ago

me: look, if this other lady dosent come in what happens?
ps worker: if she rings in sick then one of us will man that window
me: well it looks like shes not coming
ps worker: no she'll be here soon
me: i think that she should be here now what is the name of the supervisor here

the lady got up without a word went over to a middle aged gent had a relaxed chat with him
she came back

me: well?
ps worker: i'll process your application now
me: thanks

so she starts processing the forms
then another lady comes in she looks at the lady i'm dealing with looks surprised and the two of them leave and go to the back of the office
a minute later the second lady comes over aand finishes my application
it is 10;05 there were no other people in the office and 4 staff had definatly done nothing including helping me

i remember having to take a number to get road tax and waitinmg 30-40 minutes but with the online renewal etc its much easier
i'm not sure why they wouldnt process my application (i'd guess that there would be passwords that would show who did it against who should have been there to do it but the fact is they didn't even realise they were doing wrongif a staff member of mine had been the late one the supervisor or the one who refused to help i'd expect to be finished trading soon after
if i found out about such behaviour they'd all be gone fired let go made redundant and laid off

probably too long to read so:

private business in general is far far more efficient and more correctly policed than what i have seen of the public sector

zootroid

Having worked in both the private sector and public sector (and currently working in the public sector), in my experience you work harder, longer hours for less money in the private sector. Pretty much meets the definition for being more efficient in my book

Permabear

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Head The Wall

padrepio wrote: »

People point to the HSE and saying scrap it but recent EU reports that compare public health systems has it climbing the ladder each year and ahead of the NHS in 2009. That report pointed to the establishment of the HSE being crucial and that the Irish health systems suffered from an internal marketing problem.

I'll bring that report with me so for when I have to spend 36 hours in casualty. The crap some people believe is astounding, you obviously have no dealings, needs or knowledge of the health service in this country

20Cent wrote: »

Name a company which the state does not directly or indirectly intervene to subsidize them, nationalize them, bail them out, or otherwise prop them up?

You need to get out more if you think every company is getting subsidized by the govt

20Cent wrote: »

So you don't use bank accounts in your business?

If he does use bank accounts I'm sure it's his own money thats in it and if he has received a loan from the bank he will have to pay it back.

I don't get where you can relate the govt bailing out the banks to Scofflaw getting free money from the govt. Thats idiotic

round tower huntsman wrote: »

at the lower end of the scale the public sector is not over paid or under worked. the problem lies in the middle to upper levels. people on massive salaries doing fcuk all. ut their wages, no one in the ps should be on more then 80 grand,anyone over that should be cut.. dont like it, then fcuk off?
i bet not one would leave the ps.

You are so wrong, from an ESRI report on Public-private sector wage gap

The results indicate that the public sector pay premium increased dramatically from 9.7 to 21.6 per cent between 2003 and 2006. Furthermore, we found that by 2006 senior public service workers earned almost 8 per cent more than their private sector counterparts, while those in lower-level grades earned between 22 and 31 per cent more

Data is from 2006 but this is from when the Private sector was "booming".

I'm guessing from your post that you class yourself as a lower paid PS worker and you deserve more than you are currently earning but everyone else above you is getting paid too much and to cut them, yeah right :rolleyes:

20Cent

donegalfella wrote: »

This post has been deleted.

I was replying to your point that a business that is not profitable will go under. This is patently not true. I also agree with Scofflaws point, we do need government to create an environment conducive to doing business. As listed there are very few businesses that are totally independent, even those rely on the state to an extent. The banking system for example, courts to enforce contracts and copyright etc.

There sure are abuses and waste in the public sector but at least we can find out about them and do something about them.
Imagine water was controlled only by a private company!! Jack up the prices, can't pay tough. Create a false shortage and jack up prices. See what happened with Eircom, went into private hands and was stripped for profit, no interest in providing a good service or rolling out broadband.
Business is very good at making profit from things, that is good in most cases but essential services should not be used just to make profit for a few. Like what happened in Bolivia. If its in public hands at least we would be able to do something about it.
Same with transport. It should be a mixture of public and private. Live in a remote area, sorry a bus route to you is not economically viable so tough luck. Going to the park for a walk? private pay up. Want to go to the beach, private pay up. Everything in private hands sounds like hell.
This idea that private business will provide the best service at the best price is nonsense. It provides whatever will give it the most profit, that is not necessarily what is best for the customer or society.

ei.sdraob

donegalfella wrote: »

This post has been deleted.

Yep the likes of Hayek kept banging on

That regulation is required in order to create a competitive environment in which business can flourish and produce results. The keyword here is competition, this of course could be taken to an absurd extreme as has happened in Ireland with the ESB being told to keep prices high in order to "encourage competition" :rolleyes:

For example the EUs anti monopoly work helps create a more competitive environment. But regulation beyond this could be taken too far, for example having a 5 year plan to produce X tractors for the good of the nation is going too far, this is going into command economy territory which never ends well...

Another example would be food safety regulation == good
Banana curvature regulation == silly :P

Hell even things like carbon taxation to address externalities is not a bad thing since it prevents businesses cutting corners, tho in case of Ireland its being implemented at bad time imho and without a global cooperation.

Alot of people here keep thinking @df is some sort of anti government/law anarchist or something, he is not, we had plenty of threads on the subject before..

ei.sdraob

20Cent wrote: »

This idea that private business will provide the best service at the best price is nonsense. It provides whatever will give it the most profit, that is not necessarily what is best for the customer or society.

Profit doesn't have to be monetary.

20Cent wrote: »

Everything in private hands sounds like hell.

everything in public hands is hell just ask the citizens of the likes of North Korea or Cuba (oh wait you cant :rolleyes:)

Nijmegen

There are lessons to be learned from the private sector in the public sector.

And business ideals can work effectively in the public sector. Bill Gates is running his foundation like a business, and it is led day by day by an ex-Microsoft bigwig who ran their Office division (I think.) The foundation is having a good impact.

Big business, some of which have more employees than our entire public service with as many different departments, goals, and spread over the globe, have a lot of advanced systems, process and management control that we could do well to implement in the public service.

There is no such thing as a perfect business. But there's a lot more successful businesses than there are public sector success stories in Ireland.

We could look to Dell or Tesco if we want to learn just-in-time supply chain optimisation.

We could look to Microsoft or Google if we want to see how engineering and the free flow of ideas can be encouraged and managed to solve major problems.

We could look to PayPal or Amazon if we want to see how government can transact with and target its services to its citizens.

We could look at GE or Toyota if we want to see how to implement excellent management controls and constantly improve... And we could take some warning from Toyota too, on taking it too far.

We could look at the best private hospitals in the world and ask, beyond attracting the best in individual talent, what are the processes, the ways they do their business, that make them the best at what they do?

We need to have a transparent culture of open and constant change, reform and adaptation in our public service, the same as you have in any successful business.

johnboy_123

I think the problem is motivation not so much private vs public. I reckon in either sector if there is no motivation to do a good job and produce tangable measurable results then there will be an increase in slackers.

The issue is that in private sector when this happens the company goes bust if the employee is not found out or they get fired. What happens in the public sector is they get a pay rise or ring in sick

Tim Robbins

Back to OP.

Private does whatever it can to make as much profit as possible. This usually means doing what the customer wants as quickly and as cheaply as possible. They would still use slaves if it was not illegal.

There is nothing to motivate public sector to work harder, faster or smarter.
Unless they are self motivated which is statisically unlikely.