Making the civil service more businesslike

This is all the more amusing for having been written in the 1930s!

Officialdom classifies activity according to the capacity for undertaking it formally acquired by means of examinations and a certain period of service. 'Training' and 'length of service' are the only things which the official brings to the 'job'. If the work of a body of officials appears unsatisfactory, there can be only one explanation: the officials have not had the right training, and future appointments must be made differently. It is therefore proposed that a different training should be required of future candidates. If only the officials of the communal undertaking came with a business training, the undertaking would be more business-like. But for the official who cannot enter into the spirit of capitalist industry this means nothing more than certain external manifestations of business technique: prompter replies to inquiries, the adoption of certain technical office appliances, which have not yet been sufficiently introduced into the departments…, the reduction of unnecessary duplication, and other things. In this way 'the business spirit' penetrates into the offices of communal enterprise. And people are greatly surprised when these men trained on these lines also fail, fail even worse than the much-maligned civil servants, who in fact show themselves superior at least in formal schooling.

It is not difficult to expose the fallacies inherent in such notions. The attributes of the business man cannot be divorced from the position of the entrepreneur in the capitalist order. 'Business' is not in itself a quality innate in a person; only the qualities of mind and character essential to a business man can be inborn. Still less is it an accomplishment which can be acquired by study.... A man does not become a business man by passing some years in commercial training or in a commercial institute, nor by a knowledge of book-keeping and the jargon of commerce...

When these obvious truths became clear in the end the experiment was tried of making entrepreneurs, who had worked successfully for many years, the managers of public enterprises. The result was lamentable. They did no better than the others; furthermore they lacked the sense for formal routine which distinguishes the life-long official. The reason was obvious. An entrepreneur deprived of his characteristic role in economic life ceases to be a business man. However much experience and routine he may bring to his new task he will still only be an official in it. It is just as useless to attempt to solve the problem by new methods of remuneration. It is thought that if the managers of public enterprises were better paid, competition for these posts would arise and make it possible to select the best men. Many go even further and believe that the difficulties will be overcome by granting the managers a share in the profits… But the problem is not nearly so much the question of the manager's share in the profit, as of his share in the losses… To make a man materially interested in profits and hardly concerned in losses simply encourages a lack of seriousness…

(Ludwig von Mises, Socialism, pp215-7.)

World may stop turning of 31 January 2007

Panic is palpable across Britain as thousands of civil servants have voted to strike on 31 January.
Regulation will become Byzantine as civil servants eager to undue the regulating urges of other civil servants miss a day’s work, soft loans for exporters may be delayed, and public service advertising will remain patronising! And how will any of us survive without HM Revenue and Customs checking up on whether we have paid enough tax or imported too many cigarettes?

Of course, a few people will suffer from this; mainly poor people. Job centres and benefits offices will be closed, meaning that either people will get their benefits without having to sign on (so having no impact at all) or their benefits will be delayed (causing suffering to the most needy). It makes more sense that driving tests will be delayed, as these are exactly the sort of service that the government should be privatising, though it is ironic that while the strike is about the Public and Commercial Services Union’s opposition to privatisation, this particular service is not one of those in the frame. And the courts will be hit, but some might argue that justice is so slow that nobody will really notice.

Of the 280,000 members balloted, 61,488 voted in favour of the strike and 38,823 voting against. In a brilliant example of wilful misrepresentation, PCS General Secretary Mark Serwotka said the size of the majority showed the anger at the way civil and public servants were being treated. Some might counter that the fact that almost two thirds could not be bothered to vote implies that the result shows the total apathy of Mr. Serwotka’s members, and that basing a strike on the opinion of barely a fifth of his membership suggests that the agenda being pursued here is Mr. Serwotka’s rather than that of his members. But that’s union politics for you.

In fact, the main impact of the PCS strike will be that for one day only thousands of civil servants will not get paid. That should save the taxpayer hundreds of thousands of pounds. So here is a novel suggestion: rather than the citizens of the UK missing out on this non-event, why not give every taxpayer a tiny tax rebate. On 1 February, when they wake to find a couple more quid in the bank and civilisation still intact, they will really be able to judge whether they are getting value for money from their public servants.

The end of the free society?

I came across some disturbing statistics over the weekend. Apparently, less than half of the eligible voters in the UK work in the private sector. The rest are either state employees or on state benefits.

This is important because a free society requires the citizens to keep their government in check. It is easy for those who do not rely on welfare and who are not paid a salary by the government to insist that their rulers take a long term view of their needs, look to the health of the economy and not just the wealth of the public finances, and rule in the interests of the nation and not simply serve a host of special interests. But a client nation where the citizens rely on receiving money from the state cannot exercise the same restraining hand.

Of the 44 million on the electoral register, only 20 million are either employed in the private sector or are self-employed. Over a third as many (7.1 million) are employed by government, and their interests lie in pushing up public sector salaries and benefits at the expense of taxpayers; we have already seen the effect of this in the government’s spineless and unprincipled decision not to properly reform the civil service pension scheme. The rest are made up of 11.8 million pensioners, 2.7 million on incapacity benefit and 3.2 million on various other benefits, many of whom pay very little direct taxes and yet all of whom have a vested interest in seeing public spending – and consequently direct taxes – rise.

Benjamin Franklin described democracy as “two wolves and a lamb voting on what to have for lunch.” In this case, the welfare dependent and those on the government payroll now outnumber those whose productivity must ultimately pay the government’s bill. Yesterday I wrote that “It may seem at present that intervention and the large state dominates, but the tide will turn. The voters, be they the over-taxed middle class or working class playthings of bureaucracy, want freedom.” However, if over half the voters are dependent on the government’s ability to squeeze money out of the remaining less-than-half, that is not the case.

Ultimately, freedom relies on autonomous individuals agreeing to pass over a proportion of their wealth to the public good. This is not the case if a predatory government can use the votes of its clients to extract ever more from a minority of independent wealth producers. The results will not only be spiralling taxes and unemployment and a generally worsening economy, which we are already seeing. It will be to draw ever more people into government control, ever expanding its power until we are all its subjects.