But whilst it is always important to constantly strive for efficiency, it is not clear to me that either system is inherently more efficient than the other.
If I have learned anything in my fairly lengthy exposure to organisations both Public & Private the only absolute truth I can establish is that both have a capacity to screw-up quite spectacularly and neither is inherently more likely to do so than the other.
During recent arguments about Ed Milliband’s idea on freezing energy prices for 2 years should he be elected in 2015, I have heard arguments that suggest Government efforts to control prices are doomed to fail and suggesting that there is some rationale which suggests that this somehow might suggest that food retail outlets like Tesco’s or Sainsbury’s might be next given the importance of food to the lives of our citizens.
This argument is of course completely disingenuous as whilst many of us may have serious questions to ask about the power and behaviour of the supermarkets, and I’m certainly one, I do have some choice as to where I get my food, I believe there is genuine competition going on between supermarkets, small businesses and food producers, in fact I can even generate some of my own if I try hard enough (my courgettes and cucumbers are a wonder to behold)!
This is of course not true with energy and water who operate effectively, if not openly as a cartel and a monopoly. They argue they make no more margin on retail sales than supermarkets and blame ‘Green Taxes’ and ‘wholesale prices’ for rising bills – despite the obvious fact that the wholesalers who are charging them high prices are in fact themselves as they often are effectively the generator and the retailer.
Whatever the truth, the argument goes that they need to make profits to re-invest and to provide a return to shareholders.
The argument continues that the Public Sector do not need to generate profits which is the discipline imposed on Private Companies that drive their need for efficiency and subsequently reduced cost profile.
This may well be true where true competition exists but it certainly does not apply in the case of such things as Gas, Electricity, Water, Trains and the latest in the line of selling off the family silver, the Royal Mail.
Of course there is always, it seems to me, an attempt to polarise the arguments – either you are an adherent to an unfettered so called ‘Free Market’ or an out and out Socialist (which it seems to me many people cannot differentiate from Communism).
Nobody ever seems to talk any more about a ‘Mixed Economy’ where things that operate best in the Private Sector are allowed to – and those things that don’t, remain in the Public Sector’.
The ultimate question surely is ‘How vital is the service to the majority of our citizens?’
I have a simple belief – if the consequence of not having access to a service is that people die – or it is effectively a monopoly, then it should never be subject to the vagaries of the Private Sector.
Remember, the legal duty of a private company is to operate in the best interests of its shareholders – not the consumer. This can, in my opinion, never be justified where the life and well being of the consumer is at risk.
If Apple want to charge ridiculously inflated prices for an iPad that is fine, they will ultimately face competition from other electronics companies – but I will not die if I can’t afford an iPad.
But if I can’t heat my home (assuming I have one) or get access to water or cook food, or even more fundamental have free access to healthcare, then the consequence is not a lower standard of living – it is illness, disease and death.
The real answer to this problem is not more unrestrained capitalism which is still continuing as we watch the rape (strong word but justified I feel) of the Royal Mail – but neither is it some tinkering with prices as proposed by Ed Milliband.
The real answer is that where something is a monopoly or is difficult to make a profit at but is essential to human life, it should be in public ownership not private.
What we currently have is the worst of all possible worlds – the Public Sector is deprived of the profits, but are still ultimately responsible for much of the costs, it is easy to see this as prior to Privatisation the Government took on responsibility for the black hole in the Royal Mail pension scheme and the fact we pay 6 times more in subsidies for trains than we did before they were (allegedly) privatised.
If things are essential to human life but difficult to make profitable, you do not fake the market to enable rich people to make more money regardless, but accept the reality and realise we have to find the money to pay for it.
We do that by allowing private companies to flourish in real competitive markets and stop them interfering in those things that are social necessities.
Oh, and let’s make some meaningful attempt to collect taxes from those who can afford to pay them to fund what ultimately will be a much more pleasant society, if somewhat less acquisitive.