The Battle Joined
Posted by Lex, on February 17, 2011
Last month, the Economist published an excellent cover story entitled “The Battle Ahead” about the impending battle governments will have to wage with public sector unions to ensure that, if taxes are indeed to be eaten by a professional class of bureaucrats, they at least be eaten efficiently:
Private-sector productivity has soared in the West over the past quarter-century, even in old industries such as steel and carmaking. Companies have achieved this because they have the freedom to manage—to experiment, to expand successful innovations, to close down bad ones, to promote talented people. Across the public sector, unions have fought all this, most cruelly in education. It can be harder to restructure government than business, but even small productivity gains can bring big savings.
The coming battle should be about delivering better services, not about cutting resources. Focusing on productivity should help politicians redefine the debate. The imminent retirement of the baby-boomers is a chance to hire a new generation of workers with different contracts. Politicians face a choice: push ahead, reform and create jobs in the long term; or give in again, and cut more services and raise more taxes.