The article makes excellent points about national productivity. The public sector, by its nature, is not innovative or efficient. It’s always dragged down by political concerns, which tend to trump real economic concerns.
Secondary education in America has not improved much at all in the past several decades. The teachers’ unions have essentially created a situation where it’s impossible to assess people based on the quality of their performance. Instead, years of experience and political connections have become the primary factors affecting teacher compensation.
We’re seeing a situation where the private sector continues to become more productive via technological innovation and labor specialization, but the public sector continues to drag down the economy with inefficiency and extremely high (above-market) wages.
Finding a solution is difficult. There are certainly some public sector positions that should absolutely eliminated, but you can’t really replace teachers, firefighters, police officers, etc. And in spite of the fact that a privatized school system might theoretically be more efficient, if we totally privatized the system, we would be depriving millions of people of any form of education.
So instead, the only hope is to reform the public schools somehow. And I don’t think it will be simple, because entrenched interests (i.e. teachers’ unions) will block any and every attempt to improve the system. So instead, we get garbage reforms like “No Child Left Behind” that don’t actually improve anything.
The article also talks about public transit and the increasing inefficiency behind it. I’m a big critic of our current mass transit model. Many people argue that it’s not possible for the private sector to profit in that sphere, but I disagree. I think the public sector is so extraordinarily inefficient, and if a private company took over, costs could actually be lowered and service improved.
The problem is that politicians always try to cut public transit spending before anything else. Moreover, different political agencies often end up fighting over public transit systems, which then cripples funding and decision-making. Meanwhile, demand for mass transit is skyrocketing. Yet, supply is falling. There’s definitely an imbalance between the two.
It would actually be better to put some mass transit systems under private company operation. High-speed rail and intra-city rail systems in large metropolitan areas, in particular, would be the most viable candidates to survive in a more privatized system.
Regardless, I agree with the concerns expressed in the article. We are becoming too dependent upon the public sector and it’s lowering our economic growth and bankrupting governments. It’s alright if a private company goes bankrupt, because our legal system can handle that (unless it’s a big bank, apparently); but it’s much more difficult for us to handle a large state becoming insolvent.