Chronicle Herald: The backward logic of privatization

Public sector workers are not a cost to the economy; quite the contrary, they are producers of value

An article in the Halifax Chronicle Herald suggests public sector workers are a cost to the economy and should be eliminated. The item entitled “John Bragg: Cut civil service to help dig N.S. out of debt” quotes Bragg, the president and CEO of Oxford Frozen Foods Ltd. saying, “Reducing Nova Scotia’s civil service down to the national average would result in savings of $836 million a year.”

Capitalist Bragg and the Chronicle Herald push this unscientific logic to attack the wages and benefits of public sector workers and make their jobs a target for privatization or outright elimination. According to their view, a bus driver or waste recycling worker produces no value from which a portion is dedicated to pay wages and benefits. Following their line of reasoning, if they are public sector workers, their wages are a cost to the public enterprise for which they work, which translates into a drain on the public treasury, which Bragg calls the taxpayer. If they work for a private enterprise, the workers in turn produce no value to pay for their wages and benefits, but in this case, their wages and benefits are a cost to the private owners of the enterprise and a burden on them and not on the public treasury. To the relief of Bragg, the transfer of work from the public realm to the private sector or its elimination altogether saves the public treasury the cost of the wages and benefits of the bus driver, waste recycling worker or other public workers, and the means of production, which they use while working.

Readers of the Chronicle Herald are supposed to applaud the heroism of private entrepreneurs, mostly global monopolies in this era of monopoly capitalism, for taking on through privatization the cost and burden of the wages and benefits of the bus driver, waste recycling worker or other public sector workers and their means of production.

But why would private entrepreneurs want to assume this cost and burden of paying wages and buying means of production? What is in it for them that is not there for public enterprise? Privatization would not take place unless some profit or gain was in it for the privateers. Maybe it’s magic. Perhaps something mysterious occurs when public sector work is privatized that introduces a way to generate value and make profit that does not exist with a public enterprise. Supposedly with privatization, profit suddenly appears that somehow was not there with public ownership. Bragg and the Chronicle Herald do not explain the mystery of privatization because nothing can be explained; it can only be asserted. It exists in capitalist faith and empty propaganda not in economic science.

The value workers create exists equally in public and private enterprise. Their wages are paid from a portion of the value they create. The profit from the value they create is claimed by both public and private enterprises. The private enterprise distributes the profit the way it wants, most likely into the coffers of certain owners. The public enterprise distributes the profit according to its policies, perhaps broadly through lower prices amongst private enterprises that require the public service or infrastructure; or possibly, a portion of the profit is poured back into the public enterprise or public treasury as Canada Post has done for much of its history but which is now under attack from the Harper government.

In public and private sectors, the bus drivers, waste recycling workers or other workers are the productive social force, the actual producers who create the value. Their wages and benefits come from the value they create whether they work for a public or private enterprise. Likewise, the profit comes from the value workers create whether for a public or private enterprise.

No value is saved when public sector work is privatized or eliminated. When privatized, certain private owners of social wealth become the claimants of the profit workers produce. If the work is eliminated, no value is created to claim and the economy and people suffer the loss. Privatization, austerity, wrecking of the economy and concessions by workers are not solutions to the economy’s problems. A new pro-social direction is the solution that leads to nation-building not nation-wrecking.

Capitalist Bragg and the capitalist Chronicle Herald want to claim for themselves the value workers create. For capitalists, the value workers claim or any value claimed in the broad public interest and good and not in the narrow private interest of a privileged few is a waste, a cost and burden.

The capitalists do not want to admit that workers are the source of value in the modern economy. If they admit the truth, then the obvious question arises as to why workers do not control the value they create and the means of production, which they have built and use to produce value. Control by the actual producers of the production process and the value they create would give the economy a modern motive, outlook and organization in conformity with its socialized nature. It would be a great step forward in resolving the contradictions and problems now confronting the economy and society.

Source: Workers’ Forum, March 3, 2015, No. 2

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