Mark Serwotka, general secretary of the PCSU, is not keen on the markets:
But what are the markets? Who comprises them and why are they so powerful? I didn't vote for them and I doubt you did either – yet they apparently have the power to dictate policies to elected governments and, in the case of Italy, to even select the government.Well, Mark, you and your members don't have to worry about markets because your pensions are paid directly by the Government, no matter what the markets do. However, for all the other employed people whose salaries pay for your pensions, their pension savings rise and fall according to how well the funds in which they are invested perform. Those funds aim to maximise revenue (we hope) by investing in companies and countries whose prospects appear rosy, and pull money out of the entities which appear to be heading for a fall.
I'm guessing that Serwotka does not intend for this article to become a Nassim Taleb discourse on performance of fund managers relative to passive trackers, and indeed it does not:
...the myth that the public sector caused the crash was allowed to develop, and the dangerous conclusion allowed to take root that hacking back the public sector would solve the crisis.Huh? I've read the Guardian, Telegraph and Daily Mail since 2007 and can't remember anyone blaming the public sector for the 2008 crash. I thought it was fairly well-established that the crash was caused by a) American mortgage lenders lending to bad risks, b) stupid American and European banks exposing themselves to those bad risk mortgages via structured products and CDOs, and c) a flip-flop let-them-fail/OMG-bail-out-everyone approach by governments. The public sector's cost has been steadily rising over time, but has not jumped in such a way as to cause a crash.
The problem the public sector faces, Mark, as you well know but appear to have omitted in your argument, is that employment and retirement costs are steadily rising while Government income - tax, basically - is falling. Even if you fired 50% of current public sector employees, you would still have to pay extremely expensive redundancy costs, way above the statutory amounts paid by the private sector, and be on the hook for their pensions which accumulate far more quickly than private sector pensions and have no pre-funded component - each year's pension payments come directly out of Government income.
It appears that Mark is not keen on privatisation either:
Entire industries – from the railways and telecommunications, to gas, electricity and water – were taken out of collective public ownership. This transferred power over them from the ballot to the wallets of a few, the directors and shareholders who have extracted billions from them.This may be news to you, Mark, but the public did not have any control over nationalised industries. They ran as monopolies, able to charge what they liked and subject to at best vague regulation by inept regulators. British Telecom was privatised in 1984, forced to submit to competition, and waits of weeks for telephone installation were forced down drastically. For sure, privatisation of services which retain monopolies is not likely to result in much improvement - look at the profits of the ROSCOs which lease rolling stock to the train operators in the UK - but privatising BT was one of the best things that the Government did in recent years. The constant pressure of competition resulted in rapid growth of ADSL provision around the UK; can you imagine the pre-privatisation BT ever deploying a new network at that speed?
Serwotka is afraid of privatisation squeezing out his public-sector membership; it's that simple. He is a rent seeker for public sector unions, and he does his job very well. However, that doesn't mean that the taxpayer should bow to his whims. When Mark says
When what we really need is to assert our democracy over the tyranny of the markets, in the interests of the many.you should substitute "a few million public sector workers" for "we" and "the many", and "tens of millions of people whose pensions depend on the growth of private sector companies" for "the markets".