Who will stand up for the maligned public sector?

Gavin Kelly and Julian Le Grand present a strong case for the Labour Party and trade unions to rethink their basic attitudes toward public sector-private sector partnership ("Should Labour go private?", 14 August).

Part of the problem is that the entire debate has been clouded by mythology about the "efficiency" of private enterprise and the market as against the "stifling bureaucracy" in the public sector. This led to the simplistic view - the foundation stone of Thatcherism - that private enterprise equalled "good" and public enterprise was clearly "bad". We know this is nonsense, but, sadly, too few Labour leaders are courageous enough to argue that corner.

To be sure, there have been and still are black spots in the public sector: it is difficult to provide managerial dedication and skill on the basis of low public sector salaries. But any serious analysis will reveal black spots and corruption in private monopolies and gross inadequacies in many small and medium-sized businesses. Far too little credit has been given to the considerable achievements in the old nationalised industries and even to their profitability - after Treasury accountancy has been taken into reckoning. We need to refresh our thinking on these issues, which is why George Bull and I have set up the Institute of Public Enterprise Studies (IPES).

There remains a powerful case for the public sector and for a new style of partnership with the market. The profit motive, personal gain and greed are extremely powerful motivating forces - but, unaided by public intervention, they will never build a civilised society, always assuming that is what we prefer.

Geoffrey Goodman
London NW7

Gavin Kelly and Julian Le Grand ignore a wealth of evidence from other countries.

In particular, anyone advocating corporate organisation really has to begin by explaining why that vast test bed of private healthcare, the US, is irrelevant; and why the US has such expensive healthcare (consuming 14 per cent of GDP) while the results, in terms of indicators such as life expectancy, are so indifferent. In addition, about 40 million Americans are not covered by health insurance. In 1999, about 500,000 Americans filed for bankruptcy "largely because of heavy medical expenses" (BMJ, 13 May).

The absence of this kind of comparison makes the writers' essay hopelessly theoretical, not to say ideological.

Peter Draper
via e-mail

This article first appeared in the 21 August 2000 issue of the New Statesman, The New Statesman Essay - What are we doing to our children?