Public Administration v Business Management

Why are managers in the public and private sectors treated so differently? The former are talked about in terms of layers – all too many layers, they are a drain on precious resources, they are paid too much, they get in the way of the ‘real’ workers, and they are to be blamed for the many things that go wrong in the public sector. The latter are referred to as entrepreneurs, leaders of industry, who must be paid a lot if they are to be attracted to take on any job, they are worth every penny because they have to take tough decisions, and make money for their company.

But isn’t this all a mirage to give the impression that the private sector is somehow superior to the public sector? Think about it. 

At the most basic level, all organisations – private or public – need managers, otherwise there would be no overall planning, no coordination, no strategic adjustment in response to disparate feedback. Too many layers of command and control would – again in the private or public sector – be counter-productive, but lack of management support means that operational staff have to set aside time to do the planning and coordination, only less well because they can neither focus on organising everyone else nor concentrate on carrying out their own work.

As for pay, managers in the public sector are generally paid less well than their counterparts in the private sector. Some try to argue that this must be down to public sector managers not being ‘good enough’ to get private sector jobs, or they simply haven’t got the ‘go-getter’ mentality to work for businesses. This trite observation overlooks two factors. Firstly, pay structures in the public sector are on the whole bound by a greater degree of equity, and both the gaps in pay across the different ranks and comparable rates of pay increase are kept in check. In the private sector, the higher one goes in the management chain, the more one tends to be able to secure much higher pay and pay rises than people lower down. Secondly, and this might be difficult for people who can think of little beyond monetary self-interest to understand, there are many people who are motivated by the ethos of public service, and do not consider salary level the be-all-and-end-all in career planning.

Leaving aside the fact that private sector managers may play only a minor part in their company’s profit-making (which could be mostly down to the hard work of operational staff who get just a tiny share of it), or barely breaking even, it should be noted that their public sector counterparts have to deal with pressures that are of a whole different order.

Public administrators – responsible for policy development, strategic planning, service delivery – have to constantly balance competing demands and interests. There is no such thing as ‘this is not our business’ because everything in the public domain connects with each other, and the politicians in charge rightly want to address any issue that is impacted by the activity any public administrator is handling. Different people have different views and expectations; housing decisions affect community safety; environmental arrangements affect public health; and one has to strike a sensitive and effective balance if one is not to end up upsetting everyone.

In the private sector, good management can generate higher revenue and thus more resources to do one’s work. In the public sector, good management can improve services which lead to higher demands with no corresponding increase in funding, and one has to come up with constant innovations as well as the good old ‘efficiency’ cuts to keep things going.

Finally, there is the public accountability and intense scrutiny that places public administrators directly under the microscope of political oversight. There is no hiding behind commercial confidentiality, a manager working for a government body has to be prepared to answer questions – raised in any quarters – about any aspect of their work.

There are public-spirited managers in the private sector who have made a move to the public sector, but some have moved back to the business world not because of pay, but because managing in the public domain – for those who have never experienced it – is surprisingly challenging.

A Right Slippery Slope

The Republican Party in the US has become a vehicle for the cult of Trump. It does whatever Trump wants, even though all Trump wants is more money and power for himself. Some people, especially former Republican supporters, could not understand how this has happened. Around the world, alarm bells are ringing as more budding autocrats are looking to copy Trump’s playbook to gain power and start their own reign of egocracy. 

To make sense of all this – and how it could take place in other countries – we need to go back towards the end of the 19^th century when the Republican, William McKinley, won the presidency (1897-1901) with the support of millionaire businessman, Mark Hanna, on a broad economic platform. McKinley backed protective tariffs (because businesses at the time wanted them, not despite their opposition as it is the case with Trump), and put forward policies favourable to farmers, industrial workers, and immigrants to the cities. 

When Theodore Roosevelt succeeded McKinley as the next Republican President (1901-1909), he continued to focus on the economic interests of the country, which led him to tackle monopolistic and other harmful business practices which dampen competition and deprive the public of reliable goods and services. He promoted a form of responsible capitalism – to enable businesses to thrive but also ensure they do not hurt the interests of workers and consumers, and that taxes contribute to building national resources and amenities for everyone.

Theodore Roosevelt’s progressive approach came to be rejected by the Republican Party when big business interests increasingly dominated its policy thinking. From 1921 to 1933, three successive Republican presidents – Warren G. Harding, Calvin Coolidge, and Herbert Hoover – steered the party firmly towards serving the wealthy corporate elite. Tax cuts for the rich, low wages and job insecurity for the poor, leading to lack of demand for goods produced, factory closures, banks endangered by debts, collapse of share prices, and the Great Depression.

The Democrats under Presidents F. D. Roosevelt and Harry Truman (1933-1953) responded to the mass unemployment and poverty afflicting the US with a three-prong strategy: the New Deal safety net for all Americans, sustained investment in vital infrastructure for the country, and regulatory safeguards to curtail irresponsible business behaviour.

Big business leaders unhappy with the Democrats’ approach poured funds into strategists and advocacy groups to come up with ways to turn the table. Their core concern was removing regulatory restraints so they could maximise their profits at the expense of consumers, workers, and the environment; having to pay less tax; and reducing public provisions so that people would be more dependent on private enterprise. The corporations most drawn to this project were those engaged in business activities that required the closest public scrutiny – guns and other weapons, fossil fuels and other pollutants, pharmaceuticals and private health insurance, gambling and other harmful addictive offers, speculative financial deals, etc. But the Republican Party could hardly present itself as the party to help the wealthy few get even richer. What can it do?

In the 1960s and 1970s, a series of events gave Republican leaders a chance to reposition the party. The liberation culture favouring gender equality and more relaxed attitudes towards sex-related matters provoked a clamouring for ‘traditional’ values. The determination by Democratic President Lyndon Johnson to advance civil rights for all led to a backlash which handed the hitherto solidly Democrat-dominated South to the Republicans. The protest against and eventual American withdrawal from the Vietnam War stirred up fervent anti-Communist feelings that backed heavy defence spending and military intervention. The oil crises of the 1970s caused economic problems which provided the excuse for bringing in the ‘free market’ alternative.

With the help of William F. Buckley, goaded by Pat Buchanan, and steered by Milton Friedman and others, the Republican Party under Presidents Ronald Regan and the two Bushes moved ever closer to invoking God to ‘uphold the values’ of a ‘traditional, Christian, essentially white America’, while favouring the rich and leaving the poor ever more vulnerable. But while they still felt that they must be careful in not going too far in turning everyday prejudice into fanaticism, for Donald Trump nothing would be too far so long as it would provide cover for him to secure gifts, favours, and money for him and his closest allies. And the Republican Party today is with him all the way. Basic rights are trampled on, discrimination endorsed, judicial rulings are ignored, convicted criminals who stormed the Capitol are pardoned, and innocent people are arrested and deported without trial. 

Anyone who thinks it’s OK to follow the Republicans’ lead, should be under no illusion what is at the end of that slippery slope.