my small unit within the state railway company managed
Change is often needed in the world. Why don't you guys, within the government structure, and your management, just change it?
If the government model of running things is to be effective, it has to change sometimes. So if the government model is a good one, why is it not handling this challenge that you are describing. Obviously you personally have some great ideas for some of the solutions.
Correct.
Why doesn't the government have good management,
Good question. Have you read my diaries on Hungarian politics?
vision for the future,
That one they have, as I pointed out in the first third of the diary. It is to back out from managing things and sell off things.
hire effective leaders for your railway company
It's not hiring, but stopping firing. As I implied in the diary, over the past two decades, every man who understood something about railways was removed from management, and replaced with shiny new able peoplefrom the private economy (or the privatisation bureaucracy) without a faintest clue. For example, the boss of my current branch used to be the liquidation overseer for the closure of a mine...
Why doesn't your managers immediately fund your own groups profit making potential?
As I explained in the diary, because the overriding command from above, from our wonderful rational Jack "neutron-Jack" Welsh-worshipping managers, is to raise productivity by firing people.
why don't you, your colleagues, and their managers fix it?
Why obviously, because the neolibs are stronger in the system. They are using our own weapons against us.
Change is often needed in the world.
Which change are you thinking of?
If the government model of running things is to be effective, it has to change sometimes.
There is no "government model of running things", that's a dualist propaganda language. There are different models of running public companies. But preparing them for sell-off is neither of them. By the way, what do you mean when you use the word "effective"?
Obviously you personally have some great ideas for some of the solutions.
Obviously. You could have read most of them in various train and transport diaries I have written. But I am neither the PM, nor the transport minister, nor opposition leader, nor one of their economic advisers or former teacher, nor an IMF representative, and not even a railway manager. I am powerless, except for ranting to anyone who'd listen. That's why I am here. *Lunatic*, n. One whose delusions are out of fashion.
if your managers think that firing people is a way to raise productivity, they are far, far from the truth. and far, far from modern practises of business. they may be neocons, I don't know them of course, but they are certainly not good business managers using modern techniques of running something.
It just seems odd to entitle your diary "the wonders of capitalism", and then use as an example a government company run by people that don 't seem to understand business principles in use today. firing people to raise productivity is not a business principle.
You are adding up the workers kept of companies bought up, and not substracting those not kept. And you are speaking about a company with large capital influx and no responsibility other than to shareholders, rather than one denied of funds yet obliged to do public service. Apples and oranges, my friend.
finding the young, bright, hard working people
By the way, what shall happen with the rest in your world? And what about the assembled experience of old hands, and the not bright but hard-working who know all the tricks of the trade?
They were a strong proponent of qualities to improve quality
But sometimes with torturous detours. For example, after 1989, a big light bulb maker in Hungary which dominated parts of the world market (f.e. India) was bought up by GE. The first thing they did was to eliminate a large part of the production capacity (along with jobs) and apportion specific geopraphical areas for export -- and thus, also, India was forced to buy bulbs made elsewhere by GE for a higher price. It was years later that they realised that that old light bulb company had a lot of specialist engineers, and Neutron-Jack decided to put a development centre there. Today this former company is a nice good-running little branch, but far from what it could have been.
f your managers think that firing people is a way to raise productivity, they are far, far from the truth.
Very true.
and far, far from modern practises of business.
This is not true in my experience. We are speaking of the business experience of rescue schemes for major loss-making companies. Though it is true that in this case, this is made worse by economical theorical (ideological) ideas of what changes are needed to be made to a state company.
t just seems odd to entitle your diary "the wonders of capitalism", and then use as an example a government company
Nope. I see you are completely ignoring the case of the private company that made me turn the earlier comment into an extended diary and give it this title. *Lunatic*, n. One whose delusions are out of fashion.
Despite all prior difficulties and one re-organisation a year, my small unit within the state railway company managed to mostly stay together, makes a profit by also taking industry orders, and is highly productive. But we learnt today that (1) we have been transplanted from one big branch to another, (2) our new owners are eyeing us for their quota for further workforce reduction ordered by the government. That we make profit doesn't count, in fact it appears that they will take away our right to take on orders. And even so, we already reached the minimum practicable level of workforce, taking away more will mean that we simply won't be able to do our job.
But we learnt today that (1) we have been transplanted from one big branch to another, (2) our new owners are eyeing us for their quota for further workforce reduction ordered by the government. That we make profit doesn't count, in fact it appears that they will take away our right to take on orders. And even so, we already reached the minimum practicable level of workforce, taking away more will mean that we simply won't be able to do our job.
No, I perfectly understand why the above could happen.
I don't understand why someone running a company would take actions to make a profitable unit unprofitable.
How many levels of hierarchy did the companies you worked in have had? Because the above sounds extremely naive. (For a private economy example of these things -- because there can be many reasons -- you can't understand, I wrote up one here.)
I've run businesses
So here is a management exercise for you.
I don't understand why someone running a company would deliberately take actions to make a profitable unit unprofitable.
How about 20 years ago?
Leaving aside, of course, the political side of things as much as possible... Fai de bèn a Bertrand, te lou rendra en cagant
Isn't this an argument against state run things?
No, this is an argument against letting people who do not believe that the State can do useful things run government assets.
Neolibs, who do not believe in government, should not be allowed near it, as their only goal is to break it. In the long run, we're all dead. John Maynard Keynes
"They", who they? They are the neolibs. *Lunatic*, n. One whose delusions are out of fashion.
What can governments advised by neoliberals/adhering to neoliberalism do?
With this practice, a merely loss-making state company can be run down into a ghost of its former self in a few years.
No. Of course, when you do public service, making profit is not the main goal. But those who made a more or less functioning public company into a dysfunctional mess are neolibs. *Lunatic*, n. One whose delusions are out of fashion.
Another obvious thing to emphasize again is that what the job needs is not 'a good manager', but a good railway manager. Railways (at least properly run ones that serve both freight and passengers) are very complex systems, with lots of interdependencies, which a manager should know or his cost-benefit analysis isn't worth anything. Only the command structure of the workforce is hierarchic, but not 'production'. *Lunatic*, n. One whose delusions are out of fashion.
then why don't they hire some good managers rather than neolibs. some managers that understand how to manage people, improve productivity, set a vision, etc. why are they hiring these neolibs?
That's what the French State used to do (hire good managers). It was prestigious to work for the government, and a good career for ambitious people. Now that government is systematicaly denigrated ("bureaucrats", "lazy", "inefficient", "the cause of all problems", etc...), it's not so prestigious. Plus, in order to avoid "unnecessaty waste of taxpayer money", the government is not allowed to pay as much as banks offer for bright young engineers, thus they go to work in banks, where they are properly "valued".
And it's a self-reinforcing cycle, of course. In the long run, we're all dead. John Maynard Keynes
I love trains. Freight haulage in US is now I believe, totally privatised (Conrail poof), and a theft-privitaztion pool has been trying to wreck-break up Amtrack(passenger rail) for 35 years.
These thieves(the neolibs) are much more rapacious and parisitic than the railroad guys of old. At least Hill, Harriman,Gould, and the like were attempting to build something.
Course we here, save one, can recognize a metatasizing parasite when we see it. "When the abyss stares at me, it wets its pants." Brian Hopkins
What is needed to run a complicated public service continuously? It takes much more than just profitability. Profitablity optimization can be irrelevent to public service functioning, or worse. That's why purely commercial management is not a panacea.
The main purpose of public srevice is long term function - short periods of mild financial losses can be acceptable, but surely, the service ought to be self-supporting (and even better) most of the time. The imperative of maximal short-term profits can often tighten the public service "organism" unnecessary, increasing the risk of dysfunctioning.
Besides, large scale buisinesses do not like the grey are of low profits. Privatisation of telephone service worked because it coincided with a technology breakthough, and you can normally make millions here. In many cases, public servises like postal or transportation, can make modest profits regurlarly, but it is not a very effective investment for the buisiness point of view. Once the "last" generation of dedicated supervisors and specialists will be gone, most public service companies will fall into the problematic category and be taken over by "rescue" capitalists. Frequently, a service will be minimized to a "most effective" scale, taking a one-time maximal profit from the assests and functionality.
