Should government break strikes? -Competition will take care of strikes

FACE - OFF

Competition will take care of strikes

PARTH J SHAH
The Economic Times, Aug 27, 2004

In britain, coal miners, employees of the British Railways, the staff of the National Health Service routinely went on strike. In the US, so did air traffic controllers. In France and Germany, industry labour unions brought national economies to a halt. About India, we know all too well. What is common to all these strikes?

Centralisation! Of decision making, management, resource allocation. What is the solution? Decentralisation, simple!

Centralisation creates problems where none would otherwise exist. Imagine that our auto industry is under central (government) control. How many cars to produce? How many of small, family sedan or luxury type? How many of what colour? How many with power windows? Every big and small decision about auto manufacturing would become a contentious, political decision. Some group or the other would be offended by one decision or the other. There would be strikes galore.

Imagine now a decentralised auto industry. Actually privatise it and open the entry to any new comer, domestic or international. Make it fully competitive. Let each individual auto company then make those decisions depending on its knowledge and judgement of the market. If a company makes mistakes, it will suffer the consequences. The people don't need to worry about what decisions they make or how they make them. There would be hardly any strikes in this decentralised competitive auto industry.

Monopoly industries, not competitive industries, generally suffer from strikes. Monopoly behaves so whether private or government. Privatisation of electricity, water, or garbage collection does not typically result in lower prices and better service. A government monopoly has been simply converted into a private monopoly.

We do not get the expected benefits of competition because there is none. The objective should be to make the industry competitive or contestable, not just private. This principle is as applicable in education and other essential services as for ordinary goods. Competition delivers better product at lower prices in education and healthcare as it does in computers, cell phones, or celebrities.

Should government break strikes?

No, it should evolve equitable mechanisms

D RAJA, National Secretary, CPI

We must approach the issue of strikes from various angles. The constitutional angle is one. It guarantees dissent; political parties, mass organisations, citizens, can all express dissent, including via voluntary associations and demonstrations. Secondly, the political angle: parties and mass organisations can adopt various forms of struggle - bandhs, hartals or strikes. It has been thus since our struggle for independence from British rule. So, banning strikes would neither be feasible nor wise in a democracy. Even today, workers strike work but it is not their first, most pleasant, option. Nor do they table unreasonable demands. But, of late, even the judiciary in some high courts have laid down strictures against dissent: one even lays down that demonstrations should be confined only to between 8 PM and 8 AM! We do not approve. The bench cannot assault our democratic rights nor deprive us of the Fundamental Rights. Political parties, mass organisations and even citizens in a democracy must be free to criticise government policies. That is why we propose negotiations - bipartite, for public sector labour, or tripartite for private sector labour. Government's role in tripartite talks should be to arbitrate, and evolve mechanisms that are equitable and acceptable to both sides.

Meanwhile, strikes by owners of buses, or trucks or their operators are different. Drivers, cleaners or loaders all stand to lose wages, but not they! So, truck owners are misleading people, bullying them and being irresponsible about inflation. They are fighting a tax that is not on them but on booking agents. And their strike is worse than a lock-out: lakhs are affected, not just an unit's workers. They must talk with government which has set up a committee. Only because many also act as booking agents are they pressurising the government for a roll-back. They are guided by certain political positions too - which prevents them from acting uniformly, or apolitically, across India. Trade unions act responsibly by exempting certain social sectors from strikes. Truck operators are showing no such sense of responsibility, especially when the government has neither hurt their interests, nor refused to talk to them.