Why I support markets in public services:
Its simple - they are too important to be left to governments.
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November 5th, 2007 at 3:35 pm
Tristan,
In theory, I support you. In practice, in the rush towards economy of scale through collective tendering, the element of competition has been lost.
In order to bid for contracts in large chunks of local and central government, a bidder either has to be of a certain size, usually large, or have the means and/or opportunity to expand to do so. Accordingly, limited competition and the demise of in-house opposition (often surprisingly capable) means that the market is unbalanced in favour of the provider as opposed to the payer, leading to inflation in the cost of the public sector, and a higher level of council tax.
Markets are important, but they don’t necessarily work in the public interest…
November 5th, 2007 at 4:12 pm
Tristan,
In what sense are they public services if there is no role for the government?
If, on the other hand, the government is buying, there is some artificiality in whatever market mechanisms are in use. So shouldn’t we be agnostic on delivery mechanism, going for whatever delivers the best value for money?
November 5th, 2007 at 4:35 pm
Mark and Joe:
You both make fundamental mistakes in your reasoning - you assume public services must be provided in big chunks.
Why?
Public services are those things deemed essential and in which state intervention is required to provide access to all (so food is not a public service).
Nothing there says the state must provide it, or it must be provided in a uniform manner in one area.
The fundamental unit of the education system (on the supply side) is the school, not the local education authority.
In health care its the provider not the NHS.
So, let markets work, just ensure everyone is included in the market.
As for results, if you think the NHS and education system (the two big public services) are working well in the state sector - you’re living in cloud cuckoo land. You’re even more deluded if you think that more money is the solution.
November 5th, 2007 at 4:41 pm
I’ve spent the weekend perusing “Social Statics” by Herbert Spencer. Some very good arguments in favour of all this sort of thing and the subject of a soon to be completed tome on my blog.
November 5th, 2007 at 5:00 pm
Tristan,
Read what I said. Where did I say anything, ANYTHING AT ALL, about uniformity or the size of the chunks?
If arguing for agnosticism on delivery is assuming too much, I struggle to see how I could assume any less.
November 5th, 2007 at 9:04 pm
Joe didn’t, but Mark did.
It is a sad fact that public perceptions of markets in public services have been twisted by the way in which they have been (ab)used by both Conservative and Labour governments.
If the only consumer of private delivery is the government, when companies bid for contracts, then the competition is bound to be limited and the market ineffective. If the choice was passed on to the individual, things might get a little better.