David Abbott: The fetish of competition

David Abbott, journalist and author of Culture and Identity, argues that both the Left and the Right are wrongly making a fetish of competition in public services.

As we face the prospect of a longish run up to the next General Election, Conservatives should be looking around for more policy ammunition and David Cameron has made much of re-casting the Tory Party in a new light.  At such times it is traditional to set fire to a few holy cows. But one he hasn’t touched is competition. Isn’t the obsession with competition ripe for such treatment?

Competition used to be an idea which belonged to the right. But now it seems to be part of the consensus, a general, unquestioned idea that competition is good for us and is an unqualified social good.

Competition in all things, as practised in the market, will, we are told, benefit everybody. The competent, the efficient and the clever – all of these, whether people or institutions, public or private – will thrive. It will be you and me, the public, the average Joe customers, who will be the beneficiaries.

In this universe of the divine, it is the incompetent, the inefficient and the stupid, who will all perish, ground into the dust by the moral superiority of the market and the iron laws of competition. It will, perhaps, be a little like living in one of Ross Clark’s columns in The Times.

If only life were so simple and so fair.  Looking around me, I can only presume that I have somehow slipped into some dystopic reality nightmare, for such a benign universe eludes my sight.

On a fairly regular basis, I see, not a perfectly formed self-regulating market, but businesses which lie and cheat or which thrive with little effort simply because they are just about good enough.  I see idle capitalists wining and dining on the fat of the land, paid for in part by me. I see airlines who are allowed to quote me wildly inaccurate prices.  I am kept on hold by inefficient and unscrupulous companies keen to coin it by keeping me waiting whilst customer services pour cheap musak into my ears.

If competition was such a wonderful, cleansing form of economic and social soap, I for one, would not complain. Unfortunately, this does not seem to be the reality.

The idea of therefore applying the sharp logic of the market to public services seems to me to be both illogical and unnecessary.  Why should I want to choose whether to go to this hospital or that hospital, this school or that? I am not a greedy person drawn from a greedy populace; we need only one ‘good’ hospital and one ‘good’ school in any given area. 

Will having two or three hospitals within reach of my house, or two or three schools, for that matter, create a competitive environment whereby all of these service providers will work harder, thus raising quality and is this really how the private sector works anyway? The examples above in fact suggest that competition does have a bad side. For sure, it has its advantages, as thousands who really have benefited from cheaper flights will testify. But don’t let’s kid ourselves that quality always, inevitably and inexorably rises. We’ve lost too much luggage and goodness knows what else to fall for that one. 

Let’s avoid the sins of over-generalisation and exaggeration. Both forms of organisation, public and private, can be unwieldy, inefficient and ineffective forms of organisation.  Both can bring certain advantages.

We should take particular care not to turn competition into a fetish or make it the key criterion of public virtue.  Competition may bring about innovation, a striving for perfection, and so on. But it does not necessarily do that and nor when it does, is it always a good thing for the consumer.   

We can after all, have too much choice.  How many times am I going to have to replace my music collection, my computer, or my mobile phone because some clever dick in Japan or California has decided that they can ‘improve’ the technology?   

People and companies keep innovating and competing (they are not the same thing either) – to the extent that they do – for many reasons. Sometimes it is because they genuinely have a good idea which really does benefit others, but on other occasions it may just be because they want to make even more money and has nothing to do with demand or ‘need’. Let’s not forget about market failure and the Principal-Agent problem. 

We should think of public and private sector forms of organisation as being imperfect, complementary, and yes, necessary.  Each form of delivery or provision has its uses for different purposes. Would we want to privatise the armed forces? I think not, because we all understand that the reason why we no longer hire bands of mercenaries is because you can’t trust, or indeed, control them. 

Granted, procurement issues in recent times do not always seem to help the argument for state intervention, but that should not be allowed to con us into believing that the market provides all the answers.  On the contrary, there are loyalties and interests which go beyond mere economic bonds of self-interest.  There is something called society. And for that you need political, not just economic, regulation, even if it is hard to understand how there could be such a thing as ‘non-political’ economic regulation.

What of choice then? Does it have any role in public services? Yes, but within limits and not as a mechanism of quality control. Since resources are finite, our choices may be either to use state services or not to use them in our private life. Hopefully we will be able to agree on what will count as a ‘good’ or ‘good enough’ standard of service. It is a matter of political regulation to work out the answer to that question, and a political matter to thrash out how much we are prepared to spend on public services. 

If citizens decide that they require some form of education or medical care which is not, for some reason, provided by the state, or if they have some other reason for turning their nose up at what the state provides, it should be their individual right to see what alternatives can be found; but this only applies to life in the private sphere.  We cannot all have the right to hire our own private army simply because we feel the armed forces just aren’t up to the job any more. Individual rights in this respect are quite rightly restricted by the greater good; there are such things as collective rights.

Choice therefore can be dismissed as a red-herring. The quality of public services is a valid topic of concern, but it is not to be addressed through the economic regulation of choice.  It is far better to see it as a matter of political management and an area where the economic mechanisms of the market need to be over-ruled. In short, public services can be improved only by better management.  A truth obscured by the dogma that the market will sort everything out. 

Of course equality has most often been a concept laid claim to by Labour, and it is true that Conservatism has tended to focus on individual rather than collective rights and freedom.  But if David Cameron is really serious about wanting to steal New Labour’s clothes, he could do much worse than to set about repossessing the concept of equality, using it at one and the same time as a big stick to beat Labour with and as a means of effecting radical change and improvement in the public sector. 

An emphasis on equality rather than competition in the public services would permit the logic of a much cheaper, more effective and more efficient public sector. It could of course be painted as a ‘take it or leave it’, ‘bog standard’, or ‘one size fits all’ welfare state. But it does not take too long to find strands in Conservative thought which remind us that ‘we are all in it together’, that the ‘strong must help the weak’ and the wealthy owe a duty of care to others.   

Surely such a vision of equality is entirely consistent with Tory visions of meritocracy?  No political party interprets equality in a fundamentalist sense as meaning that no inequalities will be tolerated. In a free society, it is always a matter of degree, a compromise between liberty and equality. 

If that is so, surely it is time for the fetishist concern with competition to be cast aside? The New Toryism has the possibility of being a system of thought which simultaneously recognises both the strengths and the weaknesses of the market and the public sector and can harness both to the benefit of all. It is time to break the consensus that improvements in public services must come through choice and replace it with a more radical and vote winning appeal to a certain sort of equality. 

And surely, at a time when public opinion is highly sensitive to news about ‘fat cats’, corruption and unmerited privilege, the language of equality and a policy to match, would be one which would find favour with the electorate?

To steal, or if you prefer, to repossess equality, of all concepts, from the grasp of New Labour would be an act of the utmost political daring. But, as George Osborne showed with his tax ‘innovation’ a few months ago, it is only those who are prepared to take risks who will gain prizes.  It’s not choice Conservatives should be worrying about, but equality.