Thatcher, Blair and Beauty Pageants – moving mainstream politics

Dan Hannan’s recent Telegraph piece described how Classical Liberal ideas have become part of mainstream UK politics over the course of a generation. It seems apparent that through Thatcher, and arguably continued via Blair, that the case for private enterprise providing services previously run by government has become mainstream.

From my perspective as a GP who provides care, but also is party to those who buy the care on behalf of the NHS, it seems only half the battle has been won. That is the principle that any new service goes out to tender and any organisations, NHS or otherwise, can bid to provide it. The purchasing, however, remains a centralised affair.

Unfortunately the tendering process with public money, above all else, demands that those who make decisions can prove the fairness of their decision making processes. This means that tendering decisions are made on the basis of things that can be measured, and monitored only by targets that can objectively be measured. Often the fact that an organisation has provided a shoddy service elsewhere can’t be assessed in a tender, as this is not easy to demonstrate if challenged in court.

The result is an incentive structure that rewards those who are good at bidding. Like an antiquated beauty pageant the bidders dress up their bids, mention all the buzzwords (replace ‘world peace’ and ‘loving animals’ with ‘integrated care’ and ‘patient empowerment’), yet have no incentive to perform during the contract itself.

No doubt the private providers are more efficient and dynamic than the public organisations they replace, but faced with an unimaginative purchaser, using someone else’s money, the difference between dealing with a single regulated union and a single provider working to contract might be less than hoped.

The answer needs central state controllers to give up their treasured control. I am a crypto-classical-neo-liberal and it is the market mechanism itself that I treasure most, rather than who pays for or provides the services. Thus wherever possible those using services, regardless of who pays for them, should have dynamic choices in which services they utilise, at every possible junction. In health this might mean using Any Qualified Provider (AQP) contracts as the default, rather than the single provider tendering, so that patients can choose, on whatever criteria they wish, supported with relevant data, as to who they access. This can be extended to who administers benefits, provides care services, schooling etc.

This competition at the individual user / customer level is the only way to truly improve such services by making them responsive to the needs of the users. Emerging efficient IT and payment technologies can contribute by helping to unbundle previously large state industries into more efficient, more responsive, more specialised parts.

Of course many will argue that this destabilises providers, making arguments that poorly performing schools need more money, rather than allowing good ones to expand to cope with demand, or that bad hospitals in well served urban areas can’t possibly close. Destabilisation is part of the point of this, in that poor providers don’t thrive, but the argument needs to be repeated in political circles.

More destabilising would be to allow top up or additional services for many of these services. Like 1st class tickets on a train, or freemium phone apps, this helps differentiate the market whilst still providing the core service to all. Only with both provider and purchaser competition in place would these industries fully thrive, and over time the state component could be frozen as more innovative funding, including self pay, insurance, friendly societies and online group purchasing, came into play.

Non government innovations, such as cryptocurrencies and digital autonomous corporations, will provide shocks to help these processes along, but for those who wish to influence the incumbent political landscape a reaffirmation of the desire to open up the markets both for purchasers and providers is no bad way to advance the cause of Liberty.

  12 comments for “Thatcher, Blair and Beauty Pageants – moving mainstream politics

  1. Paul Marks
    Jun 9, 2014 at 7:17 am

    I would argue that Classical Liberal ideas have NOT become a part of the mainstream in Britain – but perhaps I define “Classical Liberal” differently. To me it means (essentially) voluntarism – not whether (for example) a hospital is state owned or privately owned, but whether medical treatment is paid for voluntarily (commercially or charitably) or by violence (tax funding).

    Of course putting government schemes “out to tender” can save money and (sometimes) improve services – however it can also lead to crony capitalist organisations getting lots of taxpayer money, and it does not real touch on the PRINCIPLE of Classical Liberalism (i.e. that such things should not be financed by violence).

    It was wildly suspected (and I believe quite rightly suspected) that the daughter of Alfred Roberts (Mrs Thatcher) had some sympathy for the principle of voluntary funding (of self reliance and mutual aid – rather than violent “redistribution” to pay for health, education, old age provision and so on). However, this was considered a terrible thing about Mrs Thatcher (almost as if the lady had been a secret Devil worshipper) – hence the need for endless statements from Mrs T. about how the NHS was “safe in our hands” (the hands of the Conservatives) and endless THROWING OF MONEY at the Welfare State.

    It is often forgotten that the “cuts” under Mrs T. were BBC lies (I remember smashing a radio as a child because I could not take the lies of the BBC any more – a stupid thing for me to do, but you had to live through the period to understand how bad the news broadcasts and “comedy” programmes were). Actually government spending on the Welfare State continued to expand (in both money terms and inflation adjusted terms) – all Mrs Thatcher managed to do (between 1979 and 1990) was prevent the Welfare State expanding as a percentage of the economy.

    Such things as allowing private spending on health, education and old age provision to be tax deductible were things that Mrs T. was privately in favour of (and if that had been done in say 1979 – the results by 1990 would have been worth noting), but they were “politically impossible” (partly because of the non stop collectivist propaganda of the education system and the BBC) and the government seemed to have no response to the collectivist stranglehold on the education system and the electronic media other than to complain about it (of course it can only really be changed by getting the VOLUNTARY PRINCIPLE into the funding of education and the media – and ending state REGULATION so that pro freedom schools universities, radio and television stations can be created).

    The effort to hold back the growth of the Welfare State (as a percentage of the econy) largely broke down under Prime Minister John Major – and as for Blair-and-Brown……

    I have never understood how some pro freedom people think there is something good called “New Labour” (in reality a P.R. campaign rather than a political philosophy), the figures on the expansion of government spending (and regulations) in the period of the 1997 – 2010 Blair-Brown government are in the public domain.

    Lastly on regulations – as Christopher Booker and Richard North are fond of pointing out, terrible though it was the submission of Blair-Brown to E.U. regulations (the signing up for the Social Charter and son on) was NOT the beginning of the process – the process began when Britain joined the EEC (as it then was) in 1973, but it really got out of control after Mrs Thatcher (yes Mrs T. – in perhaps the worst mistake the lady ever made) signed (what became) the “Single European Act” in 1986 – after that the regulations became a tidal wave.

    Of course 1986 was also the year of “Big Bang” in the City of London – sold (for example to Mrs T.) as the noble government courts striking down the “restrictive practices” of the City it was actually a government take over of financial services in the United Kingdom leading to the nightmare situation we have today (where private investors are basically sheep thrown to the wolves – and thousands of pages of government regulations are used as cover for the looting).

    Mrs T. was repeatedly lied to – about the Single European Act, about the “Big Bang” in financial services (a government take over sold to her as the “free market”), about “reform” of the BBC (each new head of it was going to stop the lies – and never did) about “reform” in education (the collectivist brainwashing in schools and universities was always going to be dealt with – by X moving around the chairs on the deck of the Titanic….) and so many other things…….

    However, there is a responsibility of a leader not to be gullible – not to believe lies (again and again and again).

    A minster who “does their boxes” (obsessively reads every scrap of paper in the boxes provided by the Civil Servants) tends to get a totally false picture of the world (that is what the “boxes” were for) – and Mrs T. was a classic example of a minister who “did her boxes” (staying up to the small hours of the morning obsessively going over all the rubbish as if was Holy Scripture from on high).

    Know what you want to do and DO IT – and (please, please, please) do not rely on official sources for your information

    Otherwise you will end up supporting lunacy such as “HS2″ (tens of billions of Pounds for a new railway that does not stop anywhere) or a “expansionary monetary policy” (creating money, from nothing, in order to “boost demand”).

    • Richard Carey
      Jun 10, 2014 at 3:04 pm

      Not much to add to that. It strikes me that much of the privatisation, and especially the execrable “Private Finance Initiatives” started under Major and put on steroids by New Labour, are closer to mercantilism or corporatism than liberal capitalism.

  2. Ayumi
    Jun 14, 2014 at 10:31 pm

    “…Classical Liberal ideas have become part of mainstream UK politics over the course of a generation. ” I disagree. As Paul says, the concept of “voluntarism” is still eons away from being mainstream. (Who’s protesting CCTV cameras for example?).

    I feel that Reagan/Thatcher put a bad name to Libertarianism, that’s why a lot of people now equate Libertarianism only as those who cut welfare (and in the case of Reagan, put people with mental illnesses on the streets), without understanding the whole picture of what Libertarian is.

    Then I try to explain to people, that in a Libertarian world, free market would be able to take care of vulnerable people, that welfare can be cut EVENTUALLY, but you can’t cut welfare and call it Libertarianism without going the full mile.
    True, “destabilisation is part of the point”, I agree, but there’s an order to doing this. (What this order might be is like playing a game of stix, any ideas? Like maybe cut military first, loosen up small business regulations and tariffs…) but you can’t cut taxes for the rich and slash welfare, then forget about the rest.

    More importantly, to advance Classical Liberal ideas, an open discussion of the most basic question of “what government is for, or why we might need a government at all”, might lead to better a understanding.

    • Paul Marks
      Jun 15, 2014 at 7:15 pm

      I do not fully agree with you Ayumi – and (far more importantly) neither does reality.

      The Western World is being destroyed (economically and culturally), by out-of-control Welfare States, they have to be limited (rolled back) and right now.

      Waiting till the libertarian utopia can be created (“the full mile”) is just no good.

      Western governments spend far too much money – and most of the money they spend goes on the Welfare States.

      The logical conclusion is inescapable.

      Even pro Welfare State people should understand it – as government schemes depend upon Civil Society (economically and culturally), if the government schemes grow too big they kill the host society -and then die themselves.

      “But the old cultural institutions that used do deal with health, old age, and so on, have been undermined”.

      I do not deny it – but the grim logic of the numbers will not be denied either.

      The whole world hates the government spending cutter (and there are few of such folk – contrary to legend neither Mrs Thatcher or Ronald Reagan were cutters of government spending), but they are true benefactors of mankind, including of the poor.

      Because out of control government spending destroys society – and that hurts the poor most of all.

      • Jun 15, 2014 at 8:44 pm

        Worth putting numbers to this. “Social protection” is 30% of state spending.
        http://www.theguardian.com/news/datablog/2014/mar/21/budget-2014-tax-spending-visualised#

        • Paul Marks
          Jun 15, 2014 at 9:09 pm

          The Welfare State is health, education and welfare (income support – which includes pensions) government spending. Once, long ago, I was a nice person who did not assume that the government was always trying to lie to me – but I am not like that now. So when an official source tells me that the Welfare State is only 30% of government spending – I know their definition of “Social Protection” is leaving out large areas of the Welfare State (I know without even looking).

          • Jun 15, 2014 at 9:59 pm

            I’ll save you from looking. On that basis, the number is 70.5% (calculated from the same Guardian source)

    • Jun 16, 2014 at 7:46 am

      Ayumi

      We currently spend 70% of an unsustainable budget on welfare (broadly defined) and people want more. I think that in order to be trusted to cut that we need to be in a position to provide our alternative solutions *before* removing the old one.

      Solutions like food banks, not-for-profit supermarkets, directly accessed GP care, friendly societies etc will probably need subsidies (although we should start with those that do not) but if they existed in advance of libertarian reform then they are a convenient answer to the claim that we would let people die in the streets.

  3. Jun 15, 2014 at 1:07 am

    The big puzzle:

    http://www.theguardian.com/news/datablog/2013/mar/20/budget-2013-tax-spending-visualised#zoomed-picture

    I’m surprised military spending is not that great compared to health and welfare.
    Now, how would we tackle this?

    • Paul Marks
      Jun 15, 2014 at 6:55 pm

      You should not be surprised Ayumi – in fact military spending in Britain has been a declining share of the economy for 60 years (although the key changes that undermined the Royal Air Force and Royal Navy came in the late 1960s – the work of “moderate” Mr Denis Healey, who did far more harm than the “extreme” socialists of his generation).

      Remember what really drives government spending is false “compassion” (the desire to “help people” with other people’s money) and Social Justice ideology.

      Military spending (stupid Blair-Bush wars-as-social-work aside) has no “Social Justice” ideology backing it – so (as a percentage of the economy) it tends to shrink unless there is a real-and-present-danger.

  4. Paul Marks
    Jun 16, 2014 at 10:30 am

    In the past Churches were the main source of non state health, education and income support.

    However, now the Churches are much weaker. One can think of counter examples such as Utah where the LDS Church (the Mormons) are strong enough (at least outside leftist Salt Lake City itself) to offer a real alternative to statism (indeed I remember reading a story about the post breakdown United States where the main characters whilst certainly NOT accepting LDS theology – looked upon the LDS power in Utah as benevolent neighbours who neither tried to force their religion on others or looted, raped and murdered, as so many armed groups did in what had been the United States), but most Churches are corrupted by the “Social Gospel”.

    Basically the “Social Gospel” (or “Liberation Theology” in the Roman Catholic context) looks to violence (force – the state) not voluntary action, in relation to education, health, income support (and so on). So the local priest or minister is telling people that “the rich” or “big business” “owe them” that they have a “right” to the stuff of other people. Then they are shocked (sincerely shocked) when people loot and burn supermarkets, or kidnap the children of the rich and sent their parents body parts till they pay up (and other Latin American practices – which will not stay just in Latin America).

    Why so many priests (including the head priest in the Vatican) can not join-up-the-dots in their minds (make the obvious philosophical connections) I just do not know (I am not just saying that – I really do not know).

    This means that (in least in part) the Churches (both Catholic and “liberal” Protestant) are “part of the problem” rather than “part of the solution”.

    The “Social Gospel” is evil, “Liberation Theology” is evil, “Social Justice” is evil. It leads to economic and cultural breakdown (and often in ways that can not be measured in terms of “tax as a percentage of GDP” – a meaningless thing in Latin America where you may lose everything at any time, due to criminal or government action).

    To talk of “compulsory charity” may be a basic mistake in philosophy (even in language) but that has not stopped many theologians (and philosophers such as Samuel Pufendorf or even John Locke) making this mistake.

    Secular action?

    In 1911 some 80% (and rising) of British workers were members of mutual aid societies (Friendly Societies) the government ruined that – by stepping in.

    As Henry Hazlitt used to say – time will have to run back.

  5. Paul Marks
    Jun 16, 2014 at 10:39 am

    For those who do not understand why I said that “compulsory charity” is a mistake of language – think of (for example) “dry liquid”.

    To be a virtue (religious or secular) benevolence has to be voluntary – FORCED “benevolence” (“compulsory charity”) is not benevolence at all. Compulsory virtue of any sort is not a virtue at all.

    Take the virtue of courage (rather than the virtue of charity). You attack an enemy strong point – thus showing your courage. Now let us say that I had a pistol pointed at your back and said “attack or I will shoot you dead” – now if you attack what courage have you shown?

    We are dealing with really basic philosophical (and theological) errors here.

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