Motives don't matter

"Public services should put people ahead of profits" say Mark Serwotka and Steve Sinnott (via Tim). 
This claim contains a common  error - they think motives matter. They don't.
For one thing, we ain't invented telepathy. We just can't spot people's motives. The idea that "public service" = altruistic motives and private sector = money grubbing is just nonsense. Were the officials who dealt with Danny Biddle's compensation claim really better than any private insurance company workers? Is Chris Hohn just greedy?
The safest assumption we can make is that everyone's motives are either venal or eccentric. We can't rely upon enough people being altruistic.
And even if there were lots of altruists available to run the public services, it might not do us any good. This is because of the law of unintended consequences. Good people can do bad things. Bad people can do good things. Most good social science is the study of why this happens.
And here's a bit of luck. Humankind has stumbled upon a technology which can often transform bad motives into good outcomes. It's called the market.
The important question is: how can we import this technology into health and education?
In this context, the public-private dichotomy is woefully misleading. Private sector monopolies are as bad as public sector ones; this is why Serwotka and Sinnott are right to complain about the PFI.
Instead, the important components of the market technology are feedback and competition. Success in reforming public services requires that these be used, not private companies. How far this is possible is, of course, another issue. But it's the big issue.
Another thing: the public-private dichotomy is misleading in another sense. There's no reason why health and education services must be provided by either the state or shareholder-owned private firms. Worker co-ops are perfectly feasible. 

Comments

[Bob B]

"Public services should put people ahead of profits."

A clear example of the application of this beguiling principle is presumably already being applied by the Lib-Dem council of the borough in which I live:

" . . The price rises affect about 4,000 Sutton Council tenants who pay a fixed weekly charge for their gas regardless of how much they use. . . Under the council's bulk gas contract, the price of energy purchased by the authority is pooled and then charged to tenants according to the number of rooms in their property."
http://www.suttonguardian.co.uk/misc/print.php?artid=796274

Predictably, there is uproar as the council is now attempting to pass on the increase in retail gas prices resulting from the world-wide hike in oil and gas prices. Apparently, mainstream economics of supply and demand are regarded as unacceptable by Lib-Dems.

What are we to make of the advice from the National Institute of Clinical Excellence (NICE) today that a class of drugs called beta-blockers should no longer be prescribed routinely to treat high blood pressure, advice which is evidently motivated by prospective cost-savings in downstream prescription costs?

"Bryan Williams, Professor of Medicine at University Hospitals of Leicester NHS Trust and a member of the guideline development group, said that the cost of implementing the changes would be about £58 million. Later cost savings are estimated at about £250 million."
http://www.timesonline.co.uk/article/0,,2-2246551,00.html

Is this yet another case of the malign principle of putting longer-term prescription cost savings before patients?

[dearieme]

' "Public services should put people ahead of profits" ... This claim contains a common error': bloody right it does; the common error of being twaddle.
"Public services should put apples ahead of Tuesday" makes as much sense.

[Bob B]

"they think motives matter. They don't."

If so, how are we to distinguish between murder and manslaughter in trials for culpable homicides?

[chris]

Bob - the victims are equally dead. So from their point of view, motives are indeed irrelevant.

[Phil]

[The idea that "public service" = altruistic motives and private sector = money grubbing is just nonsense.]

Who's talking about motives (apart from you and DM)? The idea behind Sinnott & Serwotka's letter is surely the simpler proposition that private-sector companies need to sell what they do for more than it costs them, wherease tax-funded services can in principle be allocated entirely on the basis of need. Individual examples of altruistic capitalists and jobsworth civil servants are irrelevant.

[Paulie]

Phil,

If services were all applied in exactly the same way and there were no premium on innovation, imagination, efficiency, professionalism or personal dedication to do a job well, then what you say would make sense.

But there is such a premium. And I'd suggest that you'd have to be deaf and dumb to conclude that the public sector - as it has traditionally been organised - are always - or even usually - the best social force to use in acheiving a given aim.

I wholeheartedly endorse Chris's suggestion that competing Worker Co-ops provide the best of both worlds.

While co-ops still want to extract profits, the people providing the service are the same people who are demanding their dividend at each AGM. They are more prepared to listen to arguments in favour of high-quality services than more distant shareholders.

[Paulie]

Sorry. That should read...

"They are more prepared to listen to arguments in favour of high-quality services than the more distant type of shareholder would be."

[Phil]

Paul - I'm all for worker co-ops, but I'd want to hear a lot more about cases in which the private sector (as *it* has traditionally been organised) has delivered better services than the public sector before I started talking about getting 'the best of both worlds'.

I mean, the private sector does some things very well, but - in the specific context of social goods which should be allocated on the basis of need - what *is* the 'best' of the profit-driven world? Scolarest? Sodexho?

[Andrew Bartlett]

"Private sector monopolies are as bad as public sector ones"

Well, there is the argument that private sector monopolies are actually worse than public monopolies, as the public monopolies can at least be directed by democratic control, while private monopolies will, with only eccentric exceptions, maximise the exploitation of their power in the interests of those who own the monopolistic institutions.

[Paulie]

There's a real problem with comparisons between the way that the public and private sector provide services. The public sector, in my limited experience, never hands over a service to the private sector in a way that is designed to ensure that the service in question is provided more effectively.

But either way, it's a fairly sterile bit of ground to fight over. The way that Greenwich Leisure Services was 'privatised' to it's own staff IS a good example to look at though. They are a worker co-op, and they've bid for (and won) lots of contracts to supply leisure services to at least 11 other Councils in London as well as the management of Crystal Palace.

Have a look - www.gll.org.uk

I'd be interested to see if they become too big a company and the workers become too distant from the commercial direction of the company. But it doesn't seem to be happening noticeably at the moment.

AND where I live, I wouldn't bother with one of those pricey commercial gyms because the GLL one provided by the Council is quite good enough.