How many types of human being? – Mid Staffs and public choice

James Buchanan pointed out that the problem with much policy-related economics is that it assumes one type of human person in the market place (the imperfectible human being generally pursuing his own self-interest) and a different type of human person in government (the public servant only interested in the general public interest). Those who believe in markets simply believe that there is only one type of human person. Persons may be good, bad or indifferent; they may pursue their own self-interest or be entirely selfless. We all come with a mix of these different characteristics – a different mix, but a mix nevertheless.

The above might seem self-evident to almost any reader of this blog. However, it is commonly – sometimes explicitly and sometimes implicitly – assumed otherwise. This is Polly Toynbee talking about the financial problems leading to the threat of closure for Southern Cross Care Homes: ‘Cameron’s privatising zeal looks even less enticing in the wake of this week’s two care home scandals. The “dead hand of the state” looks rather more welcoming than the grasping hand of private equity.’

In fact, there was a relatively orderly workout of that particular problem – not perfect, but reasonably satisfactory. A mix of enlightened self-interest and prudent sacrifice took over as landlords took the homes from Southern Cross and the Chief Executive gave up his severance pay. But, why should the hand of private equity necessarily be ‘grasping’ and the hand of public sector officials be benevolent?

I am not arguing that the terrible events at the Mid Staffordshire hospital demonstrate that nationalised care is worse than private care. However, the events should be a warning to those on the left who fail to recognise that there is, in fact, only one type of human person. We certainly did not have unselfish bureaucrats, administrators, regulators and clinical staff providing patient care whilst ignoring their own self-interest in the Mid Staffs Trust.

The report into that trust shows that patients were so thirsty that they had to drink water from vases and that receptionists decided which patients to treat in A&E. Nurses were not trained properly. It is true that staff have left their positions – though I am not sure whether they left without severance pay – however, one implicated official higher up the system actually became head of the national regulator. The ‘elite trust’ was signed off by ministers and, in fact, the enquiries into Mid Staffs were motivated by pressure from outside the system and not by the government’s own regulators.

So, we come to the question that the left do not wish to confront. Given that we have human imperfection in all its forms present to some extent in all of us, which are the best economic and institutional arrangements to provide health and other forms of care? Is it an arrangement with a centrally funded set of institutions ultimately responsible to politicians who are not themselves always paragons of virtue? Or is it an arrangement where institutions are in competition with each other and people have choice and a right of exit? Those institutions might not necessarily be profit-making of course – they could be charitable or mutual. It might be added that, neither set of institutional arrangements will work at its best, given the ‘information asymmetries’ in health and personal care, unless there is good monitoring by families. Experience in both private and public sectors demonstrate that.

Perhaps the Olympic opening ceremony celebration of the NHS will prove the zenith for that organisation. Certainly, aside from Canada, the ‘envy of the world’ has not been copied anywhere else. And, of course, the huge irony was that the ceremony used a hospital as an example (Great Ormond Street) that opened and became the world’s leading children’s hospital nearly 100 years before the NHS was created.

The self-styled enlightened left regard themselves as the purveyors of reason. However, when it comes to deciding whether services should be privately or publicly provided, they jettison the concept of reason altogether, relying on slogans and implicitly assuming that man is perfectible in the public sector but not in the private sector.

Philip Booth is Senior Academic Fellow at the Institute of Economic Affairs. He is also Director of the Vinson Centre and Professor of Economics at the University of Buckingham and Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham. He also holds the position of (interim) Director of Catholic Mission at St. Mary’s having previously been Director of Research and Public Engagement and Dean of the Faculty of Education, Humanities and Social Sciences. From 2002-2016, Philip was Academic and Research Director (previously, Editorial and Programme Director) at the IEA. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. He is a Senior Research Fellow in the Centre for Federal Studies at the University of Kent and Adjunct Professor in the School of Law, University of Notre Dame, Australia. Previously, Philip Booth worked for the Bank of England as an adviser on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.

1 thought on “How many types of human being? – Mid Staffs and public choice”

  1. Posted 08/02/2013 at 11:40 | Permalink

    Once again, Philip Booth hits the nail on the head.

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