Why private enterprise won’t save a country
VANCOUVER ISLAND, CANADA – One of the mainstays of the conservatives’ argument for their political stance has always been that governments are incompetent at running anything at all and that necessary services are best provided by the private sector. The argument continues to point out that competition among service providers guarantees a lower price per unit, innovation in the industry, and a higher level of expertise in the specific field under consideration.
It is a persuasive argument and one that relies heavily upon the economic theory of Adam Smith, an 18th Century Scottish moral philosopher and pioneer in the field of economics as a serious field of study. In its highly simplistic and overly unsophisticated interpretation, the Adam Smith principal theory, seen as common sense by conservatives, runs like this: if corporations were allowed to run unfettered by law and without interference by government, those corporations would compete on a level playing field and the best would succeed, while those that were inefficient or that sold their goods or services too expensively would fail…the cream would naturally rise to the top; prices would remain as low as is consistent with a corporation’s making sufficient profit to thrive, the product and services would continue to improve as a corporation would necessarily need to stay technologically and socially competitive to maintain an edge.
I should clarify that the foregoing is the underpinning of the law of supply and demand. Businesses which supply a service or product for which a demand exists are likely to survive; moreover as the demand rises, the price they can charge for it does as well; if the supply increases, the price drops. In its simplicity and uncluttered inevitability, Smith’s principle is elegant, even beautiful. Even stated as simplemindedly as that (any formulation of greater subtlety or of more profundity is generally lost on those who wish to formulate political theory from this primary economic theory) the law of supply and demand is a great rule of thumb.
It is so simple, however, that any inclination to derive a comprehensive theory from those fundamentals is destined to encounter some entirely predictable difficulties when the subtleties of the theory come into play. Moreover, there are very few politicians indeed who could explain Adam Smith economics with any greater depth or subtlety than I have just done, and many would be baffled by the complexity of even the foregoing. Nonetheless, conservatives who have never heard of An Inquiry Into The Nature and Causes of The Wealth Of Nations are constantly demanding that government adhere to its principles as though they were holy writ. But then we already know that studies have shown that conservatives are generally not as intelligent as they think they are, or as smart overall as liberals.
The result is that governments are constantly privatising services that should be government run. Rick Santorum, for example, a serious[sic] Republican candidate for the US presidential nomination actually proposed that any service that was provided by government and could also be found to have a private provider on the Internet ought to be disbanded and given to free enterprise to run without interference, unfettered by nasty old government constraints.
Even centrist governments try to appease the Smithians out there by privatising everything they can get away with. It sometime works. Not always. The British Columbia Ferry Corporation was privatised, for example. For British Columbians, I need say no more. For the rest of you, I don’t imagine you care very much, but if you should, the research is easy.
Here in beautiful British Columbia, Canada, I recently ran across yet another example of the failure of private enterprise to provide better service than even a fairly incompetent government department. What you need to know is that although we tend to lean to the left here, the province, indeed the country, has its share of adherents to conservative principles. Sad but true. The result is that many of our provincial governments are peculiar hybrids of more or less efficiently run government services and outsourced private industry contracted to provide some of those government services. In this case, our much vaunted public health service has contracted out the bulk of the laboratory work required by physicians. Your doctor is concerned about your chronic fatigue? The first thing she’ll do is send you out for blood work, check your glucose, thyroid, iron, and all those other levels for abnormalities that could be detected in a a blood analysis. The labs that do this work are private and contracted to the government.
By and large these labs run reasonably well. The doctor gives you a requisition for the analyses she wants done, you take it to a nearby branch of the company and a trained technician takes the sample, and others perform the tests with the results being sent to your physician in a just a day or two for simple stuff and a little longer for tests that need culture done. Recently they’ve even added a website with which one can register and access their own easy-to-read reports; they’re presented in a simple way that tells you what the normal or expected values are, what yours are, and the percentage of variation from the norm. When you next see your doctor, you are in a position to ask intelligent questions.
These labs all used to be run on a drop-in basis. But, as this province and particularly this part of BC, has a high percentage of retirees, these labs do a thriving business. Consequently, in an effort to reduce waiting times, they’ve introduced a system whereby you can call for an appointment. Let me give you an example of the overhyped efficiency of private enterprise as demonstrated by these labs.
I registered at a local one this morning to have some blood drawn. Seeing the crowd in the waiting room, I approached the receptionist and asked if I could make an appointment for a later date as this looked ominous as hell. Certainly, I was told; I would, however, have to call in as they were not set up to take them personally. I found this strange but complied. So I sat in the waiting room and using my cellphone, I phoned the appointment line. It was answered by the very same receptionist I was sitting ten feet from and by whom I had been told I couldn’t book an appointment in person. Looking her directly in the eye, me on my cellphone and her with her headset, she looked at her computer screen and said that despite the enormous demand, she could accommodate me in about two weeks, would I prefer morning or afternoon? While I had her on the phone and we were conversing while looking at each other across a crowded room, a patient left, a soft bell chimed, she looked at a number on her screen and called my name. I had waited eleven minutes. It was my turn.
Complain to the government about the idiocy you encounter in those situations and, after they’ve stopped laughing, they suggest that you speak to the company’s customer service department; they are, after all, a company and not a government service. Can you even begin to imagine the depth of faith I will have in the results when I see them? Can you imagine how much lower it would be if we privatised whatever agency oversees the testing protocols of laboratories like that one? If we simply let them compete unfettered by government interference?
One of the reasons that Adam Smith economics may be good economics but is not necessarily a foundation for good government is that people aren’t corporations. Corporations go bankrupt if they can’t outdo the competition; without help, people die. We have government precisely because competition weeds out the weaker; as human beings we are here to ensure that failure to produce most efficiently the latest widget doesn’t mean that you will starve to death. Government is there to take up the slack when Smithian economics works.
There is a place for government in our lives. Government is what separates us from the beasts. If we have a bitch about government, we change the government. For that is the one and only fundamental question of political philosophy…. “How do we replace an unpopular or incompetent government with the least turmoil?” “Should we have a government at all?” is the question of an idiot.