Privatised Healthcare: What Would We Lose?

Contrasting the different challenges facing British and American healthcare, Janet Daley attacks the “anachronistic and unsatisfactory” arrangement of a “state-owned-and-run monopoly of medical provision”. This throws up a number of obvious issues around the equity, efficiency and sustainability of these different models. But even aside from the questions of whether state run healthcare is cheaper, more equal or produces better health outcomes, I think Daley accidentally touches upon a couple of underappreciated benefits of the NHS style system: the limitation of unpleasant choice, and avoidance of the distrust of the market.

“Note to politicians: there is a new generation of adults out there who buy their holidays and their electronic equipment on the internet, who purchase their insurance on price-comparison websites”

Daley makes the automatic assumption that because they live in a consumerist society and are constantly making consumer choices, people must desire and enjoy these choices. We do live in an era where most people purchase their insurance on the internet. But that doesn’t mean that they like doing so – in fact, the majority of people see it as an unpleasant chore. The ubiquitous adverts for price comparison websites are intended a) to motivate people to exercise their consumer choice and b) to convince people that acting the consumer is less unpleasant than they expect.

So why then does Daley assume that the NHS deprives people options they want to take, rather than preserving them from having to go through tedious and time consuming decisions? I can’t be the only one to look at the process of Obamacare and be extremely grateful that I don’t have to worry about health insurance, don’t have to sit down on my hard-earned weekend and run through the different plans, however nicely they are laid out. I can’t be the only one grateful that I don’t need to worry about anything, and can still know I will receive care when I need it.

“A system that is absolutely, unconditionally free at the point of use with no questions asked and no exceptions made”

Daley sees this as an outdated principle which can only cause problems. But one benefit this principle brings is obvious. It means that the unwell and their families never need to worry about money at a stressful and difficult time. Even if the money can be claimed back, even if the excess is small, the fact of needing to have money free to pay for care just adds another potential headache at a difficult time.

But, more subtly, the fact of money changing hands alters the social dynamic between doctor and patient. For example, psychologists have shown that ‘priming’ people with the idea of money alters their outlook: it makes them more individualistic and less socially-oriented, a worrying trait to encourage in doctors.

Moreover, the exchange of money creates a more ‘transactional’ relationship between doctor and patient, and potentially erodes trust between doctor and patient. The doctor’s job is no longer to make me better, but to get the most money out of me. How do I know they are prescribing that drug because it is the most effective and not because it is the most expensive?

Now I’m sure Daley would respond that those willing to take the time and effort to work out their optimal health insurance plan will receive better care at a lower cost. And she would probably say that a bit more mistrust between doctor and patient might make doctors less complacent, and force them to improve standards to meet the challenges of their patients. I have my doubts, but they are not implausible claims, However, she cannot deny that something has been lost, that people would be in these ways worse off, without the NHS. And so a lot depends on showing that cost and effectiveness would be clearly higher with greater privatisation.

Are opinion polls bad for democracy?

Ahead of today’s general election, the German broadcaster ZDF has broken with convention and published an opinion poll in the final few days before the vote. Previously, it had been agreed that surveys would not be released fewer than ten days before polling day for fear of influencing voters. This is a worrying development because it conflicts with three of the most prominent theories about why democracy is valuable: aggregative, epistemic and deliberative theories.

According to the aggregative theory, democracy is fundamentally a procedure for reconciling the different interests and preferences of citizens. On any given issue, citizens will come with ready-formed preferences, based on their personalities and circumstances. It does not matter why people want to criminalise cannabis or ban the burqa – the only salient question is whether more people are for or against these proposals. The more popular policies are the ones that should be enacted.

However, aggregative democracy depends on people accurately reporting their preferences. If we cannot rely on voters to vote for the policies they actually want, then the vote will not reveal which proposal is genuinely more popular, the one which satisfies the most preferences. Opinion polls make it more likely that people’s votes will not reflect their true preferences. If my favoured party or policy is far behind in the poll, I may believe it is pointless to vote for them, or even to bother to vote at all. Opinion polls make tactical voting more likely – I may cast a positive vote for a policy or party that I don’t like to stop a worse one succeeding. In other words, opinion polls help to mess up the clean aggregative interpretation of elections.

A second major theory of democracy is the epistemic view. Epistemic theories see democracy as trying to find the ‘correct’ or ‘true’ answers to political questions, such as ‘What is the best set of policies to encourage economic growth?’ Epistemic theories take their inspiration from ideas such as the wisdom of crowds – the notion that the more views are canvassed on an issue, the more likely they are to converge on a correct answer.

This basic principle is formalised in the Condorect Jury Theorem. However, one of the key assumptions of the theorem is that votes must be independent – person 1 voting for A should not make it any more likely that person 2 will vote for A. Imagine if you ask two separate people for directions, and they both advise you to go right. This would ordinarily give you reasonable confidence that this advice is sound. But if you knew the second person was only copying the first, you would be more likely to seek further verification.

Opinion polls may flout the independence criterion valued by epistemic theorists of democracy, because of the momentum they create. If my instinct is to vote Pirate, but everybody else appears to be voting CDU, I am bound to wonder if I have missed something incredible in the CDU platform. Conversely, the lack of support for the Pirates is likely to make me reconsider their competence. The Asch conformity experiments show that people are susceptible to peer pressure even on beliefs they have a great deal of confidence in – these effects are liable to be even more acute in politics.

A third perspective on democracy emphasises deliberation. According to this view, democracy is as much about forming opinions as aggregating them. Thus deliberative democracy emphasises free, open and rational debate, whereby citizens attempt to criticise and refine their own views, as well as understanding those of others, in the hope of achieving consensus. 

Deliberative democrats have reason to fear opinion polls because they distract from the process of debate. They distort media coverage and public attention by encouraging passive spectatorship of a competition, rather than engagement with ideas and policies. This creates a ‘horse race’ model of politics, where tactics, strategies and who’s winning draws more focus than substantive discussion of different platforms. Moreover, deliberative democrats are wary of excessive focus on voting rather than other elements of the political process (such as deliberation), a trend exacerbated by polling.

These arguments may give opinion polls too much credit – it could well be that they have much less influence on voting behaviour than suggested here. However, if opinion polls are in fact this powerful, they may indeed be damaging for democracy.

Nigel Farage: Defender of Immigrants?

Among the many outraged voices at the the use of vans to tell illegal immigrants to “go home or face arrest”, perhaps the most surprising was that of the UKIP leader Nigel Farage, who called the message “nasty, unpleasant”. Farage’s position on the issue was unexpected, given UKIP’s fiercely anti-immigrant stance at present. Yet if Farage is wily enough, his intervention could mark the start of a more nuanced position on immigration, with major strategic benefits for the party.

The argument I envisage UKIP making, basically, is that these desperate and illiberal measures are a consequence of the UK’s membership of the membership of the European Economic Area, which compels Britain to allow entry to all EEA citizens. Since visitors from the EEA account for 70% of arrivals to the UK, the Conservatives are forced to squeeze the remaining 30% as hard as they can – too hard, even for UKIP’s liking – to meet their targets on reducing net immigration to the “tens of thousands”. By contrast, UKIP, Farage can say, would simply pull out of the EEA, restrict migration from Europe, and do away with the heavy-handed approach of this current government towards other immigrants. If he is bold enough, Farage would criticise policies such as immigrant bonds, spot checks and requiring landlords to be informants. In sum, Farage could stand against the idea that Britain should be the “hostile environment” for immigrants that the current government seems to envisage, with the promise that UKIP offer a more humane way to keep immigrant numbers down.

The big advantage of this position would be to give UKIP some defence against the accusations of racism that are bound to pursue a right-wing party by showing a willingness to stand up for vulnerable minorities. If UKIP are to break into the mainstream, they need to be seen as a respectable and non-racist – these sorts of positions would go a long way to making them credible. They would also strengthen their claim to be an alternative to an increasingly out of touch and broken political elite.

Of course, the strategy brings risks. If Farage and the UKIP leadership do not really believe the position I am sketching out, then it is likely to ring hollow. Moreover, this strategy would require UKIP to defend predominantly non-white (non-EU) immigrants at the expense of predominantly white (EU) immigrants. Insofar as their support genuinely is racist, it might abandon the party. But then, it might be in the long-term interests of UKIP to trade some of these core backers for a more moderate audience.

A more interesting question is whether such a shift would be good for British politics. On the one hand, any move that tries to make the immigration debate less toxic and which tries to move beyond demonising migrants is bound to do some good. Further, it could encourage some interesting and productive coalitions between left and right, much needed in an area that doesn’t cleanly divide left and right. Then again, I can’t help but revolt against anything that gives UKIP  and their brand of unreconstituted  conservatism and libertarianism more influence.But it would certainly be compelling to watch…

On the basic liberty to eat what you like

Contrary to popular reports, the recent School Food Plan for England and Wales does not call for packed lunches to be banned. However, the idea of a ban, mooted by Henry Dimbleby – one of the report’s authors – is interesting because of the response it has provoked. Dimbleby suggests that a blanket ban might be unwise because “There's a strong libertarian streak in the English”. Sure enough, ‘Fleet Street Fox’ raises the spectre of totalitarianism in the Mirror, describing the idea in the following terms: “So [packed lunches] must be banned, he says. Not improved. Not guidelined. Not discussed. Just banned, like thought in China.” The frothy outrage is reminiscent of the common objections to the proposal of ‘Meat Free Mondays’ in certain dining halls – presented as a matter of freedom and rights.

In general, the idea that people should have the ability to decide for themselves what goes in their own mouths is surely uncontroversial. This is a fairly clear example of the sort of autonomy that anybody with any sympathy for liberalism is bound to respect. Yet at the same time, there are very few freedoms which are entirely unconditional or unconstrained, if for no other reason than to avoid them restricting other valuable freedoms. On what grounds might it be morally legitimate to override this freedom?

The most obvious argument is the paternalist one – where a freedom is likely to be misused in a way harmful to the agent, it is sometimes right to require them to act in a more prudent way. This is the logic behind requiring people to wear seatbelts, or prohibiting them from taking harmful recreational drugs. In the case of compulsory school meals, the government or school would be taking away children (or parents’) freedom to choose their own lunches, because the negative consequences of these actions for their health are too great.

A second argument posits that compulsory school lunches are legitimate because children are incapable of full autonomy, and so infringing their freedom is less morally significant. Because children are generally less informed, not fully educated and perhaps not capable of full rationality yet, their choices are less worthy of respect and protection. In most countries, children below a certain age – usually 16 – are not judged capable of deciding that they don’t want to go to school.

This argument is complicated by the fact that most children don’t have much control over their diet anyway – their parents decide what they eat. In this case, the question is the more contentious one of whether the state or parents should have control over children. The most plausible response is that both should have a role to play – the state should not dominate child rearing, but nor should it treat children as the property of their guardians, free to treat them as they wish. Just as children cannot unilaterally decide to quit school before they reach an appropriate age, nor can their parents decide to pull them out. This is because in certain cases it is necessary for the state to protect the interests of children from their parents.

Finally, compulsory school lunches can be defended on the grounds that they enhance freedom in the long term. For a start, improving a person’s physical health means that they are likely to be able to do more physically strenuous things for longer as they get older. Moreover, there is the possibility that school meals will introduce children to different tastes, ingredients and styles of food, and alert them to different food cultures, or ways of relating to food, thus expanding their set of options.

These arguments are not at all mutually exclusive – indeed, they feed off one another. The paternalistic argument is all the stronger for the diminished autonomy of children and if its benefit involves greater freedom as well as better health. The paternalistic argument gives a justification for overriding parents’ desires for their children.

Together these arguments suggest that a ban on packed lunches is not a clear infringement of liberty. However, it still remains up for debate whether these are good enough reasons with positive enough effects to justify such a heavy-handed measure.

Nationalise energy?

Thinkers and politicians have been debating the limits and failures of markets since the beginning of capitalism. However, the question of which spheres of society are appropriate for free markets is increasingly pertinent, given the current economic and political context. Since the financial crisis, there has been greater awareness of the fallibility of the neo-liberal model, leading to curiosity towards, if not embrace of alternatives. Politically, the Red Tory and Blue Labour movements have revealed major currents of anti-market thinking within both major UK parties.

Against this backdrop, the work of social psychologists like Barry Schwartz, Sheena Iyengar and Dan Gilbert is deserving of close attention. Among the various problems with free markets that they identify are three observations:

1. Economic interactions have a fundamentally distinctive character, and require us to relate to people in a different way. The relationship between buyer and seller  is a fundamentally antagonistic one: the salesman is trying to squeeze as much money out of their customers as possible, while the buyer is trying to get away with paying as little as possible for their goods. This creates an atmosphere of mistrust and suspicion – can you believe the advice from the shop attendant, or be sure that they aren’t trying to cheat you? This, in turn, is likely to colour our attitudes and behaviour in non-economic contexts.
2. The very act of consumer choice can be overwhelming and reduce welfare. To be confronted by the wide array of options in many modern markets is disconcerting, and often unpleasant. It demands time and energy to establish all your options, to research them and to reach a decision. Often, this can seem more effort than it is worth, and lead to paralysis, or decisions being postponed. I go into a shop looking to buy a new laptop and discover there are twenty different brands that meet my specifications. So I have to go home, look them up on the internet and read all the reviews. By the time I get round to going to the shop again, I’ve had to struggle for two extra weeks with my old laptop, and spent much longer than I wanted to worrying about it
3. Moreover, once the choice is made, the options foregone are likely to continue to haunt us. Every time our purchase falls short of perfection, we are likely to be reminded of the fact that there might be a better option out there, which we have given up.

What are we supposed to do with these arguments? The clear implication is that liberalisation has gone too far, and that some markets ought to be restricted. But which ones? How much choice is enough?

These are big questions, and broad-brush answers will inevitably ignore the vast diversity of different markets. The best way forward is to take the social psychologists’ criticisms as a general set of considerations against free markets, and to take different markets in turn to see if the freedom they involve is worth the psychological cost.

I think that the British retail markets for gas and electricity exemplify many of the problems identified by Schwartz et al, and where the anti-market theory can produce some concrete policy prescriptions.Since the late 1990s, the government has sought to encourage a competitive market for consumer gas and electricity, with the idea that the fear of losing customers to nimbler rivals will incentivise energy companies to keep prices down for everybody.

The question of whether this project has been successful in reducing energy costs is a difficult one to answer. Prices fell after the privatisation of energy companies, but this coincided with a period of global excesses in energy supplies. It has also been suggested that initial savings came as a result of ‘asset sweating’, resulting in under-investment, and storing up higher energy bills for the future. UK consumers pay less for their energy bills than the rest of Europe, but again this comparison may be misleading. Different tax systems make like-for-like comparison extremely difficult. Britain’s offshore gas reserves have also been a factor in keeping energy prices lower.¹

All this means is that it is an extremely technical question, beyond my knowledge or expertise, whether a liberalised, competitive market means cheaper energy. However, the evidence is ambiguous enough to suggest that the benefits may not be that great. What I want to suggest is that there are other considerations that should be taken into account when we decide how to structure our energy market besides the question of how to make energy as cheap as possible. A competitive energy market may have costs which outweigh the minor, perhaps non-existent benefits it brings.

The current market in energy exemplifies the flaws identified by the psychologists above. In the first place, it is a market riven by deep mistrust. The vast majority of energy consumers believe that energy companies are keeping prices unnecessarily high, or are deliberately complicating the information they give to consumers. Now, there are probably few markets where consumers genuinely believe that companies have their best interests at heart. However, in the energy market there is an unusual sense that suppliers are trying to exploit the ignorance of their customers.

On the second point above, switching energy company is among the more unpleasant consumer processes facing people in the UK. The options available are notoriously complex, and difficult to compare. Even if the government and the regulator Ofgem succeed in their attempts to simplify this system, this will not mean that it will be obvious to each household which is the best supplier and tariff for them. There is still the problem that a proper comparison of energy tariffs requires consumers to accurately predict how much energy they are likely to use in the future. Moreover, choices between fixed and variable tariffs involve an element of gambling on how much prices will rise or fall by. Inevitably, then, people refuse to participate in the market – having to take higher energy prices because they cannot face the hassle and time investment of switching. An Ofgem report classified 80-90% of consumers as ‘passive’ or ‘disengaged’ from the market.

The British energy market typifies the third great vice of modern markets, too – it is a choice that never goes away. Given the volatility of the energy market, with deals constantly hovering in and out of view, consumers are increasingly expected to be thinking about their energy provider all the time. This is not an unpleasant decision that you can grit your teeth and get through once every few years. No, for an energy consumer to properly participate in the market, they need to be ever-vigilant – for example, by signing up the ‘Cheap energy club’, which exhorts them to “Constantly monitor your tariff”.

Perhaps these psychological ill effects are outweighed by the price benefits of the current system. Or perhaps there are ways of reforming the market to reduce or improve the choices faced. However, given expressed public support for re-nationalisation, these issues seem worthy of discussion.

¹ For more of an overview of the benefits and failures of privatisation see this Which? report, or this article by James Meek

Should fewer people be encouraged to go to university?

The obvious conclusion to draw from Allister Heath’s claim that the fastest job growth over the next few years will be in occupations that that don’t require university degrees is that fewer people should be encouraged to go to university. That’s certainly the spin put on it by Heath’s sub-editor, who headlined the piece, “Tell youngsters the truth: the UK needs you to work not go to university”. That also seems to be Heath’s view, judging from his swipe at Tony Blair’s target of getting half of school leavers into university. However, I can think of three possible objections to such an inference. The first is that we cannot depend on these projections as fixed, unchangeable constraints as policy. The second is that a skills mismatch may help drive economic efficiency. The third is that universities should be judged on their merits beyond just preparing people for jobs.

Economic projections are fairly dubious at the best of times, but it would be an obvious mistake to assume that nothing can be done to alter the relative growth rates of different types of jobs. After all, higher education teaching is listed among the fastest growing professions, but that is unlikely to remain the case if student numbers are significantly cut. Though he cautions against top-down planning, it is clear that Heath believes the list of policies he suggests at the end, including lower taxes, less regulation and improving infrastructure will create more graduate jobs. Thus one response to the projections is for the government to undertake the policies it believes can contribute to the development of more jobs requiring university degrees. So the first reason to continue to keep encouraging school leavers into university is because you believe that jobs can be created for them.

The second reason is to promote the meritocratic ideal that most capable person for a job should fill it. If student numbers are contracted to near enough the exact level of graduate jobs, there is no guarantee that the least academically capable will be the ones squeezed out. For one thing, risk aversion and a lack of information or social precedent mean that those from poorer backgrounds are more likely to be deterred. For another, many students do not reveal and develop their aptitudes and abilities until they are at university. Meritocracy is obviously a moral ideal – may people believe it is necessary for fairness. But it is also likely to bring about greater productivity and efficiency.

What of the ‘extra’ graduates that are unable to find jobs to match their skills? It is at least possible that they will be more productive in whatever job they end up in than someone who didn’t go to university. After all, beyond the direct technical knowledge imparted by university courses, there are a number of transferrable skills beneficial in almost any workplace, things like communication and time management. There is some evidence that this is the case, but it has also been suggested that these advantages can be wiped out by the lack of motivation of workers who lack job satisfaction because they feel over-qualified.

Of course, even in those cases where attending university is not economically beneficial, either for the individual or the economy at large, there are still a host of reasons why we might encourage people to go to university. The social, cultural and political benefits of a university education have been discussed by at length. It has been suggested that universities help breed a more cultured, moral and democratic society. These benefits are surely not restricted to educating those who stand to get a job at the end of the process.

More radically, for those who accept that the current level of economic development is ‘enough’, university may be seen as playing a role in ‘leisure smoothing’, giving young people an important period of freedom from the demands of paid employment. This fits Robert Skidelsky’s vision that “We shouldn't be aiming to extend the domain of work into old age, but to extend the domain of non-work into young age”. Thus universities might be seen as a sort of retirement community for the young, where they are given the opportunity to be active and social without the demands of making an economic contribution to society.

Now it might well be that these arguments are insufficient to take the sting out of Heath’s critique of the present ideology around higher education. It might be enough to show that is beneficial to have a bare minimum level of university graduates, but not enough to show that the current level is justified. That depends on the empirical facts and the weight given to the different considerations set out here.

However, I think that this debate raises a couple of very important issues for how we should think about higher education, wherever you stand. Firstly, how should the option of higher education be presented to young people? Heath’s indignation in the article comes from the belief that many university graduates are likely to feel disappointed and betrayed, believing their degrees to entitle them to better jobs than they expected. If going to university does not guarantee a graduate job, then Heath is almost certainly correct that it is wrong to mislead school leavers with false promises. Perhaps a better alternative is to present it as a calculated gamble, with a good chance of bringing about a certain type of job and lifestyle, but no guarantee. Moreover, if the economic benefits of university are smaller than we previously believed, perhaps there should be more focus on the non-economic advantages it brings? (If these messages are successful they might increase the job satisfaction of disappointed graduates, and so contribute to productivity)

The second issue this raises is the question of funding. If it turns out that much of the benefit of a university degree doesn’t accrue directly to the individual, but involve the more diffuse goods of economic efficiency through meritocracy and socio-cultural goods, this might be an argument for a greater public funding of higher education, taking  more of the burden off individuals.

Do academics publish too much?

Inspired/provoked by an old Noel Malcolm piece that’s doing the rounds, Jacob Williamson has turned his attention to the state of modern academia, and the question of whether there’s just too much of it.

Both Malcolm and Jacob trade on well-established stereotypes: academia isn’t what it once was, with the pressure on young academics to publish voluminously and make a name for themselves sending them down increasingly esoteric alleyways as they struggle for something novel to say. The standard academic article, on
this view, merely restates what dozens of others have said, with a minor twist at the end.

While that picture isn’t entirely false, I think that criticism is too easy, and that there’s nothing fundamentally wrong with publishing behaviour. Jacob and Malcolm seem to have two main problems with the volume of academic literature.

The first is that it is no longer possible (as Malcolm used to do with Hobbes scholarship) to keep up with all the literature on a particular topic. As Jacob says, “There’s a place for secondary texts to shed light on primary material, but this much light? It becomes blinding”. But why should you expect to be able to keep on top of all the thoughts that a whole world’s worth of scholars are having? Surely a field where ideas come slowly, drip by drip, is stagnant, or at least lacking in energy or vibrancy?

Two points can be made in favour of the arcane academic research that I think is worthwhile but that everyone within a field shouldn’t have to wade through. The first is that however obscure an issue is, it is worth discussing as long as somebody else, anybody else, is interested in it. The second is that apparently dull and narrow research can actually enhance what we might think of more worthwhile and consequential research, by sparking off new ideas, or being synthesised together.

It might still be asked how scholars can find work that interests them in this mountain of work, and this is indeed a problem. But there are mechanisms – the tiered pyramid of academic journals means that following the higher prestige journals should ensure you read the things of greatest general interest. Keyword searches and citations from fellow scholars can also help.

The second objection is that quantity is prized over quality. Instead of considering a topic in depth and thinking through their ideas, academics are forced to rush through superficial research in order to move onto the next publication. Worse still, they might shirk from considering really difficult questions because they require too much of an investment of time.

I don’t think this is entirely true. After all professional success for academics is not just a function of the number of publications a scholar has, but also of the prestige of the journals they are published in. Academics do have an incentive to polish their papers and seek out novel questions because they are likely to be published in better journals.

In any case, I don’t think it’s necessarily a bad thing if academics are given a bit of a nudge to share their ideas with the rest of us before they feel they are totally perfect. That Ralph Walker and Lesley Brown (praised in Jacob’s post for their sparse publication record) should hoard their ideas and views to share only with students and immediate colleagues tries me as a shame. I’m sure most of us have experienced the benefit of being forced to have work ready for a hard deadline, rather than being left to forge it in our own time  - why shouldn’t academics be similarly galvanised by the demand that they produce visible output to show for all the time they spend thinking and reading?

Moreover, I’m a bit puzzled by the assumption that just because academics are asked to write a lot, they must be lacking for things to say. I find this particularly odd coming from Jacob, who is an intimidatingly prolific blogger. Academics, almost by definition, are people who have ideas. Usually lots of them. Not all of them are good, but it’s not always possible to tell how good an idea is until it is released into the world. I think that’s an experience most bloggers can relate to. So if Jacob can share four or five ideas a week on his blog, why does he feel unable to share four or five ideas a year in academic papers? It is the same impulse behind each – the same desire to throw ideas out into the world and see if they attract interest or provoke discussion. If it’s good enough for bloggers, why not academics?