Wednesday, 26 May 2010

Choice, markets and the middle-class busybody


Despite the best efforts of us all to educate about the wonders of market mechanisms, the liberation that choice brings and the salvation that is the price mechanism, I have concluded that some people are seemingly lacking in the genes that allow for the grasping of this concept. Billy Gotta Job appears to be in that class of deprived folk – ironic as his post touching on asparagus and education discusses this very type of genetic lack:

And it transpired that those who could smell the disgusting whiff from their own urine could also detect it in that of their fellow participants; whilst conversely those who thought that their own excretory juices were pure and undefiled were equally convinced that everyone else’s were as well. So it is now believed that everyone produces post-asparagus-munching foul piss, but only those with the necessary genome can detect the fact.

Now the point of all this isn’t to provide a long explanation of classical liberal economics – others have done this before me and better – but to consider how that very “…perspective rooted in middle-class volition and middle-class means…” that Billy talks of creates a belief that other people are not capable of exercising choice – mostly because the choices they exercise when given that chance seem not to match the choice us middle class folk might make in that circumstance.

You will have heard often from your friendly neighbourhood, middle-class busybody how controls are needed on advertising. Not because that busybody is taken in by the adverts – oh no – but because other, less intelligent folk, probably working-class and smelly will be taken in by Ronald McDonald and will rush off to fatten themselves up at his emporium. This – our busybody believes – is the wrong choice and must be stopped (or rather because banning Big Macs is too shrill, the argument is to stop them advertising – to remove their right to free speech).

And, every time the subject of education is raised, you will hear the same arguments. Giving parents a choice only confuses them – I mean what do the poor dears actually know about education? Well, given we’ve an education system that routinely condemns a third of young people to a semi-literate existence, unable to access work, confused, angry and excluded – a system created and managed by middle-class busybodies – there is a sound argument for change. And why not give a choice? After all before compulsory state elementary education was introduced the vast majority of children attended (fee-paying) schools and literacy levels were as good – maybe better than they are today.

So choice is a bad thing – yet it is the basis for markets to work. Without choice you have monopoly and this – as we know (and the public sector demonstrates every day) – brings higher prices, lower consumer surplus, inefficiency and diseconomies of scale. Yet we tolerate unnecessary monopolies in health and education – under the careful direction of expensive qualified middle-class busybodies – because we’re told that markets are a bad thing. I argue – with a great deal of support – that markets (cp) bring lower prices, consumer surplus, efficiency and economies of scale.

There may be circumstances – geographical restraint or unavoidable free rider issues – where markets do not operate well but this is clearly not the case for either health or education (and perhaps more controversially security) since we can see effective and efficient markets running parallel to state monopoly provision.

But the real issue to me is a moral one. If it is possible for me (or anyone else) to have choice in education and health, the Government should not have the right to reduce or remove that choice through fiat. This doesn’t mean I get my choice – the oversubscribed school remains an oversubscribed school – but it protects my rights. And choice requires that the barriers to market entry are removed – hence free schools (and I hope in the future free hospitals).



billynojob said...

I'm grateful for Simon's interest in my blog, although I'd urge you to read more than these snippets if you want to arrive at a more balanced conclusion about my deprivations, genetic or otherwise!

I do need to correct one element of his presentation of my position on this. Simon implies that I am arguing that "the poor dears" (the working classes I assume) are incapable of exercising choice in education because of my patronising middle-class assumptions about their intrinsic capacities, or lack thereof. This is not what I'm saying. I'm saying that choice is not something that can be given to people merely by dint of saying that you are giving them that choice. To be effective, people must have the means - time, money, connections, credibility - to exercise them. My argument is that disadvantaged parts of our society are disadvantaged precisely because they lack these means. Telling them to buck up, or worse, assuming by their lack of bucking up that they were never interested in the first place, is a self-fulfilling prophecy. And here is the nub of the difference between me and Simon. I believe inequality is an objective reality. Simon appears to think that it's simply a lack of opportunity that can be put right by the provision of a choice that sounds fine and laudable in theory, but which is undeliverable in practice without other social change.

Finally, Simon's grasp of history seems almost deliberately wrong - "After all before compulsory state elementary education was introduced the vast majority of children attended (fee-paying) schools and literacy levels were as good – maybe better than they are today." Really?

Simon Cooke said...

On the historical matter some of the evidence is in this post I did on the Forster Act