Ritchie fails to note how people collaborate

Lordy but the man can be dim:

There is a problem: integration is not the opposite of competition. Collaboration is the opposite of competition.

Integration implies a disparate selection of independent bodies have to be meshed as well as possible one with another, with at any time there being risk of one component being replaced with an alternative. Relationships will be defined contractually: trust will be low because at any time the risk of a component being rejected and a replacement being sought is high. Defensive behaviour will be prevalent, focussing on the need for survival of the constituent parts, not the behaviour of the system as a whole. The patient will have low priority in that case.

Collaboration means people working together towards a common goal. If collaboration is the target the aim is to achieve a common goal. The risk of component failure is covered by seeking high standards of behaviour universally: the result is risk can be taken to achieve that aim. The relationships are built on trust, not contract. It is maximum and not minimum performance criteria that matter.

Which model is likely to produce the best health outcomes? Clearly a collaborative one.

Now, I admit we have not got such a model now. That is the fault of governments past, both Tory and Labour. So we need reform. But not the reform we are getting, which will undoubtedly increase fragmentation in the NHS (that is its purpose) and so make integration hard and collaboration impossible.

We do instead need to create a collaborative model. This is possible. Instead of breaking the NHS up we need to re-centralise it.

Markets are the way that human beings collaborate.

So, think about this for a moment. We need someone to be the person who gets weird metals into the lighting industry so that everyone can have those lovely metal halide bulbs with which to adorn their kitchens. Someone who occasionally goes out and finds some terbium to make those compact fluorescents work.

We also need someone to wibble inconsequentially on the internet about taxation: about how everything really should be paid to the taxman and we should be thankful for the pocket money we get back.

Excellent, we\’ve our division of labour and our specialisation. This is, as Adam Smith pointed out (yes, the pin factory again) one of the ways in which we can increase wealth.

Just for funsies we\’ll call our two people Mr. Worstall, who will deal with the weird metals, and Mr. Murphy, who will supply the wibble.

Now, how are we going to organise the collaboration between these two people? We\’ve products being made and they need to be exchanged. Ah, yes, we call that trade. And where does trade take place? Yes, in a market.

Good, excellent, so when Mr. Murphy requires light bulbs to make his wife\’s cooking visible from those little down lighter things he will purchase them. And Mr. Worstall, when he wants a good laugh, will purchase a newspaper or magazine that contains Mr. Murphy\’s dribbles. Or perhaps even, in this modern day and age, receive such for no money down, in what can be called the reputation market of the internet.

But we have collaboration here, cooperation. And the market is the method by which this happens.

Now, we can in fact go further than this and say that at times markets are not the correct method of such collaboration, cooperation. At times we\’d rather not have a web of contracts, at times we\’d rather have the more authoritarian \”do as I tell you\” style of organisation. When and where we would prefer this is dealt with by Ronald Coase in his Theory of the Firm. You know, that thing that gained him the Nobel Prize? There\’s been a number of decades of work done on where these dividing lines are: which is the best method of organisation for what purpose under what circumstances?

Few come up with the answer that 5% of the workforce and 10% of the GDP should be so centrally managed. But then of course Ritchie wouldn\’t be interested in such subtleties, for this is the \”blackboard economics\” which he rejects.

What amuses greatly is that Mr. Coase is the originator of the phrase \”blackboard economics\”, that thing which should be rejected, and his Theory of the Firm is entirely a rejection of the purely theoretical approaches that were taken before he advanced it.

27 thoughts on “Ritchie fails to note how people collaborate”

  1. Surreptitious Evil

    Could we improve your argument by saying that “markets are the most common way whereby disconnected human beings collaborate”?

    You collaborate with friends, family, neighbours and even colleagues in ways partially and not assisted by the market but there is no effective way (5 year plans and tractor factories demonstrating, as well as the apparently not apocryphal /paywall-ish/ “in charge of the London bread supply” story) to ensure collaboration amongst poorly or unconnected humans than a market (whether free, ‘free’, or heavily regulated.)

  2. And he would do well to read Adam Smith.

    (He ought not claim he has already read Smith–he will only embarrass himself, having so clearly failed to understand it.)

  3. Surreptitious Evil

    And, as an afterthought, are the wibblings of a retired accountant so valuable that it is an economically sensible use of the time of a highly trained and experienced medic to feed him?

    Surely he can make beans on toast?

  4. You do make me laugh, sausage.

    How is collaborative action within a system like the NHS got to do with lightbulbs!

    What we have with the NHS is a common goal; to achieve the best health care for every one.

    Opening it up to for profit competition is obviously harmful for the patient. Any fule kno.

    This article is devoid of anything.

    Don’t you see that as a systemic whole, run by collaborating interests, the entry iinto the market for Health would be coordinated and produce the the most efficient results. By breaking up the system (try breathing without your lungs, yeah. Is that easy enough for you?) into components and let the components within those components compete in a finite market, you will end up with ONE provider at the top monopolising price and supply.

    That’s the nature of competition.

    Japanese knotweed.

    Tim adds: Gosh, that’s very good. “We must keep the NHS a monopoly in order to ensure that competition doesn’t produce a monopoly”.

    Are you sure you’re not Nick Shaxson?

  5. Arnald, you’re talking about how a large system would operate in a fantasy world where nobody has any self interest, rather than in the real world. That’s the problem with you and Ritchie.

    “What we have with the NHS is a common goal; to achieve the best health care for every one.”

    This ignores the simple fact that everyone “collaborating” within the said system actually has diverse interests; for instance, to earn more money, to gain promotion, to enlarge their own department, to gain more funding, to push their particular hobby horse cause, and so on. These innate human drives push destructive, rather than constructive, competition within any monopolistic system.

    People only “collaborate” at a very personal level, where they can moderate behaviour due to deep personal bonds. In families, or among close friends. At that level, trust, as Ritchie mentions, can function. Collectivists always make the fundamental error that you can translate this up to large scale, impersonal systems. And you can’t, because once people don’t know each other, and cannot moderate interactions by personal level peer pressures, shaming, and so on, it all stops functioning.

  6. Opening it up to for profit competition is obviously harmful for the patient. Any fule kno.

    Oh, yeah? How does the NHS rank alongside other countries’ healthcare systems for patient satisfaction?

  7. Tim Newman

    Patient satisfaction is remarkable high for the NHS, despite the constant media attacks. Nobody is pretending there doesn’t need some reform. But getting private equity and big pharma and insurance to run healthcare is utter blox.

    It worked wonders for the railways, hmm.

  8. “Patient satisfaction is remarkable high for the NHS, despite the constant media attacks.”

    The NHS sucks in almost every comparison I see

    “Nobody is pretending there doesn’t need some reform.”

    So why is everyone screaming anytime someone talks about reform?

    “But getting private equity and big pharma and insurance to run healthcare is utter blox.”

    Why is is “utter blox” to get people that actually know how to run things to run things?

  9. Surreptitious Evil

    haha at least I’m not called Surreptitious Evil!

    You seem to be daft enough that it might surprise you to learn that I’m not called that either.

    Anyway, as you started misquoting Molesworth …

    How do co ops work then?

    The Co-op and John Lewis seem to work mostly by paying people market wages. The Co-op supermarket near me pays people less than the Sainsbury near me. And, frankly, the co-op “members” extend far further than the staff.

    What was then CIS Insurance was the most hierarchically stratified organisation I’ve ever worked with (we presented on the same subject over a week to programmers, project managers, programme managers and then the IT Director and his direct reports) – the facilities, particularly for lunch, just got better and better. We wondered if we’d get a trip to London for lunch if we’d spoken to the Board!

    “Proper” co-ops tend not to work above a certain size unless there are strong external incentives – Fairtrade’s iron grip on the “moral consumer” (although the actual co-ops Fairtrade mandates are much smaller) and the Israeli kibbutz being clear examples (the latter obviously – as the external pressure faded, so did the commitment – wiki sourced so beware – 72% of kibbutz aren’t co-ops nowadays.)

    Many trades union (not quite a co-op but) leaders are paid > £100k.

  10. Patient satisfaction is remarkable high for the NHS, despite the constant media attacks.

    And satisfaction is remarkably high for the Scientology movement, despite the constant media attacks. Why? Because it’s a religion. Like the NHS.

  11. …..It worked wonders for the railways, hmm…..

    That would be the railways that were built with private money, and then wrecked by public ownership, followed by blossoming under private ownership again until the government forced them into bankruptcy for ideological reasons.

  12. Can the oil companies please collaborate to bring me petrol as cheaply and efficiently as Ritchie believes the system should work. ooh that would mean sacking all of the bureaucrats in the Competition Commission in the UK and Euro governments. One way to reduce government expenditure. However, law of unintended consequences would see the tax payer fleeced in many different ways wouldn’t it? But it would give Ritchie something to really bleat about.

  13. ‘What we have with the NHS is a common goal; to achieve the best health care for every one.’

    So how is that different from (say) providing food for the entire nation and ensuring that everyone gets enough to thrive?

    I await your call for the nationalisation of land, food manufacturing, distribution and retailing. After all after water, food is the most important human requirement. Soon followed by shelter, so I fully expect the Arnald plan to expropriate all private property and distribute it via political means as well.

    Healthcare comes a fair way down the line of human needs – what makes it so special that it alone can only provided by the State as monopoly supplier?

  14. If collaboration is the target the aim is to achieve a common goal.

    That just doesn’t make sense. In the NHS fixing the patient is the goal*, collaboration be a number of different specialities, surgeon, anaesthetist, nurse etc my be needed to achieve that goal bit collaboration is not the aim, target of goal, it is a means to a short term end.

  15. Rob and Jim, as I think you already know, there are lots of places where they are already doing this (Cuba, Venezuela, North Korea, Zimbabwe). Funnily enough very few of the leftists actually seem to want to go live there

  16. “If collaboration is the target the aim is to achieve a common goal.”

    In this context, there is no meaningful distinction between “aim”, “target” and “goal”. The aim of a health service is to heal people, the target of a health service is to heal people and the goal of a health service is to heal people. Collaboration, where it is used, is a means to an end, not an end in itself.

  17. Arnald,

    Patient satisfaction is remarkable high for the NHS, despite the constant media attacks.

    Compared to what?

    The fact is that most people in this country have no idea how much better the NHS could be.

    Before Open Skies, people didn’t realise that it actually didn’t need to cost £200 to fly to Toulouse and that BA had been basically feathering their staff’s nests for decades.

    The NHS is occassionally brilliant, sometimes good, mostly average and far too often, appalling. Staffs hospital killed about 200 people through negligence, and they’re still trying to cover it up. Toyota had 20 deaths out of millions of cars worldwide (later shown to not be related to the engineering) and they did a full recall, apology before congress etc etc.

    The sooner Lansley gets on with it, the sooner we can get people to realise what a pile of crap they’ve been getting for years.

  18. Fixed it for ya!

    You do make me laugh, sausage.

    [What does] collaborative action within a system like the NHS got to do with lightbulbs!

    What we [need] with the NHS is [a rational] goal; to achieve the best health care for every one [at an affordable price].

    Opening it up to for profit competition is obviously harmful for [vested interests]. Any fule kno.

    [My brain] is devoid of anything.

    Don’t you see that as a [bloated beaurocracy], run by[unaccountable pencil pushers implementing endless tractor-production policies], the entry iinto the market for Health would be [single-mindedly dull] and produce [fatuous empire building, monolithic management structures and tickbox processes]. By breaking up the system (try [playing the flute wearing boxing gloves] yeah. Is that easy enough for you?) into components and let the components within those components compete in a finite market, you will end up with [the choice of a range of innovative, efficient services].

    That’s the nature of competition.

    [Not at all like] Japanese knotweed.

  19. I hit “The relationships are built on trust, not contract.” with a thud.

    I practiced law for 30 years. Every person who ever said that, or something similar, to me, was a crook or a fool, often both.

  20. haha Niels! That’s quite good. It probably took longer than everything i’ve typed put together, mind. But still, I look forward to the next one.

    Fred Z
    Surely one must have trust in the other side if a contract is to be signed?

  21. The NHS is occasionally brilliant

    When the NHS is good, it’s largely because a bunch of specialists are co-operating (e.g. A&E, ITU). Wibble about competition as much as you like – because it’s not how messy stuff gets sorted on the ground (not here, and not in continental systems).

    Deal with it.

  22. “Surely one must have trust in the other side if a contract is to be signed?”

    No. One has trust in courts, bailiffs and police. One hopes the other contracting party is honest and diligent but one does not trust that he is.

  23. Fred Z

    Just like those in the finance industry were hoping everyone else was telling the truth or at the very least, knew what they were talking about.

    Blind hope.

    Are we to have an NHS run on hope? Gosh, I hope Glaxo aren’t running that hospital to maximise profits, thereby minimising patient care. No, they wouldn’t do that, they’ve signed a contract saying they’ll provide the best care possible!

  24. Arnald, glad you liked it. But no, didn’t take very long at all. It all kinda falls into place.

    Cynics demand contracts and evidence, blind hopers will take someone’s word for it. You know, like when people assert that the NHS’ central planning is the only way to go because people are just maniacally altruistic and infinitely knowledgeable.

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