Allowing schools and hospitals to fail

It opens up the potential for schools, hospitals, social care systems and nurseries to fold without the government stepping in to prop them up. Labour called it an \”appalling revelation\”.

Appalling revelation?

But that\’s the damn point!

\”This problem is mitigated if the system allows for provider exit as well as entry – and indeed the evidence suggests it is exit which drives efficiency … There is also evidence from the private sector that a significant share of productivity growth is due to entry and exit processes.\”

Yes, this is one of the major differences between market and non-market systems. Market systems punish the shite very strongly: shite suppliers go bust, for which we should all say Hurrah!

We do want shite suppliers to be driven from the health and education sectors, don\’t we?

\”But exit of providers (eg school closure) may be controversial and unpopular and an appropriate failure regime must be designed,\” it warns.

Very much so. The basics of the structure already exist in the various forms of administration and bankruptcy we have. Administration might be the most appropriate: we\’re not likely to say that a bust hosptial should be razed to the ground. Rather that the management, that shite part, should be replaced and the investors should lose all their money. So that other investors can have another go with different management.

This is known as an incentive to investors and management not to be shite.

Concludes there is a benefit in choice and competition in driving up standards, but that it works best where there are fixed prices in health for operations, or in education per pupil, otherwise there is a risk that companies will simply compete by undercutting each other.

This is indeed part of recent research.  I\’m unconvinced that it holds true over the long term but in the medium it does seem to. (The difference being that in the long term we can have technological change which leads to competition on price between the new and old technologies: in health care, say, the ideas of that Indian heart surgeon who does it on a production line basis.)

Highlights the potential for \”market failures\” in the public sector, saying some areas may not be appropriate. \”In particular, it is worth noting that if the service is complex; time-critical; and used infrequently, (for instance accident and emergency services), it may be difficult for users to make an informed choice.\”

Sure, no one is saying all markets all the time markets is the solution to anything: only that more markets than we currently use might be a good idea.

Tessa Jowell, the shadow cabinet office minister, said that the potential for allowing schools and hospitals to collapse was \”an appalling revelation\”.

She said: \”The education of children and the treatment of the sick should not be treated as a commodity to be traded, as if healthcare and educations were chocolate bars or washing powder.\”

Do fuck off you ghastly old cow.

We already have evidence that competition, as above, improves quality. What is it? You don\’t want to improve quality or something?

Nobody, but nobody, is suggesting that you select your treatment after a car smash (yes, this is an important and significant part of the health care system: around 0.5% of all deaths are from this cause) from a shelf like you do your washing powder.

Rather, we want those who are shite at providing care after car accidents to lose their money and their jobs: so that they work hard to become less shite at doing so.

Labour complaining that a market will mean that suppliers are allowed to fail is simply their own gross stupidity shining through. This is the whole point: we want the shite to fail.

10 thoughts on “Allowing schools and hospitals to fail”

  1. Nail on the head, again, Tim.

    Closing a school (in an orderly fashion), is for those inhabitating the left-hand side pavement in this journey through life, the same as DENYING CHILDREN AN EDUCATION, you basta*d.

    The orderly closing of a failing hospital (which kills people and I exagerate not) with planned coverage of the necessary services, makes you a MASS MURDERER, you scumb*g.

    In reality, they are guilty of gross conservatism. All change is bad change. What we have is disfunctional, but heaven forbid, change?? Obviously, our ONLY MOTIVIATION is that we want to make vast sums of money from people’s misery.

    What world do these people inhabit?

    We all have grannies, friends with disabilities, children with needs, parents getting older, or near pension age ourselves. I simply want the best service for my and other people’s money.

    And if that means we vary the number of people in public employment, the units open or the direction of policies, so be it. But remember its for a better service or for better value for money.

  2. Brian, follower of Deornoth

    “Tessa Jowell, the shadow cabinet office minister, said…”

    Quite. Education and healthcare are much too important to allow Jowell to interfere with them.

  3. The market system does n’t punish shite suppliers.The supply of houses is shite but the market does n’t punish the developers: it protects them.The post-war history of the market system in the UK is of waves of asset stripping,where active industrial and retail suppliers were put out of business to realise the inert land values.Global markets have collapsed because of too much investment in property,never to recover in the case of Japan but General Worstall orders one more push.

  4. “The supply of houses is shite but the market does n’t punish the developers: it protects them.”

    In what way is the supply of houses ‘shite’?

  5. I have always had the impression- at least with respect to schools- that the hardline supporters of comprehensive education generally regard pupils as existing to benefit schools rather than the other way around.

  6. Tim, I love the way you mix cogent argument with foul language.

    This post is an absolute classic. Gratuitous swearing this is not. It reinforces your argument and it is very entertaining.

  7. DBC: How many times does it have to be said–the system of state/corporate socialism we are stuck with now has ever-fewer elements of a free market left in it. How many bullshit laws, how many meddling parasites both local and national are involved in the housing trade.

  8. @DBC Reed: and the market in housing development land is a free market in exactly what way?

    Strange isn’t it that people prefer to live in houses that were built pre 1948, when there were no restrictions on development, and the shoe box housing estates we get now are despised? Plus of course State provided housing is usually total shite as well.

    Not really great evidence that ‘the free market’ provides poor housing is it?

  9. @DBC Reed: The housing market is “shite” because the free market for land is grossly distorted by planning legislation, green belts, NIMBYism etc.

    If land was freely available and the houses built of shitty quality – then you might have a point…

  10. “I have always had the impression- at least with respect to schools- that the hardline supporters of comprehensive education generally regard pupils as existing to benefit schools rather than the other way around”

    This is the public sector in a nutshell – utterly dominated by producer interest.

    It staggers me that the Labour argument is that in a choice between trying to improve standards by introducing new schools and leaving kids to rot… they’re 100% behind the rot option.

    Their argument that it’s better to try to improve standards is utterly demolished by their inability to deliver any improvements in 13 years despite billions of spending (thrown mostly at the producers in the form of pay rises)

Leave a Reply

Your email address will not be published. Required fields are marked *