Tag Archives: Free market

Will welfare reform result in a ‘two nation’ society?

As David Cameron makes a U-turn on cigarette packaging and George Osborne finally understands government does sometimes need to intervene in the free market will others follow?

Our ability as an individual to stand against the power of big business is limited to say the least, however, some on the Tory right still expect individuals to form a ‘government of self’ and develop individualised systems of social protection (via ‘big society’). Such personal independence is beyond the reach of many.

However, David Cameron and George Osborne appear to have finally grasped that for ‘big society’ to truly thrive an active state is a necessity.

Commentators are suggesting Osborne is playing social democratic catch up on pay-day loans as the Conservatives have realised Ed Miliband has struck a chord with voters by focusing on the way markets are rigged against consumers.

Yet the prevailing ideology of the right is so strong it still continues to push the contracting out of public provision of services and privatisation, whilst resisting calls for regulation.

Such a singular approach does a disservice to us all. Some on the right adhere to a narrow vision of the ‘good life’, where the promise to those families who work hard, and are deserving, is that they can send their children to the ‘best’ schools (either private or ‘free’) whilst accessing privatised pension and healthcare schemes. However, those same ministers forget to mention how your future can be wiped out by an under regulated free market (think RBS and LLoyds Bank!). Meanwhile the rest of society, the undeserving, can live in a world marked by financial insecurity, mediocre education, rationed healthcare and an impoverished old age.

Economists have already christened such a scenario as the ‘dual economy’; two societies who live side by side, but hardly knowing one another, unable to imagine what life is like for one another. Conservative Prime Minister, Benjamin Disraeli, wrote of such a scenario in 1845, referring to ‘the two nations’

‘Two nations; between whom there is no intercourse and no sympathy; who are ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws: the rich and the poor’

An alternative approach could be to try to close the gap between the dual economies by supporting a sense of shared responsibility between individuals, society and government. In this relationship government would protect the citizens it has been elected to serve from the abuse of power by the free market.

Individuals feel vulnerable and powerless because they are vulnerable and powerless. Is the average user of pay-day loans able to challenge extortionate interest rates on their own? Am I able to challenge the power of the energy companies as another cold winter approaches? Can any of us challenge the power of the financial industry at an individual level?

Many on the Tory right will scream ‘consumer choice’ as if it’s the answer to every woe, however, will changing providers of whatever service it might be really make a difference. I fear not, and that is why I want a government of politicians that understands where many in this country feel they are today, powerless, abandoned and hopeless.

That is not a good foundation from which to build our collective future. Control of one’s own destiny requires more than the fallacy of individual consumer choice in a free market economy, it requires an active and supportive state focused on the distribution of wealth, and the redistribution of wealth through the tax and benefits system along with regulation of key industries, such as the financial and energy sectors.

Well done Mr cameron and Mr Osborne, you are at last beginning to move in the right direction.

HSBC shows the way of a privatised NHS…..ignore at our, and our childrens’, peril if we want a fair system of care in the future

What has HSBC to do with the NHS?  Quite a lot in my mind.  

My biggest worry is we will not learn any lessons from the financial meltdown of the past 3 years as government persists in its drive to privatise the public sector.  As the ‘Peter Principle’ reminds us……why does history keep repeating itself?   Because nobody ever listens.

With commentators suggesting barely 10% of total care home provision remains in state hands confidence in the ability of the free market and financial sector to provide quality care is important. However, for me it boils down to trust and respect, and the simple truth is I do not trust the private sector to deliver, and I do not believe the private sector respects me enough to ensure it will prioritise meeting my care needs, rather than making as large a profit as possible.

The recent review of care at Winterbourne View Hospital demonstrates this clearly when it suggests lack of funding was not an issue, Castlebeck Ltd had clearly put profit before care. Indeed the very foundations of Winterbourne View Hospital lay in its ability to make money for investors.

However, successive governments continue to believe free markets are able to respond to individual need more quickly and flexibly than over bureaucratic state funded systems, leading to better quality care as providers compete to attract consumers.

Faith in the free market is unshakeable in government, and in many areas of life it has proved of benefit, however, the re-branding of care as a commodity over the last 30 years has all but ignored some simple truths pointed out by the economist Adam Smith several hundred years ago;  the purpose of the free market is to generate wealth for those who own the means of production, or the ‘masters of mankind’ as Smith christened them, it is not a charitable endeavour but a single minded system driven by cash not compassion, who Smith suggested had a ‘vile maxim‘  of  “all for ourselves”.  The ‘masters of mankind’  in Smiths time were the merchants and manufacturers who supported policy that enabled them to make more profit, they were not concerned with how such policy and their actions might impact on others.  Today the ‘masters of mankind’ appear to be financial institutions; banks, insurance companies, private healthcare providers and  international management consultants, such as  McKinsey and Company who wrote many of the proposals contained within the Heath and Social Care Act , and stand to makes several millions from there implementation.

At a macro level those private institutions who have already taken over some areas of  care provision have been found lacking, which does not bode well for extending this strategy.  Take, for example, HSBC who were fined £10.5 million last year for mis-selling care bonds to older people.  The Financial Services Authority found unsuitable sales had been made to 87% of customers, with the average age of those who purchased bonds being 83 years of age, many of whom having already died before the scandal came to light.  Whilst £10.5 million might sound a lot its not for a company who was recently exposed as allowing the laundering of at least 7 billion dollars of drugs money through its bank and who set aside 700 million dollars to cover fines, although it was eventually fined £1.2 billion (not too harsh for the share holders as the company made approximately £12 billion in profits last year).

The selling of care related products by the private sector can leave individuals vulnerable in a variety of ways, look at the treatment of vulnerable adults in Winterbourne View and the recent review, owned by a Swiss private equity company, has the company been penalised in any meaningful way? Or look at the doubling of the number of private care homes going bankrupt leaving older people without secure housing or care provision.

Successive governments are keen to point to the failure of ‘state’ provision as an argument for the introduction of more private sector provision. True there are problems, however, rather than addressing these issues government seeks to displace them into the private sector, an under regulated private sector, where problems can conveniently disappear from view and politicians spout an empty rhetoric of disgust when an issue is exposed. For example failure within the NHS in Cornwall and Sutton and Merton in learning disability services led to private providers, such as Castlebeck Ltd, replacing NHS provision. However, issues highlighted in the subsequent inquiries in Cornwall and Sutton and Merton, around the training of staff, shift patterns,  management systems and a general culture of indifference toward those who are vulnerable, were not addressed in any lasting or meaningful manner, so poor levels of care have continued, just in a different (private) setting.

It would appear when abuse occurs because of  failure of ‘free market’ providers, government believes the private sector is  not only to big to fail, but more worryingly, to big to jail.  In essence some major private providers, whether of financial care products or personal care, seem to operate with impunity to wrong doing.  If they are not held accountable and government is not held accountable, who is?  Oh of course, the ‘care consumer’ who bought the product will have to take responsibility, after all it was their ‘choice’.

The truth is the ‘free market’ is anything but ‘free’.  A favourite of Mrs Thatcher, economist Friedrich Hayek compared the free market to a ‘game’ where there are winners and losers suggesting trying to regulate the market in the name of social justice was a waste of time, there are winners and losers and it is not governments place to even the odds because we are all free to make choices, and should live with the consequences of those choices and not try to displace them onto others, such as government or other taxpayers.  Which in many ways I support, however, the market is not free and is comparable to a casino where the ‘house’ always wins.

Lets reflect on the global economic crisis brought about by the current ‘masters of mankind’ and the displacement of said crisis  on the public sector, and consequently those who use the public sector, to see how a system premised on  the free market is neither free nor fair, and the biggest losers are those most vulnerable.

The current government appear to believe there is only one game in town when it comes to the future of our health and social care sector, in fact the whole of the public sector,they are wrong.  Call me old fashioned but for me an active State should be about taking a lead, collective action and solidarity, setting a high bench mark for all in society, not running away and hiding behind the financial sector and an outdated ideological mantra of ‘private sector good, public sector bad’ where ‘money is the anthem of success’ like some National Anthem (Lana Del Rey).


There is a million reasons why ‘big society’ and ‘choice’ are not enough when providing care to older people

Research suggests as many as 500,000 older people are abused each year (Action on Elder Abuse), in the main by those supposed to be providing their care.  Therefore, since the election in May 2010 up to one million older people may have been abused.  

This information is not new, successive governments have been aware of this issue for many years but all have stopped short of introducing a coherent legislative framework to protect those most vulnerable in the care system.  The coalition appear to believe in the power of ‘big society’ and service user and patient ‘choice’ in a market led health and social care system.  My difficulty with this approach is it offers nothing new,  it looks no further than the rhetoric of the ‘free markets’  beloved of every government since Thatcher.  Nobody appears interested in thinking deeper and developing care from a philosophical perspective.  Surely we need to understand what motivates us to care before we can reform the system ?

Historically societal attitudes toward older people have always been poor.  In ancient Greece old age was portrayed as sad with historians arguing the Greeks love of beauty marginalised the old, especially women, sounds familiar!  Cicero’s work De Senecute, written in 44BC, pointed to a variety of individual experiences of ageing, however acknowledging that for those who were poor and without mental capacity ageing is miserable.  Sadly, all of this is still true today with research suggesting those at greatest risk of abuse and mistreatment are elderly women suffering from some level of dementia.  This,  along with the fact that the abuse and mistreatment of older people is a global issue identified by the World Health Organisation over a decade ago, suggests the issue  extends well beyond political systems and party politics in the UK.

I’m with social contract thinkers Hobbes (1588-1679) and Locke (1632-1704) when they suggest as human beings we are inherently selfish and our individual pursuit of pleasure is destructive to society, suggesting the law can be used as an apparatus to modify such human desires.  In my view the  continued economic approach to health and social care has fed such selfishness, to the detriment of certain groups in society, i.e. older people,  and we now require a strong lead from government.

Successive governments since Margaret Thatcher have relied on a consumerist approach to improving the quality of health and social care provision. The question is has turning vulnerable older people into consumers improved their care?  For some yes, but for many of the most vulnerable older people in society, those older old people with dementia and who are frail, I’m not so sure.  However, what it has done is hide the abuse and mistreatment of older people from collective view for the last 30 years, and led society to engage in debate that does not move beyond the financial.  Research suggests this has had a detrimental effect on the moral health of society and academics are now suggesting the use of market mechanisms can change people’s attitudes and values, having a  ‘corrosive effect’.    Michael Sandel makes a pertinent point suggesting

It calls into question the use of market mechanisms and market reasoning in many aspects of social life, ……to motivate performance in education, health care, the work place, voluntary associations, civic life and other settings in which intrinsic motivations or moral commitments matter‘ (What money can’t buy, 2012, p122).

So what can we do? Helen Sullivan suggests ‘a big society needs an active state’.   A useful first step would be for government to accept the Law Commissions recommendations on reforming the law in respect of Safeguarding Adults without delay.  Secondly, abandon the rhetoric of ‘choice’ and ‘free markets’  and develop a meaningful dialogue based on concepts such a honesty, morality and dignity from a philosophical  rather than financial perspective. A new approach might be to have a dialogue that goes beyond party politics (and winning the next election) and begins by asking big society what it wants to afford, rather than politician telling us what we cannot afford.

I am sure many will say we cannot afford to reform the system on philosophical grounds, I would ask those individuals “can we morally afford not too?”