Tory coops: emulating Tito, or high on Hayek?

Dave Osler at Liberal Conspiracy has a good analysis of the Conservatives’ embrace of employee cooperatives (or “advocacy of workers’ self-management along the lines of 1950s Yugoslavia”, as he puts it) (see previous post).

He observes that this “has to be read as part of the continued drive on the part of all major parties to privatise public services”, and argues that:

After they are ostensibly mutualised, social enterprises will be subjected to competitive tendering, internal markets and divisive incentive structures. The economies of scale and low cost finance available to large public sector organisations will also be lost. As an added bonus to the right, a serious wedge will be driven into national pay bargaining and public sector trade unionism further weakened.

In other words, forget all Cameron’s talk about ‘Conservative means to progressive ends’. The big idea here is to open up Jobcentres, schools and NHS trusts to marketisation. Those guys remain as high on Hayek as they ever were.

Nailed it. This may have come from Philip Blond originally, but it’s clear the Tories are filtering Blond, keeping what suits their instinctive marketisation agenda – albeit dressed up in warm “Red Tory” language about cooperatives – and ditching all the stuff about breaking up Tesco and banning gay adoption.

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3 thoughts on “Tory coops: emulating Tito, or high on Hayek?”

  1. Here’s the IEA view. Unsurprisingly, the IEA remains Hayekian.

    http://blog.iea.org.uk/?p=1649

    To my mind the killer point is the third, which Booth returns to in the fourth: that the choice in structuring public services is between a competitive environment where service users are the arbiters of quality (‘quality’ being a broad-ranging concept covering all aspects of the provision), and a non-competitive one where the State in some manifestation has made those judgments. There is a spectrum across which the State makes some of the decisions but not others. (For example, by allowing competition among co-ops.) Do you agree with that characterisation of the choice?

  2. I think that characterisation of the choice begs the question, because I’m not convinced that market approaches are the most effective way to ensure that “service users are the arbiters of quality” in public sector services (not least because any “market” in that area is always highly artificial, due to the absence of a true pricing mechanism – unless you go the whole hog and make people pay for health and education as commercial services, and good look with that).

    What tends to happen is that the commercial organisations involved end up reflecting the worst of both worlds: the rapacity of the most unscrupulous commercial entity with the customer service ethic of the most unreconstructed public sector monolith. (See: outsourced leisure services providers. I’m writing from bitter experience, here!)

    Equally, the State isn’t exactly great at guaranteeing quality and value. I don’t know how far coops will help, but at least a combined user/worker coop has the prospect of reflecting a wider range of interests, even if I have the nagging fear that it would end up being run by the sort of people who always end up running such things – people with spare time who like Going To Meetings…

  3. Well, the market’s partially artificial. You have a budget constraint within which an organisation is expected to operate. Service users get to decide what is doing best for them within those constraints, and there are sufficiently many ways to skin those cats that you can still get strong competition. I agree that the absence of direct pricing renders the market not entirely without artifice but as you say, it’s a brave politician who tries to get the Great British public to shoulder any of the burden from its after-tax pay! Apart from prescription charges, of course. And school trip costs. And glasses, and stationery, and dentistry, and schoolbooks, and… 😉

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