It sometimes seems as though all three parties in the UK have been siezed by an ideology we could call the Cult of Efficiency, or the Cult of the Business Method. They believe that the ‘efficient’ practices of business will solve all the organisational problems of government. No one ever challenges them on this dogma, but is it really the case?
We have seen that Lord Browne may not exactly be a master of efficiency, but business efficiency anyway has a particular meaning. You have a bottom line. You want to increase it. Any ‘efficiency’ that increases it is considered to be a good thing, because the bottom line is all that matters.
The key thing to note is that business efficiency – as many people will know from their own experience – often comes down to reducing wages (socially destructive by increasing inequality), ignoring human suffering (destructive to individuals), offloading certain problems onto other people (environmental destruction) and the drive towards monopoly (destructive, hilariously, of the choice that business is supposed to promote).
This business-like ‘efficiency’ is held up as the model by which governments should now operate and Lord Browne neatly embodies it in one person. Of course the politicians would see this as a very negative account of business practices and would point to all the nice things companies make and do for us. And if all you are concerned about is the end product, then it’s true these businesses get good results, although we’ll all have noted that they often seem more concerned with the results for themselves than for their consumers.
The Cult of Efficiency in government acts as though there is an end result – a perfect world – and all we need to do is find the most efficient way to get there. Becoming more ‘business-like’ is thus presented as the holy grail of good government, and so Lord Browne gets put in charge. But society is not a product, and it is not just a way to produce income, it is a complex set of processes that never reaches an end. Unlike a business, how we do things matters even more than where we are going.
We’ve written more on what’s wrong with efficiency here to explain why what appears to be an obvious good can be somewhat problematic.
But even if efficiency were a great thing, having examined Lord Browne’s record, his utility to the government is not immediately obvious. What Lord Browne does do, as a well-known cost-cutter, is support the government’s agenda of reducing the tax burden on corporations and the rich. Rich people like…most of the members of the Cabinet. They claim all the cuts are necessary of course, but more on that here.
Meanwhile are we supposed not to notice the effects of the cuts Lord Browne made at BP, and shouldn’t we ask whether he might not be equally destructive in government? We are always assured that however much the government might be cutting government spending, they care deeply about the good of society as a whole. The tale of Lord Browne tells a different story.
I am going to have to challenge you on the statement “No one ever challenges them on this dogma”. For example the argument over whether private corporations are more or less efficient than government activities has been going on for quite some number of years (hence the nationalisation then privatisation of a number of industries in the last century)?
There may have been a historical argument about it. As far as the current public debate in this decade is concerned, one side thinks they’ve won. Which they kind of have, but only by repeating themselves over and over again louder than anyone else…
It feels to me that you are handing over the victory too easily. I may say that challenges have been ineffectual, because a significant amount of power seems to be in the hands of people who state those views (I don’t know if they believe them, but I have doubts). And as seems established most mass media seems to reflect the views of the powerful. But I think we should not define the discourse by what we find in the mass corporate media, or feel that it reflects the actual state of opinion in the country/world. The vast majority of people are not represented (and do not read) western mass circulation daily newspapers.
Did you know that until recently the UK A-Level economic syllabus taught that G. Brown had ended the boom bust cycle in 1997 (by his changes to interest rate policy and his golden-rule public debt policy)? They actually showed GDP graphs and asked “what happened after 1997″. I do not know how many people actually believed this. But I could not find any (I admit the sample is biased).
Few interesting links on that topic
http://timesonline.typepad.com/comment/2008/09/boom-and-bust.html
Unfortunately I don’t have a big supply of pre 2008 past exam papers, but here is a nice propaganda extract from ACA June 2007 UK Economics paper:
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And another example from January:
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In the Chief Examiner’s Report you find:
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Anyway, I am going off on a tangent…
(sorry about the previous comment, looks like angled brackets don’t work in this software)
Few interesting links on that topic
http://timesonline.typepad.com/comment/2008/09/boom-and-bust.html
Unfortunately I don’t have a big supply of pre 2008 past exam papers, but here is a nice propaganda extract from ACA June 2007 UK Economics paper:
***In general, poorer UK households enjoyed greater real income growth in 2003-2004 than richer ones. This was the third successive year in which income inequality had fallen and was due, in part, to a large package of redistributive measures by the government.***
And another example from January:
***In the article, Harrison Lewis claims that “increased competition is good for everyone in that it raises efficiency” (lines 12–13). [...] Discuss whether increased competition will always lead to an improvement in economic efficiency***
In the Chief Examiner’s Report you find:
***The most common form of evaluation was to discuss the possibility that increased competition would lead to the loss of possible economies of scale and therefore that productive inefficiency would occur. Other responses looked at the loss of possible dynamic efficiency gains over time if firms were unable to use
abnormal profits to invest in research and development over the longer term. Where such evaluative comments were developed in terms of economic efficiency and linked in to the question set then candidates were well rewarded. One common error was to look at economic efficiency generally without looking
at the specific types of economic efficiency such as productive, allocative and dynamic efficiency. In the absence of clear evaluation, where candidates simply applied general knowledge about the benefits of increased competition in terms of lower prices and therefore lower costs of production, answers were limited to a maximum of 4 marks as they lacked the relevant analysis of economic efficiency.***
Anyway, I am going off on a tangent…
Interestingly economics has a lot to say on what efficiency is, and has defined many different types of efficiency. And in its own terms it also shows some types of efficiency to be fundamentally impossible (e.g. as I understand it, the Greenwald-Stiglitz theorem shows that Pareto efficiency cannot be achieved by markets).
Actually, if you are going to use these kind of market systems, you can (it seems) design them to produce approximations of different types of efficiency (within fundamental and practical limits). So I think it helps to treat the word “efficient” with some care.
Of course, the idea that markets are fundamental, and form by themselves is nonsense. I think that markets are constructed by people (I’ll not try to define those terms but you get the general idea). But there is significant economic work that acknowledges this, market fundamentalism is not the only available idea.
Why don’t you do a search and see if you can find any evidence that heavily unionised public sector monopolies tend to be ‘efficient’.
My whole point is that in economics the word “efficient” doesn’t mean anything by itself. You have to define precisely what type of efficiency you are talking about. Your question is totally meaningless.
This is more pointless argumentativeness. If you struggle to understand a simple, common english term ‘efficient’ that’s your problem.
Had you really had a problem with it you should have mentioned it on any number of the occasions informant used it.
This is more pointless argumentativeness. If you struggle to understand a simple, common english term ‘efficient’ that’s your problem.
Ok, you define efficient? If it is so simple, why have at least one noble prize awarded and many many famous economics papers been written on what it is? and how markets can or cannot achieve it? Are you sure you are not the one who does not understand it?
Had you really had a problem with it you should have mentioned it on any number of the occasions informant used it.
I can’t blame you for missing it as there are a lot of comments on this site. But I did object to the way Informant used it. In fact you are posting in a thread underneath the comment where I do /exactly/ that. So maybe I should blame you for missing it after all. Man, I have to believe you are just trolling… or deliberately being obtuse. I just don’t have to repeat myself so much with Informant, as I know that even though we might be disagreeing over this point, he is taking in what I am saying…