Jamie Whyte: Thunderer
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All schools and hospitals should be privatised and run by profit-seeking firms. I suspect that some politicians agree, but none would dare admit it. The policy is an instant election loser. The British public has a visceral distrust of private enterprise in healthcare and education.
How did things come to this? How can a policy that should be obvious sense to anyone who has compared the British Telecom of today with its state-owned ancestor, or a North Korean farm with a New Zealand farm, strike the public as unspeakably wrong? How did socialism get into the public bones?
I blame teachers. Resist as we may, they influence us. They have our little minds at their disposal from the ages of 5 to 18, and they are institutionally socialistic. Most are state employees. And most are women. For evolutionary reasons that I will leave you to gather, women are more risk-averse than men and, hence, congenitally disposed towards the nanny state. In the battle for hearts and minds, what chance have we free-marketeers when 90 per cent of the population is educated by female government employees?
Yet the problem with teachers seems to be even deeper than their sex and employment contracts. On Tuesday, Sir Eric Anderson, the Provost of Eton, explained why independent schools should be charities: “Charitable status is a guarantee that the schools are out to do the best for their pupils, not make the most money.”
This displays an almost aristocratic ignorance of economics. It is precisely because competing private enterprises aim to make money that they also try to do the best for their customers. Does Sir Eric really believe that supermarkets, car manufacturers or law firms would serve their customers better if they were charities? A customer must be satisfied, whereas the recipient of your charity ought to be grateful.
Charities are also expensive providers. The absence of profits is not the cost saving that many believe it to be. If it takes an hour of labour and £100 of capital to make a widget, then that is the cost, whether these resources are donated or provided in return for payment. The difference lies in who bears the cost. When donated, the cost is borne by the donors. When invested for profit, the cost must be passed on to the paying customer. This means profit-seeking firms have an incentive for efficiency that charities lack. Whose money will you spend more carefully: a donor’s or a customer’s?
Sir Eric’s sophistry inadvertently provides a reason to remove independent schools’ bogus charitable status. If they were openly commercial enterprises, their headmasters might divert their energy to defending the profit motive. It is more in need of charitable attention than are the children of investment bankers.
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"It is precisely because competing private enterprises aim to make money that they also try to do the best for their customers" - do i detect a fallacy here? One does not lead to the other and if more money can be made at the expense of the customer then that will happen. A private enterprise cannot exist without customers but profit is paramount and if the best interest of the customer in not profitable then the customer will lose unless there is some kind of loss-leader idea going on.
bill cory, London,
unfortunately, there are some "private" companies who also are not in the least customer friendly.
british telecom is one. they are quite happy to take money from customers, but when it comes to refunding it, because they overcharge or make mistakes, forget it!
they are a disgrace!
grindles, london, england
Dear HJ,
A "de facto" monopoly private supplier has a limit to its margins: let it make too much money or provide too bad a service and soon, I mean SOON, a competitor will spring up. Again, profit seeking comes to the rescue of customers' interests
CT, Madrid, Spain
I thnk that all schools should be independent, but I'm not convince by jamie Whyte's argument. In some areas (e.g. rural areas) there may be only one school and it is better that this is a locally owned charity or trust than a monopoly private supplier.
Also not that John Lewis/Waitrose is effectively a charity that distributes its surplus to its workers - and they were recentlyvoted the country's favourite retailer. It is enoughthat they exist with a competitive environment, where customers have a choice.
HJ, Reading, UK
Railway lines are owned by the state.
Postal system is owned by the state.
London Underground is owned by the state.
Not really "examples of great privatisation" then?
Neil, Herts,
There is debate about how private schools can demonstrate their contribution to the public good, in order to justify their charitable status. When an institution provides a service that would otherwise have to be paid for by the state, surely one major contribution to the public good is the reduction in overall tax burden that results from the reduction in the state's obligations.
Andrew, Farnham, UK
Andrew Partridge, FARNHAM, UK
Celia Green has said it all before. And better.
Fabian Tassano, Oxford, UK
Hugh the postal service is not private it is still in government hands, when competition from other postal services appear on our streets in the not too distant future Royal Mail will have to pull their socks up or go bust due to lack of customers, this is where competition and private enterprise trounce government run organizations everytime! Except where government needs to be involved ie defence, armed forces and policing, courts and security. Totally agree with the article privatise all schools would probably be the best solution, and let US choose where we send our kids.
Tom, London, UK
The removal of charitable status may have the unintended consequence to make private education cheaper. For-profit companies will now be able to complete against the current independent schools and drive prices down. This will increase demand and expand the sector.
Private equity buy-out of Eton? It may happen.
Kit, London, England
No, supermarkets, factories etc. wouldn't do better if they were charities because their aim is profit and they have to compete. This doesn't mean that they don't provide an excellent service but it does mean that they can -and do -readily close any non-profitable branch or service. This just cannot be done with the basic necessities of large-scale transport, health, education and social services which, by their very nature, have to be chiefly under government control.
To have independent players in all these areas is admirable and should provide a innovative stimulus to the government but, again, if they don't break even they close, as some independent schools have done recently. I fail to see why independent schools should be charities. They should be run like any other business- no more and no less. As for the Provost of Eton's remarks - where was he in the recent fee-fixing scandal? And all schools want to do the best for their pupils, not just those with charitable status.
Ann Keith, Cambridge, uk
He's so right. Just look to the trains system, the postal service and the underground for examples of great privatisation.
Trains ridiculously outdated lines.
Postal system is dreadful.
Underground most expensive in europe.
Hugh, london, Uk