The Market Society

kamsandhu —  January 22, 2015 — 3 Comments

Following on from ‘The Success of Inequality’, we delve deeper into the effects of ‘The Market Society’…

‘The more things money can buy, the harder it is to be poor’, argues Michael Sandel in this Guardian, Comment is Free video. When money determines access to basic human necessities such as healthcare, education and political voice, inequality becomes far more important. Sandel claims that we have already made some of these destructive financial moves, becoming a ‘market society’ rather than using a ‘market economy’ as a tool.

We are currently seeing a huge transfer of public money and public services go to private hands, but little is said of the true contradictory effect of these moves.

Outsourcing public services and institutions such as the NHS or prisons, or providing cash incentives for short-term results, generally acts to hollow out the true purpose of the service. The nature of the service will tend to mould itself around the new motivation: profit – a motive hammered down through management from shareholders, CEOs and investors. In the following examples we see how this can destroy the purpose of services:

Healthcare

Putting private healthcare companies, who’s only motivation is profit, into the NHS risks the standards of a universal system, fractures it and creates unaccountability.

The NHS is one of the best healthcare systems in the world, but it is under threat.

Part of the reason the NHS is so effective is because the entire system has been run as a complete public service. This allows cohesion between departments, access to cheaper medication and supplies, as it is one large healthcare provider (which means value for money to the taxpayer), and management sees input from doctors and nurses who can focus on providing the best, effective service and have the best knowledge to do this.

Private healthcare firms looking to profit from NHS contracts exchange the priorities from providing the best care to making the most profit. Virgin Healthcare did not exist before NHS contracts came up to tender, demonstrating the lack of background, expertise and track record required to take on these contracts. In 2011/2 Virgin Care won a £450m NHS contract to take over a practice in Surrey:

Since Virgin took it over from the NHS, patients have had to wait up to three weeks for an appointment instead of three days, three GPs have been reduced to one, and three nurses cut to one part-time nurse. And while the company boasts about the surgery’s opening hours, often there are no clinicians present, just an open empty building. Locals complain that Virgin has “brought Third World medical standards to Kings Heath.

Alex Nunns, Liberal Conspiracy

Earlier this month, Hinchingbrooke Hospital became the first hospital declared ‘inadequate’ by the Care Quality Commission in providing care for patients, instead putting patient safety at risk.

The report from the CQC said the hospital was substantially and frequently short-staffed, particularly in the A&E department.

Cutting staff hours is a common trope used by companies to save money. Hinchingbrooke hospital is run by private healthcare company Circle.

RealFare

RealFare

Another reason privatisation of the NHS is ineffective is because it breaks up the system. It causes problems in cohesion and communication with different departments. And perhaps the most telling aspect of privatisation and it’s motives is that companies buy up only the most profitable and easy to run areas of healthcare, leaving the difficult areas to the public purse. So, the taxpayer and the NHS is laden with the difficult and expensive areas of healthcare, whilst seeing all the profitable departments sink rewards into private pockets. The only ones gaining from this transaction are private healthcare investors. The public, the NHS as a whole, staff and public money are all losing out.

In 2013, it was the coalition government’s treatment of the NHS as a business that lead to criticisms from the influential medical journal, The Lancet:

“Reading headlines last week, such as ‘Struggling A&E units to get £500m bailout’ and ‘NHS managers to get price comparison website’, one might be forgiven for thinking that the current coalition government views the NHS as a failing bank or business,” it said.

“This stance is one of the most cynical, and at the same time cunning, ways by which the government abdicates all responsibilities for running a healthcare system that has patient care and safety at its heart.”

 

If you want examples of private healthcare systems to compare, look no further than America. A country which spends the most on healthcare, and yet has the worst standards and results among wealthy countries.

Image: Leftfootforward

Image: Leftfootforward

 

Clive Peedell, National Health Action Party: “The American Medical Profession lost public support faster than any other group during the rapid commercialisation of their healthcare system in the 70’s and 80’s. They lost huge public support because they were putting money before patients.
“When the patient comes in, they say ‘well you need this procedure’. They make money. So if there’s a borderline decision whether someone actually needs a procedure or doesn’t, [for] all those borderline decisions, they’ll give that treatment.
“Now prostate cancer, I manage prostate cancer. If you go and see a prostate surgeon in America, you get a prostatectomy. If you see a radiation oncologist, you’ll get radiotherapy. So it depends who you see and what treatement. In the UK we have careful discussion in our meetings. We all do what’s best for the patient, we give the patient a choice in terms of what treatment they want to have.”
Max Keiser : “So if I go to Kings Cross station and I accidentally get on the wrong train, the conductor doesn’t bother whether I’m on the wrong train or not. They’re gonna stamp my ticket. Similarly, you’re saying in the healthcare system, if I happen to wander into the wrong department in the hospital, they’ll just give me whatever procedure they’re doing over there in the hospital. They don’t really care what the situation is at all. They’ve got money to make, they’ve got quotas to meet…”
Clive Peedell: “If you’ve got the money in the United States, you can get very good care. It’s a system that’s got islands of excellence in a sea of misery because for 50 million uninsured people, it’s a disaster.”

Outsourcing work programmes

As part of coalition welfare reforms, A4E, a for-profit welfare-to-work company were contracted in at taxpayer’s expense to help jobseekers into work. Cameron promised a revolution in welfare to work programmes and quickly made A4E chairwoman, Emma Harrison, the family tsar. Cameron promised that those stuck in long term unemployment would see the greatest support and results.

However, one year into the Work Programme and the initial results from A4E were grim reading. Over 94,000 people were attached to A4E work programmes. Of these, 3,400 had successful outcomes with employment lasting longer than three months. The cost to the taxpayer for these 3,400 outcomes was £46m. That’s around £13,500 per person in work.

The success rate for A4E amounted to 3.5%, below the government’s minimum levels of 5.5%.The government said they expected “that providers will significantly exceed these minimum levels”.

“Effectively, the department was saying that if firms failed to hit these targets, they would actually be making the situation worse than it would have been if they had done nothing.

“So the government wanted to see 5.5 per cent of 18-24-year-olds claiming jobseekers’ allowance in sustained work after the first year. They got 3.4 per cent.

“DWP also wanted long-term jobs for 5.5 per cent of over-25s on jobseekers’ allowance. The actual result was 3.4 per cent.

“And they wanted the same percentage for new claimants of employment and support allowance (ESA) – the payment for some sick and disabled people that replaced incapacity benefit. Only 1.5 per cent of people from this group found sustained work.

“This last figure is especially poor and that is important, because getting people off ESA could be one of the keys to beating long-term unemployment.”

FactCheck, Why the Work Programme isn’t Working – Yet

It wasn’t long before whistleblowers and ‘customers’ (as they are called when being sent to A4E, rather than jobseekers) were speaking out about the problems with the provider. Staff were plied with hundreds of cases, leading them to deal with their ‘Top 10’ that month to hit targets and secure income, leaving those harder to help without support and at the bottom of the pile. When the focus is on income rather than providing the best support, ‘easier’ cases were quicker to deal with. Claimants who found work on their own were also cashed in on by providers. This is a subject touched upon by the jobcentre advisor we interviewed last year:

“I am unable to emphasise enough what a massive con and waste of taxpayer’s money this is. Daily, I speak to those poor souls on this mad scheme and many who have returned after a 2 year stint. How journalists have not scooped this, I do not know.  The payment by results contract is an incentive to do nothing. Look at it like this; you are a private company paid to get people into work. You have a financial investment. Who do you invest that money in? Mr Jones who is highly educated and has only recently been made redundant? Or Mr Simpson who has been out of work for years and needs everything from numeracy and literacy training to PC skills? Mr Jones may only need a £50 interview suit or most likely no intervention at all – he will find work on his own. Bingo! The Government will pay you £2,500 if he starts work and stays there for 6 months. You could invest a hell of a lot of your staff resources and profits in getting Mr Simpson to a job ready state, but it’s a huge gamble. You get a higher reward but your losses are higher if he doesn’t find work. Private companies do not like this kind of risk. This is why it is now without question that Work Programme providers ‘park’ the harder to help customers. I have seen this relentlessly for the past couple of years and I do not think anyone could deny this is what happens. I ask customers what the WP is doing for them and they tell me they are lucky if they get a phone call every few months. But, if this person finds a job on his own (which does happen) the WP provider could get £12,000+.”

Interview with a Jobcentre Advisor , RealFare

Other claimant cases cited being forced to apply for jobs they were not qualified for or could not get under threat of sanction. We were paying for a company to force unemployed people on poverty benefits to write meaningless applications under threat. Who is benefitting here?

The situation has not got any better in the years since with statistics released in 2014 revealing that the Work Programme had seen a 3% success rate for the 1.5million people referred. Additionally, 5 times as many people were sanctioned as found work. Again, a result that is worse than doing nothing at all. Yet, the entire work programme is projected to cost the public purse between £3 – 5bn in the five years from 2011.

Those that this work programme revolution was meant to help, the long-term unemployed, are undesirable and risky ‘investments’, and thus are neglected in the system purported to serve them. Arguably, the work programme is pushing them further away from work and support, whilst those able to find work on their own are cynically cashed in on by a company.

Simply adding a cash incentive for private companies to provide a service that requires support and long term goals, does not solve the problem. It merely moulds the shape of the service to the area that provides quickest, highest return because the goal of a profit driven company is profit. Under pressure, the bottom line comes first.

Political Voice

Who does our government represent? Who do they work for?

Adding financial leeway and incentives through donations (as above with Paul Ruddock and the NHS) is seeing parts of our society being sold to those who are not providing the greatest social good or service but whoever rubs shoulders with and stuffs the pockets of our politicians. Indeed, sometimes those who participate in the very ‘cancer eating our democracy’ (Richard Murphy’s view of tax evasion and avoidance), are held in the highest regard. Gary Barlow made a donation to the Conservative Party and was then put forward for an OBE by David Cameron. Barlow also took part in a tax avoidance scheme with bandmates. Tax avoidance and evasion is estimated to cost the economy over £100bn and rising. Enough to pay off the deficit. But Gary Barlow is rewarded, defended even, by our PM.

Companies also gain access to politicians through lobbying, a manipulative trick costing millions, seen as an investment by companies in exchange for political sway and favourable concern in policy. Further still, these lobbying meetings are a secret.

‘Whoever you vote for, big business gets in’ 

Pleasing business interests seems high on the list of all the main political parties. And while the language of profit and business infiltrates all aspects of our political sphere, we neglect to realise or debate the problems with this design. As Sandel notes, this sees us becoming a ‘market society’ as opposed to using a ‘market economy’ as a tool. This is why we have a housing crisis which is intent on building more luxury housing, likely to stay empty for months at a time, whilst our social housing waiting list continues to grow into the millions. A market society does not seek the route to creating a better society for all, but a more profitable climate for itself, and therefore the very nature of this as a basis for a political system is severely flawed.

We need a political sphere that acknowledges this.

Our current politics does not. Instead, we are witnessing the metamorphosis that seeks to empty our creative and social systems of their value and replace them with business jargon and the financialisation of every human and their needs. A case in point being the appointment of Sajid Javid; a man who was vice-chairman of a bank at 25 and has a history of financial employment has become, you guessed it, Minister for Culture.

Our political system has come to reflect the image of those it serves. Two thirds of the cabinet are millionaires and most of our MPs come from private schools which are attended by 7% of the population. As the gap between rich and poor increases, politicians become more removed from the realities of the lives of the 99%, and their diaries reflect their interests as such.

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by Kam Sandhu @KamBass

kamsandhu

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kambass@hotmail.co.uk

3 responses to The Market Society

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  1. 3 Reasons Why Cameron’s ‘Full Employment’ Promise Means Full Exploitation « REALFARE - January 27, 2015

    […] – The Work Programme has been worse than doing nothing at all. It has been punishing claimants and r… […]

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