Government Crowding Out

Jonathan Freedland both notes that when government, the State, gets into the provision of something, whether it be a good or a service, then private supply of the same thing withers away. This could be a good thing but as Freedland goes on to point out, it also wipes out any innovation, experimentation, in the process:

And yet the Pioneer Health Centre closed in 1950, weeks before Pam was due to hold her wedding reception there. "It felt like news of a death," she says now. "We were like one massive family." The reason for the closure can be summed up in three letters: NHS. There was no room for an independent outfit, focusing on wellness rather than disease, in the new, centralised National Health Service.

And that of course is one of the great values of markets (used in the wider sense, there are social markets, just as there are financial), that they are a process of discovery. Being decentralised people get to try out new things and those that work, spread, those that don't die away.

But Peckham is also a parable of a wider kind. The post-1945 rush to build a universal welfare state trampled on too many small, creative hives of ingenuity. Before the Fabian infatuation with the central state, Britain had been host to a whole ecology of mutual societies, cooperatives, Sunday schools and workers' associations. Most went the way of Peckham, crushed under the giant heel of the Whitehall state.

Quite.

The thing is about this logic though....if we follow it, where would it take us?

So, perhaps the key aspect of the Peckham experiment is not which sector produced it - voluntary rather than public - but its scale. Geoff Mulgan, the former head of the Downing Street policy unit who now runs the Young Foundation in London's East End (and who has had a team of doctors, NHS managers and others examine the Peckham story), reckons we are too often hung up on public v private v voluntary. A large, national voluntary organisation can be just as faceless and bureaucratic in its operation as a state agency - and so, as every consumer knows, can private companies.

So we would still have financial provision from the centre, but with local people making use of it in whatever way seemed most appropriate. Experiment would run riot, local people would be involved in the decision making, we'd move away from faceless bureaucracy and toward direct accountability.

All sounds very good to me, just I can't help thinking that someone's already though of this. Where was it....ah, yes. The proposal that education be paid for by vouchers, that was it.

I do hope Freedland and Mulgan are now signed up to that idea. They are, aren't they?