I was recently asked, in a group discussion, whether protectionism or open-market globalisation was better. Instinctively I replied globalisation. But I was surprised by the number of people who were strongly in favour of protectionism (of course their reasons varied but mostly it was because it does indeed protect some people).
What has this to do with my title? Well – a lot. Because one of the reasons that we have so many problems with banks, with public services that don’t deliver, with remote politicians and with institutions that we can’t trust in is that the outcomes of their actions do not seem to have any relevance to them as individual citizens. With banks in particular, but also in public services, there is a sense that they are not subject to a free market at all – they get bailed out, or helped along, and so they do not actually fail but are free to carry on behaving irrationally or dangerously.
Of course there should be a proper investigation into what went on with the Libor fixing – who did what, how they did it, and how to fix the problems it caused. But I think that there is an even bigger lesson to learn from it than technicalities of regulation and the fact that existing laws should be enforced, and it’s this: that when individuals do not feel connected to the outcomes of their actions, they do not care about those outcomes.
Opening up data so that people can see and understand the best public service providers (be they public, private, third or some other sector); opening up provision so that providers succeed by delivering better services; opening up markets so that – yes – some institutions DO fail; and ensuring that deliverers are exposed to the real results of their behaviour is the only thing that is going to go any way to resolving the problem.
Even Ed Balls (as Patrick Butler of the Guardian noted, “Ed Balls!”) has recognised this today, admitting that Whitehall cannot micro-manage public service delivery. The way to ensure accountability to users and funders is to devolve responsibility, power and money as well – so providers can innovate, and so they will not be used if they fail to deliver; one of the reasons that mutuals are such an exciting part of what is happening in public services at the moment is that as soon as someone has a stake in the service they are providing, they become engaged in delivering better services and saving money.
This government has, to its credit, talked a great game and started on a (slow and painful) path of delivering that. It is essential that it continues to deliver, and hastens along this path; because without responsibility, power is corrupting.