Saturday, April 17, 2004

Vouchers, vouchers, vouchers

I recently commented on this blog entry concerning the Right's fascination with vouchers - education vouchers, health vouchers - and some possible extensions. They seem to consider that all problems may be solved simply by invoking the magic of vouchers. A couple of things stand out: firstly, what's the point of a voucher? The entire argument for them is based on an analogy with perfect competition theory - all those little rational utility maximisers will simply grab their vouchers and flock to the best school/hospital/whatever and the others will either Shape Up! or Go To The Wall! But why should the nanny state presume to tell people how much they should spend on education (or whatever), then? Why not hand out a briefcase of cash for each sprog, and set the parents free to take responsibility for their own decisions? (Tory Langue de Bois set to OFF)

After all, whatever decision they came up with would be a logically valid choice based on their individual preferences as represented by an indifference curve, and taken in the totality of all choices would represent the most efficient distribution of resources at any given moment - at least if you believe in this stuff. The reason why they won't is, of course, that they don't trust Dave and Brandee Forklift not to spend it all on vitamin Stella (or conversely, Hugh and Cressida de Bolleaux to spend it on sherry). Which implies that some choices are better than others and that, after all, the state knows best. Which doesn't leave the argument in terribly good shape. But leaving that aside, why not extend vouchers into other fields of government? Why not issue each citizen with a defence voucher equivalent to their share of the MOD budget, to spend as they see fit? If they consider themselves threatened by any international crisis, they would take the voucher to whatever army or, I suppose, private security contractor offered the operational plan they preferred. Obviously, the one who out-competed would collect. Simple, I feel, and elegant.

For a start, it neatly solves the problem of getting the disciplines of private business into the subsidy-bloated deep state. It disposes of the prejudices and preconceptions of staff officers in favour of the scientific certainties of The Market. It forces public agencies to compete and hence seek efficiency, and opens up the possibility of the privatisation to end all privatisations - selling off the armed forces! If all the MOD does is to whack out the vouchers, why should it also run the service? And if not all the vouchers go to our army - and they won't, if only due to being left under sofas, torn up by pacifists, etc - the budget will steadily reduce, forcing yet better performance or more likely worse! If it's worse, the customers will go elsewhere and it will shrink and be privatised - in fact, it's exactly what Kenneth Baker wanted to do with education.

It's the modern way!

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