A PENNY FOR YOUR THOUGHTS

Dick Pountain/Political Quarterly/The Knowledge Corrupters/13 May 2016 10:19

"The Knowledge Corrupters: Hidden Consequences of the Financial Takeover of Public Life" by Colin Crouch

Polity Press (Cambridge 2015)

Soft cover, 182 pages

ISBN 9780745669854"

"The Knowledge Corrupters" opens with an example of a truly perverse incentive – the 2014 revelation that the NHS was paying doctors £55 for every patient they diagnosed as suffering from dementia. Inadequate diagnosis of dementia had become a political hot potato, hence this modern solution: pay 'em to find more. Colin Crouch observes that this should surprise no-one because "That as much of life as possible should be reduced to market exchanges, and therefore to money values, is one of the main messages of the most influential political and economic ideology of today's world, neoliberalism."

That very word is currently site of a skirmish in the civil war for the soul of the Labour Party. A December 2015 editorial in the Blairite magazine Progress condemned the term neoliberalism as "lazy use of language" and "a catch-all for anyone with whom you disagree", but since it's mostly Corbynistas who use it against Blairites this was a predictable defensive parry. It's nevertheless true that, as a shorthand for the newly aggressive capitalism we've suffered since the late 1980s, the word is at risk of demotion to a status like that of "fascist" – a loosely-defined insult only vaguely connected to its proper historical meaning. Colin Crouch would be the last person in the world to use the term carelessly: his three previous books "Post-democracy" (2005), "The Strange Non-death of Neoliberalism" (2011) and "Making Capitalism Fit for Society" (2013) contained masterly analyses of the crisis of 20th-century social democracy and its ongoing struggle with the neoliberal reaction.

Crouch regards neoliberalism not as an alien imposition, to be eliminated by return to some improbable variant of state socialism, but as a permanent feature of the political landscape, an inevitable response to social democracies that had become ossified, conservative, protectionist: no longer capable of dealing with the globalised power of multinational corporations and demands for choice from affluent consumers. For him a "mixed economy" means not just separate public and private employment sectors but also corresponding social-democratic and neoliberal ideological sectors, locked in permanent struggle for territory and even capable of mutual influence. The neoliberal Old Testament is Friedrich Hayek's 1943 work "The Road To Serfdom", which proclaimed that the market is a repository of superior wisdom which "renders all human attempts to second-guess it through the use of expertise imposed on its outcomes as necessarily inferior". Against communism, social democracy and fascism, Hayek and colleagues claimed that all attempts at planning were potentially totalitarian. During the economic instability that followed the 1970's Oil Crisis some conservative thinkers dared to resurrect this belief, electoral victories by Ronald Reagan and Margaret Thatcher enthroned it as the alternative to Keynesian demand management, which forced "Third Way" politicians like Clinton and Blair to entrench it as the new orthodoxy.

Crouch's new book focuses on one specific problem, the concerted attempts by neoliberal agents to restrict and corrupt the dissemination of information, by attacking the status of knowledge professionals and expert advice itself. His first chapter explores neoliberalism as a theory of knowledge, and claims that these attacks erode the feedback mechanisms necessary for democratic governance of modern technological, knowledge-based societies, thus becoming a threat to democracy itself.

Neoliberalism's current assault against the public realm goes by the name of New Public Management (NPM), the doctrine that all public services must behave as though they were in the private sector. NPM first emerged under Thatcher, but was enthusiastically extended by New Labour and continues under Cameron/Osborne. In Chapter 2, "The Corrosion of the Public-Service Ethos" Crouch explains that though proponents can portray this doctrine as democratic and anti-elitist – a cure for the blundering of planners which encourages experts to evolve and improve their skills through market exposure – it also masks a darker, populist belief that people who aren't motivated by profit must automatically be considered lazier and less competent than those who are. This belief prevails among most businesses and throughout our current Tory administration, and it demands several kinds of remedy: privatise whatever can be privatised; outsource all regulation by public professionals to private agencies; set performance targets and assessment regimes for those public professionals who had hitherto been self-governing.

Outsourcing forces public service professionals into closer contact with business, supposedly to teach them efficiency through competition but in practice encouraging corruption by breaking down firewalls deliberately erected after long experience (for example school inspectors or credit rating agencies). Performance targets are the neoliberal's way of evaluating services to which a monetary value can't be directly attached. They are meant to imitate the way businesses choose product lines, but in complex activities like healthcare, education and policing it's not possible for politicians to know which are the most significant aspects of performance to target. The result is dangerous over-simplification that undermines the accumulated knowledge and expertise of the service providers. Providers are also provoking into spending time gaming the targets that could have been spent providing service.

School and university reforms offer grim examples of this kind of interference, as does the police force. When opinion polls suggested that burglary and car theft most influenced public perception of the crime rate, targets were imposed to prioritise those crimes at the expense of police efforts against other areas, like child abuse. Hence new scandals, targets reset, narrow spotlight shone onto newly-crucial areas, a state of perpetual re-re-reform. Crouch calls this kind of excessive politicisation "hyper-democracy": when there are few major policy disagreements between main parties, they explore ever finer levels of detail to promote as distinctive policy, which further sidelines and undermines the knowledge of practitioners on the ground in favour of bright ideas from political ideologues.

Crouch condenses his arguments into five major points, which are:

1) Forcing public services into markets encourages them to over-simplify the knowledge that they demand, and undermines the professionals who create and deliver that knowledge.

2) Though markets do indeed concentrate certain kinds of knowledge, as Hayek claimed, over-reliance on them undermines other forms of knowledge, including science.

3) For earlier free-market theorists like Adam Smith it was axiomatic that market participants would behave with moral integrity, but contemporary Rational Choice theory actually exalts and rewards dishonesty and the corruption of knowledge.

4) Pure market theory presupposes an economy with many producers and consumers, but today's neoliberals tolerate high degrees of monopoly and often permit corporate elites to restrict access to and distort knowledge in their corporate interest (Crouch calls this "corporate neoliberalism").

5) To act fully effectively in a market demands amoral, calculating and self-centred behaviour. As one small component of a total personality this may be tolerable, but as markets spread into ever more areas of life it tends to coarsen us all into calculating machines.

He illustrates these points with copious real-world examples drawn from contemporary affairs and scandals, far too many to catalogue in this short review: suffice to say they include: BP's Deepwater Horizon oil spill; the 2011 Japanese tsunami and nuclear meltdown; the Greek bail-out; PPI mis-selling; climate-change science; food nutrition labelling; the Libor, Euribor and Forex fiddling scandals; school GCSE performance indicators (gaming of); university impact targets; PFI building programmes; Big Pharma's suppression of adverse test results; G4S and Serco prisoner tagging scandals; HMRC's leniency to rich tax evaders, and much, much more.

Central to Crouch's critique is a distinction between three different conceptions of the consumer of goods and services: as citizen, as customer or as object. Citizens have rights to participate in discussion and decision-making, rather than merely to consume services. Customers have the capacity to choose to pay for different goods and services in a marketplace. Objects are mere statistics, passive recipients of whatever is offered to them. Neoliberals charge social democracy with reducing people to objects without choices, and preach privatisation to promote them to customers. Crouch agrees with the diagnosis but not the treatment, and would instead promote them to full citizens.

His conclusion is that we can't avoid depending upon markets that will always give suppliers the incentive to ignore important information or to deceive us, upon professionals who don't merit the trust we can't avoid placing in them, and upon politicians who exaggerate both problems to enhance their own power. The solutions he proposes are not such as to set one's pulse racing: more and better inspection regimes and more participation (that is, two-way communication between professionals and their citizen/users).

In fact these prescriptions are both hard to achieve and highly political. Inspectors must again be experts in their field (rather than price-cutting private agencies) which is expensive, and they must be freed from both political and commercial pressures. The recent furore over the BBC's charter renewal shows how political this can become. As for participation, the problem is a gross asymmetry of knowledge and educational level between expert and typical user. The neoliberal solution is to interpose a middle layer of advisory services, often via websites supported by advertising, which merely displaces the problem of trust onto these advice services and so is no solution. Colin Crouch is not entirely pessimistic, observing that in the UK at least strong public support for the welfare state persists, and that the assaults have not so far actually diminished the expert skills required for education and medicine – but for how long?