By its recent involvement in some high-profile media celebrity and politics sex scandals the previosuly fogeyish and curmudgeonly Spectator weekly magazine has made itself relevant to popular culture and society in 21st century UK. For those who missed all this its rich American publisher Kimberly Quinn was discovered to have had a long-standing affair with Labour’s Home Secretary David Blunkett which had produced one, and according to Blunkett, two children. The story goes that Quinn had told the blind Blunkett that she was ‘six foot and blonde’, when in fact she is the opposite. Quinn’s husband was spectacularly cuckolded and Blunkett was eventually forced to resign for a series of perks at public expense which he had ordered to support the relationship, including fast-tracking a visa application for the nanny. Meanwhile the magazine’s married editor and Conservative MP for Henley-on-Thames, Boris ‘bonkers’ Johnson, was revealed as having enjoyed what men of his type call ‘a spot of rumpy-pumpy’ with long-time Spectator columnist and ageing ‘girl about town’ Petronella Wyatt, daughter of the border-line insane right-wing journalist Woodrow. Meanwhile, assistant editor Rod Liddle, former producer of BBC Radio 4’s Today programme and a refugee from the fallout over the David Kelly tragedy, was exposed in the tabloids by his tabloid journalist wife after she discovered that he had an affair with what men of his type call ‘posh totty’, one of the stick-thin 22 year old in-bred receptionists at the magazine. Apparently, the wife realised something was up when she discovered empty packets of Viagra in his pockets. One might conclude from such goings on that The Spectator is trying to position itself in the Heat, Closer, and Now market, albeit with better grammar and punctuation.
In the light of The Spectator’s outstanding efforts to get itself sexed-up it might be worth having a look for other signs of relevance inside its covers. The 22nd January 2005 edition published an article by Theodore Dalrymple under the heading ‘Goodbye to the NHS, and good riddance’. Dalrymple is a veteran contributor and regularly writes columns about his day-job experiences as a doctor which describe his encounters with the idiosyncrasies of deserving, but more often in his view, undeserving poor patients, for example as a prison doctor. Opening with the Martin Luther King pastiche ‘Retired at last! Retired at last! Thank God Almighty, retired at last!’ Dalrymple took the opportunity to lay into what he saw as the real cause of the problems in the NHS and of his joy at leaving its employment. The low morale, ‘existential despair’, and general disillusionment of doctors is not simply attributed to the fact that their power and status has been eclipsed by the rise of a managerial type with no medical knowledge or expertise who see the provision of health care simply as an instrument to the ‘advancement of their own inglorious careers’, or what management theorists euphemistically call ‘manager-stakeholder conflict’. The damage is a consequence of the fact that managers are the agents of a political authority which continuously invents and imposes a constantly changing web of directives, initiatives, and administration onto non-managers. Dalrymple’s point is that none of this has anything to do with improving health provision and its effects are quite the opposite. Management has ceased to be about ‘getting things done’ through command and control. Instead the authority and power of management has been reinvented as the regulation of the activities and relationships within an organisation through which things get done, and which have to be changed in order to be regulated, and which in turn changes what gets done, which then requires further regulation. Management grows by the creation of more things to be managed, and this productivity is passed onto non-mangers, who in turn become managers. Management aborbs what gets done. As everyone becomes manager the risks of management are distributed.
As one would expect in The Spectator the target of the complaint is the ‘modernisation’ agenda associated with the Labour government, yet Dalrymple is enough of a subversive to acknowledge that the phenomenon is rooted in previous Conservative administrations and the de-structuring effects of the free-market reforms which they introduced. ‘Modernisation’ and its managerial subalterns are inoculated against the possibility of failure because the response to it can only be more management. Dalrymple’s complaint points to the presence of a more general political logic which is both Kafkaesque and Orwellian. For Labour ‘modernisation’ does not refer to a present moment in time but to a relation between two representations, a past to be corrected simply by virtue of the fact that it is not a future which is itself unknown. Hence the emphasis on ‘change’ as both cause and effect, and the use of inane phrases such as ‘going forward’ which seek to bond a commitment of hearer to speaker without ascribing content to the purpose or direction of movement. The facts have to change to fit with ‘the vision’ and ‘the vision’ changes in order to evade the consequences of ‘unhelpful’ facts. In the belief that everything must be subordinated to the market, from which managers are of course exempt, the ‘consumer’ itself must also change. Managers themselves are rewarded for their ability to conform to constantly changing directives which they themselves initiate in order to ‘stay ahead of the game’, to use the language in which they like to imagine their actions, and thus to capitalise on a purely symbolic advantage. The productivity of management is evidenced by more management, and the dynamism of management is expressed by the purely self-serving expansion of administration.
Dalrymple illustrates his argument by detailing the pervasive fiddling around ‘performance targets’ which takes place in the NHS, and which was brilliantly dramatised in the recent BBC series Bodies. Yet this is not in order to set up an opposition between innocent doctors and corrupt managers. The success of ‘modernisation’ stems from the fact that there is no reason to oppose it. Modernisation provides advantages for those subjected to it, not least the easy and rewarding option of becoming a manger too. Although this can only ever be for some no one knows in advance if they are or are not to be included in it. Thus the rational course of action is to play safe and hope for the best. Hence playing games of sticks and carrots by participation in administration, ‘continuing professional development’, revalidation, audit, ‘appraisal’ and the like constitute the hidden causes of service failure, with Dalrymple estimating that health staff spend only half their time actually doing what they were initially trained to do. As management monopolises the allocation of financial reward and symbolic prestige then participation in it raises the expectation that one might escape from what one was trained to do and do something easier for more money. Hence the ‘too posh to wash’ syndrome amongst nurses. For Dalrymple this explains how health workers are merely willing accomplishes in their own humiliation, reduced to the level of ‘worthless functionaries’, and thus eroding the trust that any organisation depends on to be able to function, and sustaining the attack on trust which management advances in order to present itself as the solution to the problem which it has created. As nothing can be straight the organisational environment is characterised by vindictiveness, dishonesty and clientelism, or ‘political skills’ as these qualities are commonly called. As responsibility is diluted and impossible to track blame is simply politically motivated scapegoating, a means to eliminate rivals. Thus ‘modernisation’ is peculiarly feudal and causes the ‘court society’ which managers try to build around themselves through personal patronage, lobbying, and more backstabbing than Shakespeare. For managers the stakes are high because they know that anyone can do it, like a privilege acquired through an accident of birth or conquest.
Dalrymple’s article was published in a magazine politically associated with the right, reinforced by its simultaneous publication on the front page of the January 23rd Sunday Telegraph review section. One can imagine how the attack on management fits in with a possible right political agenda in that it links to both a romantic conservative view of management as simply ‘getting things done’ and an opposition to management as an expansion of regulation and ‘red tape’ associated with the Labour government which is felt as dictatorial and controlling, perhaps most strongly as a response to bans on smacking children, smoking, speed limits, ‘hunting with dogs’, ‘political correctness gone mad’, and the use of physical force in defence of private property. Yet the limits and relations between these ideological components are not settled and in many ways overlap with positions normally associated with the left, not least in Dalrymple’s defence of one of the key institutions of the Welfare State, but more interestingly with the question of positive freedom and liberty that the UK left has never quite come to terms with. On the one hand Dalrymple’s complaint is just another episode in the dissolution of the Thatcherite glue which stuck libertarian market capitalism together with moral and institutional conservativism. As we all know the libertarians won, not least because male Conservative politicians simply could not control what went on in their trousers while at the same time lecturing everyone else to do so. Indeed The Spectator is now almost exclusively libertarian, editorialising in favour of both the abolition of immigration controls and the reduction of welfare benefits. The Telegraph papers provide a postmodern pastiche of moral conservatism, almost camp and usually accompanied by glamorous photographs of Halle Berry, the Williams sisters, and Beyoncé. Only The Mail papers continue to spew out rabid moralism as a comfort to the large rump of bitter down-sized mortgage-endowed pension-mis-selled wives of Middle England.
Yet on the other hand Labour is the target of the attack because it seeks to provide its own solution to the collapse of the Thatcherite agenda, and with good reason. Labour is constrained by its inheritance of the social composition of Thatcherism as a settled and sedimented starting point and with it the problem that libertarianism cannot win politically because by definition it has no need of the institutions of government and its laissez-faire approach to morality remains electorally unpopular, yet at the level of everyday life, popular culture and ‘common sense’ it is almost universally affirmed. Both the aspiration to personal freedom and autonomy and the expectation that government will punish the immorality of others continues to determine electoral behaviour, as does the equally contradictory desire for increased welfare provision and decreased taxation, and cheap money and high wages with which to enjoy commodity culture. The loved-up bourgeoisie ‘stressed’ by the prospect of sending their children to ‘local schools’ and the mashed-up proletariate ‘stressed’ by the prospect of Anti-Social Behaviour Orders are symptoms of the same phenomenon.
The growth of regulation can be explained by many causes, not least de-regulation. Yet from the perspective of culturally mediated political agency the specificity of regulation is derived from the fact that it is simultaneously un-popular and popular, as if within the same voice one might say, in the course of answering an opinion poll questionaire or participating in a focus group about local auhtority services, ‘yes, there should be less regulation, and someone ought to do something about it without limiting my personal freedoms’. In this respect regulation should be understood as the source of an ideological and material solution which absorbs the antagonistic potential of the conflicts between liberty and morality which characterise the present conjuncture. Conservative regimes tried to do this through share-issues in the newly privatised firms but because of the volatility of finance markets there is less risk and greater reward from participation in the regulation of the consequences of privatisation. One way in which this has happened derives from the capacity of regulation to create an essential identity or common cause between the broadly caring ethos of the public sphere and the narrowly competitive ethos of the market in conditions where the latter dominates such that each is able to pass itself off as the latter. Caring is efficient, and competition cares. The incentive to create regulation derives from its market and competitive nature, and not from its good or bad effects, insofar as the development of regulation is compatible with the assumptions which explain market behaviour, and insofar as maket behaviour institutionalises individual commitments to personal autonomy and freedom. Normally these assumptions are contained in the aphorisms of competition, such as ‘buy cheap and sell dear’, but equally they are present in observable market behaviour in which individuals seek to maximise the utility of their actions according to the principle of the least effort for the greatest reward, where effort is understood as a cost, and utility is understood as a the subjective quality of happiness. Not only does this mean that free-riding will always be an entrepreneurial activity. Utility maximisation will always prevail in an environment dominated by the market and this extends to the regulatory activities which arise as a consequence of that dominance. There is no reward for self-denial and no one is encouraged to sacrifice the possibility of advantage. One must resist the pious temptation to deny that this is the case. Agents compete according to market rationality in a non-market environment or, to put it more simply, the empirical distinction between market and non-market collapses in so far as subjective motivation is concerned. To be competitive is not simply about making better things and selling them. Competitiveness is also about inventing new things to be regulated and new ways of doing it. It’s not about making the economic cake bigger, but about getting a bigger slice of it by claiming that doing so makes it bigger for others. The claim is impossible to verify but as long as it is framed in the language of competition it is ring-fenced against reality.
The old opposition between state and market has no relevance in this scenario as the market depends on redistributionary policies. As everyone knows, left to themselves participants in a purely free market will end up stabbing each other without the presence of some non-market force to restrain their behaviour such as the police and ultimately the state. The non-market force is sustained through the redistribution of resources in its favour which it can subsequently redistribute in order to secure its legitimacy. Ideally non-market forces are governed by democratic accountability but the force of such a requirement has been weakened by the rising cost of democratic participation in relation to the diminishing benefit, and the unreliability of notions of representation. By conceiving of the non-market force as a commodity and thus of its users as consumers government, or the capacity to rule, is ‘reinvented’. By subjecting the non-market force to the competitive logic of the market the circled is squared. This is why less government and more market does not mean less taxation, a point which can be evidenced by the quasi-autonomous status of regulatory agencies and the markets in services which they create in order to sustain themselves. Wealth is redistributed to non-market activities which are in turn encouraged to mimic an idealised and exaggerated notion of the market. At the same time, the market redistributes wealth to its own non-productive regulatory activities in management and administration in order to alleviate the governmental defecit. Once installed, regulation must grow by inventing more regulation in order to become economically viable and self-sufficient, and does so by competing for resources which would otherwise go elsewhere. For example, advisers and ‘consultants’ on doing, complying with, or avoiding regulation are available to hire in both the public and private sectors. So-called ‘public-private partnerships’ in public building projects are only one example of this, albeit spectacularly inept. The general phenomenon of ‘contracting out’ and competitive bidding is another. Just imagine the budgets for IT software and ‘training’, the workshops on ‘communication skills’ and ‘team-working’. Just imagine the amount of mortgages and bank overdrafts and credit cards that depend on regulation, perhaps even your own. Dalrymple provides a routine example of the dissolution of the distinction between public and private. At the end of the shift the doctor or nurse walks away from the patient, irrespective of the state of the patient’s health at that point in time. Everyone’s at it.
It is in these displacements that a certain type of left intervention characterised by de-mystification, critique and polemic can be directed provided that it is a) realistic, b) honest and c) consistent. With that scenario in mind perhaps it’s worth having a closer look at libertarian arguments against the regulatory character of management. For example, writing in the ‘Comment’ section of the 18th February 2005 Financial Times under the heading ‘The rising spectre of intrusive regulation’ Samuel Brittan, smarter brother of former Conservative chancellor Leon, argues that it is not public expenditure through taxation on public services as such which is the enemy of market freedom, but its diversion on the expansion of public administration which is sustained by the logic of regulation which has to be implemented, monitored and then changed, a cost which adds to its negative consequences for market activity. Brittan reckons that regulation absorbs 40% of GDP. As one of the best and most consistent libertarian followers of Hayek and Smith as well as J.S. Mill, having on a previous occasion advocated the legalisation of narcotics, Brittan maintains that the market provides the best solution to its own problems. The specificity of Brittan’s argument is that it proposes to extend the logic of the market to regulation itself. Hence Brittan endorses a typically novel Adam Smith Institute proposal for competition between regulatory agencies as a means to reduce ‘the total amount of red tape’. Despite its obvious appeal to the little caesars of ‘small and medium sized enterprises’ who whine constantly about how, for example, having to pay minimum wages prevents them from being competitive, this won’t wash. It will create another bonanza like the privatisation of state services in the 80s and 90s, and which itself explains the expansion of regulation which Brittan complains about. This is because regulatory competition will create another regulatory layer to measure ‘the total amount of red tape’ in order to provide evidence for reduction, and then another layer to regulate that one, then another to measure, and so on ad infinitum. If the 40% of GDP figure is true then it is sustaining a politically created market subsidised by taxation, but a market no more or less comeptitive and free than any other. Brittan can only grasp the economic logic of regulation indirectly by agreeing with the proposition that ‘regulation keeps reinventing itself to hide the inevitability of its failure’ without understanding why it is true, as if regulatory competition will somehow produce regulatory success, and success is defined as the reduction of regulation. In fact the opposite is the case precisely because regulation is competitive and thus requires failure in order, precisely, to produce more regulation.
Indeed the logic of regulatory competition can be grasped by considering the implications of the anti-state run economy argument formulated by Hayek, one of Brittan’s intellectual influences. Hayek’s main achievement was to convince his readers of an equivalence between the necessary impossibility of total knowledge and the virtues of a free-economy. By improvising on the mathematical paradox that no set contains the set of all sets Hayek argued that no system or structure could be closed by itself but required an external agency to do so, which then created another open system, and then an agency of closure, and so on. Each moment of closure is a cost paid for by the formerly open system. Far better then to leave open systems to themselves, of which the free market was the main and most successful example, as this would prevent the corruption and inefficiency which characterised those who had an incentive to earn a living by the easy way of making sure everything is in order. As an open system free markets make the utility maximising motives of individuals virtuous because they will always be in the dark about what they do so that each is equally disadvantaged and no non-market agency is in a position of advantage. Yet Hayek did not anticipate the invention of regulation in an environment where the free market dominates. Each regulatory agency is as equally in the dark about what’s going on as any other. Hence regulatory competition and failure takes the form of the production of more regulation to overcome the necessary epistemological deficit. The reduction of regulation through competition which Brittan proposes will either create the non-competitive structurally advantaged external agency, or state, an economic monopoly which Brittan otherwise opposes, or it will create more regulation not least though the requirement to prevent monopoly. How then can the market dimension of regulation be understood? It is important to appreciate that the question is distinct from that of the contribution of regulation to the economy which its advocates claim it provides, and the loss to the economy which its opponents claim, as neither claim can be reliably verified, and each misrpresents regulation as a non-economic activity. The conflict is possible because there is no necessary relation between competition and the production of wealth.
The situation can be illuminated by considering an influential off-shoot of free-market economics called Public Choice Theory (PCT). The basic axiom of PCT is that people will seek to maximise their self-interest at the least cost to themselves, a characteristic which is used to explain both market and non-market activity. A typical example is a beggar who self-amputates in order to receive alms or other benefits. The receipt of benefit is greater than the cost of the loss of the limb. If it wasn’t then the beggar would not do it and in doing it the beggar competes for resources in the market of sentiment. Yet the beggar does not contribute to production so that begging is a cost to wealth. On the basis of such blunt logic PCT has relentlessly attacked state and centralised welfare not simply because it encourages begging, but because it creates a whole tier of activities to support the encouragement of begging and thus in doing so also creates a double drain on the ‘real economy’ of hard working risk-takers who make the cake bigger. PCT captures the nature of non-productive but economically advantageous activity by developing a theory of rent. For economists rent is simply a term for unearned income, either because the income is not matched by labour or investment, or because the rental price is not determined by free competition. In this respect PCT advocates taxation of rents precisely because doing so has no adverse effects on the ‘real economy’. For PCT rent is not-productive. Like the recipients of welfare benefits all the owner of rents has to do is sit there and wait for the income to roll in. Given its behavioural premises it should not be surprising that PCT finds evidence of ‘rent-seeking activities’ everywhere, and more often than self-amputation. The key is that rent provides the advantages of exclusivity and is thus protected against the daily cut and thrust of the free market by a non-productive force. Gangs and protection rackets are a good example of rent-seeking where members simply take a cut from the earnings of others. Hence the clients of The Sopranos ‘have to pay the rent’. PCT classes both cartels of firms and unions of workers as rent-seekers in that the former seeks to fix the price of commodities and the latter seeks to fix the price of labour, or to negate its commodity status. In general, lobbying political authority for tax, spending or regulatory policies that benefit the lobbyists at the expense of others are a form of rent-seeking which the more left-leaning PCT economist George Stigler calls ‘regulatory capture’. In short, for PCT rent-seeking is a throwback to the pre-capitalist feudal economy where wealth was shared out between monarchs, their princely advisers, their regulatory barons, their ecclesiastical symbolists, their knavish hangers-on, their families, and their friends.
Of course, the problem for PCT is that both unhealthy non-productive rent-seeking and healthy productive risk-taking are explained by the same assumptions about human motivation. Both are compete for the prize of greatest reward for least effort. That is why members of the gangster community have to ‘whack’ their rivals. Thus the PCT anti-welfare position is a moral decision which is added to the theory but does not derive from it in order to try and shame types of economic activity which it happens to dislike. In fact, although PCT desribe the instituions and practices of welfare regimes as rent-seeking the application of the term is not fixed. The same phenomenon explains the emergence of what Marx called a ‘rentier class’ and what others have more recently called ‘crony capitalism’, or ‘socialism for the rich, capitalism for the poor’. Thus rent-seeking is perfectly compatible with the dominance of the free-market. As soon as we realise that the hypnotic and commonplace equivalence between competition and productivity is false then we can understand that the situation is not a paradox, whereas free-market advocates are unable to acknowledge this precisely because they are so tied up in rent-seeking activity.
To discourage rent-seeking would at the same time be to discourage free-market risk-taking, assuming that an omnipotent position from which to do is conceiveable, because both types of action stem from the same theoretical account of human motivation yet neither enjoys any necessary relation with the production of more wealth, accepting for the moment the fiction that wealth is objectively measurable. Of course the competitive entrepreneur will buy a BMW and cocaine for her fashion model boyfriend as an expression of her income, yet like the former party apparatchiks in Eastern Europe who have cornered the market in regulating free-market reforms her success only makes the economic cake bigger by the joy of spending, not by the work of earning. Hardcore economists will predict that under such circumstances economic life will collapse or enter into crisis. Such a view rests on the belief that competition is productive, and on the belief in a future point when everything will coincide. Thus pessimism rests on optimism. In the real world the situation is the exact opposite. What gets produced is regulation.
So to return to Dalrymple’s complaint we can see that the issue goes far deeper than that of meddlesome administrators and corrupt bureaucrats. It concerns the shift from a ‘real economy’ to a ‘rentier economy’ in the guise of a return to the tough, hard ‘real economy’ because rent-seeking is competitive. The extent of individual involvement in regulation is enormous and mirrors the UK government obsession with, for example, ‘creative industries’ as a solution to economic problems. If the basic commodity produced and exchanged by such industries is rights in intellectual property then perhaps these should be seen as a form of rent. After all, when you buy a Robbie Williams CD all you own is the plastic, not the sound which comes out of the speaker. Similarly the popular obsession with house price rises is indicative of a form of rent-seeking in that the rise is not a consequence of the efforts of the property owner. Of course the price can only be realised through sale which in most cases would be pointless as the profit could only be used to buy another property. Yet re-mortgaging and other forms of personal debt allow owners to enjoy part of the profits on their unearned income. The cost of the debt may be absorbed by further price rises, or it may not, assuming that it is possible to calculate. Either way, if you die before the debt is repaid, and take more in welfare benefits than you have paid in through tax and insurance contributions, for example by subsidised child care for the bourgeoisie, then you win. You have your cake and eat it.
Under such circumstances it is pointless for the left to retreat to the comfortable enclosure of moral indignation. It’s not just because if the popularity of TV shows such as The Weakest Link and The Apprentice is anything to go by no one would take any notice. It’s also because the left should come clean about its own investments in rent-seeking, not least with respect to its sponsorship of the sort of moral regulation to make people nicer which the right targets. If the left was suckered by taking talk of free-markets at the face value with which Thatcherism represented it then perhaps instead of its customary position of auditing the failures and injustices of capitalism it would be far more useful to consider the possibility that the game might be going elsewhere and that a new series of problems and solutions around the relations between individuals and economies might be in development. It is hard to identify any objective tendencies but perhaps one thing will remain constant. No one has ever been against what Thatcher called ‘the something for nothing society’. The only question has been who does and does not benefit from it.
A good ‘how to’ guide to rent-seeking, although they don’t use the term, is Dave Buchanan and Richard Badham, Power, Politics and Organizational Change: Winning the Turf Game, London, Sage, 1999
A good account of the rise of management as regulation and the weakening of the state/market distinction is John Clarke and Janet Newman The Managerial State, London, Sage, 1997
A good account of the Labour government’s inheritance of the culture of Thatcherism is Alan Finlayson Making Sense of New Labour London, Lawrence and Wishart, 2003
Jeremy Valentine works at Queen Margaret University College, Edinburgh. He has had writing published about the empirical and theoretical relations between culture and politics and has become quite interested in the emergence of governance and other changing forms of organisational mediation and rule. He also sits on the Quality Audit Committee.