Monday, September 19, 2005

Function vs Purpose

It is, perhaps, because the old aristocratic ruling class has now, almost entirely, been replaced by the new merchant princes, that the concept of the state as an institution has so fallen from favour in latter decades.

To the aristocrat, the state is the structure which sustains and legitimises their position. To the market-devoted merchant, it may more often be seen as a shackle, hampering the accretion of private wealth.

And so we begin to see the gradual usurpment of many public functions by private institutions. The justification of this is usually that private companies are capable of 'efficiencies' which elude the public sector. In truth, this usually means the ability to pay wages that would embarrass a public body. Moreover, the dividends of these 'efficiencies' are rarely if ever passes on to the public, but rather to the shareholders of the company.

If this is so easily seen, then why are these policies being so ardently pursued? The answer lies in a general failure to distinguish between function and purpose.

Take the example of a supermarket. A supermarket can be seen to have many functions: it acts as a distribution hub for food and clothing, it gives producers access to consumers, it provides employment in its catchment area and it makes profits for its shareholders. Which of these, then, is its purpose? This we may divine by discovering which of its functions cannot be removed. A fully automated shop might well do away with the provision of employment. A shop that could obtain goods without suppliers surely would do so. If a shop could legitimately take the consumers' money without supplying goods, then that would be the only industry. If you take away the profits, however, there will be no shop. To make profit, therefore, is the purpose of a supermarket, no matter what other tangental functions it may also perform.

Now take the example of a publicly run Health Service. It too provides employment and gives pharmaceutical companies an interface with the consumer, but the function without which it would not exist is to provide healthcare to the citizenry according to need. If it did not supply healthcare, then the supply of public funds would be cut off. The provision of healthcare, free at point of use, is the purpose of a public health service.

Contrast with this, then, with the case of public health provision by private institutions. Yes, it fulfills all the same functions as the public body, but its purpose, once again, is to make profits for its shareholders. Functions, such as treatment of rare or expensive illnesses which conflict with this purpose will soon be abandoned. Given the nature of government contracts, it is doubtful whether, should the provision of healthcare cease, that the supply of public money would likewise be cut off.

Another favoured mantra of the British government is that the consumer now demands 'choice' in healthcare. Given that it is usually used as a code to mean that the wealthy should not have to subsidise the healthcare of the poor, it is hard to hear the word spoken by any politician without hearing Thatcher's ophidian sybilants.

The private sector brings no choice to the citizen, or 'consumer' as we now are. Take, for example, the case of Patientline. Patientline was awarded the contract to supply entertainments and telecommunications to the bedside of every in-patient across huge swathes of the UK's National Health Service. The system commended itself to the NHS administration as it would eliminate the need for the nursing staff to maneuver bulky payphones to the patients' bedside. Since the use of mobile celphones is prohibited in UK hospitals, the contract represents a complete monopoly.

The quality of the service is acceptable. However the fees were very high. Phonecalls to patients cost more than a call to Australia. The fee for entertainments was more than the standard rental fee for a 60cm television and Sky TV subscription.

Patientline, rather than bringing choice to the consumer, has gained the power to hold the sick, the infirm and the elderly incommunicado, unless their family can afford to pay these - quite literally - extortionate rates. They have no choice.

Again, the purpose of the old method was to allow patients to contact their family. The purpose of Patientline is to make profits for its shareholders. The new system benefits only those consumers with sufficient income to pay the fees. Not one penny is paid back to the NHS.

So, though politicians are always easily convinced by their friends in industry that only function is of importance and that the purposes of the market may be substituted for the purposes of the state, ask yourself:

Do you wish to put your life in the hands of any organisation who's core purpose is to give as little as they can for as much as they can take?


Kelli said...

You may say that the purpose of any business, as in your example of the supermarket, is to make a profit. However, a business focused solely on profit will not deliver a quality service. For example, if the produce department at the supermarket focuses only on profit, it will try to obtain the cheapest produce it can. But the cheapest produce will be that of the worst quality. And now much can be said. The point is that the PURPOSE of the produce department should be to provide the customer with the best quality produce at a price that is compatable with with its customer base. The FUNCTION of the department is to bring in the profit. I do think there is a "general failure to distinguish between function and purpose" is the blog.

Quixotematic said...

Hi Kelli. Indeed, there is a minimum quality of service required to make a profit, provided that the business does not have a monopoly. Big business, of course does strive to achieve de facto monopolies wherever possible. Supermarkets do indeed seek the cheapest produce available - to the detriment of both suppliers and consumers. There is of course a quality threshold below which produce will not sell, negating profitability. So the purpose of the enterprise dictates that produce of the lowest possible standard will be sold. Likewise, premium product lines, designed to attract the custom of wealthier consumers, will be of the lowest quality which may pass as such.

You say "the PURPOSE of the produce department should be to provide the customer with the best quality produce at a price that is compatible with with its customer base." The key word there is "should". "Should" according to whom? You? the Office of Fair Trading? God? or the shareholders?
Regardless of what "should" be, the sole purpose is profit. Any other desirable function is merely epiphenominal.

This may be a tolerable state of affairs in a supermarket. It is not tolerable in healthcare provision.