Rory Sutherland
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I mentioned this ‘red or white’ issue at an advertising conference about six months ago, and a delightful man came up to me afterwards. He had, as he explained, recently visited his NHS GP to discuss an impending minor operation. To his immense surprise, the GP asked him in which of two neighbourhood hospitals he would prefer the operation to be performed. As he explained to me, ‘I live equidistantly between both hospitals, which as far as I know are both equally good: so the decision was theoretically irrelevant. But the question completely changed my feelings towards the experience. Unlike my past experience of the NHS, it felt like being a customer, not a supplicant.’
I know how he feels. I much prefer eating out in America to eating out in France. The food is probably better in France, but it often comes with that demeaning sense of patronisation which ruins the whole experience. There is the implication that it is a privilege to be in the bloody restaurant at all: turn up for lunch at 1.32 p.m. and they refuse to give you anything to eat. I have stayed in French hotels featuring gastronomic restaurants where they claim they can’t make me a sandwich. In the US, they’ll make you a Caesar salad at three in the morning. Again, ‘a customer, not a supplicant’.
In our admiration for the German school system, we sometimes overlook one important detail. German schools are of course ‘selective’, typically in a three-way divide, the Gymnasium being the most academic school, the Realschule and Hauptschule being progressively less academic and more vocational in their teaching. The children are usually sent to whichever of these three schools was deemed most suitable by the headmaster of the primary school, using a mixture of past performance and subjective judgment.
But there is an important distinction. You can, if you wish, override the primary school’s recommendation and demand that your child attend the Gymnasium. This power is not limitless — if your child struggles at the Gymnasium for a couple of years, he moves to a Realschule. But the option to choose is vitally important. It means you are not at the mercy of the state, or some pinko headmaster instinctively prejudiced against the offspring of the bourgeoisie.
Does this small element of choice also contribute to a far greater readiness among all Germans to use the state system? By creating the feeling that you are a ‘customer and not a supplicant’? And can the greater willingness of Scandinavians to pay tax partly be explained by the fact that, when you have local democratic control over how tax revenues are spent, the payment of taxes feels less like an act of appropriation and more like a contribution towards something you want?
•••
Where does this all leave me politically? A little conflicted. At one level, it makes me a committed libertarian, in that I will defend to the death — well, to the point of mild inconvenience, certainly — the notion that individuals should, wherever possible, be left to make decisions over their own lives.
But I don’t quite buy the argument that the only way to do this is to tax people as little as possible and to view any form of wealth redistribution as a form of theft. The danger of this approach is you end up with the insane imbalance between private and public goods you find in California, where the cars are great but the roads are dreadful.
The real issue here may be psychological, not economic. The problem with paying tax is not purely about the amount you pay but the feeling that, once you write that cheque to HMRC, you surrender any control over how that money is spent.
Economics can be peculiarly blind to psychology. Since it sees everything in numerical terms, it considers the amount people pay in tax as the only important variable, not the frame of mind in which they pay it. But this is too simplistic. Paying a parking ticket and giving £40 to charity are economically indistinguishable — but they do not feel the same. Pay £30,000 to your local hospital to buy a new machine and you feel like a philanthropist; pay £30,000 in stamp duty and you feel like a mug. Ultimately, we spend money for how it makes us feel.
I’m not disputing that the left has done far more to limit freedom of choice than the right. I’m not even saying taxes should not be reduced. But the right, especially the American right, seems to have become trapped by a false dichotomy — the belief that there are only two things that can happen to your money. Either you get to spend it yourself, in which case you enjoy complete control over what you get with it, or else it disappears into the ungrateful maw of the state, in which case you might as well have burnt it.
But if choice matters to us as much as these findings suggest, what governmen t should be trying to do is to find ways in which we can fund public goods without sacrificing a feeling of control. How can we make our payments to the state feel like — if I may borrow my employer’s slogan for the new and surprisingly affordable Ford Fiesta — ‘a choice, not a compromise’?
Should there, for example, be two forms of TV licence you can buy: one which costs £130 and operates just as the present TV licence does, and another that costs £150, but which allows you to direct where 25 per cent of your money goes?
Taking this principle to further extremes, some interesting theoretical solutions present themselves. You could create a parallel currency which you use to purchase public services called the Public Service Unit (or ‘sou’). Everyone receives a set number each year, with the option of buying further units at a cost that increases with earnings. You can now offer government services based on ‘willingness to pay’ without discriminating against the less well off. For one PSU it’s ‘the doctor will see you now’. For two PSUs it’s ‘when would you like to see the doctor?’ For three PSUs it’s ‘the doctor is coming to see you’ — a level of service unavailable on the NHS since the arrest of Harold Shipman.
The problem with democratic government isn’t that it’s government, it’s that it’s not remotely democratic. Starbucks typically offers me more choice in a day than the state offers me all year. And, unlike British democracy, it offers more than two kinds of coffee.
So it’s true. Democracy is great. Now can we have some please?
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