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Market economics not the solution for human services

Roland Manderson |  11 August 2016


There is a well-known joke about a drunken man looking for a coin under a streetlight: he had dropped it elsewhere, in the dark, but was looking under the streetlight because he could see more clearly there.

Man ponders small humans services package under streetlight, doesn't see larger package in the darkness behind himIn the same way, the thinking behind the Productivity Commission inquiry into increasing competition, contestability and informed user choice in human services is fundamentally flawed.

Using a contestable market to make the delivery of human services more effective and responsive is simply misdirected. The complexity and interconnectedness of human services — for individuals, community, and our whole society — is too challenging for market economics to properly address.

The consumer is given a lot of status and assumed power in the inquiry's terms of reference, because she or he gets to choose where their favour, or funding, is delivered. We are led to believe this will result in more appropriate, desirable, responsive services. But the problem is that consumers do not shape the products they consume, they simply choose between them.

The true value of such a consumer is as an income stream for the service provider. It might appear to be a convenient way of evaluating the allocation of resources but it's a step in the wrong direction for a society where the human services we deliver are — or ought to be — part of a larger, shared, social project which values the people using services as highly it does those producing them.

The best human services are the result of co-production. They may be a part of a community endeavour or an individual relationship between the person at the heart of the service and the people working with them. But defining someone simply as a consumer takes away any expectation that they will be a partner in the design and delivery of the service.

Such an approach also works against more expansive notions of collaboration between community organisations, service providers and public institutions. We are asking the service user to select from a menu of products that may or may not build on other community or social connections; feed into the ongoing wellbeing of other people; or add to or detract from the greater good of the wider society. We aren't giving them much of a chance to make a difference.

The implication that giving people consumer choice enhances their autonomy and respect, and improves the quality of the services they can get, is itself problematic.


"As consumers, we are trained to seek value for money. People now receiving consumer directed care are choosing not the most valuable or nourishing support, but the cheapest."


People do need to know that as individuals they are recognised, that they can connect to others around them, and that they can exert influence and control over how they interact with and access the services they need. But a consumer shapes the product only in as much as the product shapes her or him. As consumers, we are trained to seek value for money, getting the best bang for our buck. People now receiving consumer directed care, for example, are choosing not the most valuable or nourishing support, but the cheapest.

It is not a simple black and white issue. These models of consumer choice being introduced into aged and disability care are associated with many positive outcomes. Not least, that providers have had to change and develop their work and communication systems in order to seek out and pay attention to their customers' experiences. The change in culture that this shift requires is at times profound, although whether this requires a business imperative to bring it on, or whether it can come about without the reductionism described above, is an open question.

Many faith and community based social services, including Anglicare, are now looking at the power of a relational approach to caring for and working with people in their communities, rather than one that is in essence transactional. While such an approach is an obvious counterbalance to the dehumanising construction of service users as consumers, it is also a way to focus on the high quality, and the transformational possibilities, that such services offer.

For such agencies, compassion underpins much of their commitment to providing human services that can give an opportunity to all to flourish as active members of our society. And while the contract of consumer economics might conceivably assure people of essential services it can never require compassion from those providing the care or support.

There is another joke that is appropriate to this discussion. A traveller asks a farmer how to get to a distant town. The farmer suggests one set of directions and then changes her mind. She half suggests another, but stops. 'No,' she says 'if you want to go there, you wouldn't start from here.'


Roland MandersonRoland Manderson is Acting Executive Director of Anglicare Australia.


Roland Manderson


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Submitted comments

Changing demographics will increasingly demand that every service provided is measured in terms of impact and cost. Tax payers will demand that we see more service for less money. Putting forward a framework - as you do - whose impact cannot be measured is not a policy solution and does not offer any alternative path. I am interested to hear any workable alternative paths but you have not provided one.

luke 12 August 2016

I heartily agree. Market economics for human services is a fundamentally flawed model and is based on faulty assumptions. I refuse to be characterised as a consumer or customer as if I was buying food or objects.

Shen 12 August 2016

Thank your sharing you insights

Ann Laidlaw 12 August 2016

Thank you Roland Manderson, for raising this issue. Once, when I caught the bus, I was a passenger. Now I am a consumer. I would prefer to be a passenger. This applies to many areas. As I grow older, I anticipate with some trepidation, the day that I might become a "customer" of an aged care service.

Janet 12 August 2016

Luke's comment provokes thought. I was thinking ... why do we provide any of these services at all? If there's a moral reason behind it all, how to measure the cost and impact of behaving morally or immorally? Kind of difficult. If we are treating others in the way we would like to be treated, that's also a bit hard to measure with numbers in a spreadsheet. I think the author is providing some comment on this new alternative way of 'delivering services' - he doesn't need to present an alternative, that's already there - the way we traditionally have (just better resourced).

Russell 12 August 2016

We are not an economy. We are a series of communities arranged into a nation. We are not consumers as some have mentioned we are persons. Many human services attend to complex human systems where dealing with one element may just make the whole matter worse. Allowing economists and accountants to dictate the processes of human services demeans the whole matter. It is like asking an engineer to design a cloud. Further the feedback loop to the planners and policy makers needs to be in place so that the systemic causes of human problems are managed rather than just treating the sufferer. Roland's article demonstrates how bad assumptions lead to bad planning and service delivery. And if you think "Customers" is demeaning spare a thought for Bunnings' employees who have the indignity of being called 'Team Member'-Who is keeping score? Who decides hours and wages and who plays where in the team with whom?

Michael D. Breen 12 August 2016

The Neo-liberal world doctrine revolves around market economics , a system that distributes equality resulting in those who are a part have no part a state of dissensus. By allowing those who are a part to participate in the social structure of society is an expression of active equality ie. Democracy not Neo-liberalism

Jeffrey Morrall 12 August 2016

Good article. It's important to develop a critique of the simple view that everything can be done better if we just assume that everything is a market and that complex human beings are rational maximising consumers.

Ray Polglaze 14 August 2016

Unfortunately in a climate of neo liberal economics the individual misses out, being seen as simply a "unit of consumption or production". The power of the "invisible hand" takes over and we are thrown on the whims of the "market". As Roland quite rightfully points out we need to be seen as individuals with our own unique needs and wants. Provision of social services will always have to be supplied by government, not profit motivated private enterprises.

Gavin 14 August 2016

A word of caution from Murray Rothbard to Gavin and others, who suppose the government must have a monopoly in the provision of all social services. “... but one vital assumption is missing: that there is nothing wrong with the fact that an increased amount of revenue will thereby accrue to the coffers of government. The implicit value assumption is that there is nothing wrong economically or ethically with an increased amount of social resources being siphoned off to government. For those of us who do not take such a sanguine ethical view of government, this consideration must be an important factor in our policy conclusions. In the area of government, indeed, there has been much discussion of the difficulties of national product accounting, but little has been said of the implicit—and scarcely self-evident—value assumption at the heart of the treatment of government. The blithe assumption that government expenditure on its own salaries can in any way measure government’s contribution to the national product encapsulates what some of us would consider a highly naïve view of the functions and operations of government—indeed a view that places one’s ethical imprimatur on every one of the government’s activities. ”

Gerald Lanigan 15 August 2016

Great article Roland. The 'consumer' model also relies on real choice being available. In may regional and certainly remote communities in Australia, the capacity for services to provide support becomes marginal when relying on income from individuals rather than block funding. This will give rise to for-profit providers focussing on the more profitable urban areas, where they can cherry pick the 'most profitable' clients, with people in rural, regional and remote communities left with few if any choices because their community is not seen as sufficiently profitable. We have already seen this happen in the job services area where people with complex issues are left to flounder with job support agencies only focussing on the most profitable and 'easiest to assist' clients in order to claim government payments. People cannot be reduced to a series of fragmented needs. Human services are just that, in the service of the whole person. While the 'market' might be an appropriate place to secure the cheapest solution to build a road, human beings are more complex and deserving of greater dignity and respect.

Marcelle 15 August 2016

Actually, market economics is not the solution for many non-human services either. Yes for commodes perhaps but even there think 'electricity'. Does anyone really think that 'marketising' electricity generation, transmission and distribution has improved the economy let alone society?

Ginger Meggs 21 August 2016

Great article Roland. As most political parties seem to accept that market economics control our lives rather than serving us, it is up to NGOs like Anglicare to champion the compassionate alternatives.

Peter 30 August 2016

God help those aged that are suffering mentally, are isolated without family support, have no computer or skills to receive the online - information about accessing Government program assistance. So many of what are Government responsibilites and stuff up's are being forced onto individuals in society to solve. One may ask, why have governments when they do not help individuals by making access impossibly difficult?.

Cam BEAR 18 March 2017

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