Should the government make iPhones?

How many people think the iPhone would be better if it had been produced by the government? Would you think the battery life would be longer? That there would be more apps? A better camera maybe? Probably not. In fact, very few would call for the government to take over production of mobile phones. Private ownership is generally seen as the preferred way of organising the production of consumer goods.

With services traditionally provided by the government it is different however. Healthcare is a prime example. People are convinced that the quality would deteriorate if the NHS was to be privatised. The profit motive is seen as a threat to patient care; if someone is making money on running a hospital then surely that money is somehow missing from the pot available to provide service to patients.

But what is the difference between production of mobile phones and healthcare really? It is not that healthcare is more essential than iPhones; we are not just accepting that mobile phones are produced by private companies because they are not that important, but all agree that the government would be better at it. Granted, there are hard-core believers in public production of everything, but the mainstream would profess a fundamental belief in private ownership of production in general. Still, there seems to be an (unarticulated) reason why the profit motive is seen to drive innovation and quality in consumer goods, but at the same time as being detrimental to those exact things in the traditional public services.

There are two points worth clarifying. Firstly, there are vested interest which are bound to fear privatisation. Bureaucrats will resist losing control. Unions have good reason to oppose private ownership: effective management with a keen eye on productivity is likely to mean loss of token jobs and maybe harder work or changed work practices. But these are not principled arguments against private provision of services, and should hardly permeate public opinion. Secondly, iPhones might be priced cheaper if produced and sold by the government – not thanks to more efficient production but because the government does not have to make money; the taxpayers can be forced to provide a subsidy. But the opposition to private healthcare is not based on the fear of costs going up alone; even if the government is footing the bill the mere idea of private firms providing the service is met with suspicion. And in any case, private insurance can eliminate any concern over affordability – just like it does for your house or car without the general public asking for those risks to be socialised.

So the reason for the opposition to private healthcare must be found in elsewhere. Tradition is one such place. The status quo must be maintained, this is how it is and ergo it must be the way it should continue. Denmark provides an example: ambulance services are run by a private company, it has always been that way and is just matter-of-factly accepted. However, Danes cringe at the thought of other parts of the health service being provided by the private sector. The opposition to private healthcare of course also lays bare the regrettable suspicion towards a free market economy among the general public, a suspicion which has allowed the state to grow so big in the first place. Modern social democracies, as is the prevailing philosophy of government across the western world, are based on wealth created by private companies, a large proportion of which is then gobbled up by the public sector which has managed to present itself as uniquely able to take on a number of responsibilities, such as education, transport and healthcare. Only by challenging this dogma will we be able to begin the task of radically transforming and reducing the size of the state.


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