21st Century Socialism and Health

What is socialism?

Socialism is a social system in which decisions are made at all levels to maximise the well being of people and not to maximise capital accumulation. This basic contrast between socialism and capitalism is vital: rather than starting from the secondary consequences of capitalism (markets, inequality, irrational investment decisions and so on) it is important to identify the source of the problem. Our present system is dependent on the endless growth of capital. This is not only unsustainable in planetary terms (creating consequences for health on a global scale) but in terms of the economic system itself: where do you go when there’s nowhere left to grow? … to financial speculation, to the colonisation of public services, to the creation of false needs, to the exploitation of new workforces and markets, with all manner of fatal consequences for the health and wellbeing of people here and abroad, and for the various systems of support, formal and informal for their health and wellbeing .
Socialism offers an alternative – a system based on the rational consideration of human need and the coordination of human action, productive, relational, ameliorative, and transformational, for collective and individual benefit. It thereby replaces, as the primary logic, the economic with the human.

Socialist coordination

It is in the consideration of the precise nature of that alternative system of coordination that the difficulties start. Attempts to establish a socialist system to date have been flawed. Four main variants can be identified .

1) Statism

This approach has sought to use the capture of state power to establish a alternative coordination system. In the post-Bolshevik systems this approached a total approach to the economy. In Britain and some other capitalist states this approach was taken to health care and to a lesser extent to social care (as well as to certain sectors of the industrial and service economy): hence the NHS.
However we could distinguish between State socialism (as in the former socialist states) and the social democracy best characterised by the Scandinavian welfare model, and also the social policy of Labour prior to the neoliberal turn. Social democracy is basically ‘mitigated capitalism’ where the worst antisocial consequences of the rule of capital are reduced through state coordination and intervention – an approach with roots in the 19th century interventions in public education and public health.
The command approach of Statism brought many benefits, not least in health care, but because of its reliance on the state there was limited social control and sense of ownership of decisions and their products (e.g. services, production). This led to inefficiencies and a lack of responsiveness to needs and aspirations.

2) Market socialism

Market socialism attempts to use markets to coordinate socially owned systems. The most ambitious attempts to establish this were in Yugoslavia and in Hungary. Soviet bloc countries used various market mechanisms at various times (and this is not to be confused with the harnessing of private capital accumulation as in Lenin’s New Economic Policy, or the joint venture companies in present day Cuba – although market coordination can go hand in hand with this strategy).

We could also see this approach in some aspects of the quasi market of the Thatcher third term NHS , in the NHS as ‘preferred provider’ within the commissioner-provider matrix of the last years of the New Labour administration, or in the personal budgets which have become the new common sense in social care and other domains (although in this case while these use public money they also fuel capital accumulation) and should be seen as part of a strategy to that end.

What limited evidence there is suggests that market socialism tends to veer away from rational decisions for public welfare. Thus in the NHS, competition on cost negatively affected quality (although competition on quality did seem to have positive benefits ). In Yugoslavia, the system exacerbated the inequalities between the republics of the federation, sowing one of the seeds of the post-socialist disaster there .

3) Cooperative socialism

The cooperative approach to socialist coordination can be classed as a model distinct from the Statist and Market Socialist ones although it can and has coexisted and interacted with both. The idea is straightforward: enterprises (in whatever social or economic sector) are run by members for their own benefit. Examples include the consumer co-ops, workers’ co-operatives and service co-ops – for example those established by working class communities prior to the NHS to secure health care (a model enjoying some resurgence in the Global South today. At a State level the Ujaama socialist model of post independence Tanzania stands out as a model that while negatively evaluated by the IMF and Western commentators, would repay closer analysis . Meanwhile Cuba has been transferring agriculture from the state sector to the cooperative for some time. The cooperative approach is something of an undercurrent in British democratic socialism, usually subservient to Labourism and Statism yet a ‘prefigurative resource’ in our imaginings and struggles for an alternative to capital’s rule.

There are two main weaknesses of the cooperative model. 1) Its openness to capital: think of John Lewis, or look at the Cooperative Bank’s transfer of its independent financial advice arm to a commercial buyer. Even with ‘asset locks’, coops like other social enterprises are an alternative that is just too weak to stand against the destructive power of capital on its own, and could actually be little more than a ‘stalking horse’ for capital’s penetration of the NHS. 2) Because the co-op exists for its members, there is not necessarily representation of others interests (although some co-ops do include this in their principles).

4) Participatory economic models and negotiated coordination
So if there are flaws in Statism, market socialism and co-operativism, what other options are there for socialist coordination? One way to approach this is to start from first principles:

The challenges of a system that responds to human need are
1. To accurately identify what is needed.
2. To plan and implement its delivery through both existing systems and through the creation of new or replacement ones.
3. To be appropriately sensitive to signals that changes are required and to seek this information out.
4. To ensure communication throughout the system, without overloading any level with unmanageable information.
5. To negotiate between differences of opinion and interests.
6. To avoid waste, ineffectiveness, distortion and inefficiency.

These in turn imply some secondary principles, the most notable of which concern the democratic taking of decisions and the principle of subsidiarity in relation to the relative but not absolute autonomy of each level of the system
None of the three models identified so far achieve all these things. Surprisingly, socialists have devoted little attention to the design of a system model that does. However, there are some examples of this.

1.) Pat Devine’s work on democracy and economic planning . This is a thorough treatment that starts from a review of the failings of both Statism and Market Socialism and then develops a model that he calls ‘negotiated coordination’.

2.) The work of Michael Albert and colleagues on Participatory Economics (or Parecon) . Similar to Devine’s model: there is more material although it is in my view less well articulated and lapses into anarchist thinking.
3.) The experience of Participatory Budgeting in Workers’ Party run administrations in Brazil – a model that has also been adopted elsewhere and well researched .

4.) The only attempt to develop a system with these properties at a national level was in the Chile of the Popular Unity government led by Salvador Allende. Given the growth in that part of the economy under social ownership (from nationalisations and worker expropriations) the attempt was made, with the support of British systems theorist Stafford Beer, to devise a computer and telecommunications supported system of national coordination, that combined management autonomy, democratic control and national coordination using cybernetic principles of nested viable systems and feedback . Unfortunately the experiment was cut short by the CIA supported coup of 13 September – the threat of a good example?

A socialism that achieves effective negotiated coordination is what democratic socialists need to aim for, regaining the initiative in the context of the disastrous rule of capital and the imperfect attempts to create socialism through the State (statism), the market (market socialism) or in isolation (co-operativism).

In the real world it is likely that a system of democratically negotiated coordination would involve the state apparatus, some market mechanisms and cooperative arrangements, but none of these would be dominant. Rather, new forms of coordination, fit for purpose for the rational human system of socialism are needed to subsume all three of these models. This is what the term 21st Century Socialism must mean.

Socialism and health

Having set out a definition of socialism and considered its coordination mechanisms, we can look at health and welfare systems to see what they might look like.

What would go, what would stay, and what would be added?
For the NHS as we know it, this question can be addressed by means of a table.

To go To stay To add
The market Public health Democratic governance – with close linkages to local government, comprising community and worker representation with provision for representation from disadvantaged groups.
PFI General management Increased integration – hospital/community where this matches patient pathways; health local authority for prevention, public health and services to disadvantaged groups.
Private beds Clinical governance Reduced pay differentials within the NHS.
Commissioning Inspection and regulation
Appointed boards Approximately four organisational levels (National, regional, district, service unit)
Payment by results Strategic planning
Contracts Planning agreements between governance boards and provider units, based on deliberative process of negotiation supported by evidence on effectiveness, need and preference.
Imposed targets National evidence reviewing service (like NICE and SCIE) Polyclinic tier but on Cuban model supporting primary care and integrated with community resources on Peckham model.
Choose and book Public health function with powers to intervene in the commercial sphere.
Commercial domination of R and D
Bias towards outsourcing of support functions Emphasis on cost-effectiveness but with negotiated parameters Primary care with responsibilities for health promotion and ‘up stream preventative intervention’.
Provision by the for profit sector Limited use of third sector and small businesses to provide niche services. Real time data collection monitored at each level with time allowance for local adjustment before superior system intervenes.
Use of ‘Chicago boy’ management consultancies Support for local research and development, embedded in service provision.

The above lists are not comprehensive or definitive but are intended to give a flavour of the structure and functioning of the system that would replace the present hybrid of Statism, markets and capitalist encroachment. It does not focus specifically on the allocation mechanisms for funds but this would follow the overall architecture of the system which would be funded by a progressive system of corporate and individual taxation.
It is possible to suggest an order of strategic approach for socialist transformation. Firstly, experiments with alternative systems of coordination could be established in social care provision where local authorities have relative autonomy. This would allow the development of person centred provision without the automatic recourse to market models as the only alternative to local Statism. This would give substance (currently lacking) to the rhetoric of co-production .
Secondly, a future left government could expand this approach to the NHS, establishing a system wide set of reforms that would be as ambitious as those of 1948 yet would not need recourse to organisational restructure. Whatever structure left by the Tories could be invigorated with a completely different set of governance processes, starting with an annual round of participative budgeting and adding refinements along the lines suggested by the models of Albert, Devine and, yes Allende.
Finally, the NHS does not exist in isolation. The structural crisis of capital is not going to go away and we on the left certainly need a new vision of socialist coordination that frees us from having to defend all aspects of the social democratic welfare state, allowing us to take the offensive in promoting a vision of a sustainable society, where people decide together what they want to have produced and how they will share it out. That is how we will replace the invisible hand and the logic of endless accumulation with a visible, rational and democratic approach that secures, health, wellbeing and human survival.
To reiterate:
Socialism offers an alternative – a system based on the rational consideration of human need and the coordination of human action, productive, relational, ameliorative, and transformational, for collective and individual benefit. It thereby replaces, as the primary logic, the economic with the human.
We should not be apologetic or reticent in saying this: it is we who have the moral high ground.

Mark Burton
October, 2010

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