The saying, “If it ain’t broke don’t fix it” is not one that can be applied to SA education and healthcare. Much of the state’s provision of healthcare and education is broken and government, with the best will in the world, cannot fix it. In SA, as far as our policy makers are concerned, a more apt version of the saying they seem to adhere to is, “If it ain’t broke, break it!”
What is it that motivates Gauteng politicians and officials to eliminate the very actions that cause former Model C schools to obtain above-average educational results, i.e., parents paying incentive bonuses to teachers and being involved in the selection of headmasters? And what is it that motivates politicians and officials that appear to be intent on nationalising private hospitals and doctors who are generally acknowledged to supply a better service than their government counterparts, and castigate medical schemes that ably manage the finances of their contributors? There is no defendable logic behind destroying centres of excellence in this country.
Actions that destroy rather than build give every appearance of being driven by a malevolent ideology that is bent on dragging everyone down rather than building them up. Such ideas will certainly not inspire young South Africans who would certainly prefer an environment in which “the sky is the limit” as far as opportunity is concerned.
Governments everywhere fail in their endeavours to fix services because it is impossible for them to create the incentives and disincentives that encourage and maintain staff enthusiasm and efficiency. For one thing, merit is not properly rewarded because those administering the system have no way of, and no interest in, measuring the value of above average service. For another, there is the constant ideological pressure to pay everyone the same salary, ignoring what might be huge differences in the quality and quantity of the services different people provide. As can be expected, the selection and advancement of staff is not merit-based.
Although the mechanics of delivery of healthcare and education are important, it is the fundamental philosophy that guides that delivery, and the economic premises that underlie the process that determine the outcomes. It is not possible for governments to have all the knowledge and information necessary to provide the best healthcare or learning environment required by every single patient or student; they can never gather or process the required information even if the responsible officials had an interest in doing so. In an environment that allows students and patients to choose between a multiplicity of competing service providers, they will have a much better chance of finding the service that suits them than they have in a uniform one-size-fits-all government healthcare facility or school.
SA could do a great deal better by adopting economic freedom oriented policies rather than the negative and destructive beggar-thy-neighbour policies that are too frequently being put forward. For instance, had SA benefited from the same high level of economic freedom that Hong Kong experienced during the last half century, when its economy grew at a phenomenal average rate of 5.2 per cent for the entire five decades while SA’s languished at 1.0 per cent, the SA per capita GDP would be an average of about R215,000 per annum, 3.7 times more than the current average. SA’s apartheid socialism and command economy restrictions and negative interventions explain the huge difference in the growth in incomes. At that time Hong Kong, with a GDP per capita only 1.26 times that of SA’s, was practising deliberate non-intervention in its economy.
A high level of economic freedom and high economic growth will resolve many of SA’s social and economic problems. Until SA reaches Hong Kong’s current levels of income, the government could improve healthcare and education significantly by increasing the choices of patients and students by steadfastly withdrawing from the delivery process so as to allow competitive private providers to supply a rapidly increasing choice of services.
At the same time, as government withdraws from the provision of these services, it should remove all the unnecessary interventions that prevent the proper development of private healthcare and education. Government’s budgets for healthcare and education, instead of being devoted to providing services, should be devoted to purchasing healthcare and schooling for those whose incomes do not allow them to pay for the services themselves. These budgets are likely to purchase a much greater quantity and quality of services than they currently provide.
In education and healthcare the rule should be “Don’t break the bits that ain’t broke!”
AUTHOR Eustace Davie is a director of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.
FMF Feature Article / 10 January 2012