Free market (with strings attached)


1 Sep 2006

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Most of us would raise an eyebrow if Ford or Volkswagen were to start coming up with suggestions that the government should be supplying everyone with a car because, in terms of car penetration, Ireland was at the bottom of the league.

I use this to illustrate again the fundamental flaw in giving credibility to calls from the suppliers of good and services for the government to satisfy what they like to portray as a demand.

I recall two years ago when an ICT industry representative called on the government to give laptops to secondary school students. I was a bit troubled at that time by the source of the alleged demand (ie the people who could meet the demand) and I know that when I complained about the two-dimensional thinking behind the call there was some disquiet in the industry. I had argued that the technology suppliers had seemed to resort to slinging solutions at problems that hadn’t quite been analysed.

I was recently given an old and yellowed copy of John Kenneth Galbraith’s book The Affluent Society which is a real eye-opener in many respects. My copy was published by Penguin in 1968 and is an updated version of the edition first published in 1952. Galbraith, who died earlier this year within weeks of my being given the book, warns repeatedly about the creators of ‘conventional wisdom’ — about how they can manipulate public opinion to their own ends and how this ‘wisdom’ needs to be constantly challenged.

In the area of demand, Galbraith talks about ‘the dependence effect’ and points out that “if an individual’s wants are to be urgent they must be original with himself” and that “they must not be contrived by the process of production by which they are satisfied”. He puts it so well.

I have heard it said, even by some people from a ‘process of production’ — one of the big consultancy houses — that the dotcom collapse saw a tremendous surge in interest in e-government around ICT industry circles. We are now regularly treated to pieces of ‘wisdom’ from the large corporations about what government should or should not be doing to advance e-government.

They seemed to have all the answers to government problems because they are so good at transforming their own organisations and, by comparison, government is really a dawdle, they extrapolated. Unfortunately, many of the ICT media instruments that perpetuate the language confusion give credence to these seasonal bleating and to the ‘conventional wisdom’ that private sector is good and public sector is bad.

What I find fascinating is how these people have such insights, knowledge and confidence that they can supply all the solutions that government requires when they could not possibly understand the complexities of government and public administration — complexities, indeed, with which many people even within government and politics have great difficulty.

I notice also that every time there is a hint of trouble on the terrorist front, the media wheels out the same old ‘security analyst’ to tell us about how deficient we are in the area of national security. For instance, in the immediate aftermath of the liquid explosives scare in August this ‘analyst’ asserted on several occasions that Ireland was Europe’s weakest link in the security chain because we cannot respond to this type of emergency.

While my first thoughts were that he mustn’t have tried too often to get through the belt and shoes examination at Dublin airport, it goes without saying that all the government has to do is to employ the services of a ‘security analyst’ and everything will be fine. Is this not someone from the ‘process of production’ talking up — or contriving — a demand for their own services?

I suspect that by the time this goes to print we will have had the perennial ‘call for laptops’. Or maybe there is some reality emerging at last. We know, for instance, that there is low demand for broadband in some areas while there is a shortage of supply in others.

While I can understand that people are upset by a poor supply, you’d have to question why there is a lack of demand. Is there a chance the original ‘demand’ was nothing more than hype on the part of those who stood to gain commercially from the investment, portraying those outside the loop as being in some way backward?

Surely not!

By Syl O’Connor