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Beware of free-market economists bearing ideological gifts

6 février 2008, 20:00

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lexpress.mu | Toute l'actualité de l'île Maurice en temps réel.

When my family and I were on an extended stay in Mauritius some fourteen years ago I was stung on the hand by a hornet -- en mouche-jaune -- after I accidentally disturbed a nest hanging from a tree in the garden of the house where we were living. I was lucky that it was a single hornet rather than the swarm which attacked me. But the immediate experience was painful enough -- it felt like I'd been hit by a hammer -- and despite having onion rubbed on the site by our maid (I'm sure it did some good) the following day my hand had swelled and I could barely move my fingers.

By the evening the problem seemed to be getting worse rather than better and I was advised by some of my in-laws -- my wife is Mauritian -- not to leave it another night but to go to the local hospital and seek help. So at about nine o'clock I drove from the house where we were staying at La Caverne to the Victoria hospital at Candos and stepped into a very crowded waiting room.

I hadn't brought anything to read and so the prospect of hanging around for several hours before I received attention was not an attractive one. Luckily, I didn't have to wait long as there were only a few people in need of medical care and the rest were their relatives (which taught me something about the strengthand significance of family and kinship patternsin Mauritius).

I saw a doctor who told me to go with two nurses who would give me some injections. I did as I was told and I was given tetanus, steroid and antihistamine shots (which, I later learned, when I returned to the UK is a standard treatment for this sort of thing).

I then had to wait 20 minutes after the injections had been administered in case I had some sort of allergic reaction and passed out. I didn't and instead spent the time talking to the nurses who were interested in my views on Mauritius, how long I was staying, where I was staying, who I was related to and so on. I returned home with a supply of oral antihistamines which I was instructed to take over the next few days. The treatment worked and my hand returned to normal very quickly.

Now all of this was free -- I didn't have to pay anything for the treatment or the medicine. And it is a similar story in the UK. Any local or foreigner suffering from a severe insect sting (or worse) can turn up at the accident and emergency unit of a local hospital and be treated (although it probably won't be as quick as the treatment I received in Mauritius and any medicine has to be paid for albeit at a subsidised rate).

Over the years I like to think I have repaid my debt to the Mauritian taxpayer by telling my British friends about my experience with the mouche-jaune. Put simply, my message to those who can afford it has been: ?Why don't you take the opportunity to visit Mauritius some time? It's a great place for a holiday -- very nice people, very interesting cultural mix and fantastic beaches and hotels -- and let me assure you that if something nasty happens to you while you're there, you will be well looked after if my experience with the hornet is anything to go by.?

Marketing experts involved in the leisure and tourism industry will tell you that these sorts of personal, word-of-mouth recommendations -- known in the trade as ?buzz marketing? -- are worth their weight in gold because of the way they influence people's decision-making. In fact, over the years several of my friends and acquaintances have made the 12-hour flight from Heathrow to Plaisance airport. I like to think that these journeys have been made at least in part because of my enthusiastic storytelling.

So a strict cost-benefit analysis of the sort much favoured by most economists who tend to focus on the immediate transaction rather than the larger context (which takes place in a much longer timeframe) would be a very partial account indeed of my encounter with the mouche-jaune -- in other words, although the burden of my medical treatment fell on the Mauritian health service, it wouldn't reveal anything of my (very modest) contribution to the country?s economy by promoting it as a tourist destination.

In any case, I see the type of healthcare provided in Mauritius and the UK as the hallmark of civilised societies. Care and treatment at the point of need rather than on the ability to pay or a function of status is indicative of a culture which has a strong tradition of public service which benefits all citizens and even stretches to incorporate temporary residents and tourists.

Indeed, at the time of my experience with the hornet, I was reminded of a book I was obliged to read as part of my university course, "The Gift Relationship: from Human Blood to Social Policy", by the late Richard Titmuss who was Professor of Social Administration at the London School of Economics. (He also advised the first Mauritian government led by Dr Seewoosagur Ramgoolam on population policy and family planning amongst other things.)

The book was first published in 1971 and has had a huge influence on government policy and the academic community in the UK (and, to some extent, in the US). Titmuss? thesis on blood donation was highly intriguing -- he contrasted the American system where blood donors were often paid for their services with the British system where people donated their blood for nothing (although they were and still are given tea and biscuits afterwards).

Titmuss concluded that the latter system was more efficient because not only was more blood wasted in American hospitals compared to British ones but that, more importantly, blood purchased from poorer American donors was more likely to be contaminated with hepatitis B because the typically poor blood donors -- often drug users -- were only interested in the money they would receive rather than the health benefits to blood receivers. (The book was written, of course, before the era of HIV infection.)

But as well as producing a specific analysis of blood donations, Titmuss was also trying to make a bigger point. For him, the contrasting practices around blood donations in the UK and US were indicative of two very different types of systems of healthcare, the first based on private and commercial forms of care, and the second based on altruism and public service. He considered that the British system was ethically superior because it generated a sense of mutual responsibility and social solidarity amongst all citizens, rich or poor.

Although Titmuss is not much talked about now, his influence has been long-lasting because he helped shape the British (and Mauritian) welfare system. In the UK, recent governments of all persuasion -- left and right -- accept that some services are best provided on a collective basis and some best left to the private sector (although there is healthy disagreement about the precise details of any particular arrangement, especially when public-private partnerships are involved).

But I was interested to read three related stories last weekend. The first was that the UK?s centre-right Conservative opposition party led by David Cameron announced plans for the roll-out of a dedicated maternity nurse service to help every new mother in her home for up to six hours a day during the baby's first week of life. It is envisaged that the nurses will advise on bathing and breast-feeding as well as monitoring a child's early development.

The idea based on a policy initiated in the Netherlands is to give every child the best possible start as well as supporting families as they begin a new phase in life. This sort of institution building using the service of paid professionals is vitally important in societies like the UK where, unlike Mauritius, family and kinship links are often weak.

The second story was that the Republican governor of California, Arnold Schwarzenegger, has distanced himself from many of his political allies and is now backing proposals for a universal care plan for all of his state?s citizens in order to tackle the profound problems in the present US system where not having health insurance can be a matter of life and death especially in the case of a serious disease or illness like cancer.

These sorts of policy initiatives are normally the territory of the Labour Party in the UK and the Democrats in the US but now it seems that even centre-right parties in both countries believe that the state shouldn?t remain neutral in matters of child and family welfare and healthcare.

<I>«Care and treatment at the point of need rather than on the ability to pay or a function of status is indicative of a culture which has a strong tradition of public service which benefits all citizens and even stretches to incorporate temporary residents and tourists.»</I>

Which brings me neatly to the interview with ex-World Bank economist, Percy Mistry, (l?express, 2 février) who is advising the Mauritian government to take a radically new approach to healthcare and welfare provision. Some of Mistry?s points about the general economic context are undoubtedly well made: the end of subsidies on sugar and the phasing out of textile quotas in key markets like Europe means that Mauritius faces some serious challenges in generating income in the new global economy -- he quite rightly notes that no country is owed a living just because it has nice beaches and the sun shines a lot.

But Mistry is convinced that the real problem for Mauritius is that it continues to follow a European "socialist" style system -- he uses the word ?sclerotic? for the economies of the countries that make up the EU which is a surprise to those of us who live here in the UK, for example, where there are only 2.5% classified as unemployed, the lowest since 1975.

Anyway, Mistry contrasts the European model unfavourably with the American free-market system which he thinks is far more dynamic and competitive (he also likes the Chinese and Indian economies for similar reasons) although it is noteworthy that he fails to say anything about the US budget or balance of payments deficits and the problems with healthcare. He says: ?Europe really believes in trying to equalise everything and rips you off in taxation to provide universalism in the name of equity.?

Mistry advises the Mauritian government to dismantle many aspects of the health and welfare system in the country -- ?wasteful public expenditure,? as he puts it -- so that the country can target money derived from taxation on infrastructural projects which will produce a competitive advantage in goods and services in the international marketplace. He continues: ?You [must] get rid of this notion that everything should be universalised for everybody -- that everybody should have free education, free health, free transport.?

Mistry tells Finance Minister, Rama Sithanen, to ignore political attacks from his opponents (which include some of his cabinet colleagues) and go further and faster in the process of economic reform and hack away not only at public institutions but also abolish subsidies on staple foodstuffs like flour (and presumably rice) because he doesn't see why wealthy Mauritians or tourists staying at posh hotels should benefit.

But if Sithanen is feeling the political heat because of proposed policy changes, this reveals something interesting about the historical and social significance of institutions which provide free education and healthcare and the long-standing subsidies on basic foodstuffs in Mauritius. All of these things have helped to create a sense of solidarity in a socially and ethnically complex society.

<I>«(...) their commitment to a particular theoretical framework means that they are often so obsessed with wealth creation they fail to understand the issue of social solidarity and, ultimately, therefore what makes a functioning society tick.»</I>

It really is not good enough for Mistry to say Mauritians don't ?understand it because they don?t want to and they don?t make the effort to learn. And because economics is not taught the way it should be. You see, Mauritians don?t know what?s good for them!? This is patronizing nonsense and fails to take into account the advantages of democratic mechanisms in relaying messages from the electorate to the government if they are not happy about the direction of economic or social policy.

Gung ho free marketeers like Mistry often miss the point about economic and social change partly because they tend to be well insulated from the effects of policies they advocate but mainly because their commitment to a particular theoretical framework means that they are often so obsessed with wealth creation they fail to understand the issue of social solidarity and, ultimately, therefore what makes a functioning society tick.

It's not a mistake that Richard Titmuss would have made and it?s revealing that the current leaders of the Conservative party in the UK and the Republican Governor of California don't make it either. A free-market ideology shouldn?t be one that the current Mauritian government should fall for. Institutions like education and healthcare in Mauritius have contributed to the success and solidarity of the country and should be preserved for the sake of future generations.

<B> Sean CAREY <I>(Dr Sean Carey is Research Fellow at the Centre for Research on Nationalism, Ethnicity and Multiculturalism (CRONEM), University of Surrey and a Fellow of the Young Foundation.)</I>

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