The hidden exploitation of frontline staff by their own administrators
Tax or cuts? It’s a dilemma that has characterised British politics for the past six years, and shows little sign of abating. The public is told that frontline public services cannot be maintained because we’re living longer, we’re less productive, and have more national debt. It’s a choice, apparently, between inevitable cuts to public services or a politically unpalatable tax hike.
I have argued before that wholesale administrative reform of public services offers a third option. It is going to happen eventually anyway, but, mysteriously, no one discusses openly. I believe this has something to do with the fact that we confuse public administrators with public servants, and cannot see where the latter are exploited by the former. If this exploitation became visible to us, we might call time on all these frontline cuts.
Let me explain with a Marxian idea: the labour theory of value, and the associated notion of economic rent. Economist Bryan Caplan provides an example: “A worker earning $10 [£7] an hour, when their alternative on the open market is merely $9, is considered to earn a $1 an hour rent … the general assumption is that rents are just useless inefficiencies.” In these situations, the surplus value (earning in excess of opportunity cost) accrues to the rent-taker, instead of being spread among the population as a public good.
So how does the idea of rent offer the clarity of thinking that we need to save our public services? This is where digital politics comes in. In this TED talk by Jeremy Heimans, he explains how the arrival of the internet enables people to exchange value more cheaply and directly, bypassing the traditional, command-and-control restrictions. It is part of a shift from old to new power.
This was foreseen by Marx, who explained that technological innovations would eventually undermine monopolies by providing cheaper and more efficient inputs. In public services, the “shared plumbing” of the internet means that information management, accountancy, logistics, payments, identity checking, registration, workflow, and so on can be accessed without traditional administration processes. Technology is opening up a gulf between the cost of these functions as we could consume them if we organised ourselves better, and the current cost of what people are paid to perform them. The difference between these two constitutes rent paid to administrators.
Take the local government sector. There are around 430 local authorities, each surrounded by health, social care, housing, blue light, and third sector organisations. Most of these persist in doing all of these standard functions in their own special ways – supported by a few large corporates who have effectively captured key administrative functions such as revenues and benefits, patient administration and police operations, but which sell the state many different versions of these, again and again. Viewed through our Marxian lens, this is rent-taking by public and private-sector administrators alike, skimmed off in the form of salary and contracts by those monopolising the process. The inevitable result is cuts to the front line, as we spend public money on unnecessary administration rather than actual public services.
Those who benefit from rent-taking are spread across private and public sectors: their skillsets and career paths are increasingly convergent. They are, in Marxian terms, a discrete class. In contrast, those who lose out are frontline public servants and the citizens they serve, who must make do with shoestring public services. These latter two groups form a separate class wherever transactions between them are brokered – and skimmed – by the bureaucratic class of middle-management.
UK voters are being sold a lie. There is no need to cut public services
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In a previous article for the Guardian Public Leaders Network, I looked at a community nursing organisation in Holland that has been able to achieve a 7,000 to 30 frontline to back-office ratio by freeing itself of its bureaucratic class. This has resulted in happier patients and employees, as well as saving money. I speculated that achieving a similar ratio in the UK could save £35bn every year – money that is currently extracted in rent by public and private sector corporates, but which theoretically could be redirected away from public administrators to public servants.
To those who say that such a prize is impossible for our own public services, given their siloed, bureaucratic structure, I can suggest a good place to start. Replace the traditional public-private sector categorisation with a more accurate distinction between the corporate interests of public administrators (and their private sector partners), and public servants (alongside recipients of public services). Such a distinction enables us to expose the fundamentally extractive nature of corporate organisation – both private and public – and to dismantle the false consciousness that limits our ability to challenge this unnoticed form of exploitation.
In an age of finite resources, this would enable us to prioritise resources towards those that provide the most public value: to the doctors, teachers, nurses and social workers who serve the public and justify the existence of public services.
Dumping the misleading “public sector” label, and replacing it with a new distinction between administration and service, is about framing a new political discussion for a digital age. Developments in technology have turned activities that used to be absolutely necessary into forms of rent – ironically, these roles are mushrooming even as their contribution to the public good decreases.
If we are serious about maintaining face-to-face public services for future generations despite a finite tax base and elastic demand, we need nothing less than revolutionary thinking. Perhaps Marx is a good place to start.
Mark Thompson is a senior lecturer in information systems at the University of Cambridge Judge Business School. He tweets at @markthompson1
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