Where there’s choice there’s progress

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The choice between Tweedledum and Tweedledee may not matter much to the chooser but it matters a lot to Tweedledum and Tweedledee. While rich diversity may at times seem of little value, it is an axiom of modern economics that we benefit from choice – from products to public services and government.

It is an axiom of modern economics that we benefit from choice. If you are offered a yellow car as an alternative to black, you do not have to select it. But you might. So you can never be worse off and you might be better off.

But, as psychologist Barry Schwartz argues in a recent book*, too much choice can leave us bemused and unhappy. Do we really need the 275 varieties of cereal and 175 salad dressings he found in his local supermarket? He cites marketing surveys that suggest that when the number of options becomes too large, people are less likely to buy anything at all. Deregulation has given consumers a choice of utility suppliers: but most people stick with their original provider although that is almost always more expensive.

It is vital that there is a choice of clothes, or entertainment, or newspapers. Not only do people have different shapes, tastes and opinions but a world of identically clad people would be drab and boring, and even if Beethoven’s ninth symphony is a great orchestral work no one wants to hear it all the time.

But arguments for diversity of product are much weaker for health or education. There is general agreement on what is good and what is bad and most people want the best. Surveys show little public enthusiasm for choice in public services.

But choice may be valuable even where diversity, in itself, is not. The choice between Tweedledum and Tweedledee may not matter much to the chooser but it matters a lot to Tweedledum and Tweedledee. Such a choice can have a large effect on the efficiency of producers, and their flexibility and responsiveness to consumer needs, even if it does not widen the range of goods and services available to consumers.

When British Telecom lost its monopoly of the UK telephone service, few consumers of any kind and virtually no residential customers switched to an alternative supplier. But the lengthy and long established waiting lists for phones disappeared immediately and call charges fell. The opportunity to take your custom elsewhere may have a dramatic effect on performance even if you do not want to exercise that right and choose not to do so.

And so it is with public services. What is the point of giving parents a choice of school if there are no more places at the best schools? Quite a lot, actually. You need to be a thick-skinned headmaster or headmistress, and an unobservant governor, not to be chastened if everyone would rather send their children to another institution. No one wants to go to a hospital a hundred miles away to have an operation. But the option to do so may reduce the probability you will have to. If your doctor will not allow you to book appointments more than 48 hours in advance, you can appeal to the prime minister for help. But if you can easily find other doctors who care about the convenience of patients, you probably will not need to.

The health secretary could design the appointments system for every surgery. But uniformity of provision is the enemy of quality. This conflict is hard for politicians to explain or voters to accept – surely everyone is entitled to the best services the public sector can provide? But it is easier to give everyone the best if the best is not very good – which is likely if appointments systems are uniform and centrally planned – or if you do little to monitor quality and can simply assert that everyone is receiving the best. These are the mechanisms by which supposed equality of healthcare in Britain has actually been achieved.

The triumph of market economies over socialism demonstrates the importance of choice in securing economic progress, and the triumph of democracy over totalitarianism demonstrates the importance of choice in securing political advance. As class and ideology have declined in political significance, parties seem increasingly the same. But prospective leaders still have to compete strenuously for votes. And that is why democratic government is usually more honest, more competent and more responsive than government that does not have to worry about the electorate’s verdict. If choice of government seems less important in Britain than in Ukraine or Zimbabwe, that measures the success of democracy, not its failure.

*Barry Schwartz: The Paradox of Choice, Harper Collins

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