F-B-F.org -

At its heart is the question of what is the most effective driver of change in big organisations. If it is not careful it will end up defending a real market in schools, where cash buys access to better education (through house prices in good catchment areas), while the Tories advocate a “quasi-market” in which poor people have as much clout as rich.Equally, the Labour Party has got to realise that this country needs a real internal market in the NHS and to be proud of it. The Tories were right in principle about this, but they did not put the money in. An egalitarian defence of markets: now that is intellectual boldness.The surprise sprung at the weekend by Tim Yeo, the Tory spokesman for education and health, suggests how tricky this territory is, and how important it is that the Labour Party is clear about its definitions. The important feature of market exchange, he argues, is that it promotes respect for other people.”To offer something in exchange is to make an effort to understand the needs and wants of the other party to the potential exchange and to persuade them that what is on offer will meet those needs or wants.” The exploitation of labour or the intensification of poverty often wrought by capitalist markets should not confound the case for “quasi-markets” in public services in which consumers have purchasing power depending on their needs. Thereby, parents, pupils and patients might be promoted from pawns to powerful queens.His arguments are lively and original, but the most striking chapter is the epilogue in which he makes the left-wing case for market forces. He does not simply argue that markets should be reluctantly accepted as expedient, but that they should be celebrated in principle.

One of the most impressive intellectuals of the movement, Julian Le Grand, has been drafted in to 10 Downing Street. As a professor of social policy at the London School of Economics, his work on the ideology of the third term is of more than mere academic interest.Admittedly, his book published last year is called Motivation, Agency and Public Policy. But its subtitle, Of Knight & Knaves, Pawns & Queens, is more beguiling and more descriptive of its central thesis, that public services ought to be designed on the assumption that their providers – doctors, teachers or bureaucrats – might be knaves rather than public-spirited knights. It is a shame, for example, that Renewal, once the journal of the modernising avant-garde of New Labour, has been reborn as a mouthpiece of the internal opposition – the very negation of its original purpose.

Its latest edition accuses Blair of suffering from a form of “political agoraphobia – a fear of open, public spaces in which non-market values might just prevail, where political and therefore collective power might just take precedence over individualised purchasing power.” This is just clever, but empty, rhetoric.By contrast, the marketisers have a more practical, credible and exciting vision. Teachers’ pay is up and workload down, to the point that it becomes at least possible to ask: what is the best way to raise standards dramatically across the board?This is where the battle is joined. On one side are those who think it is enough to rely on the altruism of public servants – doctors, nurses, teachers – to make best use of the greater resources; on the other are those who put more faith in market-style incentives.Intellectually, the altruists are pathetically weak. The amount of extra money being pumped into the health service and schools since 1999, when Gordon Brown turned the taps on, is beginning to mount. The NHS, which struggled for three decades to keep up with a rising demand for health care, is finally reaching the stage where capacity is increasing faster than demand.