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Privatization and the Welfare State: Implications for Consumers and the Workforce.

Edited by Philip Morgan. Aldershot, England and Brookfield, Vermont: Dartmouth Publishing Company, 1995. Pp. xvii, 317. $59.95.

This provocative volume was conceived in an attempt to examine some of the seemingly worthwhile questions pertaining to privatization. The numerous essays which contribute to this volume are the result and outcome of research evidence presented in the form of case studies, empirical and secondary research. The various articles are encompassed in four sections ranging from the rationale and implications of privatization to privatizing education and services. Privatization's effects on consumers and employees are also examined.

The initial presentation, entitled "The Privatization and the Welfare State: A Case of Back to the Future," is written by Philip Morgan, and commences with a brief historical overview of the beginnings of capitalism and the development of the Welfare State in the United States and, to a lesser extent, in the United Kingdom. It is interesting to note that the author makes a comparative analysis of Adam Smith's "self-interest" ethic, Calvinism and the neo-human relations ethic of the "me-generation" of the 1960s and 1970s.

The second article, pertaining to "Reasons for Privatization," by Madsen Pirie, emphasizes that one reason why privatization has become significant in modern economies is that it offers simultaneous solutions to numerous societal objectives. It is certainly true that privatization has undoubtedly lead to the emergence of several strong national industries in the British economy. According to Pirie, privatization has sufficiently accomplished enough of its stated objectives to make it "the most significant economic development of modern times."

In their essay entitled "Private Finance: A Driving Force to Enhance Efficiency," Tony Hazell and Dolph Zubick mention that Private Finance Initiative or PFI is certainly a brave new world. Nevertheless, the authors emphasize that the impact of PFI is underestimated at both the central government level and local service delivery levels. The fourth presentation, by Peter Anthony and Mike Reed, is entitled "Public Service and Private Profit: The Managerial Limits to Enterprise" and seemingly focuses on the body of evidence suggesting that the competitive market model is an inadequate source in terms of explaining the internal relationship of business enterprises and the specific behavior of managers. The adventitious blindness of the market and the random grasp of its invisible hand are seemingly seen in schools, universities, hospitals and social agencies as threats that managers must repel in order to defend the wider moral networks of which their organizations are a part.

The fifth article, by Nigel Allington, pertains to "Some Political and Economic Issues Raised by Privatization," and assesses the economics and politics of the conservative government's privatization policy in an attempt to determine whether the parable and reality of privatization have any intertwining relationship. Allington suggests that the new independent East European states and Western states currently planning or enacting privatization policies might benefit from a consideration of the British experience. It is important to emphasize that the author states that "to gain full advantage from any privatization it must be accompanied by greater competition." If monopoly is really inevitable, it becomes a finely balanced question as to whether state or private monopoly is worse. The author mentions that the main distasteful feature of investment or unearned income is that too few have it. After all, writers down the ages have sung the praises of a "modest competence."

The succeeding essay, "Recreating the Past: The End of State Dirigisme and the Creation of a Private University Sector in Britain," by Nigel Allington and Nicholas J. O'Shaughnessy, simply states that privatization is an idea whose time has gone and is now much discredited, sometimes for a good reason. These scholars provide several examples of its dysfunctional consequences. The thesis of this particular presentation focuses on the political attack relating to universities under the guise of efficiency. The authors contend that all international models of universities are flawed. In essence, the central idea pertains to the form of independence for some British universities based on the repayment of grants and tuition fees by means of additional taxation for university graduates. In fact, the independence of some universities is simply no longer an ideological absurdity, but has become a practical necessity.

The seventh essay, by Peter Morgan and Marsden Preece focuses on "Privatization: Some Implications for Education" and evaluates the changing societal expectations of the educational process, which is implicit with respect to privatization and the practical career needs of students who are expected to cope with a changing worklife scenario. The authors emphasize that there can be little doubt that privatization and the widespread trend towards market economies is one of the major influences in the world external to the formal educational process.

Miguel Martinez Lucio presents a provocative insight to "The Question of Privatization in the British Post Office: A Discussion" in the eight article. The analytical discussion provides an overview of some of the broader economic and political rationalizations for privatization and its centrality within the New Right discourse. The subsequent presentation, which relates to "Privatizing the Police Force: Issues and Arguments," by Roy Wilkie, Colin Mair and Charles Ford, argues that the core-ancillary distinctions underpinning the privatization of the police force are extremely questionable in that they simply doubt whether or not they would survive an explicit policy debate. Even so, the implications of privatizing the police force are so overwhelming that they certainly should be addressed by a Royal Commission.

A tenth essay by Charles C. Okeahalam is enticed "Franchise Operations, Competition and Consumer Welfare: The Privatization of British Rail Passenger Services." The establishment of a framework with which to effectively introduce private sector investment and managerial functions in the British Rail is quite complicated in nature. In essence, the author concludes that the governmental strategy will most likely increase the complexity of the privatization process. The succeeding article by Tom Clarke enticed "Improving Management in Government? The Creation of the Executive Agencies," emphasizes that the transformation of the civil service caused by the creation of executive agencies and related reforms has certainly posed many unanswered queries. Clarke perceives that the intrusion of the private sector business format into the management of government threatens the traditional public service values of impartiality, universality and accountability.

The twelfth article, by Chris Potter, is entitled "NHS Plc" and mentions, of course, that the National Health Service (NHS) is generally perceived to be the flagship of the British welfare state. In fact, it has frequency been described as the envy of the world. According to the author, it would appear that government reforms have perhaps paved the way for increasing privatization of health services by more accurately identifying what particular services are provided and at what cost.

Colin Harris subsequently examines the employee effects of the privatization of the Water Industry in England and Wales during 1989. The writer concludes that privatization apparently achieved one of its primary objectives which is obviously to the general enhancement of managerial autonomy. The analytical discussion by George Thomason relating to "Privatization and the Employment Relationship" examines the methodology of strategic changes pertaining to the delivery of public services in a cost-reduction format.

Peter Saunders is the author of "Consumers and Privatization: The Case of the Water Industry," which emanates from his recent research pertaining to the sociological significance of the privatization process. It is important to mention that in most of the industries which have been privatized consumers have received price benefits. Yet, with respect to quality and accountability the author purports that] one should remain more circumspect with respect to the overall perception of the privatization process. The final essay "Empowering the Consumer: The Case of Social Housing," by Robert Smith, Richard Walker and Peter Williams provides an interesting explanation of the housing dimensions with respect to efficiency, quality and equity.

In essence, this compendium of scholarly topics represents a worthwhile addition to any relevant graduate reading list. Bon appetit!
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Author:Adams, Jack E.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Oct 1, 1996
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