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In October 2008, former US Federal Reserve Chairman and “federal market cheerleader” Allan Greenspan told a US congressional committee he made a “mistake” in assuming the self-interest of organisations would not endanger their clients.1 In his words, his years of policy stewardship erred, “in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms”.
It has been that belief in corporate efficacy and stewardship that has powered the last two decades of policy analysis in healthcare. Over this period the increasingly accepted goal has been to shift the responsibility for healthcare from public agencies to private contractors and insurers. In some cases the result has been a remaking of the “public-private mix” in healthcare, with an emphasis on ever greater corporate involvement.2
Reflexively, the assumption has been that the private sector always does better what governmental agencies do badly: “the market predictably leads to better long-term outcomes overall”.3 It is this assumption, and the libertarian economics Greenspan and others have espoused for 40 years that are now in question, if not wholly in disrepute.
The obvious first lesson of the current crisis is that the unfettered market is not necessarily superior. Without real and stringent public supervision, private corporations may do very badly indeed in providing necessary service. It may be that not only government supervision but also government participation—and here the nationalised banks are an example—is necessary for the common good of corporate and private citizens alike.
The primary goal of any business is to maximise profit and market position, not the welfare …