ourinternationalbusinessHere’s a thought. One way into several of the policy issues dominating British news headlines – from the future of the national health service, to the Southern Cross catastrophe, to the funding of higher education – is to look at them through the lens of Jane Jacobs’ distinction, in her book Systems of Survival, between systems based on territory (‘guardians’) and systems based on exchange (‘traders’). Most human societies need both. But when we get the distinctions between them blurred, breakdown and corruption follows.

In some ways Systems  of Survival is an odd book. It was published in 1992, towards the end of Jacobs’ working life, long after the work on cities and neighbourhoods that made her reputation. Although it has a serious intent, it’s written in the form of a series of dialogues – with a nod towards Plato – from a fictional study group, which develops its arguments through discussion between its members over a period of time. I was introduced to it by Victoria Ward when doing some futures research.

Traders – we’re talking here about honest traders, of the ‘my word is my bond‘ type – are concerned with commerce and exchange. Guardians on the other hand, are more concerned with territory. Jacobs has a list of the principles which each of these two syndromes abide me to inform their work, which can be found in this good descriptive post summarising the book. For a flavour, though, the 15 Trader principles include,

  • Shun Force
  • Be Honest
  • Collaborate easily with strangers and aliens
  • Compete
  • Respect Contracts

The 15 Guardian principles, similarly, include:

  • Shun trading
  • Be Obedient and Disciplined
  • Adhere to Tradition
  • Respect Hierarchy
  • Be Loyal.

Drawing the lines

I’ve included these here just to give a flavour of the differences between the two underlying sets of values, for Jacobs’ discussion is quite rich. And when these systems go wrong, it is because they have got their principles confused or entangled. I’ll come back to this point later. But I was reminded of some of this in a recent post by Diane Coyle recently, when she quoted this passage from C. Wright Mills’ classic book The Power Elite:

A society that is in its higher circles and middle levels widely believed to be a network of smart rackets does not produce men with an inner moral sense; a society that is merely expedient does not produce men of conscience.

So, if Guardians are concerned with territory and Traders are concerned with commerce, the question here is which domain or syndrome public services should fall into. In practice, there is not a perfect line that can be drawn between them which holds good in all circumstances; the line moves around in accordance with shifting social and political circumstances. As Stéphane Hessel writes in Time for Outrage, the French government nationalised power supplies in the aftermath of the Second World War as part of a wider programme in the wake of depression and occupation to ensure that “the general interest had to be given precedence over particular special interests”.

Territory and citizenship

But it is striking that some of the political battle lines which have emerged in the UK over the future of different public services have fallen along assumptions about universality and citizenship, which are more about territory than trading.

In the case of the National Health Service, one of the aspects of Andrew Lansley’s original proposals which most alarmed critics was that it removed from the Secretary of State for Health the statutory duty to provide universal healthcare free at the point of delivery – without reassigning it to another agency, while the proposed Monitor regulator was to involve itself only in issues of competition. While the second of these has, apparently been modified – at least to a modest extent – by David Cameron in his “five personal guarantees“, the first still remains unaddressed, as far as one cn judge from reading the news covearge.

In higher eduction, much of the rationale for the present UK funding reforms come from the review conducted by the former BP Chief Executive John Browne – emphatically a Trader. The loans are a small part of the whole; the underlying idea is of the vision of the university as a utility – as Stefan Collini has argued – which exists to feed the needs of business. And the system of funding tuition fees from loans rather than from a graduate tax (which would be a better solution for everyone except the Treasury) is clearly a Trader model not a Guardian model. As Helena Kennedy observed on a recent edition of Question Time, the loans model loses sight of the common interest. And, as Howard Hotson argued persuasively in the London Review of Books recently, the ‘market’ in education produces perverse results. In part (although he didn’t use this language) this is because the benefits of elite universities, which have been created by several hundred years of Guardian culture, can’t be replicated by Trader models:

Oxford and Cambridge have a 600-year head start on their English rivals. Many of the advantages they enjoy are the product of their long histories: their architectural settings, their libraries and archives; their unique systems of tutorial teaching, collegiate organisation and self-government; … Their competitors cannot produce these things at any price, much less one that undercuts theirs.

Social assurance or financial assurance

The case of Southern Cross, as one news report memorably put it, “shows how a system of social assurance for older people became a system of financial assurance for investors, how private equity groups and investment funds turned care homes into a money funnel, passing a flow of cash from local authorities into the pockets of bond holders”. Although the care of old people is a statutory obligation (and this is Guardian language), 1990 legislation allowed councils to have this obligation delivered by any willing provider, which meant that private companies moved in, attracted by the stream of guaranteed income that they saw when they looked at a care home, and also the financial packaging that could follow.

What goes wrong when Guardians and Traders confuse their roles? When Traders behave like Guardians, you get gangsterism and mafiosi. Systems of Survival spends less time on what happens when Guardians start behaving like Traders, perhaps because it was written in the early 90s before the dangers became as clear to us as they are now, and perhaps because Jacobs seems more sympathetic to the Traders than the Guardians, even while asserting that both are necessary. But we know the answer now: the public interest is subverted to private advantage, as with Southern Cross, or Britain’s shocking PFI agreements, or the luxurious benefits gained by bankers even while they’re being bailed out by taxpayers across Europe and America.

Ownership arrangements which protect the public interest would help, of course. But the larger social and policy question is, what goes with the territory? In the wake of the political crisis, as demonstrators take to the streets and squares across Europe, it seems to be a question that’s live – and dangerous.

The picture at the top of the post is from the London Stock Exchange Group, and is used with thanks. It is also worth visiting The Platonist blog, where a Depeche Mode song quoted at the end of the post linked here sums up some of the contradictions I’ve been talking about here.