Centralisation? Bah, humbug!

Urghh, I have Covid. My 9-year-old bounces down the hallway like the energizer bunny and I feel jealous irritation. It’s day 7 of nasty headaches, sore throats, fevers, aches and exhaustion. 

This makes me grumpy, particularly the expectation that I should report it on a government website, so they can monitor me and perhaps send me patronising advice. But that’s exactly what I’m going to do. 

There are very few things that I think should be run by central government, but a pandemic response is one of them. It feels invasive but the management of our national borders, limiting internal travel and large domestic events are reasonable pandemic measures. 

Having said this, delegating local rules to the regions via their DHBs would have more sensible. The good folk of Hokitika spent many months wondering why the cafés were closed and they were all wearing masks. For 22 months up until January this year, the West Coast recorded no cases of Covid and as a reward should have been entitled to pop out for a flat white unencumbered.

A trend towards centralised government has been underway for many years. Two of the big-ticket centralisation initiatives this term are healthcare and Three Waters. Our DHB and local body control of drinking water, storm water and sewerage will shortly end. 

However, centralisation of public services has a dodgy track record and for several obvious reasons. 

Connection

Powerful central government arose with the formation of nation states. This was a fairly recent phenomenon, mostly occurring during the 19th century. For centuries before this ‘countries’ were really a series of city states. I don’t fancy life back then, without decent heating, flush toilets and electricity, but Canadian historian Francis Dupuis-Déri makes the administration of French city states sound very appealing:

“During the Middle Ages and the Renaissance, thousands of villages had an organized assembly where communal decisions were made. This ‘community of inhabitants’, which even had legal status, functioned for centuries by a process of self-management.”

“The hierarchical or aristocratic authorities did not interfere in the affairs of the community, which met to deliberate on political, communal, financial, judicial and parochial issues.”

Such systems worked because there is greater trust within a community and also greater accountability. Everyone knew the local judge and had a fair idea of how he’d see things. If a good deal of the community didn’t like the judge, I bet there was a way of appointing a new one. 

I have the same feelings about the Havelock North gastro event a few years ago. As a victim, then and now, I liked being able to run into councillors in the street and talking directly to them about it. I was also reassured that the likes of Councillor Nixon wrote to the newspaper to share his horrendous experience. You can’t beat politicians with skin in the game.

This feeling of connection, trust and accountability is no trivial issue. Magyar maven, Gabor Maté, suggests that the increasing physical and mental sickness of society reflects stress borne of ‘uncertainty, lack of information and loss of control’.

This happens when decisions are made far away by people who don’t know you and vice versa. Your life feels greatly affected by powerful forces over which – you increasingly sense – you have no influence.

Such a situation creates stress, elevated levels of cortisol and adrenaline. These hormones have helpful short-term effects, but we were never designed to feel stress constantly. When people feel this way constantly they are likely to seek solace in addictive activities that release positive hormones – drugs, alcohol, junk food, porn, online shopping, gaming or simply tiddling with some inane app on your phone. 

The libertarian principle is that responsibility should be delegated to the lowest possible level. Each individual should have as much autonomy as possible. Where that doesn’t work the responsibility should fall to the next smallest group: the family, the community, the city, the region, the nation and potentially a group of nations. 

Underlying this are two concepts. Firstly, the ‘aged-care principle’ – never do something for a person that they can do themselves. Breaking this rule is infantilising and will ultimately make them dependant on help they may otherwise not need. Secondly, the further away from an individual the power structure gets, the less we trust it. 

Centralisation may be more efficient and even occasionally more effective, but the rational argument fails to take into account how it makes us feel. Society is not an industrial machine and centralisation too often fails to respect the human condition and our need for connection.

Transparency

Centralised systems are nothing more than state monopolies. We’d be horrified over a supermarket or fuel monopoly because we’d always be suspicious that we weren’t getting the best deal or that, absent competition, the operator wasn’t very efficient. 

A good example, telecommunications. Prior to deregulation in the 1980’s, they were run by the Post Office. I recall we tried to get a new phone line to a property just on the outskirts of Hastings and were told it would take six months. No one under 45 believes this.

It’s easy to love the ‘free’ healthcare system. It is full of wonderful people and saves peoples’ lives. But is it the best we can hope for in terms of customer service and cost efficiency? Many who work in the sector are deeply unhappy. Without exaggeration, every nurse I know is looking to get a job at Kaweka health. They see it as driven by younger, more innovative people, paying a bit more and providing modern working conditions. The DHB is set to lose some of its best people. 

By nature, centralised systems also centralise any error. If you can’t measure and compare systems it may be a very long time before a major error becomes apparent. 

A recent report by the Education Hub revealed a ‘crisis in literacy’. I took this up with a local school principal. He replied, “No one in education is remotely surprised by this. Standards have been in decline for at least 20 years.” The ministry has had the data but action has been very slow to emerge. The most disturbing comment from this report was that, “There is no system to ensure new advancements in knowledge on effective literacy practice get put into practice in the classroom.” 

The real world understands the risk of this type of centralised error. In IT they talk about a ‘Single Point of Failure’ (SPOF): ‘a risk posed by a flaw in the design, implementation or configuration’ of a system that could cause it to fail. 

In such systems engineers built in redundancy and back-ups to avoid disaster. An obvious example is aeroplane design and now air travel is incredibly safe. Of course, it’s more immediate and obvious you’ve crashed a plane than it is that you’ve crashed the education system. It is curious that continuous improvement processes are not so present in people-centric systems.

Accountability

If a system isn’t very transparent it can’t be very accountable. Central government works hard at not being accountable and is very reluctant to admit when it’s made a hash of things. Hubris and denial are endemic in bureaucracies. 

The most emphatic example of this is post-war Germany. It took a few short years to demonstrate that socialism made everyone poorer and citizens started to slip over the border from East to West Germany. Despite the obvious market signals, ideologically East German officials knew they were right and so they opted for the obvious solution – build a wall. 

A more recent example comes from that most centralised of systems, central banking. The GFC housing bust and the current inflation reflect gross errors in monetary and fiscal policy, but you’ll never hear anyone admit responsibility for them. The central banks simply claim they are doing about the same as similar countries. 

Only in a world where you compare independent performance is it obvious where you’ve gone wrong and what you need to do. 

I’d suggest a governmental role that is far too humble to have much appeal. 

They should create an environment where decentralised systems can be established; systems that tolerate a range of different approaches and encourage innovation. Government should develop a small ministry whose only job is to measure performance and efficiency and to report their findings. This way we can actually figure out what works and what doesn’t and various sectors can spiral the effort upwards. 

Let’s have some council-controlled organisations, some private-public partnerships, some rapacious profiteers – I don’t care as long as we get good services at an efficient cost. Such an approach will allow for communities to tailor systems to fit their actual, varied needs. 

Until you point to a centralised government system that is a paragon of excellence, I’m afraid I won’t be supporting Health NZ, Three Waters or any move by Government to manage community services out of Wellington.