Efficiency Is Not Your Friend

When they say ‘efficiency’ that’s when you should reach for your revolver

by Gordon Campbell

Before it got seduced and started hanging out with the wrong crowd, ‘efficiency” used to be an innocent little word. At its best, it conjured up images of health and economy, of things whirring happily in place as men and women in suits strode confidently towards their destiny. Efficiency is, in that sense, the enemy of waste, the friend of purpose. At its worst, though…’efficiency” has a ruthless quality, and is easily irritated by human frailty. These days, when people use the word “efficient” it can reliably be taken as a sign that ends have become means, and that what started out as a quest for the wise use of resources has now totally jumped the shark.

Here, for instance, is “efficiency” hard at work in our hospitals, from the Briefing to the Incoming Minister of Health last December:

Between 2001 and 2010, average length of stay in hospital decreased from 4.4 bed days to 4.1, which is low by international standards. This suggests hospitals are becoming more efficient, as a shorter stay can shift care from expensive in-patient settings, reducing cost per discharge.

So….people are spending fewer nights in hospital in New Zealand, more so than the international norm. And this is seen to be instrinsically more “ efficient” because it shifts the burden of care away from those expensive, in patient settings. In other words, current policy is more ‘efficient’ healthcare because it is cheaper healthcare. Patients, schmatients.

The adjective “efficient” – usually expressed as “more efficient” since current practice can always be improved – is not merely the best friend of the bureaucrat with a calculator. In the field of politics, “efficient” and its evil henchman “ affordable” have become the Aryan Twins of fiscal austerity.

The two words have become highly paid mercenaries in the fight against the nanny state and its regulations and red tape and whatnot. Ask Fox News. Here for instance, is a clip of Fox panelist Gretchen Carlson urging Mitt Romney to use the word “ efficiency” whenever he wants to attack the policy settings of the Obama adminstration.

“The word ‘efficiency” – when you said that a lightbulb went off in my head,” Carlson said to one of her fellow panelists. “That should also be the word Mitt Romney should use when he goes up against Big Government. Do you want it to be run more efficient? (sic) Does the country need that right now? Or should we spend more money?”

Right. Because that’s the bogus choice that the ‘efficiency’ brigade always likes to put forward. It is one where austerity = small government = efficiency. As opposed to spending on public services which is not only very bad for everyone but is held to be inefficient, at any point beyond the minimum required for survival, and so long as that doesn’t inhibit the quest for market dominance. As Harpers magazine ( February 2012) recently pointed out, when Ronald Reagan took office in 1981, his official for antitrust enforcement ( William F. Baxter) quickly dropped any serious attempt at promoting or regulating competition, and vowed instead to deliver a competition policy “ based on efficiency considerations.” The business oligarchs were pleased to hear it.

That’s basically how it goes. Getting voters to vote against their own best interests requires them to believe what benefits them is (a) unaffordable and (b) a wasteful indulgence, a ‘like to have’ luxury, rather than strictly necessary. To that end, “efficiency” has a usefully breathless, ‘no time to lose’ aspect to it – as if only inefficient quibblers with too much time on their hands would dare question the policies being peddled in efficency’s name.

It really is a scam. The word “efficiency”is merely the sauna to which the crusty old policies of slashing wages and limiting the role of government are sent, to provide them with an illusion of health. Which is why it can be quite amusing to stop, smell the roses and look back at what has been peddled in the past as the hallmarks of efficiency. A classic example can be found is this celebrated 2005 speech by then-Treasury Secretary John Whitehead, in which he sang loud and long about enhanced efficiency in ways that are now embarrassing, given what has gone down since 2005. Because what seemed like efficiency – to Treasury at least – became a seedbed for criminality. Here’s what Whitehead thought he was bringing about :

Using greater managerial freedom to apply new technology judiciously combined with clear performance expectations, [the Companies Office] was able to reduce the cost of registering a company from $200 in 1995 to $70 in 1999. Its average turnover time for registering a company fell from two weeks to just thirty minutes. The benefits are still evident now – New Zealand has been identified as one of the easiest countries in the world to start up a new business from a compliance point of view.

Yet by only four years later, criminals from places like Panama were beating a path to New Zealand to make use of that very same “efficiency” to set up bogus shelf companies, and commit fraud, money laundering and tax evasion. They proved to be very efficient at it:

…Commerce Minister Simon Power acknowledged New Zealand’s reputation as a good place to do business had been harmed by overseas individuals using New Zealand registered companies “to commit or facilitate crime such as money laundering, tax evasion and fraud, in overseas jurisdictions”.Mr Power also said a lack of enforcement of current company law meant New Zealand authorities had been unable to help international agencies in trying to combat international fraud. He said the misuse of company structures by “a small number” of overseas individuals and New Zealand-based agents “threatens our international reputation as a good place to do business”.

Incidentally, Whitehead also went looking in 2005 for signs that tbe Rogernomics reforms of the 1980s had paid off, and found them :

We have got significant payoffs from our reforms. We can see this in the wider economy in indicators showing increased, and more sustainable, growth, much lower inflationary expectations and the unemployment rate has fallen very dramatically indeed over the past decade and is now amongst the lowest in the world.

Right. Using that logic, the same reforms could now be said to have failed : given that growth has all but ground to a halt, unemployment has risen, the surplus long ago turned to deficit, a chronic balance of payments problem still exists, debt levels have risen etc etc. The prophets of “efficiency” have moved on, though. They always have been dab hands at treating fluctuations in the business cycle as divine blessings from the Market Gods.

Already, the failings of the Global Financial Crisis have disappeared down the memory hole, and the calls for leaner government and ever- greater“ efficiencies” in the public sector have been resumed here and here and here.

Just think of the ‘efficiency’ concept as being a drug. It feels good to those who are on it. But that might be because it resembles so closely that other “E” word that keeps you dancing all night, to someone else’s tune.