I came across, thanks to Samantha Connor, a beautiful new word the other day – confusopoly.
After some searching around the internet I think I found the source of the word to be Scott Adams, the comic genius behind Dilbert. He defines confusopoly as “a group of companies with similar products who intentionally confuse customers instead of competing on price.”
Well we can all recognise the truth of that. Who has not been confused by the complex and mobile pricing structures used to disguise a crude choice between a handful suppliers of utilities, phone lines or TV services? We all know we are being bamboozled; we often accept it as a feature of modern life.
I may not have given this enough thought, but it seems to me that confusopolies must thrive when:
- We have little choice but to accept one of the available options – e.g. we need to heat the house
- There is little, other than price, to distinguish the actual choice in front of us – e.g. iOS or Android
- There are few real competitors – e.g. BT, SKY or Virgin Media
Oligopolists would not risk a strategy of confusopoly if they though most people would just walk away, choose on the basis of some different criteria to price, or choose someone offering a simpler and clearer alternative price plan.
I’ve always found the behaviour of firms in competitive situations interesting to watch. Do you remember when cash machines were new? (I’m showing my age now). Originally you could only use your cash card at your own bank. Then banks started to club together to create greater advantage for their customers. Eventually the system became a kind of duopoly, where about half of all banks would take your card. At this point the Government intervened (from memory) and insisted banks agreed to accept all cards – without charging us for the privilege.
This was a case study in how diversity becomes duopoly – but how duopolies must be forced over the line into more useful forms of monopoly. There was no commercial advantage to the banks in organising a monopoly – it was just better for us, the customers.
The reality seems to me that free commercial enterprise is basically helpful, innovative and creative – but always in danger of becoming damaging, exploitative or absurd. I find it strange when some people think commerce is bad. I find it equally strange that some people think democracy shouldn’t try to discipline commerce into being better than it naturally would be.
I love a beautiful garden. I don’t make the plants grow. But it wouldn’t be much of a garden without weeding, pruning and some overall design.
The tension between commerce and democratic control is inevitable and we should not be persuaded by liberals or by Stalinists from wanting both free commercial activity and strong democratic discipline.
However, when Sam Jenkinson used the term, she was referring to Australia’s disability support system and I found the term also being cited by Australia’s Productivity Commission in its design of the National Disability Insurance Scheme to replace the previous complex system. So perhaps it is not just commerce that creates confusopoly.
Reflecting on my own field of endeavour I can see that systems can become unnecessarily complex for a number of reasons:
- We may create an innovation from within a largely static system. For example, Direct Payments were a good innovation, but they created greater complexity because they left the old social care system untouched. One system became two systems.
- Alternatively we may create an innovation which can only be fully integrated into the system over time. For example, Personal Budgets were progressively rolled out, but many systems protected older forms of practice either by excluding Personal Budgets from their domain or by corrupting the definition of Personal Budgets to include inflexible options.
- Or we can force an innovation to adapt to an unreasonable obstacle. For example, integrated Individual Budgets died when parts of the bureaucracy, like the civil servants running the ‘Supporting People’ programme successfully defended their own funding stream from integration into one coherent model.