Simon Duffy

Thoughts, Bemusements & Arguments

Tag: capitalism

Confusopoly: Lessons for Social Change

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:

  1. 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.
  2. 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.
  3. 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.
In fact we can see that here bureaucracy mirrors commerce. Bureaucrats do not always prefer what is rational, clear or to the advantage of the citizen. Their first concern (as with business) is to safeguard their own roles, their own funding streams and their own patterns of thought and behaviour.
Bureaucracy is not bad, bureaucracy is necessary; but it is perhaps no more likely to choose to do the right thing than is commerce. This is what I take from my own experience. Just as you cannot give a good idea to commerce and expect all to be well, so with bureaucracy. Discipline and integrity are required and some of this will need to come through democratic processes that can exert pressure on both bureaucracy and commerce.
The lesson for advocates of social justice and true welfare reform is that to have a good idea is not enough. Giving good ideas away is not enough. We must also attend to the process of change itself and in particular to the public and political processes that create some of the necessary discipline for coherent change.

What Monopoly Teaches us about the Welfare State

I didn’t know until recently that the game Monopoly was originally designed to teach people about the perils of capitalism. Sadly I think I’m not the only one who missed the point and just saw it as a chance to win. How often our best intentions are mistaken and misused.

But for the sake of Elizabeth Magie and her noble, if flawed, educational effort I am going to reclaim Monopoly for its intended purpose, to show that it can still teach us some important lessons about capitalism and the welfare state.

1. There is no alternative but to play

Monopoly forces people to buy, to rent and to pay up. We keep going round the board, some getting richer, some getting poorer. Perhaps to some worthy souls this all seems sordid and material; but there is no choice. It’s how the game works and so far the only real world alternative to capitalism – state socialism – is far worse. State socialism is the equivalent of giving all control to the Banker. The Banker then decides what you’ll get and what you’ll give – and it turns out that the Banker is no more interested in equality than real bankers. Orwell’s “All animals are equal, but some animals are more equal than others” is an exact description of state socialism. You are no longer playing Monopoly, you are playing Who Can Please the Banker – a game which is both more boring, yet much more dangerous.

2. The goal is not the goal

Monopoly forces you to compete – kind of. But we also learn, often with great difficulty, that winning is not the point of the game. The game is about having fun, not winning. If only the victor enjoys himself then you have all missed the point. In the same way life is not about winning. Life is about joy, goodness, love and beauty. You can’t win life and if you think that having more money makes you a better person then you are a fool. What is the point, as Steve Jobs put it, of being “richest man in the cemetery?”

3. Skill doesn’t count for much

There’s definitely some skill involved in Monopoly, but it’s a pretty basic skill. You need to understand the power of holding property and of using it to squeeze out as much money from everyone else as possible. If you are playing against people who haven’t figured that out then you will win more often. But if all of you have figured that out then its mostly luck – who lands on the best squares before they’ve been purchased. Life’s much the same – it’s not the best, the brightest or the most worthy who get rich – it’s the lucky ones. Even our talents are mostly a matter of luck. The trouble is we also want to feel that all our victories were deserved – that we are ‘entitled.’  But in reality almost everything we have was given to us – without our deserving it.

4. Redistribution is essential

Monopoly, like capitalism, takes small natural differences and turns them into huge inequalities. If we are winning we kid ourselves into believing that we deserve to be winning; if we are losing we can feel unworthy, unlucky or even cheated. But in reality it’s just a game which some will win and some will lose. The key to Monopoly’s success is that it normally lasts a good length of time – but doesn’t go on forever. If we only had the money that we started with then the game would be finished much more quickly; however most of us are kept in the game because we keep going past GO and getting £200 from the Banker.
Of course Monopoly is a game. In real life we don’t want one person to ‘win’. We want everyone to win and that doesn’t mean everyone getting the same money – which turns out to be impossible. It means everyone living full lives – as equal citizens. It means everyone getting the chance to use their talents – in their own way. It means living with joy, finding love and experiencing beauty.
But this is impossible if we only look out for ourselves. Markets do not redistribute resources to the poor, they concentrate resources in the hands of the rich. The only way to rebalance things is to control the inevitable inequality-making machine which is capitalism.
This is the job of the welfare state – to make sure people are not driven to poverty, and to make sure that some people or some groups do not get too powerful. Instead, to help us all work together, to thrive, to create and to share.
So the lessons of Monopoly are:

  • Having money and property is okay, if it helps people have fun and do useful things
  • You can win Monopoly alone, but you can only win life together
  • Don’t kid yourself you’ve deserved whatever you’ve earned
  • Share – make sure everyone can keep only playing, with dignity and with rights
There has never been a better time to learn the lessons of Monopoly; and if we don’t then none of us will be having much fun in the future.

In addition, Monopoly can even teach us some valuable lessons about the true meaning of welfare reform:

1. No means-testing for the poor

Imagine if, when you got to Go, you weren’t given £200 but instead the banker looked at how much money you had and decided whether you poor were enough to ‘deserve’ your £200. Very quickly you would find many more people in poverty, barely struggling to get round the board. The game would be over much more quickly. But that’s how the UK benefit system works. Monopoly is actually using a system of basic income (sometimes called citizen’s income) – everybody gets £200. This gives you a much better chance of bouncing back if you do hit hard times.

2. Essential services are free

Actually there are very few safe spaces on a monopoly board: Go, Jail and Free Parking. But Free Parking gives us a good metaphor for the important way in which the welfare state works – free support for essential services. For some parts of life it is not enough to just distribute income – sometimes income is not enough. For example, if you are seriously ill you need good medical care and its much better that the community organises this than people go shopping for it. The same is true for education, disability support and many things we do to create a safe environment. Private property (or private insurance) is inadequate and it just leads some people getting unacceptably poor support. Something things need to be like Free Parking – free and a safe haven from the pressures of the market.

3. Markets can be disciplined

Monopoly also teaches us that measures to control prices and to limit monopolies can be very helpful. Notice how the price of rail fares goes up when one person controls all the stations. Notice how the price of energy goes up when one person owns both the energy firms. Imagine how quickly the game would end if rents could be set at any level the landlord chose! In the same way it makes sense for communities to discipline the market, to restrain monopolies and to set decent wages.

We’ve forgotten what the welfare state is for and welfare reform has lost its true meaning. The welfare state is now treated by politicians as if it were just some great exercise in Government sponsored charity; welfare reform has become a mean-spirited attack on citizen’s rights. Real welfare reform is needed, but it is reform that restores the welfare state to its proper role in ensuring everyone can live with rights, dignity and the ability to contribute to the making of a better society for all.

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