“The profit motive does not sit well with care of any kind”. These are the words of Greater Manchester mayor Andy Burnham, at a session on care and co-operatives at Co-op Congress. They will resonate with many people: care workers, those being cared for, families and friends; especially when they come from a former health secretary.
Why do care and profit collide, and can we do anything about it?
This is not a new topic – a recent Guardian editorial poses a similar question – but it might be helpful to look at it in a new way. Every business, whatever goods or services it provides, needs three things: customers, a workforce, and finance. If any of these becomes unavailable, it will collapse. Plus, workers need jobs, many people need care, and finance craves a profit. They all need and cannot survive without each other.
But they are also in tension with each other. Customers want to pay less or have better products for the same or less money; workers want to be paid more and have better terms and conditions; and finance wants a greater reward for the risks it is taking.
There are two ways of addressing these inherent tensions.
The first way, the route most economies have taken, is to assume that those three interests must always compete with each other. So legal arrangements (companies, contracts, intellectual property) are designed on the basis of competition, which provides a mechanism for trade. This generally results in capital being the owner of enterprise, with no place or voice for customers or workers in the ownership and governance arrangements. It institutionalises the tension. Capital seeks to reward capital; competition is for the private benefit of its owners. This is where and why care and profit collide.
All forms of care sit uncomfortably with the profit motive because giving is at the heart of care, and you cannot give while locked into competing for private benefit.
But there is another way of addressing the tension: getting capital, labour and custom to collaborate with each other, rather than compete, treating all three interests (and other external ones) fairly. This is business co-operating for the common good, rather than competing for private gain.
This approach was, and to this day remains a radical alternative. It flourished in the second half of the nineteenth century and into the twentieth. But the post-war settlement, the rise of large investor-owned businesses, and the demutualisation of most of the building society sector left mutuality as a marginal part of the business landscape.
Not only is that landscape now dominated globally by investor-owned businesses trading for the private benefit of shareholders; but it has left most people with the firm belief that competitive behaviour is the only possible basis for business, and that co-operation and mutuality are quaint ideas whose time has passed.
The apparently unshakeable belief in competition and “the market” has resulted in the privatisation of many public services and left us with a care system locked into arrangements designed to produce economic outcomes, rather than care. That’s crazy, and wrong. Can it be changed?
In recent years various things have shaken the belief in competition: the financial crisis of 2007/8; the climate crisis; and social inequality. But we still fail to address the source of the problem and continue to treat the symptoms.
It isn’t just care that is incompatible with a competitive approach. In an increasingly crowded planet with limited resources, humanity cannot afford to stand by and watch competition for private gain dominate the world of enterprise or international relations.
There is another possible basis for human society. Co-operation for the common good urgently needs to be explored.