This article originally appeared in The LGC
In a key scene in the film ‘A Beautiful Mind’, Russell Crowe (playing troubled mathematician John Nash), is in the bar with 3 male friends. 4 young women enter the bar and some coy 1950s style flirting ensues – all at a distance. The young men start debating amongst themselves which one they like the best. Unfortunately they all like the blonde, and it quickly becomes an every man for himself-type competition. (One of them references Adam Smith’s axim ‘By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it’).
Nash suddenly realises that Adam Smith was wrong. In the ‘every man for himself’ scenario, they risk all the women being angry with them – the blonde woman because she is badgered by 4 men, and the 3 other women because they are ignored. Instead he suggests the only way for everyone to be happy is for none of the men to pursue the blonde woman. Putting aside the overt sexism this requires cooperation amongst the young men, and would produce a ‘Nash equilibrium’ where cooperation maximises the overall outcome, each participant does better than if they ‘lost’, but not as well as if they were the only winner.
In all honesty I think I’ve seen more Adam Smith behaviour than John Nash behaviour. I’ve seen this inside local authorities as well as between local authorities and local partners.
Sometimes this behaviour is papered over with what looks like cooperative behaviour on the surface – for example with partnership boards, shared strategies and plans. But there are still large parts of the public sector where purely self interested behaviour produces worse overall outcomes. An example would be young people with special needs or disabilities not prepared properly for adulthood. We need to start asking why adult mental health budgets are being spent on issues that we could have targeted more effectively when they were younger. Should Could mental health teams better spend SEN money? Similarly if we look at drug and alcohol misuse or domestic violence, two significant drivers of looked after children, could a children’s service utilise that money in a more efficient way for the council? Could there be a deal to be done between adults and children’s services to swap these potentially? A better alignment of incentives between the two would produce a very different sort of public service. Better alignment between public agencies would produce a very different sort of public sector.
A Nash equilibrium requires enlightened self-interest. In this time of austerity and pre-election tension, there is a temptation to revert to what you know, and can control – and focus inwardly. But the sustainability of the whole of the sector will require reduced demand. This will require more, not less co-operation, and changed behaviour from local government, health, police, voluntary sector etc… to create a more sustainable local state.