Sale of the Century: Privatisation sucks

Review in the Saturday Guardian had an excellent article by James Meek on privatisation entitled 'Sale of the Century'. Among the highlights of its arguments were these:

'Privatisation failed to turn Britain into a nation of small shareholders. Before Thatcher came to power, almost 40% of the shares in British companies were held by individuals. By 1981, it was less than 30%. By the time she died in 2013, it had slumped to under 12%. What is significant about this is not only that Thatcher and her chancellor Nigel Lawson's vision of a shareholding democracy failed to come to pass through privatisation, but that it undermines the justification for the way the companies were taken out of public ownership.'

'There are many forms of private ownership. The department store chain John Lewis, an unsubsidised commercial firm in a fiercely competitive market, is owned by its employees. The Nationwide Building Society, an unsubsidised commercial firm in a fiercely competitive market, is owned by its members. The Guardian Media Group, an unsubsidised commercial firm in a fiercely competitive market, is owned by a trust set up to support its journalistic values and protect it from hostile takeover. And so on. None of the many alternatives to stock market flotation were put up for discussion by either side: it was either shareholder capitalism or the nationalised status quo.'

'Privatisation failed to demonstrate the case made by the privatisers that private companies are always more competent than state-owned ones – that private bosses, chasing the carrot of bonuses and dodging the stick of bankruptcy, will always do better than their state-employed counterparts. Through euphemisms such as "wealth creation" and "enjoying the rewards of success" Thatcher and her allies have promoted the notion that greed on the part of a private executive elite is the chief and sufficient engine of prosperity for all. The result has been 35 years of denigration of the concept of duty and public service, as well as a squalid ideal of all work as something that shouldn't be cared about for its own sake, but only for the money it brings.'

'What the story of the latter years of the NHS shows is that the most powerful market force eating away at the core of the welfare state is not so much capitalism as consumer capitalism – the convergence of desires between the users of a public service and the private companies providing it when the companies use the skills of marketing to give users a sense of dissatisfaction and peer disadvantage.'

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The Clash - Lost In The Supermarket.

Inequalities of wealth and power

Yesterday's Guardian had some excellent Comment pieces on the extent to which wealth and influence are unequally distributed as a result of the way political and market forces operate in the UK.

Polly Toynbee took on the Government's unthinking and unevidenced mantra that privatisation is always right and always best:

"There is no evidence about how well contracting and privatising work: the best experts can find is 1980s assessments of early contracts for simple local services. At the very least, there should always be a state comparator. NHS contracting is galloping ahead, with no centrally gathered monitoring for comparison. Other privatisations rush on – probation and the court fines collection service – while companies built by cashing in from the state, such as G4S, A4E and Serco, are in disgrace. While Serco is being investigated by the Serious Fraud Office after overcharging on tagging, it emerges that its finance director sold £2.7m shares two months before the share price tanked on a profits warning.

This is the world David Cameron assumes always does better than public service, as a matter of unproven conviction. Laying out his Open Public Services policy, he said everything was up for sale, with "a new presumption" that "public services should be open to a range of providers competing to offer a better service". When he said: "The old narrow, closed state monopoly is dead," he forgot to say that services sold or contracted would become private monopolies making handsome profits at our expense. The dogma driving these privatisations wilfully ignores past experience."

George Monbiot calls Britain the new land of impunity because no matter what the criticisms made or damage done, fat cats and politicians seem able to cling on to the rewards of power and wealth:

"There has seldom, in the democratic era, been a better time to thrive by appeasing wealth and power, or to fail by sticking to your principles. Politicians who twist and turn on behalf of business are immune to attack. Those who resist are excoriated."

These specific and evidenced UK-related accusations are set against the background of debate regarding Thomas Piketty's Capital in the Twenty-First Century with its powerful argument about wealth, democracy and why capitalism will always create inequality:

"When the maelstrom surrounding Thomas Piketty's Capital in the Twenty-First Century dies down, as all such publicity storms do in the end, its lasting achievement may be to give economics back its sense of proportion. Diligently and unnoticed outside his field, Mr Piketty – together with Emmanuel Saez and Tony Atkinson – spent years mining international tax records to demonstrate how, in Britain and the US, the portion of the national output gobbled up by the richest had first fallen by two-thirds or more in the 60 years after the first world war, but had then, from the 1970s on, more than doubled again. Having settled one century-long story, in the new book the professor moves on from top incomes to (even larger) top wealth and traces this through more than 200 years of data, while discussing how population growth and the march of technology have shaped capital's place in society since antiquity. This long view discourages worry about passing matters such as individual elections, or for that matter recessions."

In one of it's leaders from yesterday, the Guardian suggests:

"Where mainstream culture had precious little to say about inequality during the long years in which the economic gap opened up, post-bust and post-bailout, a different mood has taken hold, and rage against the rich is now part of the zeitgeist. So fashion is playing its part here. But if the fashion is for finally facing up to a maldistribution of resources previously unnoticed, then that is all to the good."

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The Clash - Working For The Clampdown.

Legacy of marketisation, privatisation, economic stratification and social dislocation

In considering the continuing divisive effect of Margaret Thatcher's legacy and funeral, it is worth reminding ourselves of what was said about Britain in the Faith in the City report published by the Church of England during Margaret Thatcher's second term of office.

As is noted on the Church of England's website, the Commission which produced this report met during what was the first half of Margaret Thatcher's second term of office as Prime Minister:

"There had been little explicit policy change during her first term in office regarding urban regeneration. What the report designated as 'Urban Priority Areas' did however feel the harsh impact of other policies as unemployment increased, public spending and taxation were reduced and a change in approach to the welfare state was initiated. The policies which put the market to the fore were beginning to take effect: it was claimed that the 'slump years' were over as inflation was reduced and privatisation caught the public imagination. Many of the problems highlighted stemmed from changes in society which could be associated with the demise of traditional industry. Other factors identified included estate design; institutional racism; poor quality housing; and lack of investment in educational and social services."

What the report says was actually far more damning than the above sounds:

"We have to report that we have been deeply disturbed by what we have seen and heard. We have been confronted with the human consequences of unemployment, which in some urban areas may be over 50 per cent of the labour force, and which occasionally reaches a level as high as 80 per cent - consequences which may be compounded by the effects of racial discrimination. We have seen physical decay, whether of Victorian terraced housing or of inferior system-built blocks of flats, which has in places created an environment so degrading that some people have set fire to their own homes rather than be condemned to living in them indefinitely. Social disintegration has reached a point in some areas that shop windows are boarded up, cars cannot be left on the street, residents are afraid either to go out themselves or to ask others in, and there is a pervading sense of powerlessness and despair ... It is our considered view that the nation is confronted by a grave and fundamental injustice in the UPAs. The facts are officially recognised, but the situation continues to deteriorate and requires urgent action. No adequate response is being made by government, nation or Church. There is barely even widespread public discussion."

As Gary Younge notes in today's Guardian, Margaret Thatcher's "is a living legacy of marketisation, privatisation, economic stratification and social dislocation." Her policies caused "a grave and fundamental injustice" in society at the time and continue to do so today.

My father, Phil Evens, was in ordained ministry during this part of this period setting up The Voice of the People Trust to sponsor Christian ministry in Urban Priority Areas through community work projects linked to parishes and the Aston and Newtown Community Youth Project which was particularly successful in reaching out to young people on the streets and steering them away from criminal and anti-social activities towards further education, training, employment and faith. His third book, Despair and Hope in the City, published in this period explored the relevance of community work to urban ministry. 

What follows is an account of a dream that my father had in the early morning after the 1987 General Election:

 

After watching the early election results, I went to bed at 3.00 a.m. and had the following dream ...

 

I dreamt that an elderly but important relative had died. In my dream I found myself outside the house they had lived in. It was quite small. All its furniture and possessions had been brought out lining the nearby streets and overflowing into a large warehouse type building. There was an amazing amount of furniture, bric-a-brac and general family possessions, from such a small house.

 

Many well dressed, upright looking relatives and, any people who had any conceivable connection with the family, had come from everywhere. They were moving around the furniture, lining the streets, pulling out drawers and taking anything they fancied. When I came near anyone they all looked as though they were politely looking on. As I went around, in my dream, I became increasingly concerned and bewildered at what was happening. No one seemed to be around to control or stop this.

 

In the warehouse type building the furniture and possessions were stacked on raised walkways. Here, some people, mainly young people, rushed off when they saw me coming and hid. One fell off the edge in the rush and I managed to reach out and draw him back to safety.

 

As I moved around this enormous collection of family possessions I found thrust into my hands a large glass container, beautifully made, into which had been put a few valuable family treasures - some small pieces of silver and a number of flat packs of what seemed like old one pound notes. I felt an increasing sense of distress at what was happening.

 

On waking up the dream remained vivid and the following thoughts immediately came to mind ...

 

The old relative who had died was the nation of Great Britain, and the small house was the United Kingdom. The nation's real wealth and assets, that had been a vital part of this small house and its family life, had been plundered by the well-dressed, polite and, in appearance, respectable people who, inside, had been rapacious and greedy. This wealth had now been dissipated and was no longer available for the home or its family life. I felt a deep sense of sadness and loss.

 

The interpretation of the dream was concluded by a picture of the Monarchy and the Royal Family. They were the only possession that the patriotic poor, the deprived, the dispossessed, now had that linked them into the life of the nation. Everything else of worth had been taken away from them and now belonged to the rich and powerful.

 

The final thought that came to me, was that I wouldn't wish to be in the shoes of Margaret Thatcher or her cabinet members for 'all the tea in China'. She, and her Government, had been weighed in the balance and found wanting.

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Elvis Costello - Tramp The Dirt Down.

The myth of greater private-sector efficiency (2)

Seamus Milne is the latest Guardian columnist to take on busting the myth of privatisation - vital action now that the Government has effectively privatised the NHS: 

"Central to the corporate-driven ideology that dominates this government and public debate is a myth: that the risk-taking, entrepreneurial private sector drives technological innovation and industrial advance, while attempts by state bureaucracies to "pick winners" are a recipe for disaster.

That myth is exploded by Sussex University economist Mariana Mazzucato in her book The Entrepreneurial State. Even in the US, heartland of "free enterprise", the public sector has taken the risk to invest in one cutting edge sector after another: from aviation, nuclear energy and computers to the internet, biotechnology and nanotechnology.

The private sector has come in later – and usually reaped the reward. So the algorithms that underpinned Google's success were funded by the public sector. The technology in the Apple iPhone was invented in the public sector. In both the US and Britain it was the state, not big pharma, that funded most groundbreaking "new molecular entity" drugs, with the private sector then developing slight variations. And in Finland, it was the public sector that funded the early development of Nokia – and made a return on its investment.

The lessons should be clear. States such as Germany, South Korea and China are now spending far higher proportions of national income on research and development into green technologies. Even some Tory ministers understand that only state intervention can drive the new motors of growth – but dare not say so publicly.

That's hardly surprising. But the government's economic strategy isn't working. If Britain is going to rebuild a broken economy, its political class is going to have to learn to turn its back on three decades of clapped-out myths and bankrupt ideology."

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Get the Blessing - So It Goes / Yes I Said Yes I Will Yes. 

Andrew Lansley, are you listening?

I've sent the following comment to Andrew Lansley's listening exercise on his NHS reforms:

"I have fundamental concerns about these proposed changes to the NHS and I think Andrew Lansley needs to go back to the drawing board.

For example, I am concerned that proposals to make competition the priority within the NHS would undermine our health service. The NHS should focus on cooperating to provide quality patient care, not on competition. The role of the regulator, "Monitor", should reflect this.

It can be demonstrated that the introduction of competition in the provision of public services, such as the tendering out of Local Authority services, has not led to cost savings, greater efficiencies or improvements in services but instead has resulted in reduced levels of service, waste of resources and increased bureaucracy. The ethos of the 'market' contradicts the ethos of 'public service' and, if introduced, will inevitably erode the government’s “duty to provide” a comprehensive health service.

Dropping this duty would erode the foundations of the NHS and would lead to the 'cherry picking' by private companies of NHS services. Such “cherry picking” must be fully ruled out, and the mechanism for preventing it must be clearly established."

You can send your own comment by clicking here.

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Athlete - Wires.