Privatise the world! Monetise it all!

20 May

Does anyone without a stake in Britain’s fire sales still believe privatisation is about efficiency or saving taxpayers’ money? Take the sale of student loans, a cornerstone of privatising higher education. The first sell-off, of the pre 1998 mortgage style loans, was the easiest but netted the taxpayer less than seventeen pence in the pound. Future sales, of the more complex sliding repayment loans, will have to be marked down more severely due to that complexity and the fact many students do degrees with poor job prospects. The markets, aware that much of the debt will be written off, have made clear they’ve zero interest in buying the loans unless they’re an absolute steal.

The best empirical work I’ve seen on this is Andrew McGettigan’s The Great University Gamble. (McGettigan blogs here, pens the occasional Graun piece and engages in email dialogue with anyone interested in HE financialisation.) Speaking of empirical work, we’re indebted to James Meek for Private Island, which analyses the selling of postal service, electricity, water, health and other once public assets to show beyond any doubt that the results – and, unless we are spectacularly credulous, the purpose – of privatisation have amounted to a transfer of wealth from the many to the few.

So far so bad, as a growing number of Britons are coming to realise. Sadly, fewer see the global picture. Many who refuse to be fooled by the mantra of greater efficiency and taxpayer savings – and have seen through the ploy of cutting services and blaming practitioners before hailing fire-sale privatisation as saviour – fail to grasp that the same is being done worldwide. One of the mechanisms is the IMF, whose economic ‘restructuring’ packages make loans conditional on public spending cut to the bone, leaving western as well as comprador capital to cherry pick the commercially viable provision. The human costs are immense but, outside of the countries involved, who cares? How many have time and inclination to trace, à la Meek and McGettigan, what happens after those nice people at the IMF ‘bail out another basket case economy’? Very few is the answer but before I finish I’ll turn to someone who’s done just that.

Meanwhile there’s that other great privatisation mechanism, war. Granted, the narrative is now different. Instead of inefficient services or irresponsible governance an empire of evil or blood soaked Middle Eastern or Balkan regime must be demonised. Such allegations may hold a grain of truth, a great deal of truth, or be baseless. (Though even where there is  truth a heavy responsibility lies often as not with those making the allegations in the run up to hostilities; as in the vilification of Saddam by the very interests that had for so long sold arms to him.)

But whether or not the demonising of distant regimes has substance, and whether or not it is hypocritical, are secondary questions. In no case – cold war on the USSR, the devastation of Yugoslavia, violent destabilisation in the middle east – have cited casus belli  been the real drivers of US led hostility. In each example, of regimes practising some degree of state capitalism, we can infer true motive from outcomes: a transfer of wealth from public to private hands, with Wall Street and western imperialism as a whole the winners. The fact of chaos all the way does not negate this conclusion when major economies, most obviously the USA, are boosted by war: directly in arms sales; indirectly by the wholesale destruction of capital and through it the offsetting of capitalism’s tendency to falling profit rates. Witness the lucrative contracts – and ‘revolving door’ between US government and corporate beneficiaries – handed out for the reconstruction of Iraq.

Here too we can cite empirical work. As in earlier posts, I recommend Klein’s Shock Doctrine. Though highly readable with an engaging style, she documents meticulously: her assertions in each chapter substantiated through scores of footnoted references to impeccable sources. Klein is not, as far as I can tell, a marxist. She began her journalistic career as a middle class liberal alarmed by the destruction of our natural environment. That concern led her to see the greatest eco-enemy as the subordination of all other interests to those of Profit. All other interests.  Our children’s health, peace and security, democracy (even the limited and compromised forms we now enjoy), rule of law and ultimately the ability of the planet to sustain human life must take second place to Capital’s drive to find new markets as profit rates fall in old ones. Privatising the world, in war as in peace, and monetising every aspect of our lives are manifestations of the true and truly totalitarian nature of a system – premised entirely on the self-serving superstition that blind market forces can match wealth production to human need more surely than human planning could ever do – which suits a tiny few at the expense of a vast and growing many.

At this point it’s traditional for marxists to pull from their back pockets a plan of deliverance: a strategy, a transitional program, a communist manifesto. I have no such plan. I’m a marxist only insofar as I’m convinced that (a) the ways societies organise wealth production are the ultimate determinants of human history and (b) the case for seeing capitalism, a once progressive force, as a life negating system that stands in the way of all that is good and wholesome could not be more compelling. Early in the last century there was, perhaps, the possibility of its overthrow by an industrial proletariat – in an advanced capitalist country, not the most backward economy in Europe – with least to lose and most to gain by doing so. It didn’t happen, and now the window is closed for good. Any uprising of the many would be against a few whose praetorian guard is so armed to the teeth and schooled in the arts of counterinsurgency as to make the outcome a murderously foregone conclusion. With a book by my former Workers’ Power comrade Paul Mason – yes, Postcapitalism – only half read on my Kindle, I confess I’ve no idea how a system which must  be done away with for the human race to survive can  be done away with. So why write as I do? Because it’s the truth.

5 Replies to “Privatise the world! Monetise it all!

  1. “When the new cannot emerge and the old cannot die, then we are living in the time of monsters”
    –Antonio Gramsci

    Words for our times.

  2. Piketty – Capital 2013 (chap 5) identifies the privatisation of wealth as a contributor to a sharp increase in private wealth in rich countries (and poor ones) 1970 – 2010 and makes the point that many sales of public assetts were below market price (eg public utilities / council house sales in UK) – ie the state got short changed.

    eg – France and Germany ( a particularly stark example):

    – 1970 – public wealth = 25% of national wealth

    – 2010 – public wealth = 2% of national wealth (just enough to balance public debt)

    He acknowledges that national wealth has increased by more than is accounted for by this process but it is a significant contributor.

    I am also reminded of the ragged trousered philanthropists making it clear that utilities were in private hands when there was a profit to be made – and bailed out by the state when losses occurred (eg East Coast Mainline).

    • Good points Bryan. On that last, in my view Labour overstated the victories the Attlee Government’s nationalisations actually represented. The state of coal, steel and rail in the late 1940s was a good example of the many contradictions capitalism continually throws up. All were vital to profit generation in what was still a huge manufacturing sector, privately owned, but were not themselves profitable. Solution? Transfer these loss makers to the tax payer, then reprivatise when balance sheets return to the black.

      Those examples played out over decades. More recently we’ve seen the same thing happen within a shorter timescale as the taxpayer, post 2008, bailed out some of the biggest banks and then sold them back into private hands at a huge loss.

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