After Privatisation

Ian Jack in the Guardian on Saturday has a thought-provoking article on the nature of privatisation, how far it can go and just how large the gap between the period before the arrival of Margaret Thatcher and now actually is.

It is of particular interest given that we were just discussing nationalisation as an aspect of social democratic programmes in the last day or two, and it points perhaps to just how much has been lost and how much was achievable by the left even under mildly progressive governments. Or to put it another way it points to how much the space within which the left can operate and expand the project has been constrained in the last three and a half decades – which of course was the point of the exercise – and how much has been forgotten.

Jack notes that it was Harold Macmillan who introduced the phrase ‘selling the family silver’ in relation to the processes of privatisation, and not in a complimentary fashion, though he later disowned it.
But it is when Jack gets into the detail that the differences between now and then come into sharp focus:

At the time of Macmillan’s speech, privatisation had hardly begun. British Rail’s ferries and hotels were the first to go (how strange it now seems that the best hotels in almost every city outside London were owned and run – usually well – by public servants in the most literal sense). But British Telecom, British Steel, British Airways, British Shipbuilders and Rolls-Royce – all of them listed as targets in the Tories’ 1983 manifesto – had still to complete their journey from the public sector, and the big privatisations that that would affect every household had yet to come. Gas, water, electricity: people puzzled as to how the same stuff flowing through the same pipes and wires could be owned by different companies, and yet somehow it became so in the name of competition. Then came the British Airports Authority and British Rail and large chunks of the Ministry of Defence, while many public institutions such as local authorities and the NHS outsourced much of their activity and shrank sometimes to the role of regulator. Nigel Lawson triumphantly announced “the birth of people’s capitalism”, but many private companies sold out to foreign ownership; others were taken over by private equiteers; others again subsumed into octopus-like businesses such as Serco and G4S, which picked up the contracts for outsourced work ranging from Royal Navy tugboats to nursing assistants.

There are issues, obvious one’s in relation to some of those companies. Rolls-Royce springs to mind, although it was not simply a car manufacturer. The Concorde project from earlier in the 1960s and 1970s likewise. The idea of state funding to ensure Phil Collins et al made it to the United States in jig time was problematic, to put it mildly. But the sheer scope of nationalisation is demonstrated by this list.

And why not. Why shouldn’t the state run hotels or ferries? I’ve always been puzzled too by the idea that a state-owned airline was somehow odd. Semi-state bodies charged with doing so seems eminently sensible in a broad range of areas and with a better understanding of market conditions and so forth what reason is there that such bodies couldn’t turn a penny for the state?

The bizarre nature of attempting to marketise areas, such as public utilities where there was no clear logic to same is underlined by Jack. This wasn’t competition but the pretence of same, and we’ve seen examples of that much closer to home, and one suspects will continue to see more. The chimera of ‘people’s capitalism’ likewise.

Jack offers an excellent quote to sum up these processes:

The words of the novelist and reporter James Meek ring ever truer. “The commodity that makes water and roads and airports valuable to an investor, foreign or otherwise, is the people who have no choice but to use them,” Meek wrote last year in the London Review of Books. “We have no choice but to pay the price the toll keepers charge. We are a human revenue stream; we are being made tenants in our own land, defined by the string of private fees we pay to exist here.”

What is most evident is that we, the citizenry, are coerced into transactional relationships in a myriad of areas – and that often due to an inability of the private sector to live up to its own rhetoric that of necessity means that many are shut out of those relationships in whole or part.

It’s darkly entertaining though to read Jack’s closing thoughts.

But why not take it further and outsource the air force, the army and the navy? Mercenaries from poorer countries would be cheaper, accepting even worse rates of pay than the average British infantryman. Why not outsource the police, given that prison warders are already privatised? Why not outsource the government? It has cut so many parts from itself that it does no more than bleed on its stumps.

Clearly he’s unacquainted with the libertarian right and those who cleave to similar paths albeit using less overt rhetoric. The current Tory project is ever more nakedly about constraining the size and shape of the state, and state provision, in a manner which, in part due to the thinness of the state in the period since Thatcherism, is vastly more easy than it was in 1979 onwards.

That said he does offer the idea of outsourcing the British political class itself, say to the Finns… yeah, that’s not the worst idea.