[Dissent-bristol-info] privatisation final draft

John Mayford john at avoncda.coop
Tue Feb 22 09:54:33 GMT 2005


Would like to do some work on this:
Key thing that influenced UK government ( Thatcher elected 1979)Labour in power 
was Moniterism: an economic "philosophy" based on the economic theories
of Milton Friedman replacing Keynesian economics. Friedman disproved 
the Keynesian theory that inflation and employment had an inverse relationship
which then had implications for public policy. Til that point Govts tended
to spend their way out of recession to create employment from Franlin D Roosevelts "New Deal" onwards -
and it seemed to work until the seventies. After they reduced public exp to limit the money supply - fitting 
in with Friedman's mo
To describe public as socialist/communist and private as neo liberal is an oversimpifacation.
Neo Liberal is a recent political term that has come into fashion because of the corporate influenced WTO/G8 attempt
to capture developing nation markets. Its a bullshit term. It aint neo liberal. It pure Capitalism.
At work at the mo - so bear with me and Ill do some work on it tonight if thats
OK

John

-----Original Message-----
From: william morris [mailto:i.resist at gmail.com]
Sent: 21 February 2005 22:40
To: Bristol Dissent Research & Info
Subject: [Dissent-bristol-info] privatisation final draft


changed 'popular political economic discourse' to 'dominant ...'
rather than 'ruling class ...' to avoid sounding too marxist (despite
it's truth, readers may not like the lexicon)

changed a couple of paragraphs, to include PPP / the london
underground and better explanation of the nitty-gritty of PFI

critique welcome

Match of the Day Century: public v private
ONLY ONE CAN WIN!

What are public or private entities?
Private entities are owned by individuals or groups, whereas public
ones are owned by the government. Public entities are popularly linked
to communism and socialism as systems of governance that were based
around an ideal of a fully publicly owned economy. 
T
Neo-liberalist
governments in the 1970s, spearheaded by Reagan in the US and Thatcher
in the UK, started to aim towards an ideal of a fully private economy
not just at home but for the world.

The move from public to private
Dominant political economic discourse in Britain and the US has been
based around recognising faults in a fully publicly owned economy and
hence aiming for the opposite, a fully private economy. In the UK,
starting with British Coal, Steel, Sugar to name a few, also
privatised (sold to companies owned by shareholders) were British
Telecom, Water, Rail and Power. These industries changed from acting
in the interests of the majority (as they do when owned and run by the
government) to acting in the interests of shareholders (as they own
the company).

What about somewhere in the middle?
What is not recognised is the possibility of operating a mixed economy
successfully. The theory behind total privatisation is that the 'free
hand' of the markets will make each industry more competitive, based
on economic models, and hence lead to lower prices and better products
(has this happened?). Included in these models is the key assumption
that private companies will act in the interests of the majority (if
the majority own a share of the company) rather than the minority
(that actually own most of the shares).

What is the Private Finance Initiative [PFI]
The next phase of privatisation in the UK involves education and
health. This has been off the agenda for discussion and contrary to
popular belief the Labour government has actually accelerated the
Private Finance Initiative, the start to privatising our entire
country. Virtually none of this has been discussed either in
parliament or in the media.

Under the Private Finance Initiave, our schools and hospitals are
being sold off bit by bit to private companies that act in the
interests of their shareholders. Contracts for building work are
awarded to building firms that have the closest links to Labour Party
members that DO NOT act in the interests of the majority, let alone
the end-users of their services. Local rural hospitals are closed to
build 'super-hospitals', making people travel further, using taxpayers
money to fund the profits of the building contractors at a much
greater cost to us taxpayers than a simple total refurbishment would
have cost.

How does it work?
PFI means going to the private sector to take out loans on which
interest rates are higher than normal for government borrowing, and
then paying private sector profits on top. These repayments have to be
made just like a mortgage over 20 or 30 years out of income - whether
that's a hospital's revenue that might otherwise be used to pay
doctors and nurses, or the school budget, which might otherwise pay
teachers, or a council's income that could be used on other services.
Ministers argue that savings made by more efficient private-sector
managers will more than offset the costs, but the evidence so far is
unconvincing. However, when the contractors standards do not meet all
of the requirements, or the deal becomes not profitable enough, the
contractor can pull out of the deal, leaving its mess behind it. The
government (taxpayers) are left to pay for it to be refinanced and
meanwhile the school/uni/hospital must carry on.

Like hire purchase, the government ends up paying several times the
original bill. This government is now building up debt for future
governments to carry. Firms can walk out at any point if they decide
on their own grounds, if they want to. Furthermore, the new services
are only designed to last for the contract period - expecting that in
20 years time, another contract must be made. The full effect of the
PFI will not be felt until 20 years time - when it will be FAR TOO
LATE to do anything except regret mistakes whilst private companies
bleed our public services dry and the politicians that made the
mistakes will be long gone.

Well documented are the mishaps of PFI, and are beginning to emerge
onto our newsscreens. So too are Public Private Partnerships [PPP],
most notably the London Underground. Despite profits of £2 million per
week, the private firms still failed on 87 out of 181 performance
measures. Business elites cite the many successes of PFI as a reason
to continue with the sell-off of our country to private firms. They
take for granted a certain proportion that goes wrong. But when
people's health and education are at stake, can we afford for a few
projects to go wrong?

And where does the G8 fit into this? The crucial thing to consider is
WHOSE INTERESTS ARE THE GOVERNMENT ACTING IN. Are they acting in the
interests of the people, as they have a democratic mandate to do, or
do they act in the interests of business? Are they acting in your
interests? Is the government making it easier or harder for private
firms to get hold of OUR (taxpayers) money? These are questions we
must never stop to ask ourselves.

We must also think about how far the UK is willing to go along with
the Project for a New American Century. This forms the stated aims of
neoliberalism - private ownership of everything. Stop to consider how
far this can go if pursued to death, and whether we want anything and
everything to have an 'owner'. This goes from material goods to ideas.
Where will this stop? Who is going to stop it?

But surely, this privatisation has nothing to do with G8 because
they're not talking about it? EXACTLY. It OFF the agenda. WE do not
feature in any part of the decision making process on key issues such
as this. It all happens behind closed doors. They set the agenda to
talk about issues we have been TALKING about for years. When the
leaders talk at G8, think about what assumptions they have made, what
they are NOT talking about but is implicit in their rhetoric.

We all have the power to do something. Use your voice, your brain,
your body, your wallet and your vote wisely. And let them know at
Gleneagles!

1089 words.

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