[Dissent-bristol-info] PFI Sheet

John Mayford john at avoncda.coop
Tue Mar 22 09:49:48 GMT 2005


Finally! Amended PFI sheet.
Just needed to amend re two key economists: Keynes and Friedman and the relationship to the drive for
privitisation, use of the term "mixed" economy and to put in the Anarchist economic model; which is the 
workers co-perative : co-operatives operating with a free market being neither private nor public 

See what you think

John

The Agenda of PFI; Creeping Corporate Control. 

Public and private economy

Private
The Private Economy is the Capitalist model where sole traders, partnerships and companies exist to make profit as the key driving force. When Companies register as 
"corporate bodies" - in this country under the companies act- they legally assume the rights of a person, and the legal purpose of their existence is profit - making - or to exploit labour for profit - or as Michael Moore says "The bottom line is the bottom line" Costs such as wages, impacts on the environment are externalized
and therefore marginalized. Corporations are the single most powerful driving force
in society

Public 
Industry in state or government control - such as the NHS, Schools, Army, Police, the Civil Service, and local government is known as the public sector.Forms of Socialism committed to State ownership of the ecomony following the Communist Manifesto in 1848 and the rise of the Trades Union movement in the same century the aim of Communist and Socialist theory . Clause 4" The Labour Party in this country committed them to a manifesto of State Ownership until it was abolished under Neil Kinnocks leadership and with it the Liberalisation of the party.

Mixed Economy
In reality most economies are a mixture between private and public,for example President Roosevelt adopting the "New Deal" to rebuild America's infrastructure through public expenditure in the 1930's /40's. Many European Economies support their transport and energy industry through state support, while Russia and China have opened their markets up to Western Multinational Corporations.

Until the mid seventies, all Western government's operated to economic model founded by JM Keynes - who believed that the relationship between inflation and employment was inverse, and that government could stimulate the economy through public expenditure in times of recession as Roosevelt had done. In the seventies this theory was exploded when inflation and unemployment occurred at the same time. A new economist, Milton Friedman, expounded a theory called Monetarism according to which sound economic growth was based on a low inflation economy, and the single biggest cause of inflation is public expenditure. This Thatcher the intellectual backing to slash public expenditure on that basis privatizing Steel, Oil, Coal, the Railways, Post Office, Buses and to line up education and health. It also gave her the opportunity to smash trades union power, particularly that of the Miners.   

Neo Liberalisation or Naked Capitalism?
Curiously selling off State assets has become known as Liberalisation. Curious because Liberalism has historically been linked to a mixed economy approach, and what the real meaning is simply that of opening assets to corporate control. In an international context, multinationals are seeking to develop control of developing nations, such as Coca Cola's attempt to control water in Columbia, and multi -national attempts in Africa. 

An alterative to Corporate or State Control.
In 1840 Pierre-Joseph Prouhdon published "Qu-est-ce-que la propriete?"  which represented the first linkage of the term Anarchy as a political system of thought. His Anarchist vision forsaw a society based on co-operatives and collectives and decentralized forms of government. In Spain in the 1930's following a period of 50 years of an Anarchist movement driven by Anarchists trades unions, FAI and CNTthe model was followed
The co-operative movement was born in Rochdale in the same decade, 1844, and it's principles recognized by the International Co-operative Alliance in 1895. Co-op principles have been applied to work, food, housing and land. There are currently 750 million members of the co-ops worldwide. Neither private nor public, this is non hierarchical autonomous organization working within a free market that is not Capitalist. There are 1500 workers co-ops in the UK. 

What is the Private Finance Initiative [PFI]
The next phase of privatisation in the UK is being looked at in education, health and transport. This is relegated in the media agenda for discussion and contrary to popular belief the Labour government has actually accelerated the Private Finance Initiative, with much of the key assets of our economy. 

Under the Private Finance Initiative, our schools and hospitals are being sold off bit by bit to private companies that act in the interests of their shareholders.. 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. Its buried in the agenda. Bu
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 and 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!




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