[Dissent-bristol-info] Briefing paper - PFI (edited/checked)

[auto_gnome at riseup.net]

Hi - I tidied this up a bit, mainly grammar, spellings, and a few weird
sentences. Also at bottom have relisted WM's 3 suggested images (I like
second best). Africa to follow later today.
cheers...ag

Bristol G8 Dissent! Briefing paper

The Agenda of PFI - Creeping Corporate Control.

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. 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.

The Public Economy
Is industry in state or government control - such as the NHS, schools,
army, police, the civil service, and local government. It is known as the
public sector. Forms of socialism committed to state ownership of the
economy, following the Communist Manifesto in 1848 and the rise of the
Trades Union movement in the same century, are seen (incorrectly, but
never mind that!) as the ultimate outcomes of communist and socialist
theory. The Labour Party’s ‘Clause 4’ committed them to a manifesto of
state ownership, until it was abolished under Neil Kinnock’s leadership,
and led to the liberalisation of the Party.

The Mixed Economy
In reality most economies are a mixture of private and public, for example
President Roosevelt adopting the "New Deal" to rebuild America's
infrastructure through public expenditure in the 1930-40'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 governments operated an economic
model founded by JM Keynes. He believed 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 1970’s 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 this sound economic
growth was based on a low inflation economy, with the single biggest cause
of inflation being public expenditure. This gave Thatcher the intellectual
backing to slash public expenditure, and commence privatizing steel, oil,
coal, railways, Post Office, buses and public utilities, and to line up
education and health. It also gave her the opportunity to smash trade
union power, particularly 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. The real meaning is simply that of opening up 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.

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 foresaw a society based on
co-operatives, collectives and decentralized forms of government. In Spain
in the 1930's, following a period of 50 years of anarchist struggle driven
by anarchist trades unions (ie FAI and CNT), this model was followed. In
the UK, the co-operative movement had been born in Rochdale in 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 co-ops worldwide. Neither
private nor public, these are non-hierarchical autonomous organisations
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 in education, health and
transport. This is relegated down the media agenda for discussion, and
contrary to popular belief the Labour government has accelerated PFI for
many of the key assets of our economy.

Under PFI, our schools and hospitals are 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 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 contractor’s
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 the future.
Firms can walk out at any point on their own grounds if they decide or
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 PFI will be felt in 20 years time - when it
will be FAR TOO LATE to do anything, except regret mistakes. The private
companies bleed our public services dry, and the politicians that made the
mistakes will be long gone (to the private sector!).

PFI mishaps are well documented, and beginning to emerge onto our news
screens. So too are Public Private Partnerships [PPP], most notably the
London Underground. Despite profits of £2 million per week, the private
firms still failed 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 will go wrong. But when people's health and education are at
stake, can we afford for a single project to go wrong?

Where does the G8 fit into this?
The crucial thing to consider is IN WHOSE INTERESTS ARE THE GOVERNMENT
ACTING? In the interests of the people, as they have a democratic mandate
to do, or 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 the questions we must never stop
asking.

We must also consider how far the UK willing to go along with the Project
for a New American Century and the stated aims of neoliberalism – private
ownership of everything. Consider how far this can ultimately go, and
whether we want everything & anything to have an 'owner', from material
goods to ideas. Where will it stop? Who is going to stop it?

But surely, privatisation has nothing to do with G8 because they don’t
talk about it? EXACTLY. It’s buried in the agenda. But 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!


Images – 3 possible ones suggested by William Morris

http://www.avine.co.uk/OpenToons/Open_PFI/PFISingle01.jpg
http://www.avine.co.uk/OpenToons/Open_Union/UnionToon_11.jpg
http://www.avine.co.uk/OpenToons/Open_PFI/PFI1FruitMach.jpg