[ssf] Privatisation: "Pity the Little Goldmines..."

Chris Malins chrismalins at gmail.com
Fri Jan 28 13:28:25 GMT 2005


There is an extreme version of the capitalist vision which maintains 
that the only and best way to deal with all the world's problems is to 
engender private ownership and accompanying free markets in everything. 
Global warming is a problem? - clearly we need to invent a commodity to 
sell, like the carbon credit. Children are a problem? - create a market 
in child care.

There are perhaps three evident problems with this strategy. Number 1, 
it is not at all clear that establishing markets in these things is a 
solution to the accompanying problems, indeed many features of the 
problems work in the wrong way to be controlled by private finance. 
Children will be more profitable if they stay in homes longer, exactly 
the wrong incentive. Secondly, the more markets we create the more 
opportunities we take to generate wealth for venture capitalists, 
investors and in short to make the rich richer. Given the clearly 
limited nature of resources on the planet, this concentration of wealth 
will inevitably be accompanied by increased oppression for the opposite 
end of society. Thirdly, there is a strong tendency for markets to 
degenerate away form the competitive nature which is supposed to drive 
their efficiency. The care homes company should have a competitor 
offering the same service for a lower profit or better outcome, but such 
a competitor may not exist. Our friends the supermarkets are an 
excellent example of a sphere of retail where the market has competed 
itself into monopolism and anti-competitiveness, companies are too big 
to be properly controlled by simple market forces, and the same raft of 
criticisms can be applied that are applied to the anti-competitive 
influence of state owned companies, without the drive to act in the 
public interest.

Privatisation sucks.

Chris

Dan wrote:
> Hi,
> 
> Sorry to keep on spamming the list with Guardian articles!  (I've 
> included this one on the UK list, because there *MUST* be some kind of 
> joint work to be done here... see end of article talk for some thoughts...)
> 
> This article by Polly Toynbee -
> 
> http://www.guardian.co.uk/comment/story/0,3604,1400386,00.html
> 
> - outlines the profits being made by 'looking after' vulnerable children.
> "Who would have thought that there was a fortune to be made out of the 
> children no one else wants - the most vulnerable, the most difficult, 
> the ones at greatest risk of ending up homeless, in jail or mental 
> hospital? But it seems the children looked after by the state - well 
> over 60,000 of the little goldmines - are attracting the interest of the 
> investment brokers.
> 
> "No words describe this opportunity better than the prospectus and 
> accompanying report on Valley Care mailed out by the Catalyst Investment 
> Group for those interested in new ventures. Note the curious political 
> language: "Valley feeds off the inexorable growth in government spending 
> on health and social services."
> 
> Profits are predicted to be a clear £100,000 per house.  The money being 
> put in for each child is somewhere between £3000 and £6,500 a year.
> 
> This is a very powerful piece of writing:
> 
> "What could that money buy? The lowest figure for a looked-after child - 
> £3,000 a week or £156,000 a year - would buy a place at Eton eight times 
> over. Or a place at Eton, with a fulltime personal mentor and intensive 
> top-quality psychotherapy. Or a room at the Ritz with a full-time 
> private tutor. Or a place in some of the expensive but excellent 
> children's therapeutic communities that closed down over the years. 
> Think of anything that might do more good to these children than 
> shunting them rapidly around NVQ level 2 and 3 staff in care homes or 
> with barely trained fosterers, receiving virtually no education. Many 
> schools are reluctant to take them. Only 9% get five good GCSEs, only 1% 
> go to university. Some will, of course, be cheaper when they fetch up in 
> prison at a mere £30,000 a year."
> 
> But of course, it's not buying a place at Eton - or even decent care.  
> It's paying for bog-standard care, carried out by carers paid £12,000 - 
> 15,000 a year: and the rest of the money is going to someone's already 
> fat bank account.
> 
> 1. What to do?  What are Leicester doing on Privatisation, and what has 
> been your experience of campaigning?
> 
> 2. We should try to get a UK LSF web-site going - one that allows 
> distributed content on themes like privatisation, so we can collect 
> experience, examples etc.  I'm not sure where the web-site project got 
> to...
> 
> 3. This *does* all tie in the up-coming G8: in fact, privatisation ties 
> in more than most things, because it shows the local results of global 
> trade policies (like GATS and the privatisation of services that 
> Mandelson's currently pushing full steam ahead with...)  It would be 
> good to work on materials showing the connections between G8 policy and 
> the selling off of  local services.
> 
> Thoughts?
> 
> Dan
> 
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