Often, for the crack, I like to ask the “privatise everything” brigade why don’t countries privatise their publicly-funded armies, navies and air forces? Wouldn’t privatisation make them even better? See how that worked out.
Of the 3 broad ways to structure an economy (and the services within it) – (i) state-owned for the public good, (ii) privately-owned for private profit, or (iii) a mixed economy (aspects of both) – in Ireland and in Britain, (ii) (profit) makes up most of the current Overton window.
In Ireland and in Britain, even though, in a democracy ran on mandatory fixed-term secret elections, covid showed up a few practical weaknesses with the idea, the dominant viewpoint remains that “the private-for-profit model is best”. This is the new First Commandment. Most people buy into this, uncritically. It’s no longer just a considered viewpoint about what works best in any given situation, it’s largely now an un-thought article of faith. I’ve sat in enough Irish boardrooms, and I know the nod-along monoculture very well – you could pretty much get away with any opinion, bar one – you cannot, ever, express any doubt about the superiority of the private sector as a panacea for all structural and societal ills. Seen plenty of bumptious characters (usually young) (a bit like second generation immigrants, desperate to fit in, and trying to be more racist than the indigenous racists) trying to affect a cartoon ruthlessness by going hard-right on this.
I’ve worked in and for businesses for 30 years, and the problem with the profit principle is that it’s frequently more of an aspiration than a reality. Most businesses fail. Some businesses are never profitable, some are occasionally profitable – and plenty fail within 3 years. If one is trying to base a long-term “universal” (i.e., universal within a country) service on profitability alone, at some point, the general public service aspect will fail.
It will fail because it’s illogical to yoke a universal service ethos to the private sector.
I’m a corporate lawyer in my fifth start-up, so I’m not about to diss profits per se. However, much as I enjoy and approve of private enterprise in many areas, I’m sceptical about the knee-jerk idea that the private / profit sector is best in all areas, and, in particular, the area of public healthcare.
I’m unconvinced by the hard left and the hard right, not least because of their habitual failure to justify the wider practicability of their extremist doctrines. They all start from a position of extreme self-righteousness, as if their opinions should not be examined. Instead of rationales, you get closed-loop incantations. I consider that a mixed economy is least worst, for 4 main reasons:
- Checks and balances (and how ordinary people’s small freedoms thrive in the interstices between the power brokers). I’m with Lord Acton and his often-quoted remark that “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men…”. Give too much power to the state, and it’ll screw you. But give too much power to the private sector, and it’ll do likewise. Give both a role, and the fuckers will keep each other at least a little bit more honest.
- Self-interest. If a society is ran into the ground by stealth neo-feudalism, ultimately, it doesn’t even benefit those it benefits. You may be loaded, but you will have barbarians at your gate(d communities). Spread it out a bit more, and you’re less likely to be whacked, and walking down the street, you will have less piss-soaked beggars to step over (I lived in those parts of London).
- Efficiency. Simple economics – a company’s first duty is to its shareholders and to pay them dividends. It’s not the role of private enterprise to lose money providing expensive treatments to poor people. The fundamental motivation is profit, and it has to be profit, or you’re in breach of your fiduciary duties. Anything Hippocratic / altruistic is, inevitably, reduced to mere window-dressing. If you’re providing private medical insurance, to satisfy your primary duty to your shareholders, you must avoid the old and the ill, and focus on signing up the healthy and the young, who will pay annual premiums and conveniently usually will not need any actual treatment.
- As an adjunct to 1, complementary roles. The state can look after the universal stuff where profit, though nice to have, is optional – defence, health, education and infrastructure (everything from roads, power, water and broadband to a competent and independent judiciary – when I do a territory analysis for our board prior to setting up a new company, the latter aspect – decent judges who aren’t routinely being buggered by the government – is very pertinent to any investment decision). That then creates a platform wherein, initially, private money (which naturally wants to cherry-pick its returns and not to be mired in universal service crap) feels it will get fair play; and wherein, subsequently, talented employees are happy to live. Talented employees won’t stay for long in a mismanaged shithole (e.g., Russia, India) anyway, regardless of how much you pay them. Both aspects matter; both are complementary.
Just look at the private-sector dominated US system. It’s dysfunctional:
“The financial costs are most obvious, and they are truly extraordinary. For a family of four, the US system costs about $13,000 a year more than that of Switzerland, which itself is substantially more expensive than any other. The US system costs more than twice as much, per person, as the universal coverage provided by the UK’s NHS. Even the government-funded part of the US system costs more per capita than the NHS.” See link.
Hard to see how it can be anything other than dysfunctional, as it’s trying to reconcile a manifest absurdity, namely that a corporation simultaneously can maximise its profits while engaging in inherently unprofitable lines of business (such as poor patients).
I forget who it was who said that Irish politicians are economically illiterate. You could say as much about many careerist politicians anywhere nowadays, many of whom have never had a real job. They haven’t thought through their positions. Instead, they cling on to inherited slogans, which they parrot, without understanding. Mostly on Twitter.
Problems start when people have no rational, openly-admitted, basis for their position. This explains the mess that is the Dublin housing sector (or as it’s known down South, the housing “market”). The Irish government knows that the practical necessity is to build a bunch of average-to-low cost houses. Comically, they sit on their hands, and hope against hope that someone like Johnny Ronan will step into their breach. Why the fuck would he? He’s busy maximising his returns by building high end real estate for the corporate sector, and good luck to him. He’s not about to waste his time by pursuing the wafer-thin margins of cheap private housing. It’s obviously the state’s job to, if not do this itself, then at least to get this started with some structural assurances (tax breaks, bonds), but the Irish govt, paralysed by its own rigid profit ideology, is unable to act rationally in this matter.
Ditto child care down South. 2 kids? That’ll be 2 grand a month, minimum, in Dublin. People work to hold their jobs and to pay the creche. The Irish govt pleads with the creches to soften their financial cough, but why the fuck should they? They’re busy maximising their returns (often by employing cheap unqualified junior staff who, underpaid and unsuited, then abuse the wee ones, as a string of scandals in recent years reveals). Ultimately, it affects people’s productivity at work, as they’re stressed up the yin yang trying to make a ballsed-up system work. There’s a role for the state to provide decent day care, but no chance of that. It’s against the First Commandment.
In some areas, the private sector is streets ahead; but it’s often in secondary areas. When I lived in Hamburg, I once, out of curiosity, drove a Trabant, a Communist car. Death trap piece of junk. But the Cubans have good mass health care and literacy. Horses for courses.
One of the last great bastions of a public service which is free at the point of use is our roads. Currently, there are no toll roads in the North, and only a few in the South. Most roads are publicly owned, and are free at the point of use. Un-tolled roads constantly make a loss. We could, for instance, sell road networks to private companies and enable them to charge you for driving to the grocery shop. This would of course be greeted with uproar, ironically including from those who style themselves as capitalists. But as fuel sales decline as we move into the EV era, expect to see lots more tolls.
The “private is better” mantra is a trap elderly businessmen also fall into, when, after years of having smoke blown up their arses by scared acolytes, they delude themselves into thinking they could “run the country”. In me hole they could. As Obama sarcastically pointed out, if a product line isn’t selling, you can just shut it down and lay off the workers (i.e., they talk a great game about “not needing the state” – apart from when they need the state to clear up the human detritus of their corporate failures, or, as with the Irish bondholders, when they want to privatise the profits but socialise the losses); but you can’t just sell West Texas to the Chinese (not yet, anyway). Whole swathes of e.g. the UK are unprofitable and rely on London to subsidise them. If the UK was a company, logically, you’d focus on London and the Home Counties and shut down / sell off the rest.
The Tories are committed to selling the NHS to the Americans for 2 reasons:
- They have to, because of the dumb Brexit corner they’ve painted themselves into. To keep themselves in power, they have to sell it.
- Plenty of them want to anyway. It’s the First Commandment. All together now, fingers in ears: “Private is better.”
The reality is that private, profit-driven healthcare is very good for those who can afford it; but it’s naïve at best, dishonest at worst, to pretend that a universal / general / national health service can be delivered to all by the private sector. If the Tories were honest, they’d come out and say, “we’re selling the NHS to the Yanks, and it’ll be a great service for the AB demographic, and the plebs can fuck right off”.
I’d respect them if they had the balls to say that, but they lack the courage of their convictions. And, of course, some of them are a bit thick. Priti ‘Vacant’ Patel’s logic is right up there with Trump’s oratory.
Of course, the other issue is that, regardless of whether one believes in the principle of a warts ‘n’ all universal NHS, or in the principle of a gilded NHS for the rich, the NHS sell-off is arguably unethical per se, in that it has been facilitated by prior misrepresentations and appropriation. The Tories came to power on a very public promise of funding an existing NHS, not selling it. And the NHS was built up over decades by public money. It’s of course technically legal (probably), but one could at least ponder the ethics of asking plebs to fund something on the basis that it’s a universal benefit and then covertly (while lying about it) turning the NHS into a shareholder-enrichment vehicle for non-taxpayers. There will be a purchase price, but much of that can be written off against tax anyway, and, as with the Post Office valuation fiasco, it’s a certainty that more value will be given away by Boris’ shower of panting dimwits than will ever be recompensed for by any US buyer.
Disjecta 