Or maybe we should ask "why did the socialist economy fail", "Why did people vote right wing"? Both essentially the same question. Dont Just apply dogma to a question. question the terms of the question, and apply a dialectic.
BTW :Communism isnt Marxism, its bolshevism, maoism, stalinism, and not socialism, because socialism involves more than having a planned economy - it (like any economic system) has social and human consequences, which react within an economy. quite complex really. 7 years of reading around, ive failed to make up my mind, but is it fair to say capitalism has worked in a world where 2.8 Billion live on less than $2 a day in real terms?
A lesson In Reganomics- a.k.a Bushanomics, Torynomics, Tonyomics:
By Conor
Ok : British Telecom :
Essentially privatised (like more or less all privatisation projects) under the old right wing guise of “liberalising” the Telecoms’ market to competition, driving prices down for the consumer, freeing the government of responsibility of a heavily unionised workforce. Everybody wins! But, of course, the Reality of what happened was different:
British Telecom was privatised in the early-mid 80s by the Tories, 80000+ jobs were shed within months, the Directors siphoned off in excess of £2million a year to line their pockets, the monies raised for the state went into the pockets of the rich, as Thatcher imposed one of the most regressive taxation policies in history, and the consumer didn’t even benefit. For most of the 80s the British Telecoms’ market was in fact a corporate monopoly. Only 2 companies – British Telecom and a subsidiary of Cable and Wireless were in a state of faux competition, cutting prices at a rate marginal to the expected values shouted about by conservatives and big business. Not until government regulators moved in during the 90s did that change, but we will see how successful they were.
In order to make BT attractive to the soft handed ,cigar smoking, lap dance loving dipsticks in the city, Thatcher left in elements of the British network under Exclusive control and Ownership of BT. For example the “local loops” (the line up to your door, in your housing estate, poles up to your cottage) are monopolised by BT, and as a result, not once in the 20 years of privatisation has Britain’s call charges come close to the European Average. BT, like ALL privatised companies has seen short term profiteering, lining executive pockets, and pleasing the City come ahead of delivering a good service to customers, business, etc, and , of course has flagged workers rights too. As a result of these factors, and the internationalisation of the neo liberal market model (a.k.a. “globalisation”-but I find that term misleading) BT is in £30BILLION DEBT, the customer isn’t happy, shareholders are jumping out, and inevitably the government will soon have to bail it out, with TAXPAYERS (i.e. consumers) money if it is to upgrade its Telecoms’ infrastructure (witnesses all us noolers are to the importance of that). These Taxpayers and Consumers Didn’t benefit from Priatisation, or (for the 90% who aren’t in millionaire land) Thatchers regressive tax cuts.
But the BT story isn’t exactly new, lets take the case of British Rail:
A bit of Backround. The British empire was legendary for its railways. As Tony Wilson said in the Film “When the Victorians built the railways, they didn’t just put up portacabins, they went to town”. Britain had the most extensive, and BEST railway network in the world. Progressive design from mechanical and civil engineering (Brinell to Tilting Trains), to Graphic and customer orientated design (Sheffield Foundries to Jock Kinneer , Kenneth Grange, and the Famous BR design Bureau). By the Late 80s British Rail needed Money. Years of underfunding under poor governance (by Labour and the Tories), coupled with extremely regressive Unions in a poisonous culture meant the Network needed an upgrade.
For example, the West Coast MainLine (WCML), the biggest, busiest line In Britain (Linking London With Manchester, splitting to Holyhead ,Liverpool ,Glasgow, and Edinburgh) needed new track, new signalling, new trains.
The government should have taken a progressive approach with unions (i.e. explain the situation, and negotiate with them), put around £3BN (of progressive tax) into proper pensions, severance payments, and an upgrade of the network, based on existing technologies and research.
But the Tories were in charge.
The promise was : we will sell off the railway, private money will put up the money, quash the unions, bring in expertise, upgrade the network and trains, and again (just like BT) everyone will win.
The BR top brass were sacked. Engineers who had moved into management and the oil industry (all Tory Insiders) were appointed to the board, BR works, Engineering Dept, Research (all very highly regarded –as a Mech Eng undergrad we are still told about these guys by our lecturers, in 2004) were all broken up. Their reports were shredded.
A private company called “RailTrack” was setup to manage the railway, with certain procedural, safety, and other parameters to be set over time by a government body. It was an open market On the network. Private companies bought railcars, setup routes in competition with each other, and the dream was set to go.
British Rail was privatised by a government obsessed with Victorian moral, Social, and Class values (Interestingly, NewLabour is too – check Gordon Browns obsession with words like “prudence”). Their approach to the railways wasn’t so Victorian though.
The WCML needed money, But the market, and RailTrack didn’t want to hear it. RailTrack compiled an engineering report into “Moving Block” , a totally unproved signalling used on 1 Paris metro line, and the London Docklands Loop. Demanding that the report say it work, the report said it would work, and, without wanting to subject people to a lengthy description of it, Moving Bloc couldn’t , and didn’t Work.
RailTracks’ international “Engineers” and “Experts” also miraculously found that Britain’s railways (including the WCML) only needed a safety check 50 % less often then under those grey, pipe puffing old nationalised hats. 5 substantial crashes on (2 rail, 2 signal related – or maybe 3 im not exactly sure), Hundreds of millions in compensa£ion , lost confidence and (dare we say it to the free marketeers) lost lives later, we also KNOW that to be false. They have gone back to the same level of checks since 2002.
The market had brief Confidence in RailTracks bullshit reports, but , again, due to its profit motive, fat cats, and disregard for anything other than short term profit, RailTrack went down the shitter, breaking contracts with RailCar operators (costing millions), underestimating, and therefore not planning for the WCML upgrade by, wait for it £8BILLION. Railtrack went into receivership in 2001.
The Government ends up paying Richard Brandsons Virgin Trains £125MILLION (im not sure of this exact figure, perhaps it was 200, but it was in excess of 100M) of (again, mainly PAYE and regressives) Taxpayers Money in fines induced under railtrack.
The government set up a nationalised operator for the track “Network Rail”, again underfunded and poorly run by a bunch of incompetents.
Network rail has picked up, among other Huge Debts, RailTracks £10 BILLION tab for the WCML upgrade. It would have save at least £10Bn overall had it stayed with nationalisation and there would be a better service today.
And who pays for that? Not the fatcats who privatised RailTrack, the Wealthy who enjoyed the associated TaxCuts around the time of privatisation (all cuts were biased hugely in their favour), the fund managers drinking cocktails and bonuses.
The Shareholders who lost, were predominantly Pensioners (more than 70% -doubtless some fat cats lost too, but It doesn’t seem to show judging by the wealth divide in the UK at the moment). The small time TaxPayers, the workers, the earners lost too. The BR top class Engineers lost, the BR Unionised workforce lost – jobs and more.
I think Tristan’s view of 80s Britain is informed more by DelBoys cigar n’FiloFax attitude and documentaries about Lamborghini driving 26 year old millionaires than the cold hard economic and social Facts of that period in that area. Im sure plenty of noolers living around Manchester ,or Glasgow for instance during the 80s will paint the picture better than Me, A kid living in holy catholic Ireland at the time
They may also tell you how the WCML is still (10 years on) causing disruption and coach transfers due to upgrade work at weekends.
Leave the Dogma out of this. Think of privatisation Theoretically, and not as Uncle Liam did, Literally. Don’t let dogma answer questions, but let Theory ask questions of questions. Is the corruption inherent in these privatised companies a case of a few once offs? Or a direct result of capitalistic objectives?
And a subject close to my feet : Ireland:
Ireland, on the surface (“on paper”) has benefited from Huge corporate tax cuts, Multinational investment, and “Globalisation”
In the real Measure of Globalisation (social, economic, cultural, etc) by “Foreign Policy ” Magazine (USA 2003) Ireland ranked as the “Most globalised country in the world” (UK: 9 USA:11 SPAIN:20). This is a long way from the economic Backwater I grew up in during the 1980s. GDP growth was up 9.3% each year since 1993. The reasons :
1)Corporate tax cuts: They all came, and they all went. Someone close to me, a trained Electronic Engineer has joined and been made redundant by 5 multinationals in 5 years. No Union Rights, No payoff, just a simple “goodbye”. The Corporations are leaving to lower taxed, lower weiged, lower environmentally controlled (if that’s possible!) countries in the global race to the bottom. The boom has not gone bust, but has been sinking year on year for the last 2 and a ½, and according to the central bank , is expected to into the future.
2)A highly trained workforce. The 90s saw the full fruits of a fully nationalised, and broadly well run Education System, (Nationalised in the 70s, although still occasionally interfered with by the Catholic Church – until then the primary “educator” in Ireland). Note I use the word “Trained” and not “Educated”. Anyone In Ireland who is educated has done so on a personal, Informal Basis. The State (like most) certainly doesn’t provide for it. Most of the writers we are famous left school early ,college early , and (usually the state). There is a Bust of James Joyce in my college – the authorities don’t mention he left after a couple of months, (It was 100% church controlled at the time), and soon fecked off to Paris.
3)Comparatively Shit running of the country in preceding decades. Families of 8 (due to an anti family planning / contraception / abortion / healthcare for mothers) approach from the church state lead to huge unemployment , and massive massive Emigration of uneducated Irish .
4)The EU gave Huge structural Funds, and wiped the church (officially, not practically) off the Irish radar. (Up until the mid 70s women had to leave the civil service once they had a child). Under the leadership of and old fashioned French Socialist, Jacques Delors, the EU DOUBLED the amount of Structural and Social funds, Ireland Benefited by around €12BN extra.
5)Social Partnership : The Trade Unions Entered social partnership with the state for 10 years and counting. No strikes as a payoff for more pay (in public and private sector), better conditions, and higher spending on social matters, incl healthcare and welfare. Yeah – you wont hear the neo cons bragg about that one! Im against partnership for reasons that would take more explaining another night J , but it undoubtably lead to a very attractive economic climate.
6)BIG GOVERNMENT ! yes, big , efficient government. Actively seeking inward investment by building factories ready to go for the Multinationals, setting up industrial development agencies (formally the IDA) developing social partnership, paying (at one stage, but not in the last year) 100% of 3rd level fees to ensure a well trained workforce, handling IMF debt payments in a by, among other things, Playing the market in a manner that a CEO of any company would be proud of (this is a market analysis, personally I don’t agree with a lot of it). Putting in Capital where the Labour was unemployed.
7)To a lesser extent, the Peace Process in Northern Ireland rubbed off well on the whole region.
8)A global economic boom. Irelands Economy is linked closer to that of the USA than any other in possibly the world, but certainly the EU. The Clinton years were good for the US, and subsequently the Irish Economy. The Bush years haven’t been so good!
So it was more than just cutting tax on the big boys that made Ireland do well in the Market, Not that the Neo Cons, will let you know.
Socially, after (and during) the Boom, Ireland is decrepit. It’s a state Ill be leaving not soon enough (2 years hopefully). Peoples sense of social Responsibility is Nil, Racism is rampant, according to the UN the Rich-Poor divide is the biggest of any state in Europe, Infrastructure and Social Projects are Mismanaged by a right wing government desperate to privatise it before GATS deadlines, the populace lacks any sense of Informed Judgement, nationalism is rampant thanks to a perennial feeling of historic struggle and a nationally clean conscience – (Ireland never had an empire-although it is part of one now, Irish people tend to be outrageously proud of their state), and a general lack of Culture that aspires to anything above the mediocrity of a couple of pints and rebble songs in a dank as fuck pub. Ireland has more playstations per capita than anywhere on earth – including Japan. In my opinion it has more shit bands , tv, and filmmakers too, but that’s just an opinion. To bring My own resentment into this, Ireland was poor in the 80s, but people did care about society, and big issues. Redsitribution and charity was rife (think live aid). People had little, paid big tax, and gave to the less fortunate. Now we have a collective sense of self centred values , money is the new church, and is a case of “fuck you” to anyone else. Our superstars are “entrepreneurs” who – it turns out via tribunals have fucked the taxpayer over at every attempt in order to but another London property portfolio or Portuguese (the new exile) mansion.
The boom has fucked our environment too. Unions are powerless, and workers less so. We have a puppet leadership.
Irelands urbanism is a visual catastrophe.
Dublin’s Urban Model is more LA than Madrid or Prauge.
Anyhow – bitter resentful rants aside - Most (not all) of my theoretical questions have led me down on the Left, and the Libertarian Left at that.
Cutting tax and spending doesn’t work : Economically OR socially.
It’s a way for the poor, or comparatively poor to pay for the rich, or comparatively rich.
I am open to opinions though, but will apply theory to it. You have yet to give me an example of conservatism or Privatisation working – even in Market Terms 
, but we have seen that Neo-Conservatism works in Market, but not in a Humanitarian or Social Sense, or over a long term within a market analysis. Please Reply in a constructive , non pejorative manner, dealing with the basis of the issues dealt with above. This took me the bones of 2 hours, a lot of remembering, and a webpage or 2 and 3 books(for more exact figures) to compile.
Think : Not all Nationalised companies are poorly run (e.g. Spanish Railways), some are (e.g. Irish Rail, pre ‘90). Surely it is governments ultimate responsibility to Run them well in the Public interest?
Not all Privatised Companies (i.e. formally nationalised) are well run (Many examples, see above), some are well run (Im open to suggestion, Im sure they exist though), but, the key difference is that ALL are run with the profit motive first, and social (or broader economic) responsibility further down the list of priorities. Private Interest in the Consumer is “how much can we make” (and that isn’t always in the most moral, but the most “liberal ” way), Private interest in the Worker is “how little can we pay, and how” private interest in taxation follows that it sets for the worker. As an aspiring (believe it or not), soon to be petit – bourgeoisie (very) small businessman, I realise this.
2.8 Billion Live on less than $2 a day. The Market, Reganomics DEMANDS that (Neo Cons Admit as much, exact instances of this available on request, if I can muster looking at this Screen again). Think of that. Its not a relative, but a real figure.
Maybe try it out? I sure as hell wont.
, but I just read a snippet about your talk about British Telecom, and I read that 80,000 jobs were cut once it privatized. Now did BT hire new people afterwards; if it expanded its operations in the recent past, did it hire new people. Ultimately did new people get hired after the newly privatized BT cut its production costs by firing 80K employees in order to start running a profit? I'll read the rest later, but can you give me experiences where these BT exec.s lined their own pockets? My experience is that usually privatization usually involves massive layoffs, factory closings, massive cost cutting in order to achieve a profit, and then when the company begins running a profit the company will begin expanding its operations, opening new facilities (factories, offices, etc.) in which new people will have to be hired).
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