This article is intended to present some of the implications of the ideological divide which cuts across each of the three mainstream parties. The divide is between those who advocate market solutions, and those who believe in the capacity of the state to promote and protect the well-being of its population. The corollary of the present market-led consensus is a lack of democracy, an ever-increasing disparity in wealth and movement towards a two-tier provision in health… as well as in education and public services.
Fraser Nelson (described by Tim Montgomerie of Conservative Home, as the columnist who analyses what the Conservative Party should be doing) writes:
Blair is not entirely delusional….. His key insight was to recognise that the great dividing line in this country is not between Labour and Tory, but between those who believe in the market and those who believe in the state.
On one side stand the Tory paternalists, the Lib Dem Left and Old Labour MPs who, essentially, believe Britain should be governed by a benign elite.
On the other side lie Tory radicals (Michael Gove, Iain Duncan Smith) and the New Labour praetorians (RIP)…. (1)
There are very few things on which the left can completely agree with Tony Blair, but this analysis is one that should be adopted … the essential dividing line is indeed between those who advocate ‘Neoliberal’ capitalism, and those who believe that the state has a role in organizing aspects of society for the benefit of its citizens (2).
Furthermore, I agree with Fraser Nelson’s suggestion that within each of the three main political parties, there is at best, an unhappy marriage between those advocating the ‘shrinking of the state’ with wholesale privatisation of public services like the NHS, and those who wish the state to play a role in regulating the markets, providing a welfare safety net, state education and the NHS.
But ignored by mainstream commentators, is the hidden implication of ‘Neoliberal’ capitalism. ‘Shrinking’ the state, also means ‘shrinking’ democracy, because democracy cannot be allowed to get in way of the workings of the market, which ‘must operate freely, unfettered by regulation’.
The confabulation, as perpetuated by the media and politicians, is that each mainstream political party comprises a cluster of Right-wing views, Centre/Moderate views or Left-wing views, which together form a continuum across the political spectrum. Hence, the assumption, on the part of the voter, that their vote when given to a particular party will result in policies being implemented which correspond to the position of that party on the Left/Right political spectrum. However, since 1979, all governments, whatever their political colour, have subscribed to the same consensus of TINA, and alternatives such as the sort of Courageous State proposed by Richard Murphy (3) have been ignored.
Barely 32 years ago, Margaret Thatcher came to power and rejected the post-war consensus by embracing Hayek, Friedman and neoliberalism … but in those three decades, globalization and the deregulated free-market has become a TINA (Thatcher’s slogan “There is no alternative”)… an unquestioned consensus for the overwhelming majority of the media and leading politicians from all three mainstream political parties. This is a false consciousness, which has had dire consequences for democracy, sovereignty, and a world effectively run by transnational corporations with governments just facilitating their businesses. (4)
This consensus is shown clearly in a political compass graph which charts the relative positions of each mainstream party since 1972. Particularly noticeable is the increase in authoritarianism and the rightward shift of the LP under the New Labour leadership, such that by 1997, it occupied more or less the same space as the Conservatives.
The electorate has, therefore, been invited falsely to believe that there has been a choice … an alternative to the progressive shrinking of the state and the creeping privatisation of the NHS and other public services. However, with the market-led Thatcherites, Blairites and Orange bookers having taken control of their respective parties, the only choice in reality, is some variation, constituted by differences in degree, speed of implementation or the nature of the privatised services. The ideological belief, across the board, was that ‘the state produces the worst option’.
For example, new hospitals were built under New Labour using PFI (Private Finance Initiatives) rather than by obtaining much cheaper one-off government borrowing. The current Conservative/Liberal Democrat government is much more overt in their privatising of the NHS. The intention is that hospitals will be simply handed over from public ownership to social enterprises, or taken over by private health care providers either directly, or by the taking over of whole departments and/or by having access to up to 49% of hospital beds.
Knowingly or unknowingly, both are examples of what James Galbraith calls the Predator State. The state as monopoly collector of taxes and corrupt distributor of the spoils to the private sector.
Galbraith distinguishes between what he calls ‘Conservatives’ and ‘Progressives’ in the US, which roughly corresponds in the UK to the Conservative Party and New Labour, there being no equivalent in the US to the democratic socialist LP, as it was, prior to New Labour.
After deregulation, laissez-faire was quickly abandoned by Conservatives “.. in all important areas of policy-making. For them, it now serves as nothing more than an enabling myth, used to hide the true nature of our world. Ironically, only the progressive still takes the call for “market solutions”
In other words, Galbraith suggests that some of our politicians have been duped into believing in ‘markets solutions’, whilst others have cynically used their position in government and the tenets of neoliberal capitalism as ‘enabling myths’ for ‘the redistribution of wealth, upwards and offshore’. Galbraith wrote prior to the 2008 Banking crisis:
“What did the new class… set out to do in political terms? The experience of the past decade permits a very simple summary explanation: they set out to take over the state and to run it — not for any ideological project but simply in the way that would bring to them, individually and as a group, the most money, the least disturbed power, and the greatest chance of rescue should something go wrong. That is, they set out to prey on the existing institutions of the American regulatory and welfare system.”
The ‘taking over of the state’ is exemplified by the disparity between David Cameron’s statements that there would be ‘No more top down reorganization of the NHS – the NHS is safe in our hands’… and the most radical restructuring of the NHS since its inception, with much of that reconfiguration pre-empting the legislation.
Disingenuously we are told that this is a ‘bottom up’ re-organisation which was in the Tory manifesto. However, the regulated healthcare market was not mentioned in either the Conservative or the Liberal Democrat manifesto (5) … and with good reason because ‘the phrase on its own, would have lost the party hundreds of thousands of votes’. Thus, the democratic process was disabled, and it is little wonder at the falling turnouts at elections and the general disillusionment with politicians.
Of necessity, the Predatory State (or plutonomy), requires to hide its true agenda (none of the 99% would voluntarily vote for it) and since 1989, capitalism has successfully presented itself as the only realistic political-economic system (capitalist realism). In furthering this mythology, neoclassical economists have played their part … a role amply exposed in the film ‘Inside Job’, written and directed by Charles Fergusson. David Malone identifies some of the ‘narratives’ being employed by banks to explain why ‘they haven’t failed in the current banking crisis':
The bankers’ version has the advantage that it is already accepted and endorsed by all wings of our political class, that the mainstream media lap up anything the super wealthy and their bankers say, and of course that the banking lobby has more heads than a hydra.
We are told that competition and choice are the only ways in which to improve the ‘failing’ NHS and make it affordable .. but implicitly ‘choice’ requires a surplus of provision which increases costs … and commonsense alone, must question how a private corporation can create a better quality of service more cheaply and still create a profit?
The only way is for there to be a corresponding race to the bottom in cutting wages, pensions, workers’ condition, the use of unskilled or less skilled labour, and doing a potentially less adequate job. Furthermore, there is no security that the service will not be withdrawn on the whim of the private company. http://gu.com/p/35bjg/tw At the time of privatisation, it was well known that some hospital cleaners felt so desperate about their inability to clean properly with inadequate products, equipment, time, that they bought their own cleaning materials to work. And we know of the myriad complaints about dirty hospitals, the spread of C. difficile and MRSA.
.. if you spend £100 on healthcare in the NHS you get one hundred quid’s worth of healthcare less about 5% management costs. In the private sector you’ll get a hundred quid’s worth less 3% management costs, 5% profit, 12% to pay bank loans and charges, plus a chunk for bonuses, dividends and return for investors. And, no provision for what happens if they go broke or get fed up.
In other words, the British public has been, and continues to be, kept ignorant, misinformed and spun plausible lines which are ‘unhampered by the facts’. (6) (7) The rationale for the stealth or creeping strategy of privatisations has been a process of ‘grooming’ the electorate into accepting the new frame of reference and forgetting the services that they have lost. Since Margaret Thatcher first introduced the internal market, the costs of the NHS have been constantly increased. For example, by losing the economies of scale from which it originally benefited, PFI and the use of private health providers. However, in spite of this, the NHS is much cheaper, with overall better outcomes than the US system, which is the direction of travel for the present government.
A classic example of the ‘persuasive techniques to justify private involvement’ is suggested in Richard Murphy’s tweet:
RichardJMurphy Richard Murphy
Gov’t is setting up GPs to fail on #NHS reform – they’ll say they gave them chance to run it and because they couldn’t private sector must.
In the same vein, the government is setting up the NHS to fail, so that those, who are able to afford it, will take out private health cover… thus creating a two tiered health service… one for the rich and another for the poor.
Cultural theorist, Stuart Hall, reminds us of the original intentions of the NHS:
“The NHS is one of the most humanitarian acts that has ever been undertaken in peace time. The principle that someone shouldn’t profit from someone else’s ill health has been lost. If someone says an American health company will run the NHS efficiently, nobody can think of the principle to refute that. The guiding principles have been lost.”
“… when there is a profit motive, the rich are overinvestigated, and the poor are undertreated. People die needlessly.”
“ … (W)ho would profit from someone’s ill health? What sort of person would that be? Would you trust them with your budget, let alone your health, or the health of a loved one? The moral case is not being forcefully enough put; indeed, it is not being put at all.”
In complete contrast, the chair of Monitor, David Bennett, an ex-McKinsey man, wrote last year in the Times:
It is too easy to say, ‘How can you compare buying electricity with buying healthcare services?’…
I would say … there are important similarities and that’s what convinces me that choice and competition will work in the NHS as it did in those other sectors. We, in the UK, have done this in other sectors before. We did it in gas, we did it in power, we did it in telecoms, we’ve done it in rail, we’ve done it in water, so there’s actually 20 years of experience in taking monopolistic, monolithic markets and providers and exposing them to economic regulation”.
Quite apart from the NHS being profoundly different … choice and competition in gas, power, telecoms, rail and water have hardly provided convincing evidence of the efficacy of privatisation. (8) (9) (10)
Richard Murphy brings us back to the beginning of this piece when he writes:
… if the focus is on care and costs are reduced by cutting out the vast amount of wasteful trading for internal costs which has inflated NHS admin ridiculously then we have the basis for a viable, coordinated, health care system that works from cradle to grave, from place to place and from need to need.
That’s what Labour has to demand now. But it too has to drop its fixation with markets to deliver this. Because only then can we afford what we want.
The divide is between those who advocate market solutions and those who believe in the capacity of the state to promote and protect the well-being of its population. The corollary of the present market consensus is a lack of democracy, an ever-increasing disparity in wealth and a two-tier provision in health, as well as in education and public services.
New Labour advocated the market solution. Ed Miliband has said that the era of New Labour is over. The LP is now also committed, under Andy Burnham, to restoring the NHS to democratic ownership and to fighting the health ‘reforms’. However, it is clear that there are many powerful forces that will need to be overcome. It seems improbable that David Cameron will abandon the Health and Social Care bill because there is too much money at stake for the City of London and the transnational corporations. The aim of the Tories must surely be to lock in as many long-term contracts as possible even if it risks the chances of re-election of the coalition in 2015. It is notable that the private health care providers and commissioning services are invariably foreign or international and will therefore be under the jurisdiction of the WTO, as well as the EU Competition laws.
But Ed Miliband is further hampered by the force of the 50% of the Parliamentary Labour Party who are committed Blairites, and who wish to perpetuate the detrimental health policies of New Labour, albeit in a different form to those of the Tory/LDs. (11)
Noun: A system of ideas and ideals, esp. one that forms the basis of economic or political policy: “the ideology of republicanism”. The ideas and manner of thinking of a group, social class, or individual: “a critique of bourgeois ideology”.
The point that needs to be forcibly made is that a belief in market solutions, and a belief in the state which acts to facilitate the potential of its citizens, are two conflicting ideologies which are irreconcilable… they are immiscible.
adj (of two or more liquids) incapable of being mixed to form a homogeneous substance oil and water are immiscible
Restoration of the democratic process requires a realignment across each of the political parties according to belief, values and philosophy. The current mismatches between the party leadership and the values and beliefs ascribed to them by the electorate is anti-democratic and, to put it mildly, misleading. This has resulted in the falling turn-outs at elections and the cynicism of the electorate that politicians ‘are all the same – out for number one’. Clearly, this plays into the hands of those who represent the Predator state who welcome such apathy.
In order to succeed in reclaiming the NHS, those within the LP who advocate the ‘markets’ must not be allowed to undermine the new found opposition of Ed Miliband’s shadow cabinet. Overwhelmingly, the electorate would back his stance if they understood what is at stake.
To conclude with James Galbraith:
There is no common good, no public purpose, no shareholder’s interest; we are the prey and governments as well as corporations are run by and for predators. The “failures” enrich the proper beneficiaries even as they “prove” government is no solution.
(3) Murphy R. (2011) ‘The Courageous State. Rethinking economics, Society and the Role of Government.’ Searching Finance Ltd., 8 Whitehall Road, London W7 2JE UK. ISBN: 978-1-907720-28-4