DEMOLITION COALITION: The Tiny State or the Big Society?

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DEMOLITION COALITION:

The Tiny State or The Big Society?

When someone comes jangling their tins of coppers, supposedly on the precept of collecting for some charity or other, I am always left feeling uncomfortable and questioning. I ponder what sort of society or world we live in, if sick, poor, and vulnerable people need to depend on these various charities. This contrasts as I look a round the streets where all eyes can see flash cars, bright lights advertising ever more expensive gadgets, and expensive holidays. With all the resources, why is there insufficient food, housing, clothing or medicines for everyone? Why do we need charities? How else can we achieve a world where everyone feels his or her life is worth living?

Now, don’t get me wrong, I have every admiration for the caring people who give their time to charity, for example the MacMillan nurses, the Alzheimer’s Society which supports carers and sufferers, and ChildLine.

I see it a matter of funding and access to human rights. The Coalition came to power spouting confidence in The Big Society. Has society grown? Has it grown taller? Fatter? What do they mean?

THE BIGGER SOCIETY

The Cabinet Office (1) states that “The Big Society is about helping people to come together to improve their own lives. It’s about putting more power in people’s hands – a massive transfer of power from Whitehall to local communities.

The Office for Civil Society, part of the Cabinet Office, works across government departments to translate the Big Society agenda into practical policies, provides support to voluntary and community organisations and is responsible for delivering a number of key Big Society programmes.

Support for local communities? What is the role of the democratically elected local councils? If power is being devolved from Whitehall to the people, why do we see cuts to local council budgets, closure of public libraries, cuts to budgets for parks and local amenities? Why are services and jobs being cut? Why are people losing jobs to be replaced by volunteers?

Shortly after the election in 2010, the National Citizen Service was announced, an example of the Big Society. 2) It has now been announced that Serco the multinational security and workfare company have acquired the largest share of contacts to expand this scheme, 6 out of a possible 19 lucrative contracts 3).

The NCS Network is biggest winner among the 19 deals, with the Challenge Network also successful. A consortium that includes Serco, the private sector services firm, has won the largest number of regional contracts to deliver the government’s National Citizen Service in 2013 and 2014.

The NCS Network, which includes Serco and the youth charities Catch 22, the National Youth Agency, vinspired and UK Youth, won six of the 19 regional contracts available.

The other successful bidders for the £200m worth of contracts were: the Football League Trust; the Cumbria-based social enterprise Inspira; Lincolnshire & Rutland Education Business Partnership; New College Nottingham; the Devon-based college Petroc; the employment and skills firm Reed in Partnership; and the Challenge Network.

The purpose of government is to serve the people. If there is to be a real transfer of power to the people, then it would be a good start for politicians to be open and honest about their intentions. The irony is that the power has not been given back to the people but that we live in a plutocracy where power remains with the big corporations.

The Big Society idea was nothing more than the government washing its hands of responsibility, tantamount to abandoning citizens to poverty and destitution.. throwing them in workhouses, mirroring the Victorian era, when Cameron and Osborne believe everyone was living a life of comfort and cleanliness, seemingly unaware of the dirty, diseased and destitution of those living in Victorian inner cities.

Anne Power writes in the Guardian: 4)

In my new report for the British Academy Policy Centre, The ‘Big Society’ and concentrated neighbourhood problems, I draw on extensive research to chart the history of community-centred activity in the USA and the UK, showing the big society idea as part of a long tradition of community organisation and social movement. There is little evidence that the big society, as opposed to the big state, will on its own carry us through the difficult challenges we face.

We need government action too

“The state cannot withdraw from its overarching responsibility towards society as a whole, and neither can private interests, at whatever level, adequately fill those roles, particularly in poor communities. The tortuous American reform of health care, the sub-prime mortgage and banking crises, the eurozone crisis and steep energy price rises have shown just how vulnerable weaker members of society are, and how much we rely on co-operative action at government level as well as in communities. “

Isn’t this really just depending on the goodwill of a few individuals? What if they tire of volunteering, run out of funds?

Involving people to be active in their communities, to feel ownership of their towns, parks and villages does seem like a good idea, but individual volunteers cannot replace the responsibility of our governments to ensure protection and care. People came forward to volunteer at the Olympics 5) this summer. It is very different to providing services on a permanent basis. That is an entirely different matter, for example if we were to consider a primary school, it is the difference between helping out at the school Summer Fayre to teaching children with special needs .

While entrusted with taxes, the duty of our government is to ensure well-trained, skilled individuals, provide the best quality services possible. Public money is not intended to give opportunities for speculators, to win a packet on the horses, the stock market, to make personal profit, to buy off favours or to silence the press.

That is what is happening in the UK., and beyond. Our democracy has been handed over to a few individuals – a self-serving plutocracy.

Handing over public services for our care, our safety , our health and education to privatized companies who serve shareholders and not the electorate will lead to poorer or non-existent services. It is a myth that privatized corporations provide better. Their priority is profit. It is that simple. When the profits are made, there is nothing to stop them getting out and leaving the rot behind.

CHARITIES AT HOME AND AWAY:

Some may say that charities will provide care at basic cost, and they are not profit making yet strive to provide the best care possible. I have no doubt that many have the very best intentions, which is both admirable and commendable.

It is well known that donating to charities is tax deductible. Undoubtedly, some use this in order to avoid paying taxes. Therefore, the money going to the charity would be less than that which would be available to the government to provide for the needy. We could justify diverting funds from public services to charities, if the services provided are necessary, and of a high quality, and there is transparency about accounts.

CHARITY or TAX?

There is something quite different about the images those two words evoke.

TAX is money collected to provide funding for services and structures. In democratic societies, people have some influence about how to prioritise how this is spent. The beauty of tax is that it can be structured so that those who are well off pay proportionally more than those who are less well off. People with specific needs can be supported. There are sufficient funds available for all as long as this is done fairly. Other taxes such as VAT proportionally hit the poor. Fiscal policies of the Coalition government have shifted the burden onto the poorest in our society. Ever since the days of Herod, the word
tax has had a negative association. This has arisen because of policies like these. A fair tax system is the best way to ensure that everyone has enough for their needs. Indeed, if tax evasion/avoidance was eliminated there would be sufficient funds available for all.

CHARITY on the other hand has a nice warm, cosy feel to it. It makes us feel as if we are helping others, that we are good Samaritans of the modern world.

Philanthropists get to choose who/what is deserving, just as Coalition international aid programme can be used to mould behaviour of recipient countries for the benefit of corporations’ profits. Let us consider Bill Gates. Having made millions from Microsoft he set up the Gates Foundation 6) famously contributing to worthy causes. Who chooses which charities are worthy?

Java Films have produced a video, The Benefactor 7) (see clip) and write:

Bill Gates is the richest man on the planet due to his revolutionary creation: Microsoft. Today he and his wife dedicate their lives to their foundation ’The Bill and Melinda Gates Foundation’. It is the most powerful foundation in the world investing 3 billion dollars or 95% of the Gates fortune a year into philanthropic causes. Calling themselves “impatient optimists”, the foundation sets out to change the world, aiming to find a cure for malaria and develop a vaccination against HIV within the couple’s lifetime.

However there may be a darker side to this miraculous foundation. Gates was considered a brutal capitalist in the 90s and some suspect that the foundation is simply a means of boosting his image by reinventing himself as a great do-gooder. However this is only a minor complaint…research into the foundation’s investments shows that some of them, notably into the development of GMOs at Monsanto, contradict their philanthropic work and are just a way boosting income.

More powerful than those without his wealth , he has disproportionate power. The distortion of the wishes of the world’s people is clear.

Is this a democracy? However well-meaning this sounds, in reality , this is an example of more power being given to those with money. Yes, some wealth may be being redistributed, but not by fair, or democratic means. In the neoliberal world, it is a plutocracy, those with wealth choose how the world’s wealth is spent.

The recent scandal with Jimmy Savile, BBC’s Saint of Charity, now points a finger of corruption. We must ask who knew of the child abuse and corruption? Is it possible that his involvement with charities could facilitate cuts to state services? The closeness to Thatcher arouses suspicion and certainly warrants investigation. Labour is right to insist on further investigation (8).

We all may salve our consciences by sharing with charities because we feel we cannot change the injustices of this neoliberal world. The President of Uruguay donates 90% of his salary to charities, and lives a fairly frugal lifestyle. 9)

In a recent interview, Mujica told Spain’s El Mundo that he earns a salary of $12,500 a month, but only keeps $1,250 for himself, donating the rest to charity.

The president said that the only big item he owns is his VW car, valued at $1,945 dollars. The farmhouse in which he lives in Montevideo is under his wife’s name, Lucía Topolansky, a Senator, who also donates part of her salary.

“I do fine with that amount; I have to do fine because there are many Uruguayans who live with much less,” the president told El Mund.

This contrasts somewhat with “charitable’ behaviour of Bill Gates and Jimmy Savile. If someone has massive sums of wealth,, and chooses to share a small portion with others, while retaining conditions and control, isn’t that also some kind of abuse?

THE TINY STATE:

The Coalition government seeks to relinquish its duty and responsibility far beyond the expectations of the majority. Far from moving to a Big Society, it is true that we are moving towards a Tiny State. This is because of deception and lies presented in 2010 The NHS cuts, planned well before the general election, plans for privatization have gone ahead under the pretext of increase in parental choice, cuts to welfare pass because of demonization of the poor and vulnerable in our society. The Conservatives planned their Big Society with the idea of more local involvement and devolution from Whitehall, and appeal to the emotions of the people under the cover-word of “charity”.

Cameron and the Shrinking State

Aditya Chakrabortty: 10) Cameron wants a Shrinking State: Drawing on IMF figures published last week, this graph, published in CiF in the Guardian compares what will happen to government spending in Britain up to 2017 with the outlook for Germany and the US. And what it shows is that the UK will plunge from public spending on a par with Germany in 2009, to spending less than the US by 2017. Had France, Sweden or Canada been included on this graph, the UK would still come bottom. If George Osborne gets his way, within the next five years, Britain will have a smaller public sector than any other major developed nation.

THE COURAGEOUS STATE Richard Murphy’s Courageous State (11) proposes to rethink the system by which we obtain funding. The Courageous State would release the funds to which the people are morally entitled to – their labour having produced the wealth. These funds, illicitly and immorally stashed away in hidden in tax havens would be sufficient to ensure that there would be homes, employment, health care, quality education and life-long learning. There would be care and dignity for our elderly, and activities and hope for our young. I have a feeling that is what the electorate is waiting for.

References and Further reading

1) The Cabinet Office: The Big Society

2) Johnny Void Blog: The Big Society

3) The Third Sector: Serco wins Contracts

4) Guardian: Big Society: Neighbourhood Problems

5) Guardian Big Society and Olympics.

6.) The Gates Foundation

7) Java Films : Bill Gates, The Benefactor

8. Uruguayan President donates 90% of income to charity

9.) Labour asks for further investigation into Savile scandal

10 . The Guardian: Cameron wants a Shrinking State (Aditya Chakrabortty) 10:

11: The Courageous State: Richard Murphy

The Charity Commission for England and Wales

Charity Commision registering Charitable Incorporated Organisations (CIOs from January 2013)

Charitable Status of Religious Groups: The Secular Society

Richard Murphy: The Courageous State

Transnational Corporations have not ‘let a good crisis go to waste’.

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There was precious little debate in the House of Commons, let alone in the country, prior to the Major government signing up to the 8th round of the GATT (General Agreement on Trade and Tariffs) treaty in Uruguay in 1994.  This treaty extended the scope of the previous one beyond manufactured goods to cover services, agriculture and intellectual property, including services such as health, education and other public provision, and environmental ones such as GM foods, nuclear power and agribusiness.

Implicit in this treaty was the intention to dismantle the welfare state and privatise public services; the US arguing that it was unfair trade that their private providers of health, employment protection and education had no access to European markets because of the state provision.

However, it was recognized that such a process would have to be implemented slowly and by stealth because of the popularity of the welfare state. We are now seeing the end-game of that process being implemented by the Tory/LD government.  The Welfare Reform bill, which will benefit private employment protection insurers, passed into legislation at the beginning of March. The Health and Social Care bill sets up the conditions which will eventually lead to further privatisation and a two tier US type of health provision; with private involvement intended at all levels from commissioning, insurance, private health providers, hospitals and financial devices for maximizing GPs budgets.  A similar process is in place with the little discussed changes to state education. Nuclear energy is very much on the agenda in spite of the lack of economic or environmental case, and there are murmurings again about pushing for GM crops to be grown in the UK.

Ostensibly, the intention of the treaty was to protect and regulate free-trade between nations, but its impact was designed to elevate the rights of transnational corporations above that of the participating nations; thereby diminishing democracy, human rights, protection of the environment, and preserving the wealth of those who created the organisation… those who we now call the 1%.

The World Trade Organisation (WTO) was set up to arbitrate trade disputes.  However, not only is that arbitration process secret and non-adversarial but inevitably the decisions are in favour of the corporations under the guise of protecting free-trade.  Furthermore, it is not a level playing field. The US, as the most powerful of the participating nations could, and has, continued to protect its own industries/agriculture and ‘dump’ its goods on smaller nations, undermining their home markets.  Retaliation by the smaller nation is limited to excluding the US which in many instances constitutes no great sanction. (1)

The WTO is an important part of the triumvirate of global players undermining democracy and national sovereignty, with the US as puppet master.

“For all the endless empty chatter about democracy, today, the world is run by three of the most secretive institutions in the world: the International Monetary Fund, the World Bank and the World Trade Organization. All three of which, in turn, are dominated by the U.S.’

http://escholarship.org/uc/item/56w0s261#page-5

ARUNDHATI ROY, THE ORDINARY PERSON’S GUIDE TO EMPIRE (2004).

Margaret Thatcher was instrumental in the setting up of the Uruguay round of the GATS treaty and the establishment WTO …  but it was also the Thatcher government who was responsible for creating the UK roots of the current banking crisis and recession. In 1979 exchange controls were lifted; and in 1986, with ‘Big Bang’, all controls over consumer credit were abolished and housing finance was de-regulated.  In concert with the Reagan administration in the US, globalization of the world’s trade and financial sectors was effected.

With the advent of Globalization with its fundamentalist insistence upon open markets and free access for capital without restraints, there were suddenly no regulations to bind the Financial Class, no taxes they could not avoid and no political process they could not buy. It was a freedom from any notion of obligation, care or concern for anybody but themselves. It was a perversion of the very word freedom. They could vote wherever they chose, buy citizenship wherever they felt like it and pay only those taxes they found convenient and have no loyalty to anyone or anywhere. They were ‘free’.

 http://golemxiv-credo.blogspot.com/2011/04/free-market-and-globalization.html

Michael Meacher MP writes:

The charge sheet against the banks is that they have used these powers — particularly in the neoliberal era since 1980 — recklessly and in self-interest, which has done huge long-term harm to Britain’s economy…This has been a significant cause of Britain’s long-term decline… British manufacturing, the lifeblood of the economy, has been systematically hollowed out….

The City has relentlessly driven short-termism at the expense of market share. The UK banks have used their control of the money supply to regularly generate unsustainable asset bubbles which destabilise industry and, when they crash, beggar the taxpayer. They have engineered a massive mis-allocation of global capital into tax havens which, worldwide, now shelter over £11trn of global wealth. They have exacerbated inequalities between the super-rich and the rest, the growing disparities between regions, and the crowding out of manufacturing by finance…

So what should be done? Above all, control over the money supply must be brought back into the public domain.

http://www.newstatesman.com/blogs/the-staggers/2011/11/banking-banks-credit-financial

So the Thatcher government’s policies are directly implicated in the genesis of the present situation… the intervening governments having done nothing to regulate the financial sector, and having continued the process of stealth privatisation of public services.

According to David Harvey, there was a tipping point in 1987, when even the US government realised that it was not sufficiently powerful to oppose the Bond markets. (2) The capacity of the financial markets to withdraw funds from any country and cause interest rates to rise, means that the financial elites are able to act as a ‘virtual’ parliament, able to coerce governments into abandoning legislation adverse to their interests.

It has taken only three decades of globalization, privatisation and de-regulation to bring the UK to the current parlous state:

The re-creation of the conditions of the Great depression; mass unemployment; the hollowing out of the UK manufacturing base; the north-south divide; the removal of an adequate safety net for the elderly, unemployed, sick or disabled; the recreation of a two tier provision of health and education; the lack of action on climate change or oil-dependency….and the re-accumulation of wealth back to the 1%.

Graph 1 shows clearly how the percentage of total pre-tax income for the top 1% of US wage earners is now back at 1920 level but the same graph could be drawn for the UK.

So how have the transnationals or ‘giant’ corporations not wasted a ‘good crisis’?

Put simply, there has been a great lie which has been perpetuated and maintained by a collusion between right-wing politicians and the media .. the supposed ‘mess’ that New Labour left in 2010.  (3)(4)

It is a verifiable lie to blame government spending on public services for the consequences of the global banking crisis.  It is solely the size of the financial sector debt which pushes up the total UK debt to nearly 1000% of GDP.  The debt did not result from government over-spending but from privatisation of banking profits and socialization of their losses (5).

However on the basis of that lie, the resolution of the banking crisis has been successfully redefined as a need to cut back once and for all, the welfare state and public spending.  The means of imposing such austerity is by dramatically cutting benefits and the opening up of public services to privatisation… which makes no absolutely no sense in the stated policy of diminishing the structural deficit … but just happens to be the desired objective of the 1994 GATT treaty.

‘Redefinition’, secrecy and distraction are characteristic of current global politics, and it is notable that the interests of corporate power are hardly discussed in comparison to the focus on the financial markets.

Colin Crouch describes in his book ‘The strange non-death of neoliberalism’ (6) … ‘The confrontation between the market and the state that seems to dominate political conflict … conceals the existence of this third force which is more potent than either and transforms the workings of both.’

‘At the heart of the conundrum is the fact that …. neoliberalism is nothing like as devoted to free-markets as is claimed.  It is rather devoted to the domination of public life by the giant corporation.’

 

Colin Crouch contends that neoliberalism is emerging from the financial collapse more powerful than ever, because of a ‘comfortable accommodation’ between the state, the market and the ‘giant’ corporation.  Corporate power makes it its business to bind them all together in an essentially hidden market-state-corporation triad.

Colin Crouch further argues that several factors have determined the power of the ‘giant’ corporations:

The lobbying power of firms whose donations are of growing importance to cash-hungry politicians and parties;

The weakening of competitive forces by firms large enough to shape and dominate their markets;

The power over public policy exercised by corporations whose contracts for public services deliver special relationships with government;

The moral initiative grasped by enterprises that devise their own agendas of corporate social responsibility.

Democratic politics and ‘the free-market’ are both weakened by these processes. 

The power over public policy exercised by corporations was explored by Think Left in the case of the employment protection insurer Unum’s involvement with the Welfare Reform bill (7). This example evidences the likely similar conditions for the development of government policy in health, education, energy and agricultural policies, and indicates the vested interest of those corporations.

So, Unum warns people to get insured against the cuts in benefits … of which they, Unum, were major architects …. either directly as advisory consultants, or through their funding of psychiatrists who created the intellectual framework, the funding of think tanks and academics who in turn recommend policies to the DWP, and  by offering ‘jobs for the boys’.

https://think-left.org/2011/11/22/welfare-reform-and-the-us-insurance-giant-unum/

There has been many revelations of the ‘revolving door’ whereby politicians receive political donations, directorships, moving on into employment in think tanks funded by corporations and finally to be directly employed by the corporations themselves. Similar relationships may be observed for ex-civil servants.  Corporations second employees into ministries as advisors and provide secondments for civil servants.  Vast sums are spent on lobbying, and corporations are brought in to advise ministers directly.  Specific mention should also be made of the global management consultancies like KPMG, Mckinseys and Boston Global, who advise government on how to privatise public services and who will profit enormously from providing training and commissioning for the GPs under the Health and Social Care bill. (8))

In this manner, corporations do not just exert pressure on the political process but have become major insider participants in framing the legislation according to their needs.

So why are the corporations so keen to be involved in providing health, education and public services?

Essentially, there is another lie.  The UK’s economic problems stem from lack of demand – not as we are constantly told by high tax rates, corporation tax, red tape or lack of investment:

 

The current shortfall of investment has nothing to do with high tax rates and everything to do with insufficient demand to meet potential supply. Cutting corporate taxes will simply make the situation worse as more wealth gushes upwards into the hands of the 1 per cent, and it goes to corporations that are letting it sit idle. As Shaxson points out, corporate tax cuts at this stage will be as effective as pushing on a piece of string….

British corporations are awash with cash. According to Deloitte, non-financial companies held £731.4 billion in the third quarter of 2011 – the highest ever….

”Corporations have all this cash because they are not investing: the opportunities are not there. They are hunkering down, spending less than they are earning, while the government is spending more than it is earning (and thus running deficits).”

http://www.taxresearch.org.uk/Blog/2012/03/02/economic-shibboleths-why-corporation-tax-cuts-are-insane/

This is shown by analagous US data in Graph 2.

 

 As Richard Murphy writes in his book ‘The Courageous State’:

‘.. (W)hy invest in businesses when something so much more attractive – the outsourced tax stream of a government as anxious as possible to give it away…. It is much easier to make profits from the certain commodities that people are always going to need, such as health, education, local government services, the utilities and so on that were once the preserve of government.’ (9)

Worryingly in terms of the future of UK public services, Michael Hudson writes:

For today’s financial planners the short run effectively has become the only aim. Running a corporation has become mainly a financial task whose objective is to raise the company’s stock price by mergers and acquisitions, using earnings to buy one’s own equity, arranging debt leveraging and orchestrating global intra-corporate “book” pricing so as to take profits into tax havens.

Financial managers are more likely to downsize operations and scale back research and development than to expand employment and production so as to leave more income to pay dividends and interest. The economy’s debt burden is made heavier by deflationary policies that keep expansion on a short-term leash, and to encourage, rather than tax, rentier income and debt financing.

http://www.paecon.net/PAEReview/issue57/Hudson57.pdf

In conclusion, the aim of Thatcherism to reconstitute the economic and social relations of the post-war consensus is coming into fruition under the Tory-LD coalition.

 

“Democracy has been hollowed out. We have seen in the last 30 years or so, the total demise of those occupations for those in the U.K. population who had few or no qualifications. The mining industry, the shipyards and car factories, heavy and light engineering, the merchant navy, product assembly, and so on.  We are seeing the dismantling of the welfare state … and all because the Government is controlled by what is good for big corporations and finance ..  not what is good for the people.”

Anon

Addendum:

To resist or reverse this situation, it is an imperative to cut through the misinformation and lack of information which is available. The hidden underlying agenda must be uncovered so that it can be confronted.  The Spartacus movement opposing the Welfare Reform bill evidenced the power of twitter and online research by crowd sourcing.   The virtual world can also facilitate international collaboration. In order to preserve and protect this vital resource all government/corporate attempts to control the internet must be resisted. http://aclj.org/free-speech-2/new-government-attempts-control-stifle-internet

(1) Noam Chomsky explains the World Trade Organization. http://video.google.com/videoplay?docid=5785830866015923087

(2) The End of Capitalism? – David Harvey (Penn Humanities Forum, 30 Nov 2011)

http://www.youtube.com/watch?v=EYzKsiev43Q

(3) Who pulls the strings at the BBC ? (Pam Field)

(4) Inadequacies of the BBC’s coverage of the EU’s financial crisis (Dr Sue Davies)

(5) Gordon Brown did not spend all the money-The Banks did (Dr Sue Davies)

(6) Colin Crouch  (2011)  ‘The strange non-death of neoliberalism.’  Polity Press, 65 Bridge Street Cambridge C2 1UR, UK

ISBN-13: 978-0-7456-5221-4(pb)

(7) Welfare reform and the US insurance firm Unum (Dr Sue Davies)

(8) http://www.guardian.co.uk/society/2012/feb/25/public-services-private-sector?INTCMP=SRCH

 

(9)  Richard Murphy (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

Related articles:

Britain Under Siege (Dr. Tristan Learoyd)

The Pfink Tank: pharmaceutical industry (Dr. Tristan Learoyd)

The market has a name – it is Goldman Sachs (CJ Stone)

The NHS and TINA – Mrs. Thatcher’s ideological, anti-democratic, political legacy

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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”

http://economistsview.typepad.com/economistsview/2008/05/the-predator-st.html

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.”

http://forensicstatistician.wordpress.com/2011/05/23/a-predator-state-the-worst-bits-of-capitalism-communism-and-feudalism/

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.

http://www.golemxiv.co.uk/2012/02/propaganda-wars-their-version-markets-dont-fail/

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.

http://www.hsj.co.uk/comment/opinion/andrew-lansley-competition-is-critical-for-nhs-reform/5041288.article

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”.

https://sites.google.com/site/nhsfuture/Home/debunking-the-myths

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.

http://www.taxresearch.org.uk/Blog/2012/02/12/the-nhs-reform-we-need-is-to-take-the-market-right-out-of-the-equation/

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)

i·de·ol·o·gy/ˌīdēˈäləjē/

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.

immiscible [ɪˈmɪsɪbəl]

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.

(1) http://www.telegraph.co.uk/news/politics/ed-miliband/9057323/If-Labour-ditched-David-and-Ed-Miliband-it-could-actually-win-an-election.html

(2)  https://think-left.org/2011/10/14/capitalism-neoliberalism-plutonomy-and-neo-feudalism/

(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

(4)  https://think-left.org/2011/07/21/red-labour-must-address-the-elephant-in-the-room/

(5) https://sites.google.com/site/nhsfuture/Home/debunking-the-myths

(6)  Inadequacies of the BBC’s coverage of the EU’s financial crisis (Dr Sue Davies)

(7)  Who pulls the strings at the BBC ? (Pam Field)

(8)  Renationalisation of Utilities -Water (Pam Field) 

(9)  Renationalise the Railways (Julian Gilbert)

(10)  Clean Coal (Another Financial Device for the City?) ( Dr Sue Davies) 

(11)  https://think-left.org/2012/01/17/is-the-prince-of-darkness-mandelson-behind-ed-balls-policy-gift-to-the-tories/