Issue 2 - 2024 200dpi

27 September 2001 Edition

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Basic economics of privatisation

It has been a bleak week for workers. 1,700 jobs lost at Aer Lingus, 2,000 at Shortts, 300 at Shinko, and these are just the latest high-profile employment disasters.

There's talk of recessions, of job losses, of economic collapse. The `need for belt-tightening' lectures from politicians cannot be far off now.

This week, Mary Harney and the PDs have been banging on about privatising the health system. Consultants would be encouraged to treat public patients in a private capacity and the public purse would fund this perversion of a public health service.

But you don't hear a word about investment in services, in these times of approaching slump, unless the capitalists have a hand in it. There is always a goodly slice of private in the now popular public private partnership. These days you shouldn't expect to get anything, rail, roads, transport, housing, waste management, even water - unless it's privatised. They are even privatising the prisons in England.

It's the neo liberal agenda in action. Nothing liberal about it of course, except liberal with your rights to equal health, housing, water.

Did they ever hear of John Maynard Keynes, who said at the time of the Great Depression, put £1 into an envelope for everyone in the country, and we'll spend our way, quick as a flash, out of the slump. They didn't of course, and war instead got the economy going, with cheap labour replacing national savings in the bank.

Did it ever occur to our present government to ask why, when the recession comes, that the economy, jobs, and tax revenue will all fall down. The reason is patently obvious. It's privatisation. When a recession looks likely here, private companies naturally cut back, fast, so they don't overproduce and have to carry expensive stock. It's an obvious market strategy.

But if the government runs a company, it can act in a socially useful manner, maintaining economic activity with an eye to the future and to the wellbeing of citizens. Such a strategic approach allows people to hold onto wages, pay their taxes, and continue to spend on the goods produced. It retains skills, protects livelihoods, and families. It's simple really.

The more the economy is privatised, the more vulnerable we all are to recessions. Well not all of us, just the working people.


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