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(en) DA #26 - Solidarity Federation - The Market is anything but Free

From Worker <a-infos-en@ainfos.ca>
Date Wed, 16 Apr 2003 09:21:46 +0200 (CEST)

A - I N F O S N E W S S E R V I C E

Free market dogma is on the wane. The idea that the
market delivers both freedom and prosperity to all is now
increasingly challenged. After the collapse of the Soviet
empire, various western leaders proclaimed we had reached
the "end of history". The way was now clear for free market
capitalism and western style 'democracy' to spread
across the world, bringing with it a new utopia, where market
forces would vanquish poverty and freedom would prevail.
Then reality kicked in.
In 2003 reality, Africa is trapped in dire poverty, virtually
excluded from the world economy. Russia languishes in
another poverty, ruled by corrupt leaders and
gangsters. South America staggers from crisis to crisis,
trapped within a vicious circle of free market meltdown and
reform, where widespread malnutrition is beginning to
emerge for the first time in a generation. Japan stagnates in a
deflationary spiral which no amount of Keynesian public
spending programmes have been able to halt, as it
inevitably drags much of the Asian economy down with it.
This leaves the US and European economies keeping the
world economy afloat, but even these are teetering on the
brink of deepening recession.
No doubt there are links between the current crisis and the
conjuring up of the new enemy; Islam. The "Cold War" has
been replaced with the very hot "War on
Terrorism", which threatens to terrorise, destabilise and
ensnare much of the world's population in yet more misery. A
crisis to conceal a crisis? It almost doesn't matter;
no-one believes the free market will bring the end of history
Far from market forces bringing prosperity and freedom,
globalisation has brought increasing poverty and inequality
everywhere it has visited. In the name of market
'freedom', globalisation has wrecked the domestic economies
of developing nations in order to open them up to western
dominance. The only encouraging sign amongst this
misery is that having experienced the "freedom and
prosperity" offered by the free market, people in the
developing world have rejected globalisation, and, in response,
increasingly turning to direct action as the means to defend
There is hope too here in the developed world. Although
privatisation has spread from Britain across Europe, attempts
at further deregulation are being met with
increasing resistance, and moves to further anglicise the
mainland European economy have stalled. And as in the
developing world, harsh experience of the 'free' market over
the last twenty years have generated a vigorous
anti-globalisation movement that may yet reinvigorate
European resistance after decades of stagnation under
dominance. The possibilities of such a movement are
reflected in the opposition to the war against Iraq.
Attempts by Bush and Blair to dress up the war in free
market liberation theory by casting the west as "freedom
loving people", sacrificing themselves in order to
sweep away the tyranny of Saddam and set up a western free
market democracy are treated with outright derision. Even
the mainstream media is refusing to peddle such
nonsense. Twenty years ago, they thought it possible to
portray the free market as the force that would liberate the
Russian people; today, such talk is recognised as a
thin cover story for grabbing Middle Eastern oil. Increasingly,
deep suspicion towards anyone using the terminology of free
market orthodoxy peddled by Britain and the US
is turning to hostility.

reasons to be cheerful?
Even here in Britain, there is room for hope. The
privatisation that dominated the Thatcher era and has
continued under Labour is now recognised as a blatant means
making huge profits for bosses/investors at the expense of the
workforce, while providing an inefficient and often dangerous
service. Popular capitalism is not quite so
popular. The Tory pioneers of the free market revolution are
in disarray and threatening to implode (go ahead - ed.). The
root cause of their predicament is their vision of
society as a load of individuals driven by pure self interest at
the expense of others. This has been rejected as the impact of
growing inequality and widespread poverty
and its effect on wider British society (anti-social crime,
unemployment, instability, etc., etc.) hits home.
There is a growing realisation that in areas that matter
most - health, education, transport and welfare - the market
simply cannot deliver. Such essential services
cannot simply be mass-produced like washing machines,
because they form part of the basic fabric of society. As such,
they reflect the nature of society, so the more
unequal the society, the more unequal the health service, and
the more brutal the society, the more brutal the education
system. A society based on narrow self-interest is
reflected in the nature of its institutions and its individuals.
We have all witnessed first hand the kind of society the
Thatcherite vision has produced, and we find it
revolting. If there is a reason to be cheerful, it is the hope that
self-interest is giving way to common interest and the notion
that a decent society is not founded on
individual greed, but on humanity.
However, even if free market orthodoxy is on the wane, the
effects of the past thirty years on society cannot be simply
wished away. Even in the face of growing
rejection of privatisation, the decades of neglect of our public
services have left them in a sorry state. Given this, although
collectively, people may prefer social
provision; as the decline continues, those who can afford it are
pushed towards the private sector in increasing numbers. If
schools, hospitals and public transport are not
working, it is inevitable that those who can afford private
alternatives will. Hence, although people have rejected it, the
privatisation process may continue by default.
There is a truism about Britain hanging on the US' apron
strings. We have turned away from Thatcherism, but unless
there is a radical expansion of public provision,
the private sector will continue to expand, causing the public
sector to contract until social provision is abandoned by the
majority and becomes merely a safety net for
the poor in a 2-tier system. Thus, a decade on, we may find
ourselves landed with a US-style system, even though
collectively as a society we oppose it. What makes this
privatised future more likely is not just that we may drift
there by default, but that there are powerful forces at work
here too. Not least, the US medical and insurance
industry sees Britain as rich pickings and as a stepping stone
into the wider European market.

Labouring under illusions
Back in 1997, people were so desperate to reject
Thatcherism that they elected a Labour government. Maybe it
wasn't all stick and no carrot. Maybe some were seduced by
the compassionate noises coming from New Labour, and the
pledges to save public service such as health and education
from the Tory wreckers. Maybe even now, some still hope
against hope that this is the direction that Labour will take,
despite all the evidence to the contrary so far. Unfortunately
for us all, the "Third Way" is simply a
continuation of the vicious free market dogma of the Tories,
but this time with scatter cushions and chill-out music.
By trading on its history and continuously pledging its
support to public provision and increased public spending,
Labour has attempted to conceal the fact that it is
engaged in a privatisation programme every bit as radical as
Thatcher's sell-offs in the 1980s. It has presented the age-old
'magic' option by claiming that Britain's
depleted public services can be rebuilt with virtually no
increases in taxes. However, it stands to reason that any real
shift back to public provision would have to be
paid for. The truth is that Labour is just as transfixed as the
Tories were by free market ideology, and Tony Blair has the
same disdain for the 'nanny state' as Thatcher
Realising that British society now prefers a shift to social
provision, Labour's ideological zeal has gone into public sector
reforms which can but lead to more
private sector provision. The political calculation is that
enough of society will benefit from expensive, privatised
public services (i.e. 'middle England') to sustain
them in power. The poor will have no-one to vote for, but then,
they don't in the US either, and what's good enough for Bush
must be good enough for Blair.
So, in December, the Labour government announced that
BUPA has been invited to bid to take over the running of
NHS hospitals. This announcement was quickly followed by
another; eleven companies have been invited to run new
publicly-funded fast-track surgeries which will perform routine
operations. Using public money to pay the private
sector to carry out NHS operations was originally supposed to
be only a temporary measure to cut waiting lists - it is now a
permanent fixture. Such measures reinforce the
idea that the state sector is failing, and must be rescued by
the private sector. Hence, they underpin the key government
message that the private sector is vibrant,
modern, efficient and necessary. Images of grateful patients
being treated in luxurious private rooms helps break down the
negative (true) images of private health
companies profiting from carrying out NHS duties.

PFI: Profits For Investors
NHS purchases of private operations are merely a
softening-up exercise designed to get the public used to the
idea of private sector involvement. If we step back and
look at the bigger picture, by far the biggest threat to public
health care provision is the dramatic increase in the use of
Private Finance Initiatives (PFIs). Labour's
argument for these is that they are the only way of providing
funds for large scale public projects that the state cannot
afford. The biggest push has been in building new
hospitals, and Blair has gone to great effort to point out shiny
new PFI hospitals and persuade us that, as long as health care
remains free at the point of delivery, we
shouldn't care how it is provided.
However, this is a bogus argument. Through the PFI, the
government is taking out public loans from the private sector
at a much higher rate of interest than normal
government borrowing. Using government borrowing to finance
public sector projects is far more cost effective, as studies
(such as Professor Allyson Pollock's) have shown.
The high payments will inevitably take income away from
public sector building of schools, hospitals and services for the
next 20-30 years - the lifetime of the loans. This
will inevitably lead to a steadily declining public sector, with
more 'failing' schools and hospitals - and these will be
increasingly handed over to the private sector.
If that is not bad enough, the government has now
announced the setting up of Foundation hospitals. The idea
was first thought up by the Tories, but dropped as too
controversial. The result will be that more successful
hospitals get 'rewarded' with greater government funds, thus
leading to greater inequality, with Foundation hospitals
attracting funds away from less successful hospitals. Rich
hospitals will get richer, while poorer hospitals (inevitably in
working class areas) will become "sink
hospitals", starved of funds and on a downward spiral to
'failing' status and privatisation.
Foundation hospitals are to be allowed to run independent
of central government, so they will have the power to borrow
on the capital markets. But how will they pay
for this borrowing? Inevitably, they will have to increase their
private patients lists as a means of generating revenue.
Hence, they will lead to yet more health
inequality and the injection of yet more private provision.
Moreover, we are not talking about one or two Foundation
hospitals, to be developed as showpieces. The New
Economics Foundation, who advised ministers on the scheme,
predicated that 40% of hospitals would take Foundation status
within five years; "ushering a style of social
enterprise that would spread through schools and local
As if this were not enough, there is growing concern that
Foundation hospitals will be able to levy charges on NHS
patients. Labour has already put forward the first
step towards charging in its NHS plan, which creates a new
category of "intermediate care". Patients will be allowed a
certain amount of free care, after which they will be
means tested and charged for what is called "personal care".
There can be no doubt that Foundation hospitals will raise
ever-larger personal care charges to fund their
capital loans repayments, while non-Foundation hospitals,
starved of funds, will have to resort to charges merely to keep

not in our name
Behind all the Labour's "public ethos, private delivery"
babble lies the clear intention to dismantle universal social
provision and to keep this practice under wraps
for as long as possible. Slow, steady change is not as dramatic
as Thatcher's floatation's, but it is less noticeable and will end
up being at least as fundamental.
Labour's strategy is to chip away at social provision while
talking of defending it, using smoke and mirrors to conceal
ever greater private provision and charging,
resulting in the demise of the public health system funded by
ability to pay through taxation and delivered according to
need by being free at the point of delivery.
As opposition to the free market grows both at home and
abroad, New Labour represents its gentler, more devious and
more intellectual face. By repackaging market
orthodoxy into the so-called Third Way, they have had some
success in overcoming growing resistance to privatisation in
Britain. The hope of the private health companies is
that they will export their Third Way policies across Europe.
Hence, lies and non-delivery on endless targets may be the
least of our worries; in the long run, they may yet
achieve what Thatcher could only dream of at the height of
her popularity and power; the dismantling of the post-war
welfare state.
At present, there seems little resistance to Labour. Along
with the rest of the social democratic left, the unions are
unable to come to terms with its free market
orthodoxy and, with a few exceptions, still haven't woken up
and smelt the coffee. Blinded by their long ties to Labour and
fearful of damaging it and letting the Tory
union-bashers back in, they remain transfixed, as they watch
them betray the very core of their principles, forlornly hoping
that the real (old) Labour will soon re-emerge.
They seem unable to believe or comprehend that the party
they cherish has finally eclipsed the Tory party - only to
promptly become it.
The only force capable of mounting resistance to Labour is
the growing anti-capitalist movement. Born out of the
rejection of globalisation, the movement has expanded
into exposing and attacking the growing imperialism of
western capitalism. However, though disdainful of Labour,
much of the resistance has yet to openly attack and expose
the dangers that Labour's free market orthodoxy poses to
British society. If the anti-capitalist movement is going to
develop further in Britain, it must begin to link the
struggle against capitalism internationally to the struggle
against capitalism in Britain. A good place to start is with the
current juxtaposition of Labour and global
corporations; for behind the government's attempts to
privatise the public sector in Britain are the very same
multi-nationals who are driving globalisation overseas - by
using the power of western states to open up public sectors
across the developing world and privatising them.

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