Back in the ‘dark days’ of the 1970s, the then Labour government was constantly hounded by right-wingers and free marketeers for propping up struggling public sector enterprises.
The argument being that only the ‘invisible hand’ of the free market could effectively and efficiently allocate wealth and resources.
‘Lame ducks should go to the wall’ was the battle cry.
Fast forward 30 years and the much-vaunted fully-flexible free market economy is a reality.
The untrammelled private market governs almost every aspect of our lives.
So presumably huge government bail outs are but a distant memory?
Not really. Just last week the Bank of England ploughed £11bn into UK banks to prop up the international money markets. This was on top of a similar figure in January. This week the Bank bails out the banks again with another £5bn in the wake of the Bear Stearns collapse. All this is on top of the £25bn now on loan to Northern Rock.
It makes the £2bn showered on the failed Metronet tube privatisation scheme pale in comparison. Yet we are still have to fork out £12bn for substandard private sector IT schemes in the NHS and £2bn a year for private sector management consultants in the public sector.
So why no populist right wing hue and cry over taxpayers being fleeced for the sake of these ‘interest groups’?
Let’s be quite clear.
The freezing of the credit markets, the collapse of Northern Rock, fears over the property market and plunging share prices are all failures of the private market system.
The private market system has never performed in the way its protagonists suggest.
The more it is left to its own devices the more it exacerbates booms and slumps.
Which is exactly why other social forces – such as governments and, yes, unions, got involved in the first place.
The private market is certainly not performing well now.
Yet it is ordinary workers who are paying the price. At the moment we are paying through our wallets and purses.
But if things get worse, a full-blown recession could mean paying with our jobs.
This is not what we voted for when we elected Labour into office all those years ago.
If the government can magic tens of billions out of thin air for its financier friends so it can also afford proper pensions, rights for agency workers and a fully-funded public sector.
Private market dogma is today’s lame duck – and it should go to the wall.
Derek Simpson
