How CV19 exposes the limits of privatization

Richard Lawson’s blog got me on to this topic.

Long before CV19, Mrs. Thatcher’s neoliberal ideology took privatization into areas where control on behalf of the community makes more sense. I concede that nationalized industries were often run sclerotically, apparently incapable of the imaginative changes of which entrepreneurs were capable (in theory). But like the debate between universal basic income and universal basic services, neither ideological extreme is the optimum (I prefer a basic income to be the major partner). I do not advocate nationalizing greengrocers, although in the absence of a basic income, supermarkets can browbeat suppliers, and compete unfairly with small shops, contrary to the supposed ideal of competition.

In my own Profession, Probation, privatization of what was a world respected going concern has only recently been reversed, in principle, not yet in fact, after untold damage.

But the prime example of inappropriate privatization is home heating. The ecological logic is a low price for low use, rising per unit as demand rises. But the commercial logic is to maximise sales. Thus Ecotricity, whose claim to be the Greenest private supplier I do not dispute, has a substantial standing charge. They are only applying the commercial logic.

But coronavirus opens up a whole new field. A pandemic was assessed as when, not if. Detailed recommendations were made. Failure to implement them appears at first sight to be a crass blunder. Perhaps we should not rule that possibility out, but consider the commercial logic just mentioned – how best to maximize sales. With electricity or gas, consumers pay more than they should, and there is the increasingly serious problem of avoidable amounts of CO2.

But with materials to fight a pandemic, thousands of deaths are at stake. At the very least there is a conflict of interest: To nip the pandemic in the bud, or let it rip, however briefly, to create a market.  This logic is unreasonable, but when smoking was suspected of causing cancer, avoidable deaths were not allowed to inhibit decades of profit, Climate denial is a much bigger ‘elephant’ where the same logic applies.

The lesson to be drawn is that there needs to be a limit to privatization. If this plays no part, we are left with the fact that detailed instructions were not acted upon. This may become the worst recession ever. Which is worse, being led by amoral bastards who at least have a plan, or by incompetent donkeys?

 

 

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