Nationalised or privatised? That's the question.
From 1947 to 1980 it was N.
From the 80s to 2013 the answer was always the same. It was P, every time.
And now? As Aditya Chakrabortty notes in the Guardian this morning, Network Rail slipped back into official nationalisation yesterday (even if politicians of all hues pretended not to notice). That's pretty much the same as the situation that pervades with RBS which is a nationalised bank but which all politicians like to pretend otherwise.
And that's the importance of this question. It is a marker in the sand as a true indicator of what a politician thinks on a key issue, which is the public interest.
I am not an advocate of nationalisation for its own sake and there is ample, even overwhelming evidence, that it can be harmful in many sectors. Equally, there is ample and clear evidence that in many others the market has failed. Railways is one. Staggeringly, Royal Mail's indication that universal delivery is in doubt is the surest sign of another such case. Water is a disaster and far too important to be in the private sector. The private ownership of banking payment and clearance systems nearly brought this country to its knees.
There are clear public interest grounds for the national ownership of some assets and sectors of the economy. This still happens in many successful states. When we can have a mature debate on where this might arise and what to do about it to best promote the public interest then we'll have better politics and a better economy in this country.
But I won't be holding my breath just yet.
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As a non-accountant this mystifies me a great deal that debt of a private company can be mopped up by tax payers and yet shareholders make money.
I can only assume that this is an extension of the growth of financial instruments of mass destruction that allow debt to beget more debt by continuous repackaging as someone elses asset.
Or is it a bit like football teams that seem to be bankrupt by any normal standards but have players worth millions on their books who then give the impression of assets exceeding liabilities?
Is that the trick we’ve played on ourselves, debts are now assets and can be continually recycled as such?
I have no understanding of this just a sense of something deeply perverse going on.
You have largely surmised correctly: the inverse is often true here
Food is essential like water, should that be nationalised too?
No, because it is very clear multiple suppliers are possible
That is not the case with water
So the two are fundamentally different
Dogma is not the priority here; indeed I would argue that it has been harmful. Calm analysis is appropriate. Why is it so hard to see that?
Schools have multiple providers
Electricity has multiple providers
Gas has multiple providers
Health has multiple providers
Those being private are ok with you?
You are clearly intent in setting yourself up as the next provider of crass comments here
These are not worth replying to
The answers are obvious in he context of what I have written to all but those willingly seeking to be blind to the real issues
I don’t understand.
You say water is not the same as food as multiple suppliers are available.
Then a list of services with multiple suppliers also doesn’t meet your requirement.
Are you confused?
By the way, even water is available from alternate suppliers if you are a big user. That should be expanded with a water grid so households can also buy their water from any provider. That should satisfy your requirements.
It is very obvious that there can only be one national grid
And only one national school system
And one NHS
Etc etc
To pretend otherwise is just dogmatic pretence at the end of the day
And as I have made clear I am really not very interested in that
I am interested in public interest
That is what matters, but clearly not to you
Terry, have you actually read Richard’s comment?
“I am not an advocate of nationalisation for its own sake and there is ample, even overwhelming evidence, that it can be harmful in many sectors. Equally, there is ample and clear evidence that in many others the market has failed. Railways is one. Staggeringly, Royal Mail’s indication that universal delivery is in doubt is the surest sign of another such case. Water is a disaster and far too important to be in the private sector. The private ownership of banking payment and clearance systems nearly brought this country to its knees.”
Quite clearly Richard is saying that while the state is NOT the most appropriate provider in some areas of the economy, that is also true of the private sector. The privatised railways now receive an annual subsidy 2 or 3 (I haven’t checked the latest figures) greater than British Rail ever got, yet we have some of the highest train fares in the world. In total contrast to what we were told before privatisation (but in agreement with what many critics of it forecast), Royal Mail’s universal service obligation is now under threat; and as for the private sector banking system………!
Terry is dedicated to dogma
I am not
gas and electricity use the same networks to distribute. Health benefits from being an integrated system for collecting data and not having to bill separate items. It goes on. Schools likewise benefit from centralising some services e.g. specialist advisors and training, payroll, legal services, providing the right number of places in an area.
As Richard implies, one answer does not fit all.
Give up…..for serious health care the NHS back-stops everything. How many private hospitals maintain eye wateringly expensive NICU’s or A&E departments?
I’m no genius but even I know that if Circle Health ever gets in properly in the mire as it runs a major NHS hospital, it will be bailed out because it has to be.
Richard, it would appear that Terry is one of those right wing ideologues who believe, whatever the evidence to the contrary, in the ‘private good, public bad mantra’. In fact, this all this blind worship of the market has really given us is private corporations replacing the state as monopoly suppliers of services that should be done by the state, and where the rewards are privatised, but the risks socialized, as many, many people have pointed out.
And what is more, as we see with the railways, or power generation (where state owned EDF has been given a guaranteed index linked price for the energy to be produced by Hinkley C), many of these companies are actually wholly or part owned by foreign governments! You could not, as they say, make it up.
This the madness produced by the right wing dogma the Thatcherites bequeathed to us.
Terry has now well exceeded his quota for the day
And is anyway in breach of the comments policy
National security is also a factor.
In times of war (think WW2) the provision of food was indeed essentially nationalised.
The manufacture of aircrafts, weapons and machinery was also nationalised.
The prevaling circumstances very much determine whether a service is vital enough to be operated by the state, not dogma.
No, it’s economics and the public interest
Not the current state of war
The manfacture of aircraft and weapons wasn’t nationalised during either world war. The government issued tenders under various specifications and private companies responded to them.
And we, by and large, benefited as a result
Just don’t mention the Boulton Paul Defiant
I have stressed: I am not being dogmatic
However Terry it was brought under government control….the following on the production of a certain iconic aircraft may be of interest.
http://www.battleofbritain1940.net/document-42.html
Not quite sure I follow your point about clearance systems. Surely payments are settled at the central bank and this is publicly owned?
The actual network if banking has to be publicly owned so that in the event of failure it can be taken over
Consider it a lupcensing arrangement like Network Rail
But there was no indication of likely failure of this network during the financial crisis, was there? You imply from your post that there was. The bit that almost failed was the banks, not the payment schemes.
There was….it was why we had to bail out banks
If the baks had merely operated on a licenced system payment could have continued with their structure reverting to the licensor on their failure
@ Richard
There was no failure of the clearing and payments systems during the financial crisis.
The failure was individual banks, and people unwilling to lend via the money markets because they were unsure who was credit-worthy or not, and preffered to keep cash on their books rather than lend it to someone who may or may not be around to repay it.
This has nothing to do with the clearing system, and nationalising those systems would have done nothing to ease the crisis.
Of course there was no failure: the government had to pump the system full of money to make sure it did not happen
My proposal is intended to prevent that need arising again
The banking infrastructure needs to be in state hands – including access to account data – to make sure that is a bank fails payment systems do not
We had to bail out the banks because they ran out of money. Liquidity. For the actual networks to continue the only thing that is needed is that someone continues to pay their staff and other operating costs. These are miniscule compared to the funding requirements to enable banks to settle. If the networks failed because the banks couldn’t pay them, then a) we would already be in a gargantuan mess and b) the state could step in overnight to prop up the syatem providers at relatively low cost. I can’t see any benefit in nationalising them ahead of a crisis.
To second James G. If you are advocating nationalisation of clearing systems as a means of preventing another Lehmans style crash, then I get the impression you have a limited understanding of what caused the crisis, and what these clearing systems actually do.
The banks ran out of liquidity. Cash. That is why the BoE had to pump cash into the system to prevent a total collapse. The clearing systems themselves suffered no inherent faults.
Your proposal of nationalising the payments system would not achieve anything. It’s just a system of clearing transactions – not providing the money for those transactions, which was the problem during Lehmans.
I know exactly what caused the crash and have shown that many, many times
I even exposed part of the problem. Much of the exposure of Northern Rock’s shadow bank was down to me – as evidenced in parliamentary debate
Your claim is just wrong
This is a proposal to prevent the massive cost of failure
You clearly do not understand that
I can’t see how nationalising payment and settlement organisations will mean that the government doesn’t have to ‘pump the system full of money’ in the event of a future crisis. Or how it might prevent a future crisis transpiring. How does that work exactly? There is simply no logical connection.
We had to pump the system full of cash over a weekend to make sure cash points worked on Monday
If the banking infrastructure had been in national ownership that may well not have been necessary
Time for a more reasoned bail out would have been bought
If the banking infrastructure had been in national ownership that may well not have been necessary
I’m afraid I really don’t follow this.
Payments are settled in central bank money. The central bank is part of the state. And the money it holds can be created by the state. Bailing out the banks is a simple case of punching extra reserves into the central bank computer. It takes seconds and is done by the state. The fact that it takes a weekend to agree is simply due to the fact that politicians can’t just hand money out to people without having at least a few meetings. So all the crucial elements are already state run.
Well if it was all that easy what was all the fuss about?
I suggest it is you who has missed the point
Public ownership of land? 🙂
From a technical point of view it is that easy. It is just numbers in a computer system, which can be changed with a journal entry. Obviously, from a legal and political point of view printing reserves electronically and giving it to institutions is not so straightforward.
You are right. I have missed the point. Because you haven’t explained it to me. I still have no idea what you mean with respect to the payment and settlement infrastructure in all this.
I have a feeling this conversation is going nowhere
Maybe when you have time you could write a post explaining your view on this and exploring in more detail. You’ve suggested it is a key defence to prevent a future crisis so it would be worth your time. Thanks.
I did
In 2008
I’ll find it