Mail sell-off is market state's 'wild experiment'

The privatisation of the Royal Mail after centuries in state hands is not simply a carve-up of a public service for the benefit of big business and shareholders. It’s also another step down the road towards a fully-fledged market state.

A market state’s task is to provide opportunities for capitalism within the formerly public realm. That can mean everything from taking over parts of the NHS, running prisons, operating trains and – now – delivering letters and parcels.

This vision of the contemporary capitalist state is shared by all the mainstream parties. Royal Mail can be privatised quickly because the previous New Labour government created the conditions for this to happen.

In 2006, the Royal Mail lost its 350-year old monopoly and the British postal market became fully open to competition. A bid to privatise the service failed after a revolt by backbench Labour MPs.

But last year, legislation was passed which created the conditions for next month’s sell-off. The mail service will be sold on the stock market and quickly fall into the hands of equity funds, pension funds and global investors. It will be run for profit which means a ruthless rationalisation of services, especially outside the major towns and cities.

Naturally, the sale of Royal Mail has been brought forward to try and beat the programme of strikes planned by the Communication Workers Union.  The CWU is pinning its hopes on a Labour government renationalising the service. That’s not going to happen, as Ed Miliband’s party is committed to the present government’s spending plans. And that doesn’t include spending £3 billion or so in taking the royal mail back into public ownership.

Labour’s policies are being shaped around Miliband’s idea of “pre-distribution” and “responsible capitalism”. The role of the state here is to encourage and “incentivise” the private sector to pay better wages and treat their workers better. Old-style state control it isn’t.

As for Miliband’s would-be partners in a future coalition government, it is significant that the privatisation of the mail service is being pushed through with enthusiasm by Vince Cable, the business secretary. Once touted as a Liberal Democrat that Labour could work with, Cable is totally pro-business.

Billy Hayes, general secretary of the CWU, points out the overwhelming hostility among the public to privatisation, with 70% opposed according to one poll. But that cuts little ice with a government responsible for a national debt that is increasing at a rate of £3,200 a second. The sale of the Royal Mail won’t make a huge difference, but every little helps.

Hayes is confident that his members – 96% of  who say they are against privatisation, despite being offered a bribe in the form of shares –  will vote for a programme of rolling strikes. “Privatisation will destroy a national public service and lead to a race to the bottom on jobs, pay and conditions. It is vandalism, and must be stopped.”

But how? The British capitalist market state is the most advanced in its ambitions to divest itself of its former role as custodian of public assets and will sell them to whoever wants to buy them.  Railways, airports, water, nuclear power stations and much more are owned by global corporations and banks whereas the American state jealously guards national assets from foreign control.

Even when it comes to the mail, only a handful of countries have privatised their services. In Argentina, it was such a disaster that it had to be renationalised. A taste of what British postal workers can expect is shown by the experiences in the Netherlands . PostNL, formerly a subsidiary of TNT, is driving down wages and conditions and is planning to restrict deliveries to three days a week.

So Hayes is partly right when he says the ConDems’ plans amount to a “wild experiment”. But that’s the nature of the beast. Rather than relying on Labour, the CWU would be better off joining with the teachers, firefighters and other sections coming into conflict with the coalition this autumn.

Their aim should be to develop support for action to oust the government and launch a discussion on what kind of new, democratic economic and political system should replace the discredited market state. That’s the way to protect and develop public services.

Paul Feldman
Communications editor

Marching in the footsteps of the Levellers

Creating a real democracy to replace our deficient, defective system is obviously no simple task. However, the positive outcome of an assembly called around producing an Agreement of the People for the 21st century shows that the project is gathering momentum.

A diverse range of groups and individuals have formed a steering group to complete work on revising the draft Agreement presented to the assembly that was held in London at the weekend (You can watch a live stream here, here and here).   

When finalised, the Agreement will be presented as the framework for a new democratic constitution for Britain. The idea is that the Agreement should embrace political, economic, social, legal, environmental and other rights.

The assembly heard proposals to complete the work within six months and to then launch a campaign to win mass support for the Agreement, to create a movement that will fight for it.

Working groups came up with many proposals to improve and amend the present draft text. These will be incorporated into the process of producing a final Agreement.

Among the many action points was a commitment at an early stage to try to create global links with other progressive organisations and groups. How this can happen was established in the assembly itself, when a representative of Revolucion Democratica from Chile was able to take part in a working group via the internet.

The need to extend participation in the process through online forums (with links to each other) and make use of video presentations was a key proposal which the steering group will work on when it meets for the first time. 

Also crucial will be the search for allies amongst networks of community groups, trade unions, activist organisations and those struggling against the state over cuts, attacks on human rights and for climate change action. This is clearly going to require resources – human and financial – so fund raising will be crucial.

  

Support from creative artists is already forthcoming. “The Revolution Will Be Networked” assembly drew inspiration from performances by poets Chip Grim, Cristina Viti and Adnan al-Sayegh. 

The Agreement of the People project takes its inspiration from the struggles of the Levellers and Diggers during the English Revolution in 1647. A new constitutional settlement was needed to complete the switch from the absolute power of the monarchy to parliamentary power.

When the Levellers put forward their Agreement at the famous Putney Debates at meetings of the Army Council of the New Model Army, it emphasised democratic control of power, the rule of law, regular elections, a wider franchise.

Theirs was the first attempt in history to create a constitution, to say how the country should be governed. Although there were two more drafts, the Levellers’ agreement was defeated. Parliament became sovereign but there was no democracy to go with it.

Leveller ideas surfaced again in the American and French revolutions. The famous words in the US constitution about holding “these truths to be self-evident” and “certain unalienable rights” sound like Leveller language.

Fast forward to the 21^st century and, although the right to representation has long been won, the state has undermined this through a direct alliance with corporate and financial power. A market state has established a stranglehold over society.

The plan to produce an Agreement of the People for the 21^st century builds on work done by democracy activists in the previous decade and the Real Democracy working group of Occupy London.

Created at the end of 2011, the group took as its starting point the initial statement of Occupy London, that the “current system is unsustainable. It is undemocratic and unjust”. The group has championed analysis, debates and discussion about our flawed political/state system as well as the English Revolution.

Seven groups have initially declared their support for the development of a new Agreement. This is significant because it cannot be the property of one organisation. It has to win broad support.

The time is right historically to consider what a real democracy would and could look like. We are in good company historically speaking. We are a line that goes back to the Levellers, the Diggers, the Chartists, the Suffragettes. We are with Tom Paine and John Lilburne and many other fighters for democracy and against state oppression.

We know that the tide of history is with us and not the status quo. 

Paul Feldman

Communications editor

Market state wrecks public services

The ConDems’ health bill is part of a major shift in the role of the state that dates back to the Thatcher period and the onset of corporate-driven globalisation in the early 1980s. Rather than a roll-back of history, we need real alternatives to what is effectively a market state.

As local councils struggling with reduced budgets prepare to “outsource” huge swathes of their services, and GPs line up to commission health services from all and sundry, the so-called “public services industry” (PSI) is licking its lips.

The PSI is made up mostly of commercial companies, many of them global operators like Serco, as well as some “third sector” voluntary, non-profit organisations. Together they take taxpayers’ money in return for providing services formerly delivered by the state

By 2007, driven by the Blair governments, the PSI had grown to mammoth proportions (link) with revenues of £80 billion year, representing 6% of the economy and employing 1.2 million people. These figures are undoubtedly far higher now.

Lobbying organisations such as the CBI Public Services Strategy Board, the PPP
Forum, the Business Services Association and the NHS Partners Network (which is actually part of the NHS Confederation) have developed close relations with government and the media.

Contractors have recruited many former government ministers and senior civil
servants as directors and advisors. Former health secretary Alan Milburn took several jobs with private health companies after leaving office.

The NHS concluded a contract with Bridgepoint Capital’s daughter company, Alliance Medical, six months after Milburn joined the parent company. Under the contract, Alliance Medical agreed to supply 130,000 MRI scans, of which fewer than half were eventually used. The government was nevertheless compelled to pay the full £16m contract price. The full scale of the revolving door between Whitehall and big business was revealed by Transparency International in its report, “Cabs for hire”.

Failure by contractors in areas like health service data management, the upgrade of the London Underground and care homes has left the state to pick up the financial pieces. Twenty-two hospitals face bankruptcy because they cannot meet exorbitant “private-finance initiative” contracts. Even the ConDems have had to come to the rescue with £1.5 billion of taxpayers’ money.

The ConDems’ bill to restructure the NHS in England is the latest chapter in a 20-year journey from a planned system to a competitive market for the supply of health care services. This began with the development of the internal market in the 1990s and the New Labour government extended it with the introduction of “patient choice”, foundation trusts, payment by results and independent sector treatment centres (ISTC).

There are nearly 35 ISTCs now operating alongside the NHS, carrying out surgical and other medical treatment on the basis of local contracts. Information about ISTCs is hard to come by on the grounds of “commercial confidentiality”, but a British Medical Association report says:

“The BMA is concerned because what evidence does exist suggests that where patients’ care is bought and sold, and where hospitals, doctors, nurses and carers have to compete with one another like businesses, we find poorer health outcomes for patients, lower quality care, rising bureaucracy and the erosion of relationships where co-operation is replaced with competition.”

As the state’s role is to enhance the development of capitalism, none of this should come as a surprise. As opportunities for making profit out of producing things declined in Britain, markets in public goods emerged to compensate. The private sector in turn drove down wages and conditions when they took over. Now the ConDems plan to drive down wages in the public sector to create a “level playing field” with big business.

Outsourcing state services is a project that all the major parties have championed. So returning to some mythical golden age of state ownership and provision is impossible. Instead, we need strategies aimed at ending the rule of the market state altogether, with policies and plans that shape a democratic future beyond profit and capitalism.

Paul Feldman
Communications editor

Welcome to the market state

From welfare to market state is the name of the project that Thatcher began, Blair and Brown continued and Cameron is intent on completing. The words he uses – “choice”, “diversity” and “freedom” – seem harmless. But the real purpose is barely disguised.

Just before he jetted off to Egypt and a tour of the Middle East with arms manufacturers in tow, the prime minister announced the plan to end the public sector as we know it. A “vital part of our mission to dismantle Big Government and build the Big Society in its place”, he announced.

“Diversity” is another warm word. But when Cameron applies it to public services, he means one thing – opening them up to “a range of providers” through competition. In other words, services delivered by the central and local state will be up for auction. Corporations, large charities and others will then compete to run them.

As Cameron acknowledged: “This is a transformation: instead of having to justify why it makes sense to introduce competition in some public services – as we are now doing with schools and in the NHS – the state will have to justify why it should ever operate a monopoly.”

To say, as TUC general secretary Brendan Barber did, that the plan was simply a "naked right-wing agenda that takes us right back to the most divisive years of the 1980s" is to miss out, conveniently, what took place between 1997 and 2010 when New Labour was in office.

Not only did the former state industries like rail, gas, electricity, water and telecoms remain privatised, they were subjected to even more competition and profit making. State subsidies for public transport were run down. As a result, for example, train fares are now the most expensive in Europe.

Not only that, Blair and Brown expanded the infamous “private-public partnership” and "private-finance initiative" arrangements under which companies provide services with the state guaranteeing their profit margins. The value of these contracts is an estimated £90 billion a year, making private involvement in the public sector the largest in any major economy and saddling the state with enormous debt.

Now the Coalition is taking the next logical step, using the cover of the massive regulatory bureaucracy that New Labour created as an excuse for what is certain to be a feeding frenzy for capitalists desperate for new areas of profit making as the recession deepens.

All this amounts to the end of the role of the capitalist state that developed after 1945. Then its purpose was to maintain a kind of class peace, provide services and prop up British capitalism where it could. With corporate-driven globalisation from the early 1980s came a profound change.

In Britain in particular, the state’s former role lost its relevance. Global corporations and a new financial system transcended borders and became more powerful than governments. The state began to assume the task of facilitating the operations of the global economy. Deregulation was its form, especially in relation to finance. Who can forget how Brown denationalised the Bank of England in 1997 as soon as he sat down at his desk.

The harsh world of the market state that Cameron envisages will more than a throwback to pre-1945. It is more like the early 19^th century, when the modern state did not exist. What will be left are the forces of repression – the police, the spy agencies, armed forces and the prison and courts system.

This begs the question as to what use a state like the present one is to the mass of people. The short answer is none at all. Its democratic side is shot through and now it denies responsibility for the welfare of its citizens. Our strategy has to be the dismantling of the market state and the transfer of political as well as economic power to the majority.

Paul Feldman,
Communications editor