Privatization of Services, the “Free Market” & Democracy

Privatization of “services” (water for example) is both for corporate profit and for undermining democracy. In both cases, virtually by definition.

Thus such privatization removes matters of crucial public concern from the public arena, where the public can in principle play a role (and sometimes does), to private tyrannies from which the public is in principle excluded. That’s an attack on democracy, by definition. Just how the goals of profit and undermining democracy enter into particular decisions probably varies, and would be almost impossible to determine, because hostility to democracy is so deeply engrained that those who make the decisions could well be unaware of what they are doing, even though it is entirely on the surface. Not unusual…

…The justification is that it is more profitable, at least as long as people shut up. Period. Water is in fact a luxury by state capitalist moral standards — and the term “moral” is the right one.

The market theories of Ricardo, Malthus, etc., were quite clear on this: people have no rights other than what they can acquire on the market. If they can’t survive, “go somewhere else” — which they could in those days, as the population was being removed or exterminated in the US and other former colonies. These economic principles were declared by the founders of modern economics to be as certain as those of Newton. It’s true that sometimes the public is too stupid to understand the elementary logic. Thus in the 1820s, when market principles were imposed in England, the army was spending much of its time putting down riots, which pretty soon led to Chartism, labor organizing, and other dangerous attempts to introduce working democracy. And since the science is more supple than Newtonian physics, it was able to shift to more social democratic principles. Same in Bolivia. When people demonstrated their incapacity to comprehend that your children have no right to drink water if you don’t earn enough, there was a virtual revolt, army massacres, and overthrow of the government. Sometimes people are just too stupid, and can’t comprehend Newton’s principles.

We don’t have to go to Bolivia to understand the point. Take the US, where we live…

… As noted in … last week’s Gallup poll… health care is the leading financial concern for the population, and only an “astounding” 6% of the population think it’s working (quote from Gallup analyst).

Majorities (often large, depending on how questions are asked) think the government should guarantee health care to the population — even that it is a high-ranking “moral issue” (far above those trumpeted in the doctrinal system). It’s no secret that the US has far and away the most inefficient health care system in the industrial world, with far higher costs and among the poorest outcomes. It’s hardly coincidental that it is the only system that is privatized to such an extent, therefore introducing massive bureaucracy, supervision, paper work, subordination to big pharma, and other factors that raise costs and reduce performance. And it is leading to a major fiscal crisis: to the marginal extent that Social Security faces a eventual fiscal crisis, it’s largely due to escalating health care costs. But the system is untouchable. When polls tell us that 2/3 of the population want a national health care system, as elsewhere, the press reports that government involvement of any kind has “no political support” — which is true, on the prevailing elite assumption that the government is to be run by financial industries, etc., with the public irrelevant. Why is the system untouchable? Because in fact it is working very well for the privileged. Health care is effectively rationed by wealth, and if large parts of the population can’t afford seriously needed health care — as is the case — that simply doesn’t matter. Also, the inefficiencies contribute to private gain. So what’s the problem?

Health care is no more a luxury than water, at least by human standards. But by state-capitalist standards, values are quite different. There’s much prating about Bush’s “moral values.” We determine values by actions, not pretty words, which are cheap. The values are transparent: shine the shoes of the rich, stuff their pockets with cash, and let the rest fend for themselves.

Free market theory — which is to a large extent irrelevant to the economy anyway — tells us nothing about adjustment of market to needs. There was a very weak argument to that effect in Adam Smith, who based his (rather nuanced) approval of markets on the principle that under conditions of perfect liberty, markets would tend towards perfect equality. But the assumptions are so radically remote from reality that the argument would be irrelevant even if it were sound.

It’s rather like the recent proof by Harvard’s president (so his supporters in the press report) that relative absence of women in academic sciences can’t be the result of discrimination, because discrimination can’t exist. Easy to prove: in a market society (which we are, by doctrinal fiat), if some group were subjected to discrimination, they could be hired more cheaply, and the institution that hires them would therefore out-compete its rivals. QED.

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