Issue 248 of SOCIALIST REVIEW Published January 2001 Copyright © Socialist Review

Britain in decline?

Dim and dimmer

The vision of a better society is not one shared by the privatisers argues Peter Morgan
Clare Short: policies clash with pronouncements
Clare Short: policies clash with pronouncements

Were you ever asked at primary school to draw a picture which showed how people in the year 2000 would travel? If, like me, you had seen a few episodes of Star Trek, Lost in Space or some science fiction film that had people floating in capsules above the hub of the city, you would have stretched your imagination as far as you could to show something beyond your wildest dreams. Yet who would have believed that when we eventually arrived at this 'future society' the state of our transport would be even worse then it was many years ago?

The most startling statistic to emerge as the railways virtually ground to a halt at the end of last year was that at the end of 2000 it took longer to travel by train from Manchester to Liverpool than when people travelled over 150 years ago. But put aside your frustration for a while and spare a thought for the residents of California. The 'golden state' may be at the cutting edge of the new digital economy, but it has regularly suffered electricity shortages so acute that on occasions they triggered a state of emergency in which lights were dimmed in public places, photocopiers and other machines were switched off, and heating systems were strictly rationed. The so called 'Stage Three' emergency had Los Angeles city officials worried that entire neighbourhoods would have to be blacked out (no doubt fearing the looting this would provoke)--so much so that they decided to turn off the lights of the city Xmas tree. So severe was the crisis that Alan Greenspan, the chairman of the Federal Reserve, was forced to attend crisis meetings to try and sort out the problem.

How is it that two of the world's richest economies are unable to meet the most basic needs of their inhabitants? If we take each example on its own, the explanation seems simple. In Britain we have a privatised rail network that has suffered years of under-investment. The root of the problem in California lies in the deregulation of the electricity industry four years ago, which effectively removed all incentive for power companies to build extra capacity. There is a link here. Privatisation and the free market are wreaking havoc on the infrastructure of some of the world's major countries.

There is no more loyal advocate of the virtues of the free market than Tony Blair. His credentials are well established. Just when the rail crisis was at its most acute, and with the popular feeling that rail privatisation has been a complete disaster, New Labour carried on regardless with its intention to privatise the air traffic control system. In fact in all areas of government policy New Labour's love for the market is clearly seen.

In part this is driven by economic needs. The long term decline of British capitalism has meant a reluctance by both Tory and Labour governments to invest in public services. But the love for the free market is also ideologically driven. Nowhere is this more explicitly put than in Labour's recent White Paper 'Making globalisation work for the world's poor', released at the end of last year. The document has a clear and unambiguous belief in the free market. So it says, 'For globalisation to work for the poorest people, governments must introduce policies that allow companies to conduct their business safely and with reasonable return. Otherwise they will take their investment elsewhere.' Alongside this is an attack on those who have been campaigning against the institutions of world capitalism: 'Campaigners demanding the end of the WTO--such as those in Seattle in 1999 and Prague in 2000--grab headlines. But without a rules-based trading system the powerful countries can bully the rest... The answer to trade rules which are not working is not to scrap the WTO, but to ensure the trade rules work for all.'

One of the most annoying things about New Labour is that while it makes pronouncements about the need to make things better for the poor, it pursues policies that will do the complete opposite. So while Clare Short introduces a White Paper whose stated intention is to end the worst effects of globalisation, the government of which she is part carries on regardless in making globalisation work for the world's rich.

The General Agreement on Trade and Services (Gats) is the latest attempt by the world's most powerful nations to liberalise whole sections of the world's economy. Set up in 1994, Gats comes under the umbrella of the WTO and is essentially a set of rules which restricts governments from making decisions in how trade in services should take place. Its intention is to 'free up' whole sections of the service sector. Everything from health and education to water, electricity and gas supplies will come under the orbit of the Gats agreement, and no economy will be able to isolate itself from the power of the big corporations. Thus the problems that have been caused by privatisation, such as we have seen with the rail in Britain or the electricity in California, are likely to be replicated worldwide if this agreement gets the go-ahead.

It is a strategy that is completely at one with the politics of New Labour. Ever since being elected it has continued to pursue policies that have done everything to improve the profits of companies and nothing to improve the lives of those who voted for it. So while New Labour ministers maintain things are getting better, most workers feel that life is continuing to deteriorate.

Just as we have a government that is ideologically driven in its belief in the free market, so we have seen a growing movement that is beginning to question the system New Labour stands for. In part this has been seen in the mass demonstrations that have occurred from Seattle to Nice, and which show little sign of abating. There is now a greater willingness to question the free market and look for alternatives. One of the features of the anti-capitalist protests over the last year is that they have invariably been accompanied by counter-conferences where ideas are debated and strategies discussed. A real ideological debate has arisen where those who are in the forefront of the struggle are part of the process of arguing the best way forward. So a combination of a growing movement against the system and a real debate as to the alternatives on offer means the crisis for New Labour is set to deepen. As the popular mood continues to move to the left, and as the government continues to pursue policies identified with the right, a real gulf will emerge which Labour may find difficult to bridge.


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