Suresh Menon in The Hindu
One of the more amusing sights in cricket recently has been that of England trying desperately to work out a formula to simultaneously discipline Ben Stokes and retain him for the Ashes series. To be fair, such contortion is not unique. India once toured the West Indies with Navjot Singh Sidhu just after the player had been involved in a road rage case that led to a death.
Both times, the argument was one we hear politicians make all the time: Let the law takes its course. It is an abdication of responsibility by cricket boards fully aware of the obligation to uphold the image of the sport.
Cricketers, especially those who are talented, and therefore have been indulged, tend to enjoy what George Orwell has called the “benefit of the clergy”. Their star value is often a buffer against the kind of response others might have received. Given that the team leaves for Australia at the end of this month, it is unlikely that Stokes will tour anyway, yet the ECB’s reaction has been strange.
Neither Stokes nor Alex Hales, his partner at the brawl in Bristol which saw Stokes deliver what the police call ABH (Actual Bodily Harm), was dropped immediately from the squad. This is a pointer to the way cricket boards think.
An enquiry by the England and Wales Cricket Board (ECB) would not have taken more than a few hours. Given the cctv footage, the players’ own versions, and the testimony of the victims, it is unlikely that there could be any ambiguity about what happened. Yet the ECB has chosen to bring in its independent Cricket Discipline Commission only after the police have completed their inquiries.
Top sportsmen tend to be national heroes, unlike, say, top chartered accountants or geography teachers, and they have a responsibility to ensure they do not bring the sport into disrepute. It is a tough call, and not everybody agrees that your best all rounder should also be your most ideally-behaved human being. But that is the way it is. After all, sport is an artificial construct; rules around it might seem to be unrealistic too.
Stokes brought “the game into disrepute” — the reason Ian Botham and Andrew Flintoff were banned in the past — and he should not be in the team. The ECB’s response cannot be anything other than a ban. Yet, it is pussy-footing around the problem in the hope that there is a miracle. Perhaps the victims will not press charges. Perhaps the police might decide that the cctv images are inconclusive.
Clearly player behaviour is not the issue here. There are two other considerations. One was articulated by former Aussie captain Ian Chappell: Without Stokes, England stood no chance in the Ashes. The other, of equal if not greater concern to the ECB, is the impact of Stokes’s absence on sponsorship and advertising. Already the brewers Greene King has said it is withdrawing an advertisement featuring England players.
Scratch the surface on most moral issues, and you will hit the financial reasons that underlie them.
Stokes, it has been calculated, could lose up to two million pounds in endorsements, for “bringing the product into disrepute”, as written into the contracts. It will be interesting to see how the IPL deals with this — Stokes is the highest-paid foreign player in the tournament.
And yet — here is another sporting irony — there is the question of aggression itself. Stokes (like Botham and Flintoff and a host of others) accomplishes what he does on the field partly because of his fierce competitive nature and raw aggression.
Just as some players are intensely selfish, their selfishness being a reason for their success and therefore their team’s success, some players bring to the table sheer aggression.
Mike Atherton has suggested that Stokes should learn from Ricky Ponting who was constantly getting into trouble in bars early in his career. Ponting learnt to channelise that aggression and finished his career as one of the Aussie greats. A more recent example is David Warner, who paid for punching Joe Root in a bar some years ago, but seems to have settled down as both batsman and person.
Stokes will be missed at the Ashes. He has reduced England’s chances, even if Moeen Ali for one thinks that might not be the case.
Still, Stokes is only 26 and has many years to go. It is not too late to work on diverting all that aggression creatively. Doubtless he has been told this every time he has got into trouble. He is a rare talent, yet it would be a travesty if it all ended with a rap on the knuckles. England must live — however temporarily —without him.
'People will forgive you for being wrong, but they will never forgive you for being right - especially if events prove you right while proving them wrong.' Thomas Sowell
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Wednesday, 4 October 2017
Tuesday, 3 October 2017
The many shades of darkness and light
If we do not recognise the multiplicity of our past, we cannot accept the multiplicity of our present
Tabish Khair in The Hindu
For most Europeans and Europeanised peoples, Western modernity starts assuming shape with something called the Enlightenment, which, riding the steed of Pure Reason, sweeps away the preceding ‘Dark Ages’ of Europe. Similarly, for religious Muslims, the revelations of Islam mark a decisive break in Arabia from an earlier age of ignorance and superstition, often referred to as ‘Jahillia’.
Both the ideas are based on a perception of historical changes, but they also tinker with historical facts. In that sense, they are ideological: not ‘fake’, but a particular reading of the material realities that they set out to chronicle. Their light is real, but it blinds us to many things too.
For instance, it has been increasingly contested whether the European Dark Ages were as dark as the rhetoric of the Enlightenment assumes. It has also been doubted whether the Enlightenment shed as much light on the world as its champions claim. For instance, some of the darkest deeds to be perpetuated against non-Europeans were justified in the light of the notion of ‘historical progress’ demanded by the Enlightenment. Finally, even the movement away from religion to reason was not as clear-cut as it is assumed: well into the 19th century, Christianity (particularly Protestantism) was justified in terms of divinely illuminated reason as against the dark heathen superstitions of other faiths, and this logic has survived in subtler forms even today.
In a similar way, the Islamic notion of a prior age of Jahillia is partly a construct. While it might have applied to some Arab tribes most directly influenced by the coming of Islam, it was not as if pre-Islamic Arabia was simply a den of darkness and ignorance. There were developed forms of culture, poetry, worship and social organisation in so-called Jahillia too, all of which many religious Arab Muslims are not willing to consider as part of their own inheritance today. Once again, this notion of a past Jahillia has enabled extremists in Muslim societies to treat other people in brutal ways: a recent consequence was the 2001 destruction of the ancient Buddhas of Bamiyan statues by the Taliban in Afghanistan, not to mention the persecution of some supposed ‘idolators’ in Islamic State-occupied territories.
Achievements and an error
Both the notions — the Dark Ages followed by the Enlightenment and Jahillia followed by the illumination of Islam — are based on some real developments and achievements. Europe did move, slowly and often contradictorily, from religious and feudal authority to a greater tendency to reason and hence, finally, to allotting all individuals a theoretically equivalent (democratic) space as a human right rather than as a divine boon. Similarly, many parts of pre-Islamic Arabia (‘Jahillia’) did move from incessant social strife and a certain lack of cohesion to the far more organised, and hence hugely successful, politico-religious systems enabled by Islam. It might also be, as many religious Muslims claim, that early Islam marked some distinctively progressive and egalitarian values compared to the predominant tribalism of so-called Jahillia.
In both cases, however, the error has been to posit a complete break: a before-after scenario. This is not sustained by all the historical evidence. Why do I need to point this out? Because there are two great problems with positing such decisive before-after scenarios, apart from that of historical error.
Two problems of a complete break
First, it reduces one’s own complex relationship to one’s past to sheer negation. The past — as the Dark Ages or Jahillia — simply becomes a black hole into which we dump everything that we feel does not belong to our present. This reduces not only the past but also our present.
Second, the past — once reduced to a negative, obscure, dark caricature of our present — can then be used to persecute peoples who do not share our present. In that sense, the before-after scenario is aimed at the future. When Europeans set out to bring ‘Enlightenment’ values to non-European people, they also justified many atrocities by reasoning that these people were stuck in the dark ages of a past that should have vanished, and hence such people needed to be forcibly civilised for their own good. History could be recruited to explain away — no, even call for — the persecution that was necessary to ‘improve’ and ‘enlighten’ such people. I need not point out that some very religious Muslims thought in ways that were similar, and some fanatics still do.
I have often wondered whether the European Enlightenment did not adopt just Arab discoveries in philosophy or science, ranging from algebra to the theory of the camera. Perhaps their binary division of their own past is also an unconscious imitation of the Arab bifurcation of its past into dark ‘Jahillia’ and the light of Islam. Or maybe it is a sad ‘civilisational’ trend — for some caste Hindus tend to make a similar cut between ‘Arya’ and ‘pre-Arya’ pasts, with similar consequences: a dismissal of aboriginal cultures, practices and rights today as “lapsed” forms, or the whitewashing of Dravidian history by the fantasy of a permanent ‘Aryan’ presence in what is India.
All such attempts — Muslim, Arya-Hindu, or European — bear the germs of potential violence. After all, if we cannot accept our own evolving identities in the past, how can we accept our differences with others today? And if we cannot accept the diversity and richness of our multiple pasts, how can we accept the multiplicity of our present?
Tabish Khair in The Hindu
For most Europeans and Europeanised peoples, Western modernity starts assuming shape with something called the Enlightenment, which, riding the steed of Pure Reason, sweeps away the preceding ‘Dark Ages’ of Europe. Similarly, for religious Muslims, the revelations of Islam mark a decisive break in Arabia from an earlier age of ignorance and superstition, often referred to as ‘Jahillia’.
Both the ideas are based on a perception of historical changes, but they also tinker with historical facts. In that sense, they are ideological: not ‘fake’, but a particular reading of the material realities that they set out to chronicle. Their light is real, but it blinds us to many things too.
For instance, it has been increasingly contested whether the European Dark Ages were as dark as the rhetoric of the Enlightenment assumes. It has also been doubted whether the Enlightenment shed as much light on the world as its champions claim. For instance, some of the darkest deeds to be perpetuated against non-Europeans were justified in the light of the notion of ‘historical progress’ demanded by the Enlightenment. Finally, even the movement away from religion to reason was not as clear-cut as it is assumed: well into the 19th century, Christianity (particularly Protestantism) was justified in terms of divinely illuminated reason as against the dark heathen superstitions of other faiths, and this logic has survived in subtler forms even today.
In a similar way, the Islamic notion of a prior age of Jahillia is partly a construct. While it might have applied to some Arab tribes most directly influenced by the coming of Islam, it was not as if pre-Islamic Arabia was simply a den of darkness and ignorance. There were developed forms of culture, poetry, worship and social organisation in so-called Jahillia too, all of which many religious Arab Muslims are not willing to consider as part of their own inheritance today. Once again, this notion of a past Jahillia has enabled extremists in Muslim societies to treat other people in brutal ways: a recent consequence was the 2001 destruction of the ancient Buddhas of Bamiyan statues by the Taliban in Afghanistan, not to mention the persecution of some supposed ‘idolators’ in Islamic State-occupied territories.
Achievements and an error
Both the notions — the Dark Ages followed by the Enlightenment and Jahillia followed by the illumination of Islam — are based on some real developments and achievements. Europe did move, slowly and often contradictorily, from religious and feudal authority to a greater tendency to reason and hence, finally, to allotting all individuals a theoretically equivalent (democratic) space as a human right rather than as a divine boon. Similarly, many parts of pre-Islamic Arabia (‘Jahillia’) did move from incessant social strife and a certain lack of cohesion to the far more organised, and hence hugely successful, politico-religious systems enabled by Islam. It might also be, as many religious Muslims claim, that early Islam marked some distinctively progressive and egalitarian values compared to the predominant tribalism of so-called Jahillia.
In both cases, however, the error has been to posit a complete break: a before-after scenario. This is not sustained by all the historical evidence. Why do I need to point this out? Because there are two great problems with positing such decisive before-after scenarios, apart from that of historical error.
Two problems of a complete break
First, it reduces one’s own complex relationship to one’s past to sheer negation. The past — as the Dark Ages or Jahillia — simply becomes a black hole into which we dump everything that we feel does not belong to our present. This reduces not only the past but also our present.
Second, the past — once reduced to a negative, obscure, dark caricature of our present — can then be used to persecute peoples who do not share our present. In that sense, the before-after scenario is aimed at the future. When Europeans set out to bring ‘Enlightenment’ values to non-European people, they also justified many atrocities by reasoning that these people were stuck in the dark ages of a past that should have vanished, and hence such people needed to be forcibly civilised for their own good. History could be recruited to explain away — no, even call for — the persecution that was necessary to ‘improve’ and ‘enlighten’ such people. I need not point out that some very religious Muslims thought in ways that were similar, and some fanatics still do.
I have often wondered whether the European Enlightenment did not adopt just Arab discoveries in philosophy or science, ranging from algebra to the theory of the camera. Perhaps their binary division of their own past is also an unconscious imitation of the Arab bifurcation of its past into dark ‘Jahillia’ and the light of Islam. Or maybe it is a sad ‘civilisational’ trend — for some caste Hindus tend to make a similar cut between ‘Arya’ and ‘pre-Arya’ pasts, with similar consequences: a dismissal of aboriginal cultures, practices and rights today as “lapsed” forms, or the whitewashing of Dravidian history by the fantasy of a permanent ‘Aryan’ presence in what is India.
All such attempts — Muslim, Arya-Hindu, or European — bear the germs of potential violence. After all, if we cannot accept our own evolving identities in the past, how can we accept our differences with others today? And if we cannot accept the diversity and richness of our multiple pasts, how can we accept the multiplicity of our present?
Monday, 2 October 2017
Capitalist? Socialist? It’s time we dropped such meaningless labels from our political discourse
Ben Chu in The Independent
The American essayist Ralph Waldo Emerson once observed that a foolish consistency is the hobgoblin of little minds. Swap “foolish consistency” for “foolish label” and one has a good description of our contemporary political discourse.
Theresa May defends “free market capitalism”. Jeremy Corbynmakes the case for “21st century socialism”. So the headlines and the news reports yell at us. So the party leaders themselves inform us in their speeches.
But what do these labels actually mean? What economic policies do they signify? What sort of societies do they describe?
The concept of capitalism dates back to the Industrial Revolution, when wealthy entrepreneurs owned the new physical “capital” that was made possible by advances in technology. The boss of the new textile factory was also the owner. And that ownership conferred immense economic power and social authority, as factory bosses could determine the wages and conditions of the workers.
But who owns the physical capital, the “means of production”, of our modern economy? It’s no longer the people who run the large organisations in which a great many of us work. Millions of us will be invested in these giant companies through our pension funds. Does that make us all “capitalists”, like little 19th century mill owners? Hardly. Economic power has been divorced from corporate ownership. But that doesn’t mean it’s been broadly shared.
Another wrinkle is that today’s most dynamic companies – think Google, Amazon and Uber – actually have very little “capital” in the classic meaning of the word. The value of such firms derives not from tangible equipment or commodities, but from their intellectual property, from the expertise of their high-skilled employees and, increasingly, their networks and brands.
“Socialism” is a similarly problematic label, dating from the era of political struggles between newly-organised workers and the established economic elite. But the workers won many of those battles, establishing workplace protections, universal voting rights and state welfare systems. So what does socialism mean in a modern context? Soviet Union-style central planning and the abolition of private property? Venezuelan-style price controls? Cuban-style suppression of civil liberties?
Or does it simply mean the state ownership of certain natural monopoly utilities? This seems to be the justification for the use of the label in relation to Labour’s election manifesto. But, following that rationale, should we describe the Netherlands as socialist because its rail system is state-owned? Is France socialist because it has a national energy company? Is Germany socialist because it has rent controls?
In fact all these countries are social democracies – a variety of developed-world market-based economy. Britain has another variety. So does Japan. So do the Scandinavian nations. These are all mixed economies, where markets coexist with some degree of state ownership and intervention. Even America, with its state-funded scientific research programmes and New Deal-era social security system, is really a mixed economy.
The idea that Theresa May and the Conservatives are offering a set of policies that can be usefully summed up as “capitalism” and Labour are offering something entirely distinct called “socialism”, is fatuous. There are certainly differences between the two major parties in their view of the proper borders between market and state within our mixed economy (bigger differences than there have been for several decades) – but their positions plainly still lie on a recognisable continuum.
Theresa May herself says she wants a louder voice for workers in company board rooms, and stresses that markets must operate “with the right rules and regulations”. And Jeremy Corbyn, for all the attempts by the right-wing press to portray him as a bloodthirsty revolutionary, is not calling for the nationalisation of supermarkets and car manufacturers.
People are time-poor, and labels can be a useful shorthand when we all know roughly what is being referred to. But these particular labels – “capitalist”, “socialist” – don’t facilitate understanding: they short-circuit it. They don’t encourage us to think seriously about the challenges of making our complex and rapidly-evolving economies work in ways that will raise living standards and opportunities for human flourishing. They are essentially a spur to mindless tribalism: an invitation to take part in the political equivalent of an English Civil War battle recreation society.
The best advice is to banish the hobgoblins. Ignore the labels and focus on the merit – or otherwise – of the policies.
The American essayist Ralph Waldo Emerson once observed that a foolish consistency is the hobgoblin of little minds. Swap “foolish consistency” for “foolish label” and one has a good description of our contemporary political discourse.
Theresa May defends “free market capitalism”. Jeremy Corbynmakes the case for “21st century socialism”. So the headlines and the news reports yell at us. So the party leaders themselves inform us in their speeches.
But what do these labels actually mean? What economic policies do they signify? What sort of societies do they describe?
The concept of capitalism dates back to the Industrial Revolution, when wealthy entrepreneurs owned the new physical “capital” that was made possible by advances in technology. The boss of the new textile factory was also the owner. And that ownership conferred immense economic power and social authority, as factory bosses could determine the wages and conditions of the workers.
But who owns the physical capital, the “means of production”, of our modern economy? It’s no longer the people who run the large organisations in which a great many of us work. Millions of us will be invested in these giant companies through our pension funds. Does that make us all “capitalists”, like little 19th century mill owners? Hardly. Economic power has been divorced from corporate ownership. But that doesn’t mean it’s been broadly shared.
Another wrinkle is that today’s most dynamic companies – think Google, Amazon and Uber – actually have very little “capital” in the classic meaning of the word. The value of such firms derives not from tangible equipment or commodities, but from their intellectual property, from the expertise of their high-skilled employees and, increasingly, their networks and brands.
“Socialism” is a similarly problematic label, dating from the era of political struggles between newly-organised workers and the established economic elite. But the workers won many of those battles, establishing workplace protections, universal voting rights and state welfare systems. So what does socialism mean in a modern context? Soviet Union-style central planning and the abolition of private property? Venezuelan-style price controls? Cuban-style suppression of civil liberties?
Or does it simply mean the state ownership of certain natural monopoly utilities? This seems to be the justification for the use of the label in relation to Labour’s election manifesto. But, following that rationale, should we describe the Netherlands as socialist because its rail system is state-owned? Is France socialist because it has a national energy company? Is Germany socialist because it has rent controls?
In fact all these countries are social democracies – a variety of developed-world market-based economy. Britain has another variety. So does Japan. So do the Scandinavian nations. These are all mixed economies, where markets coexist with some degree of state ownership and intervention. Even America, with its state-funded scientific research programmes and New Deal-era social security system, is really a mixed economy.
The idea that Theresa May and the Conservatives are offering a set of policies that can be usefully summed up as “capitalism” and Labour are offering something entirely distinct called “socialism”, is fatuous. There are certainly differences between the two major parties in their view of the proper borders between market and state within our mixed economy (bigger differences than there have been for several decades) – but their positions plainly still lie on a recognisable continuum.
Theresa May herself says she wants a louder voice for workers in company board rooms, and stresses that markets must operate “with the right rules and regulations”. And Jeremy Corbyn, for all the attempts by the right-wing press to portray him as a bloodthirsty revolutionary, is not calling for the nationalisation of supermarkets and car manufacturers.
People are time-poor, and labels can be a useful shorthand when we all know roughly what is being referred to. But these particular labels – “capitalist”, “socialist” – don’t facilitate understanding: they short-circuit it. They don’t encourage us to think seriously about the challenges of making our complex and rapidly-evolving economies work in ways that will raise living standards and opportunities for human flourishing. They are essentially a spur to mindless tribalism: an invitation to take part in the political equivalent of an English Civil War battle recreation society.
The best advice is to banish the hobgoblins. Ignore the labels and focus on the merit – or otherwise – of the policies.
Sunday, 1 October 2017
The pendulum swings against privatisation
Evidence suggests that ending state ownership works in some markets but not others
Tim Harford in The Financial Times
Political fashions can change quickly, as a glance at almost any western democracy will tell you. The pendulum of the politically possible swings back and forth. Nowhere is this more obvious than in the debates over privatisation and nationalisation.
In the late 1940s, experts advocated nationalisation on a scale hard to imagine today. Arthur Lewis thought the government should run the phone system, insurance and the car industry. James Meade wanted to socialise iron, steel and chemicals; both men later won Nobel memorial prizes in economics.
They were in tune with the times: the British government ended up owning not only utilities and heavy industry but airlines, travel agents and even the removal company, Pickfords. The pendulum swung back in the 1980s and early 1990s, as Margaret Thatcher and John Major began an ever more ambitious series of privatisations, concluding with water, electricity and the railways. The world watched, and often followed suit.
Was it all worth it? The question arises because the pendulum is swinging back again: Jeremy Corbyn, the bookies’ favourite to be the next UK prime minister, wants to renationalise the railways, electricity, water and gas. (He has not yet mentioned Pickfords.) Furthermore, he cites these ambitions as a reason to withdraw from the European single market.
Privatisation’s proponents mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver
That is odd, since there is nothing in single market rules to prevent state ownership of railways and utilities — the excuse seems to be yet another Eurosceptic myth, the leftwing reflection of rightwing tabloids moaning about banana regulation. Since the entire British political class has lost its mind over Brexit, it would be unfair to single out Mr Corbyn on those grounds.
Still, he has reopened a debate that long seemed settled, and piqued my interest. Did privatisation work? Proponents sometimes mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver. Realists might prefer to look at the evidence, and the ambitious UK programme has delivered plenty of that over the years.
There is no reason for a government to own Pickfords, but the calculus of privatisation is more subtle when it comes to natural monopolies — markets that are broadly immune to competition. If I am not satisfied with what Pickford’s has to offer me when I move home, I am not short of options. But the same is not true of the Royal Mail: if I want to write to my MP then the big red pillar box at the end of the street is really the only game in town.
Competition does sometimes emerge in unlikely seeming circumstances. British Telecom seemed to have an iron grip on telephone services in the UK — as did AT&T in the US. The grip melted away in the face of regulation and, more importantly, technological change.
Railways seem like a natural monopoly, yet there are two separate railway lines from my home town of Oxford into London, and two separate railway companies will sell me tickets for the journey. They compete with two bus companies; competition can sometimes seem irrepressible.
But the truth is that competition has often failed to bloom, even when one might have expected it. If I run a bus service at 20 and 50 minutes past the hour, then a competitor can grab my business without competing on price by running a service at 19 and 49 minutes past the hour. Customers will not be well served by that.
Meanwhile electricity and phone companies offer bewildering tariffs, and it is hard to see how water companies will ever truly compete with each other; the logic of geography suggests otherwise.
All this matters because the broad lesson of the great privatisation experiment is that it has worked well when competition has been unleashed, but less well when a government-run business has been replaced by a government-regulated monopoly.
A few years ago, the economist David Parker assembled a survey of post-privatisation performance studies. The most striking thing is the diversity of results. Sometimes productivity soared. Sometimes investors and managers skimmed off all the cream. Revealingly, performance often leapt in the year or two before privatisation, suggesting that state-owned enterprises could be well-run when the political will existed — but that political will was often absent.
My overall reading of the evidence is that privatisation tended to improve profitability, productivity and pricing — but the gains were neither vast nor guaranteed. Electricity privatisation was a success; water privatisation was a disappointment. Privatised railways now serve vastly more passengers than British Rail did. That is a success story but it looks like a failure every time your nose is crushed up against someone’s armpit on the 18:09 from London Victoria.
The evidence suggests this conclusion: the picture is mixed, the details matter, and you can get results if you get the execution right. Our politicians offer a different conclusion: the picture is stark, the details are irrelevant, and we metaphorically execute not our policies but our opponents. The pendulum swings — but shows no sign of pausing in the centre.
Tim Harford in The Financial Times
Political fashions can change quickly, as a glance at almost any western democracy will tell you. The pendulum of the politically possible swings back and forth. Nowhere is this more obvious than in the debates over privatisation and nationalisation.
In the late 1940s, experts advocated nationalisation on a scale hard to imagine today. Arthur Lewis thought the government should run the phone system, insurance and the car industry. James Meade wanted to socialise iron, steel and chemicals; both men later won Nobel memorial prizes in economics.
They were in tune with the times: the British government ended up owning not only utilities and heavy industry but airlines, travel agents and even the removal company, Pickfords. The pendulum swung back in the 1980s and early 1990s, as Margaret Thatcher and John Major began an ever more ambitious series of privatisations, concluding with water, electricity and the railways. The world watched, and often followed suit.
Was it all worth it? The question arises because the pendulum is swinging back again: Jeremy Corbyn, the bookies’ favourite to be the next UK prime minister, wants to renationalise the railways, electricity, water and gas. (He has not yet mentioned Pickfords.) Furthermore, he cites these ambitions as a reason to withdraw from the European single market.
Privatisation’s proponents mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver
That is odd, since there is nothing in single market rules to prevent state ownership of railways and utilities — the excuse seems to be yet another Eurosceptic myth, the leftwing reflection of rightwing tabloids moaning about banana regulation. Since the entire British political class has lost its mind over Brexit, it would be unfair to single out Mr Corbyn on those grounds.
Still, he has reopened a debate that long seemed settled, and piqued my interest. Did privatisation work? Proponents sometimes mention the galvanising effect of the profit motive, or the entrepreneurial spirit of private enterprise. Opponents talk of fat cats and selling off the family silver. Realists might prefer to look at the evidence, and the ambitious UK programme has delivered plenty of that over the years.
There is no reason for a government to own Pickfords, but the calculus of privatisation is more subtle when it comes to natural monopolies — markets that are broadly immune to competition. If I am not satisfied with what Pickford’s has to offer me when I move home, I am not short of options. But the same is not true of the Royal Mail: if I want to write to my MP then the big red pillar box at the end of the street is really the only game in town.
Competition does sometimes emerge in unlikely seeming circumstances. British Telecom seemed to have an iron grip on telephone services in the UK — as did AT&T in the US. The grip melted away in the face of regulation and, more importantly, technological change.
Railways seem like a natural monopoly, yet there are two separate railway lines from my home town of Oxford into London, and two separate railway companies will sell me tickets for the journey. They compete with two bus companies; competition can sometimes seem irrepressible.
But the truth is that competition has often failed to bloom, even when one might have expected it. If I run a bus service at 20 and 50 minutes past the hour, then a competitor can grab my business without competing on price by running a service at 19 and 49 minutes past the hour. Customers will not be well served by that.
Meanwhile electricity and phone companies offer bewildering tariffs, and it is hard to see how water companies will ever truly compete with each other; the logic of geography suggests otherwise.
All this matters because the broad lesson of the great privatisation experiment is that it has worked well when competition has been unleashed, but less well when a government-run business has been replaced by a government-regulated monopoly.
A few years ago, the economist David Parker assembled a survey of post-privatisation performance studies. The most striking thing is the diversity of results. Sometimes productivity soared. Sometimes investors and managers skimmed off all the cream. Revealingly, performance often leapt in the year or two before privatisation, suggesting that state-owned enterprises could be well-run when the political will existed — but that political will was often absent.
My overall reading of the evidence is that privatisation tended to improve profitability, productivity and pricing — but the gains were neither vast nor guaranteed. Electricity privatisation was a success; water privatisation was a disappointment. Privatised railways now serve vastly more passengers than British Rail did. That is a success story but it looks like a failure every time your nose is crushed up against someone’s armpit on the 18:09 from London Victoria.
The evidence suggests this conclusion: the picture is mixed, the details matter, and you can get results if you get the execution right. Our politicians offer a different conclusion: the picture is stark, the details are irrelevant, and we metaphorically execute not our policies but our opponents. The pendulum swings — but shows no sign of pausing in the centre.
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