On Public versus Private Enterprise.
Since the 2008 financial crash, there has been a marathon public bailout of private financial institutions and industrial enterprises. Bankruptcies of profit-charging institutions classed as ‘too big to fail’ at the time were avoided in two ways. First, they were granted huge loan guarantees and injections of public cash. Second, many were taken over by the state, their solvency guaranteed by the resources of a whole country. Then central banks in Europe and America created continuous ‘quantitative easing’.
Large quantities of cash and credit were supplied to banks from government sources. It was (and is) available at low interest rates to businesses deemed important enough to be ‘eased’ through the decade long crisis. Other, businesses, we’re allowed to fail. The organisations kept alive by regular injections of public money are often classified as zombie institutions or businesses.
That is to say such capitalist companies resemble the fictional human beings of horror films and novels who, technically dead are kept functioning by regular acquisitions of blood or flesh from healthy human beings. The stupidity of keeping technically failed banks and other businesses operating by this ‘intravenous’ monetary strategy has been debated, in economic and financial circles, but these discussions have typically failed to analyse the symptom beyond its surface phenomena.
Capitalism continues to fail – everywhere!
When a capitalist enterprise no longer takes in enough money to cover it’s costs and pay loans, interest and profits it’s life has ended as a capitalist endeavour. If it is kept afloat by public money because it’s operations are judged to be socially necessary or desirable, then it is in fact – not a capitalist zombie – but a social (or public) institution. From then on it rests on a different socio-economic basis. In fact in the 20th century, it became so obvious that capitalist forms of economic organisation could not answer most social needs that non-profit public services were expanded in the following areas; government, policing, defence, education and communications.
Moreover, after the Second World War (1939-45), in the UK for example, more non-profit forms of productive services were created, such as doctors/surgeries/hospitals, further education, transport, gas, electricity, water, telephones and national insurance schemes. In the UK, (and other countries) these important elements of modern 20th century life were deliberately formed on this alternative economic basis! Why? Because it was overwhelmingly recognised that capitalist economic models could not provide the stability, reliability and universality required for future societies. Non-profit, public services were the inauguration of more advanced forms of productive activity.
Furthermore, in the 21st century, humanity was reminded that the remaining greed-funded private sector had also become cancerous. Even the the richest and most monopoly-advantaged capitalist institutions, such as former Merchant banks plus huge, money-bloated insurance and mortgage companies were so internally diseased they collapsed. If we add to all the public services, all the publicly supported businesses in the aftermath of the 2008 crash, it would undoubtedly reveal that, in the UK and Europe – most of us were already living in a predominantly post-capitalist mode of economic activity.
If we factor in all the other negative outcomes of the remaining capitalist forms of enterprise such as ecological destruction, air, water, soil and sea pollution, vital species extinction, climate change, war and poverty, then the conclusion should be obvious. Replacing Dickensian private profit-making models with modern public service sustainable, eco-friendly provision, needs to go further. Some countries have already achieved more than a two thirds transition from capitalist forms to post-capitalist forms. The 20th century journey of humanity ‘beyond capital’ simply needs to be continued. In view of profit-driven extinction probabilities that transition needs to be completed.
To go beyond.
The ideology spun around the capitalist mode of production has perpetuated a myth of private-enterprise superiority despite the reality of successful public institutions and the continuing cascade of failed and failing private enterprises. The mismatch between the ideology of capitalism and the stark reality of its incurable self-harming and ecologically destructive habits is perpetuated by a class of people who benefit from keeping bits of it artificially alive. Education, media, government, law and science are staffed by publicly trained people who dominate intellectual discourse and are not accustomed to being critical or self-critical. Long-term future effects, or how the capitalist economy works – as a whole – is not their concern – just their investments on the side.
Apart from a few, that class live in an entitlement-now mode of existence. In the long run they know they are dead so they know they won’t have to face what lies ahead. Denial, pretence, hope and enhanced enjoyment currently offer a more rewarding life-style than accepting that the system they have long upheld is undermining the basic prerequisites for most forms of planetary life. It apparently matters not that sustainable, non-profit, non-polluting production for need under community-wide control is the only model which can enable humanity to have a balanced existence in the future.
Pro-capitalist bias will point to examples of countries where authoritarian politicians have also controlled more than 2/3 of economic activity and corruption, nepotism and oppression have been rife. However, those were not (and are not) post-capitalist forms. They are analogous to the Greek and Roman periods of political rule by dictators and oligarchs but now armed with modern weapons. State controlled capital relations, merely replaced privately controlled ones. They are also Zombie-type elites for they would not exist if the advanced countries did not continually supply them with the means to suppress their citizens (soldiers and weapons) in exchange for oil and other crucial mineral supplies.
A species which organised teams that devised the means to land on the moon, whilst being applauded globally by an audience who knew what, how and why this was happening, can certainly do other complicated things – when they wish to. I suggest creating ways to produce sustainably and with genuine community control is no more difficult for humanity than building space stations and calculating complex parabolic paths to distant planets.
Roy Ratcliffe (February 2020)