Who’s paying for all this?

There is poverty that is a lack of money, and there is poverty that is a lack of aspiration. True wealth lies within us, the resources we must cultivate not only to survive but to develop. And where do we find those resources? In our conversation, in our reading. Cafes, bookshops, theatres, museums: they are where we begin to be civilised, to be capable of building the city within, the informal, alternative society of fellowship. True wealth is common wealth.

In formal society public resources are the common wealth that hold society together by demanding it live up to its promises. Our leaders can be shamed, if they can be shamed at all, by great art and great thought against which they make seek to measure themselves if they dare.  Privatizing public resources and projects is a degradation of human culture, a reduction of human achievement to cynical and meretricious expediency. Selling public resources is selling society.

The idea of privatization, of asset-stripping the social fabric for short-term profit, so prevalent today, has its origins neither in liberal democracy nor in conservative tradition. It is not about ideals of citizenship, nor of continuity from a mythic golden age. The idea of privatization did not begin with Thatcher, and certainly not with her hero Churchill. The transference of public assets to private ownership has a long history. But as an ideology relevant to modern times the origins of privatization can be traced (the novelist James Meek has done so) to the gangland anti-politics of the Third Reich. It was among the Nazi elite that the idea of buying public resources for private gain, cheaply and at vast profit, became the weapon of destroying the idea of society as a common human enterprise.

We are dreadfully familiar with the pathology of Nazi destruction of human beings, the images of skeletal figures behind barbed wire. We know of their death impulse, their aim to make of life a great mortuary in which the greatest monument was to be their leader’s tomb. We know this. Their lust for power was absolute. We know that, too. We are less familiar with the more conventional, less obviously murderous, means by which this insane vision was to be achieved. It wasn’t only torture chambers. It was also about banknotes and ledgers. The typical Nazi is a cold-eyed official calculating the most efficient and cost-effective means of destroying human decency. Accountancy was the rationale of the Master Race.

Calculating the cost in the public realm must take into account the social value and the cultural gain of an enterprise. These are calculable by measures that know nothing of money. Money is only a putative estimate of an item’s worth. It is subject to inflationary and competitive pressures. Money is held to be a guarantee of worth. It is no more than an estimate of material value. Morally it has limited authority.

The plundering of public resources enabled the Nazi elite to survive the collapse of their political enterprise. Behind secure gates in exclusive neighbourhoods many Nazis prospered, protected by Latin American dictatorships which were themselves protected by American capital and military power.

It is therefore no real surprise to find that it was in such a dictatorship that the experiment in privatization took root. Chile had the advantage of being distant from anywhere except other dictatorships. Forces could take control before progressive international voices could mount a challenge. The force that took control initially was of course the militarization of civil society. There followed, once the dust had settled on the bodies, an economic experiment by North American theorists of unlimited enterprise and the unrestricted flow of capital.

There is no suggestion of a conspiratorial secret Fourth Reich using Nazi money. The connection is in the moral realm, which in this case is an amoral realm of money as the arbiter of all values. Chile became a country where an abundance of luxury goods and services were available to those privileged by money. Those whose only resource was their labour found that where labour was cheap they had no means to develop and enrich their lives.

The justification is freedom. Market economies left to themselves will regulate themselves naturally. Prices will find their natural level. ‘Spontaneous order’ will ensure that society works efficiently and smoothly. Friedrich Hayek, the most fanatical – sorry, I mean the most distinguished – theorist of  marketisation does allow for some intervention in cases of extreme neglect – in order to prevent assaults on capitalism rather than for any humanitarian impulse.

When capitalists speak of freedom this is what they mean. The state’s only real function is to ensure public order. The only necessary functionaries of the state are the police for the enemies within, and the army for the enemies without. The enemies of freedom are everywhere. They speak of abstractions like social justice, abstractions that lead to the monstrous tyranny of state control.

You may have noticed the contradiction between the supposed freedom of unregulated markets and the iron repression apparently necessary to implement these markets. The approval Hayek gave explicitly to General Pinochet’s Chile is an obvious contradiction that is justified by the cynical ‘need for dictatorships in the transitional phase.’ Somehow a better society will emerge. Prosperity is the engine of social good. Money will set you free.

The curious thing about thinkers like Hayek and his colleague Friedman in the Chicago Business School is that their academic sophistication is not tempered by common sense and humanity. They can argue their case with scholarly conceit, confident with abstract theoretical models, with a meticulous logic that bears no relation to the world out there. Bestial torture is Pinochet’s legacy. This terrible truth renders all else not merely redundant but morally wrong.

Selling public assets for selfish gain may be seen as an abuse of humanity no less degrading than the bloodstained interrogation cell. One image is in colour, the other is stark black and white. Beneath the surface aesthesis the moral turpitude has no less a stench in one than in the other. In the name of freedom a century of social progress evaporates. The return of an underclass, of slums, and even of slavery is a reality of Western society that, while not hidden, is not properly acknowledged. The Times in 1980 warned of the dangers of an underclass. But before the decade was out it was arguing for the economic policy reversals which guaranteed the shackling of lives to a cycle of under-achievement and desperation.

A glance (it deserves no more) at the jacket of Thatcher’s polemic Statecraft is revealing. It says how, with Reagan, Thatcher brought down the Soviet state and its allies, ‘bringing freedom and prosperity to millions.’ She obviously believes every word of this grandiloquent claim. The reality is the acquisition of public assets by an oligarchy of stupendous personal wealth, having asset-stripped a sub-continent. Russians are no freer, but are much poorer, than they were before. The role of organized crime in post-Soviet Russia is notorious. The suppression of human rights is routine. The collapse of the Soviet Union did not bring about the possibility of a humane democracy. Life is much worse. Once the euphoria of ‘people power’ faded, the gigantic step backwards began.

Putin’s Russia, like Pinochet’s Chile, is capitalism stripped of its illusions. The crudeness of its economic management and the rawness of its politics leave no doubt as to its true nature. It will in time give way to a softer version, an interval where the wounds of the free market are healed for the sake of social cohesion and continuity. That has been the pattern in the sophisticated democracies of the West. First you have Thatcher, then you have Blair. New Labour applies the anaesthetic on the gaping wound. That’s all it does.

Thatcher was despised for her lack of subtlety. But her position as a catalyst of free market policies made her, for a time, a powerful instrument of global neo-capitalism. How far she understood the consequences is a matter of doubt. Out of her depth, Thatcher was ultimately no more than a pawn, a useful innocent whose strident personality was the focus of anger that diverted attention from the faceless bankers who were making the decisions whose effects are becoming clear only now.

The purpose of global capitalism is the growing accumulation of financial power into an unaccountable elite. The mechanism is the illusion of mass prosperity, by means of credit (that is to say, debt) which actually reduces the wealth of the masses. Corporate enterprises seek to offer the public a range of goods and services so that a particular brand is incorporated into people’s lives. You become a Marks and Spencer, a Tesco person, a Walmart or a Virgin person. You identify with that brand. You feel it is on your side, saving you money and giving you good things.

The truth that you are paying too much for these services (how else do they make such vast profits?) is not made clear. The bright colours, the spaciousness, the easy manners, the abundance all enable you to feel that capitalism is your friend.  It is, you feel, a true public service. By comparison the Co-op looks drab, a reminder of the bad old days before electric muzak and internet games and cheap flights made you feel hip and sexy and alive. Everyone’s a rock star now.

Television reporters walk down a street of neon and noise. It might be Seoul. It might be Rio. The location hardly matters. The commentary is the same, whatever language is spoken. This, they assure us, is the road to freedom. The marching regiments of Stalinist regimes are shown as a contrast. The alternative has been tried, and failed. So we are told as a mantra of misguided liberalism. Third-rate collectivist bureaucracies may have squandered the revolutionary opportunities of the Twentieth Century.

But social experiments, where they have not been crushed by the Western powers, have indicated what may be possible when ideals of public service, combined with a respect for people, can offer, not perfection, but something more human, more natural than the conspicuous waste of public resources that is the free market.

Geoffrey Heptonstall