NANNY SHAPE

Guy Run­dle on what comes next for state own­er­ship

The Saturday Paper - - Front Page -

IN A SO­CI­ETY BE­NIGHTED BY PRI­VATI­SA­TION, PEO­PLE CAN BE­GIN TO SEE AGAIN WHAT THEY HAD FOR­GOT­TEN: THAT WA­TER, POWER, TRANSPORT AND OTHER EN­TI­TIES ARE SO­CIAL IN NA­TURE, AND SHOULD BE CON­TROLLED THUS.

“Tony Ab­bott has sug­gested that the mil­i­tary be sent in to op­er­ate gas pro­duc­tion in Vic­to­ria and New South Wales …”

Say what now? These days the fed­eral gov­ern­ment is dif­fi­cult to keep up with, hav­ing ap­par­ently split into its “moder­ate” and “armed” wings. With sum­mer com­ing up, and an­tic­i­pated heavy de­mand on power for air­con­di­tion­ing, Mal­colm Turn­bull, leader of the in­creas­ingly ill-named Lib­eral Party, is con­sid­er­ing ad hoc com­pul­sory di­rec­tion of gas ex­port ra­tios, while his deputy prime min­is­ter, Barn­aby Joyce, is ad­ju­di­cat­ing in­dus­try man­age­ment plant by plant, com­mand­ing AGL to ei­ther re­pair or sell-on its age­ing coal-fired Lid­dell power sta­tion. “It’s like driv­ing a car off a cliff rather than sell­ing it,” Joyce wailed in in­com­pre­hen­sion.

The mem­ber for New Eng­land, at time of writ­ing, does not ap­pear to un­der­stand the con­cepts of “de­pre­ci­a­tion” and “com­pe­ti­tion”. He is a for­mer ac­coun­tant. Both he and Turn­bull are wimps in com­par­i­son with Ab­bott, who has ap­par­ently de­cided to aban­don the mar­ket and pri­vate prop­erty al­to­gether. What a time to be alive.

Per­haps it is on my part an act of dis­loy­alty to the left, but I can’t be the first per­son to have sud­denly re­alised that the regime the Turn­bull gov­ern­ment most re­sem­bles is that of Venezuela, whose Chav­ista red caudil­los have been fond of mi­cro­manag­ing the econ­omy for two decades. The late Hugo Chávez once rang into a ra­dio sta­tion as he drove past a shop­ping mall un­der con­struc­tion, to an­nounce that this was ex­actly the sort of thing that shouldn’t be built, and that re­sources should be di­rected to fa­cil­i­ties for im­pov­er­ished youth. This was per­haps one rea­son why non-oil in­vest­ment fal­tered in Venezuela, and the sort of thing that the ne­olib­eral op-ed crowd jumped up and down about, and pointed to as the fail­ure of “so­cial­ism” – the in­abil­ity to guar­an­tee a sta­ble in­vest­ment frame­work, in the ab­sence of a rule of law.

Now, ap­par­ently, to judge from the cowed si­lence, fol­low­ing brief protest, of the right-wing “free mar­ket” think tanks, it’s okay to call in the heads of Big En­ergy on a fort­nightly ba­sis for a pa­tri­otic chat about their na­tional duty. Give it a few months, and Turn­bull will be con­duct­ing these in Bo­li­var­ian py­ja­mas, Co­hiba cigar in his mouth, while a tame jaguar lolls at his feet. “Gen­tle­men, Min­gus has not eaten in days. Now let’s talk about whole­sale pric­ing for in­ter­state trans­fer, mwa ha ha.”

The Coali­tion cheer squad tries to present this sort of thing as “non-ide­o­log­i­cal prag­ma­tism”, but it is noth­ing other than pan­icked med­dling. Po­lit­i­cally, Turn­bull and the gov­ern­ment have no choice. Should the power sup­ply sink below hith­erto un­heard of lev­els, then so, too, will their al­ready terrible two-par­typre­ferred vote. The gen­eral pub­lic wants ac­tion. More ex­actly, they want to never have got into this sit­u­a­tion in the first place.

It’s worth con­sid­er­ing what this im­me­di­ate im­pa­tience rep­re­sents: the long­stand­ing dis­re­gard in Aus­tralia for mar­ket ide­ol­ogy. Ar­gu­ments you can get away with in the United States, you can’t get away with here. There is lit­tle pa­tience for the ab­stract value of “free­dom”, if it is the free­dom to swel­ter, for chil­dren to get sick, and for the aged to die, while gas is sold over­seas. The im­pa­tience with it is im­me­di­ate, and the ab­surd at­tempts to blame the crises on the de­vel­op­ment of re­new­able en­ergy worked only for a few peo­ple and only for a while. Now most Aus­tralians un­der­stand that our en­ergy cri­sis is a prod­uct of a dou­ble whammy: pri­vati­sa­tion in the 1990s, fol­lowed by dereg­u­la­tion in the 2000s, a process that es­sen­tially traded away our en­ergy se­cu­rity and the sta­ble un­der­pin­nings of mod­ern life. Be­cause of this and other dis­as­ters here and abroad, both so­cial own­er­ship and reg­u­la­tion are back. The

“free” mar­ket era is far from over, but what is fin­ished is its un­ques­tioned le­git­i­macy, and the rule of the idea that giv­ing cap­i­tal open slather rep­re­sents “lib­erty” for the av­er­age cit­i­zen.

There is no real mys­tery as to why peo­ple, deep down, be­lieve that the econ­omy should be reg­u­lated by com­mu­nity in­ter­est, via means of so­cial own­er­ship of ma­jor re­sources, se­lec­tive pro­tec­tion of lo­cal in­dus­tries and prac­tices, and reg­u­la­tion of those parts of the econ­omy ded­i­cated to profit-mak­ing. Put thus, it is sim­ply com­mon sense. But for three decades and more, right-wing memes spread through the cul­ture, and had great pur­chase: first, the idea that the prof­i­to­ri­ented busi­ness firm was the only way to man­age large or­gan­i­sa­tions; sec­ond, that the state that reg­u­lated them on our be­half was some sort of pure neg­a­tive, a dead hand. Ev­ery­one was en­cour­aged to damn “red tape” and think like a chief ex­ec­u­tive.

Such think­ing took off in Bri­tain and the US at the end of the 1970s, and for ob­vi­ous rea­sons. The par­tially so­cial economies put in place decades ear­lier – the New Deal, post­war Bri­tish so­cial­ism – had been born in high in­dus­trial, class-reg­i­mented so­ci­eties. They had failed to evolve with a chang­ing so­ci­ety, to make so­cial own­er­ship and con­trol more, not less, demo­cratic and ag­ile than the mar­ket. When post­war pros­per­ity col­lapsed be­neath them, there was a whole in­tel­lec­tual move­ment ready to ar­gue the point. As post­war so­cial democ­racy dawned, the “clas­si­cal lib­er­als” – Hayek, Mises and oth­ers – had re­treated to the slopes of Mont Pelerin to fi­nesse ideas that had been bub­bling since the late 19th cen­tury: that there was no such thing as col­lec­tive good, or even a col­lec­tive en­tity; that any form of so­cial ac­tion that wasn’t in­di­vid­ual and con­tract-based was un­steer­able; and that pri­vate prop­erty was the only form in which such ac­tion could be an­chored.

Such think­ing drew on an aus­tere and sim­plis­tic form of epis­te­mol­ogy, the the­ory of knowl­edge, which saw the base of true knowl­edge as lit­tle more than ob­ser­va­tion by the senses and math­e­mat­ics. Such atom­ised logic gen­er­ated a pol­i­tics that en­cour­aged the idea of atom­i­sa­tion as a pos­i­tive good. By the late 1970s, pop­u­lar cul­ture was cre­at­ing a sim­i­lar feel­ing of in­di­vid­u­al­ism: the cre­ation of the “self ” and the “me decade”. Who wouldn’t want a phone/gas/train com­pany in which ev­ery­one could own shares? Or to throw off the shack­les of red tape?

But the ideas of clas­si­cal lib­er­als were re­verse en­gi­neered, a philo­soph­i­cal jus­ti­fi­ca­tion for a po­lit­i­cal po­si­tion. They had emerged in the 19th cen­tury in Vi­enna, the first ma­jor city to have so­cial­ist poli­cies on hous­ing, pen­sions and so­cial con­trol of the econ­omy. Clas­si­cal lib­er­al­ism was a sort of po­lit­i­cal hys­ter­i­cal re­ac­tion. Its philo­soph­i­cal base is asi­nine and gen­er­ated the now no­to­ri­ous pro­gram­matic ab­sur­dity enun­ci­ated by Mar­garet Thatcher, that “there is no such thing as so­ci­ety; there are in­di­vid­u­als, and there are fam­i­lies”. Such ideas suc­ceeded as a pro­gram only be­cause, deep down, no one re­ally be­lieves that life is like that – but that, for a time, run­ning part of it as if it is might pro­duce a growth sup­port. At some level ev­ery­one, save for a few lib­er­tar­ian comb-overs, un­der­stands that that can­not be a pro­gram last­ing any length of time.

Now, ev­ery­one can see that such a fa­tal con­ceit has started to eat into the base of ev­ery­day life. Noth­ing says ab­sur­dity like power cuts be­cause a pri­va­tised sys­tem re­quir­ing reg­u­la­tion was dereg­u­lated. The ar­range­ment gen­er­ates not free­dom, but its op­po­site: be­ing sub­jected to the rule of brute na­ture in the form of ex­cess heat, cold and dark­ness. These par­tic­u­lar in­sights lead to more gen­eral ones about the sys­tem as a whole: that mar­kets el­e­vate a “means” – ex­change and profit – to the sta­tus of “ends”, and an­ni­hi­late the no­tion of mean­ing­ful life al­to­gether.

As mar­ket cap­i­tal­ism has be­come mo­nop­oly cap­i­tal­ism – mar­kets with­out com­pe­ti­tion – the po­ten­tial ca­pac­ity to see be­yond it be­comes ever greater. To­day, in a so­ci­ety be­nighted by pri­vati­sa­tion, such as Bri­tain, peo­ple can be­gin to see again what they had for­got­ten: that wa­ter, power, transport and other en­ti­ties are so­cial in na­ture, and should be con­trolled thus.

They can see that the “free­dom” of­fered by post­mod­ern piece­work mer­chants such as Uber can be ques­tioned. In the shadow of Gren­fell Tower, for in­stance, Lon­don has re­fused Uber a li­cence re­newal, pend­ing a clean-up of its ar­ro­gant bul­ly­ing tac­tics.

It is ob­vi­ous to many that en­ti­ties such as Google and Face­book may have started as pri­vate bod­ies, but are now sim­ply “so­cial knowl­edge” and “so­cial con­nec­tion”, and should be so­cially vested and reg­u­lated ac­cord­ingly. Par­ties that can present sen­si­ble, mod­u­lated, plu­ral­ist pro­grams for mixed economies, so­cial own­er­ship and regimes of reg­u­la­tion will pros­per. Those who per­sist in the wor­ship of the Molochs of Mont Pelerin will find them­selves en­gaged in just as much reg­u­la­tion, be­cause the pub­lic de­mands it. The dif­fer­ence is that this reg­u­la­tion will be of a med­dling, in­ef­fi­cient and un­free na­ture. The clas­si­cal lib­er­als are right about that; ad-hoc con­trols pile up unco-or­di­nated in­ter­ven­tions cre­at­ing con­tra­dic­tory ef­fects. It is only through vis­i­ble, sys­tem­atic and demo­crat­i­cally con­trolled so­cial own­er­ship and reg­u­la­tion that the good so­ci­ety is pos­si­ble. For the Turn­bull gov­ern­ment, what­ever

• hap­pens, it’s go­ing to be a long hot sum­mer.

GUY RUN­DLE is the au­thor of The Gates of Europe, to be pub­lished in Novem­ber.

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