Our semi-states are worth more than scrap value — beware the vultures

By Tony Galvin TRUST Ireland to get things arseways. Unregulated, free-market capitalism has kicked the country into the financial gutter and what's our response? Turn to Thatcherism as a way of pulling us back out again.[private] We're going to sell off anything that's not nailed down to pay for the gigantic, ugly mess that neo-liberal capitalism has landed us in. And why would we do that? Well, because, naturally, who else would the small minds of Irish politics trust with resuscitating the economy but the cretins who brought us, and much of the world's financial system, to near meltdown. Obvious, when you think about it. What's being proposed is little more than asset stripping of a bankrupt country. We're being softened up to be ripped off once again. The PDs haven't gone away, you know. Mind you, we have a few national assets (read liabilities) that we could flog to the highest bidder. Fianna Fáil to Libya, for a start. They're looking for a government and we certainly won't have any use for this lot for a good few decades to come. We could even throw in an experienced leader or two, if we put Ahern on the auction block along with Cowen. Two slightly soiled but little used political leaders. Would prefer to sell as a pair but will consider all offers. Large discount available for buyer willing to take redundant cabinet and backbenchers. The Abbey Theatre is another national treasure that might fetch a few bob on the open market. Let's face it, everybody in the country who hasn't seen The Playboy of the Western World at least nine times by now, has no interest in ever suffering through it. Time to liquidate our assets here and inflict this torment on some other unsuspecting country. But let's keep the good stuff. There is a myth out there that every enterprise the State is involved in is run inefficiently while the private sector have the know-how to get things running smoothly and make a profit. This fallacy is so all-pervading that even the comrades on the Left who should be out there defending the resources that have been established at taxpayers' expense over the years rarely ever question it. There's an ideological sleight of hand here. Quite often the State must get involved in a particular sector because it is too essential to the wellbeing of the country to be left to the vagaries of the free market. The provision of drinking water, public transport, health services, road building, education and the like. Yes, the private sector can flourish by nibbling away at the margins like pilot fish feeding off a shark's leavings, but there's rarely a rush to take on the full burden when the initial investment is needed. The big monopolies are open to criticism for inefficiencies but without their presence, few private enterprises could function at all. Colm McCarthy tells us we can make €5 billion by dismantling and selling off State assets. But how far will €5 billion get us in our current predicament? There's a real catch 22 here. If anyone shows an interest in buying a State asset then we shouldn't sell it, because it's obviously worth more to us than we'll ever get, particularly in these straitened times. Socialism for the Rich THE PDs, before they were thankfully flushed down the toilet of history, specialised in this kind of saloon bar economics. While they talked a good game, it amounted to little more than socialism for the rich. Use taxpayers' money to build up a sector. Then flog it off to some cronies, making sure they're loaded down with grants and guaranteed markets first, and then let them milk it for all it's worth. And if it fails, well then the State can come back in and bail it out. Margaret Thatcher perfected this scam in Britain. The coal industry was full of bolshie union members and had to have manners put on it. After all, you can't have a well-connected minority calling the shots in a free market. Well not a working-class minority, at any rate. If they're the right sort with the right connections, that's fine. Only, where is the coal industry now? Who weighed up the social cost of putting hundreds of thousands out of work in the pits because there was a quick profit to be made by the new coal barons importing cheap coal from Poland and elsewhere? Here again, the cost of supporting unemployed miners and their families fell on the State while the profits were pocketed by a few private companies. The social cost of devastated communities wasn't factored in and was hidden behind headline figures proclaiming the success of privatisation. There is always a price to be paid. Coillte has been built up on the taxpayer's shilling and now holds something like seven per cent of the land in the country. None other than that paragon of financial rectitude, Mr no bank account himself, Bertie Ahern, is fronting a consortium circling for the kill on this valuable national asset. The consortium, despite its innocuous sounding name, is a front for the Chinese Communist government. Do we really think this lot would be interested if they didn't see a chance to make a killing here. Surely some whisper of common sense must tell us that if anyone is interested, we should be wary. The Chinese are specialising in buying up the natural resources of several impoverished African states. They even control huge food production programmes there, but for export home, not local consumption. Have we sunk so low that we're about to include ourselves in this class? State companies such as the ESB and Bord na Móna were not set up as some ideological project by the government of the day. They were established by the State because no one else would take on the task. Too much risk. The fledgling State was greatly under-resourced. Ireland had been used as a farmyard for Britain for so long that it was not thought necessary to encourage the type of industrial development going on over on the 'mainland'. It was obvious to early governments that if the State didn't take a hand in this development, as it had in Britain, then the country would be consigned to an economic backwater. We needed energy, we needed opportunities to exploit resources. We needed a public transport system and lots more besides. Ideology of the left and right is little more than window dressing today. Economic expediency with a veneer of ideology is now the sole doctrine of the prevailing economic order. I've mentioned Communist China's activities but the USA, the spiritual home of capitalism, isn't behind the door either when it comes to bastardised ideology. The US is no stranger to using taxpayers' money to prop up companies considered too big to fail. Roosevelt's New Deal was one giant Fás scheme designed to get people back to work during the Great Depression. In recent years, just like ourselves, they've been shovelling public money into failed financial institutions and tip-toeing around the dreaded â€Ëœpublic ownership' term. The US government, ie the taxpayers, pumped $57 billion into General Motors in an effort to keep it afloat. That sum could go a long way towards funding a new New Deal but that might be perceived as too overtly socialist, so won't fly. GM became the industrial giant it was by providing the military hardware necessary to defeat Hitler to the British and Russians. On the Nazi side, there was Opel performing much the same function. Guess who owned Opel at the time? Why none other than GM. So GM got to profit, albeit on the qt, from both sides. Ideological each-way bets are nothing new. Be wary of people waving cheque books WE taxpayers, as stake holders in public companies, should be very wary of people waving cheque books and free-market flags and promising to run our services and assets more efficiently. Remember Telecom Eireann, anyone? Jobs and services will contract, if the new owners fail the bill will be dropped right back in our laps. Our semi-states should be used by us as a foundation on which we can build a real economy. All the palaver about the Knowledge Economy sounds great but it's a puff of smoke. Remember the dotcom bubble? We were all going to get rich selling services to each other via the Net. No one would ever have to get their hands dirty again. The reality is that such services can only ever function as auxiliaries to an economy making real products. They are profitable and important but can never take the place of the production of tangible goods. Switzerland, for all the banking hype, is the most industrialised society in Europe. If we're to pull ourselves out of this mire we need to get back to basics. Forget castles in the air and start rebuilding real sectors such as agriculture, fisheries, food processing, tourism and value-added manufacturing from the ground up and to do this we need a strong, fit-for-purpose semi-state sector. A wounded beast doesn't offer its limbs to the circling carrion. Not unless its brain has already shut down. Quote of the Week 'A little government and a little luck are necessary in life, but only a fool trusts either of them.'     â€â€ PJ O'Rourke[/private]