« | Home | »

Magical Thinking

Tags: |

One of my neighbours came over to say hello the day the Royal Mail was privatised. ‘I expect you’re looking forward to getting your hands on all that money you’ve just made,’ he said. The shares allocated to me as a member of staff had gone up by almost 40 per cent in a day. The government had brought forward the date of the IPO in order to beat a strike ballot by the Communication Workers’ Union. Most of us, like most people, were against the privatisation. It felt like my neighbour was congratulating me on taking a bribe.

I lost my temper, and told him what I really thought about the privatisation. I pointed out the contradictions: that the state has spent billions of pounds of public money to subsidise the bargain basement sell-off; that the pension fund was nationalised to sweeten the deal; that the loss-making Post Office was decoupled from its more successful partner and retained in public hands; that pricing restrictions were lifted in anticipation of privatisation, allowing the company to increase its profits.

None of this has got anything to do with the free market. This is direct government intervention to create a rigged market. If the price restrictions had been lifted ten years ago, the entire argument for privatisation would have disappeared overnight.

My neighbour said that governments shouldn’t be involved in the business of running companies. He said that privatisation would allow the company access to future investment. He said that previous privatisations had been a great success, and cited British Telecom and British Airways as examples. He said that taxpayers were fed up with subsidising the Royal Mail.

The argument went on for a while. Every time I was about to get in my car he’d say something that I had to contradict. I finally lost patience and drove away when he talked about the investors who were going to help the company become a big success: ‘They are wealth creators. They build the factories so that we can have jobs.’

You hear that phrase ‘wealth creators’ a lot. It is a commonly used justification for the privatisation agenda, the idea that these individuals generate wealth by their investment. They are the ‘wealth creators’, and we are the beneficiaries of that wealth. It’s a form of magical thinking, like the pharaohs believing that their rituals were responsible for the flooding of the Nile, a post hoc fallacy: because they have invested in the company and increased their wealth, their investment somehow ‘created’ the wealth. The actual wealth creation, the work that my colleagues and I do, in this version of reality, is an accidental by-product of the process, a privilege I am allowed by the goodwill of these magically endowed individuals.

Moya Greene, the chief executive of Royal Mail, has already told us to expect job losses. Very soon I expect to be begging for the privilege of working longer hours for less money.

Comment on this post

Log in or register to post a comment.


  • Recent Posts

    RSS – posts

  • Contributors

  • Recent Comments

    • martyn94 on Money for nothing?: i suspect that I'm possibly the only person here who has actually tried to do the sums for UBI in anything approaching the real world. The late Ralph ...
    • IPFreely on Lesvos Burning: Al Jazeera seems to be the only TV programme that regularly reports on the situation and also gives reports on the numbers of refugees crossing by boa...
    • bevin on Cameron Quits Again: "Taking the state on a joy ride and crashing it,.." The EU was doomed from the beginning. It is very difficult to trick people into believing that ne...
    • Vance Maverick on Missionaries in a Lift: Well, your eternal salvation is pretty undeniably more important than your vote for the next President. Or it would be, if there were agreement on how...
    • Bob Beck on Up the Commonwealth: Boris Johnson's use of "piccaninnies" -- otherwise a tolerably obscure word these days, I'd have thought -- suggests that he shares Farage's adulation...

    RSS – comments

  • Contact

  • Blog Archive

Advertisement Advertisement