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Paul T Horgan: Forget the Hollywood spin. Private firms not the State act in the public interest


One ready source of badness for the movie-makers and liberal novelists tired of marauding extra-terrestrials is the conglomerate business.  Amoral corporations, according to screenwriters, are motivated only by delivering value to the stockholders and use every trick and artifice to secure profit on every transaction, regardless of the human cost.  Indeed profit is strangely seen as something dirty by the creative industry, which, despite this view, is trying to make a return on investment like every other business on the planet.

It is not surprising, therefore, that when the makers of ‘Star Trek’ depict small businessmen having the audacity to intrude in their civvies amongst the uniformed ranks of highly-toned state employees retained by the United Federation of Planets, they are shown to be shifty and dishonest individuals.  When the same franchise created a race of profit-seeking capitalists, it gave them the faces of rats.  In the ‘Robocop’ films of the 1980s, the colour scheme of the corporation’s flag would not have been amiss had it been planted in a 1930s Nuremburg rally.  Only the geometric logo at its centre was different.

The private sector tends to get a bad press outside the business pages.  Business success is quite simply not newsworthy enough for the Clapham Omnibus.  A company making a lucrative export deal, securing jobs and creating wealth is not seen as half as interesting compared to another company that puts horsemeat into its beef lasagne.  Having the private sector take over state assets is a political minefield.  The successful selling off of Royal Mail was criticised by the usual suspects for being too cheap, even though the new owners have taken on massive risk in a highly-competitive industry by buying into a labour-intensive operation whose workforce has a history of strikes and militancy, as well as being resistant to change driven by efficiency and technology.

The failure of DEFRA to sell off £250 million of forest land cost the minister, Caroline Spelman, her job and possibly her political career.  Despite the success of privatisation in converting loss-making state corporations into wealth-creating businesses, the idea that these acres of trees would be subject to the the decisions of a firm’s chief financial officer was seen as unacceptable by the liberal media.  The line put forward was that ‘our’ forests should not be up for sale.

This argument is incorrect and it is disappointing, but not too surprising, that Oxford-educated Labour politicians should be so deliberately misleading.  The forests in question were state property.  They were not ‘owned by the people’ any more than the naval base at Faslane is.  But then Labour is a statist party and its leader has made clear his dislike of the private sector.  This is also illogical.

The private sector consists of everything that is not the State.  It pays for everything.  The State pays for nothing, except by way of its taxation of the private sector or the money it borrows from it when  it has reached the limit of how much tax it can raise.  To validate this, consider the thought-experiment where every state employee has a pay cut exactly matching what they would pay in income tax, but now they pay income tax at zero per cent.  There would be no difference to the state coffers.  If the same thing happened to people in the private sector, the state would go bust.  Private-sector workers are the wealth-creators of the country and should be held in high esteem for this.  But you would not know it from the broadcast media.  All our television channels indulge in state-worship and business-bashing in some form or another.

The private sector also produces virtually everything.  The State produces nothing, with the limited exception of certain items of security and defence equipment.  It has been adequately demonstrated that when the State gets involved in manufacturing consumer items, it is unable to do so profitably and produce competitive products without restricting people’s freedom of choice first.  Such items will also inevitably be subject to shortages and waiting lists.

And yet there are still people who see the state handing over assets and services to the private sector as a Faustian concept.

Those who criticise the private sector as being predatory fail to understand that since the sector consists of all elements that are not the state, on the basis of statistics alone there will be businesses, just as there are individuals, that may from time to time cause harm to the public.  Put simply, there are good businesses and there are bad businesses just as there are good people and criminals.

However whenever a business misbehaves it will be brought to book according to the law and also by commercial reality. This cannot be said of the State.  Also there is an irrational hatred of profit by the Left, who see it as the exploitation of labour.  They fail to notice that labour has to be paid for irrespective of the flow of revenue to the business and cannot wait for investment to make its return.  Business requires investment.  Profit is the reward for the risk that the investment is exposed to.  Put simply, if there was no promise of profit, there would be no investment and thus no business.  Thus profit is essential for business to exist.  Trades unions did not understand this  and spent their time up to the 1980s trying to destroy profit in businesses through strike action as they believed that a socially-just business was one that only covered its operating costs with no reward for investors.  Now booted out of the private sector or cowed into compliance, these militant unions have retreated to the state sector as their socialist redoubt.

The State maintains a very large presence in the media industry, to the detriment of the private sector.  It has been demonstrated that one of the two state broadcasters has been facilitating child rape over several decades by a number of its employees.  When this information came to light and was to be the subject of an investigation by the state broadcaster’s flagship news programme, it was suppressed at a senior level.  Instead the same news programme decided to libel a former Conservative Party official by accusing him of the same crime in a Soviet-style ‘we are all sinners’ approach.  The man with the ultimate responsibility for this censorship and libel, the Director-General, resigned after less than two months into the job and was given a pay-off of close to half-a-million pounds, which was double the money he was entitled to.  The explanation given by the Chairman of the board that supervises the state broadcaster was that this was done to sweeten the deal and avoid a court case.

Such a legal action could not have been heard in secret.  The pay-off was, in effect, hush money.  This would not be too much of an issue if the broadcaster was a private-sector business.  It would be of concern to the owners and beneficiaries of the firm, who would experience a drop in profits as a consequence.  However the state broadcaster is funded by a regressive household tax, the non-payment of which is responsible for ten per cent of all the criminal court cases in Britain, usually against the poorest in the land.  The wastage caused by the pay-off of this inadequate individual is a small fraction of the money that has been lost due to deliberate overpayments to senior staff and catastrophic computer projects.  The common denominator is that all the people paid to be responsible for these fiascos have ended up richer using money that is coerced out of the populace under threat of fines or jail.  The programme that made the false allegations is still producing broadcast editions.  All that has happened is the the wrongdoers have moved on.  It is possible, but unlikely, that they are financially the poorer for doing so.

The morality of the state broadcaster, which maintains not one, but two channels designed to broadcast to children, is highly questionable.

Compare this behaviour of a state-sector media organisation with one in the private sector.  This organisation did not facilitate child rape, suppress its reporting or libel a retired politician to deflect attention and require us to pay under duress for it all thanks to the unique way it is funded.  Instead the private operation illegally spied on the mobile phone voicemail of members of the public on the basis of their newsworthiness.  When this was exposed, the newspaper responsible became commercially unviable and had to be closed down, costing the jobs of hundreds of people, few of which were directly involved in the illegal activity.  Some of its current and former staff were arrested, charged and tried in a court of law.  There were convictions and some of the perpetrators went to jail.  Senior managers and directors lost their jobs.  Careers were destroyed.  The parent corporation had to undergo a restructuring and lost the opportunity to expand its operations in the UK due to the public backlash.  It is ironic that this expansion would have been a rival of the state broadcaster that had facilitated child rape on its premises.

Private-sector operations have to function to a high moral standard as they do not have captive income flows.  People will vote with their wallets and shun businesses that disgust them.  If you have a Big Mac at McDonald’s and it is unpalatable, it will be replaced, no fuss, no worry.  If you have a complaint about poor treatment in a hospital, you may as well be talking to a wall.  Your complaints will be noted, a member of staff may be ‘spoken to’, but nothing else will happen.  The complaint will be filed and ignored.  The reason for this is simple.  The socialised state medical system has removed competition.  Private-sector incentives driven by consumer choice are absent.  Unless they are wealthy, people cannot walk away from the NHS or any other state quasi-monopoly.  The downside of under-performance by state-sector employees seems far too limited to the point of non-existence.

They seem to be able to get away with taxpayer-funded homicide as well.  The catalogues of death at Stafford and especially Furness General Hospitals where new-born babies and their mothers were being killed has not resulted in anyone being arrested, charged, tried, convicted or imprisoned.  Instead senior managers have been able to move on and up in the hierarchy with six-figure pay-offs and their underlings have disappeared into other positions in the state sector.

The most recent example of organised mass rape in Rotherham, where the various state agencies tacitly went along with the rapists’ abuse of vulnerable girls, has not involved any charges for people in authority, despite there being a clear case of criminal levels of negligence to be answered.

The hatred of the private sector by the forces of the Left in this country is irrational and self-serving.  The statism of the Left blinds them to the crimes freely and openly committed by those on the state payroll.  This is ironic because wilful negligence by state employees almost exclusively targets the most vulnerable who are held up by the Left to be the true victims of capitalism.  In truth, they tend to be victims of the State due to the indifference and carelessness of state employees who are protected by the statist Labour Party.

The current election may be the last chance the people of this country get to have a government institute real state-sector reform, by increasing accountability and also making it harder for the unions to strike in support of blatant wrongdoers prevalent in their ranks. Should Labour win, on the basis of past performance, the state sector will only become more bloated and unaccountable with taxpayers’ money used bribe the guilty and withhold proper scrutiny.

Observant readers may note I have not been referring to the public sector and instead using the word ‘State’.  After the numerous scandals, the publicly-funded employees who have lied, cheated, threatened and killed the vulnerable while wasting taxpayers’ money can hardly be described as in the public sector.  Although paid for exclusively by the people in the private sector, they have stopped acting in the public interest.  The sooner this is acknowledged, the sooner the public can obtain proper reform.  The state sector seems to have stopped helping us and is now helping itself and its employees.  Only by applying the standards and practices of the private sector can we be saved.

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Paul T Horgan
Paul T Horgan
Paul T Horgan worked in the IT Sector. He lives in Berkshire.

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