From Socialist Voice, March 2005

Selling out

Paul Sweeney, Selling Out: Privatisation in Ireland (Dublin: New Island Publications; ISBN 1-902602-78-1; €14.99).

The ideological power of global capitalism is perhaps nowhere more powerfully illustrated than in its ability to present contemporary economic arrangements not as choices taken by dominant groups but as the natural way of being. There is—we are continually told by an associated clique of politicians, uncritical journalists, and finance houses—no alternative. In addition, not only are such arrangements presented as natural and inevitable but they are also dressed up in the language of “modernisation” and the promotion of “choice”—the implication being that those who question the wisdom of such processes are crusty and outdated relics who long for a return to the “bad old days.” And who wants to be portrayed like that?

     For those of us interested in countering the hegemony of neo-liberalism and the “logic” that those who beg to differ belong to the past, Paul Sweeney’s Selling Out will be of particular value. In an impressive piece of academic work on the Irish experience of privatisation, the author, who is economic adviser to the ICTU, traces (1) the contribution of state-owned industry to Ireland’s economy, (2) the trend towards privatisation and (3) the results of privatisation and provides an argument for why companies in the state sector should remain that way.
     In particular, he deals with the illustrative example of Eircom. He describes how Eircom’s privatisation (at the time presented as a triumph of “popular capitalism”) was in fact an abject failure and a hard lesson in how pivotal state assets should not be turned over to the private sector. As a state company in 1997, Eircom had actually recorded profits of €197 million. As a private company owned by a consortium of global venture capitalists it has since reported losses of €233 million in 2002, €40 million in 2003, and €103 million in the year to last March. Surely if this were still a state company and such losses were recorded the cries for privatisation on “Questions and Answers” and other mouthpieces of the political establishment would be deafening. We’d be told that things really must change if the country is to remain competitive and that only the private sector can come in and save us from stagnation. As it is already private, however, there is a curious and telling silence. Perhaps this is because the government, its mouthpieces in the media and those greedy shareholders who thought they could buy their way cheaply into wealth are in effect implicated in the squandering of a vital state asset, leaving taxpayers at the tender mercies of increasing prices and decreasing services.
     This is the reality of “popular capitalism”: the ultimate disenfranchisement of the very working people who built the company up in the first place.
     Sweeney also challenges the conventional assumption that the state is incapable of effectively running a commercial enterprise. Far from being inefficient, he shows how state-owned enterprises as a whole have been quite successful. In total, state-owned enterprises made more than €500 million in profits after charges, tax and interest payments last year. The only ones that made losses were An Post and CIE, which in any case should not go private, for a variety of reasons: they provide vital but largely unprofitable social services that no private-sector company would ever dream of pursuing.
     From a broader historical viewpoint, state-owned industry on the whole has been not only pretty successful but immensely important in the overall scheme of things. When the private sector was not up to meeting the social needs of the Irish people it was the state that took charge of affairs: electrifying the country, harvesting bogs, installing telecommunications, and purchasing sugar-beet. Those that have been failures were private-sector failures in the first place, the state rescuing them on the grounds of political or strategic reasons. Nor, indeed, has the influence of politicians been wholly benign. More often it has been the case down through the years that the political elite (think Lowry, O’Rourke, and Brennan) have chosen to play politics and to interfere unnecessarily with state companies. In addition, the government has all too often failed to live up to its duty as a capital provider, resulting in many state bodies in the past surviving on next to nothing other than state-guaranteed bank loans.
     For readers of Socialist Voice, many of these arguments will be familiar, but nevertheless Selling Out remains particularly relevant because it integrates a wealth of material and data that has never been brought together before in such a coherent and rigorously analytical manner. It should therefore become an important reference point for those on the left involved in what is essentially an ideological tug of war over the state’s role in the Irish economy in the coming years.


Home page  >  Publications  >  Socialist Voice  >  March 2005  >  Selling out
Baile  >  Foilseacháin  >  Socialist Voice  >  Márta 2005  >  Selling out