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Chapter 5

The assault of the market

In a society in which, little by little, everything is being put up for sale, even health care is being given over to the marketing men and soon suffering itself will be sold as if it were "just another bit of fun". – John Jansen van Galen
Alles is te Koop (Everything Must Go)

No-one knows who first dreamed it up, but some time in the late 1980s a number of politicians began to speak in terms of BV Nederland, UK plc, USA inc, and so on. To talk about a country as if it is a firm of course suits neoliberal ideology perfectly. If every political decision eventually comes down to a discussion about money, and if the struggle to maximise profits is raised to a point where it is seen as the single, almost holy goal of all human activity, then it makes perfect sense to talk about a nation as if it were an enterprise. The founding fathers of both liberalism and social democracy would surely turn in their graves if they could hear such talk, but it is one of the distinguishing features of neoliberalism that it pays no attention to its ancestry. History has come to an end, the world is one big market with neither past nor future. The only thing that counts is the present.
Of course, every right-thinking person understands that a country, with its history, its culture, the great diversity of the people who live, work and play within its borders, is infinitely more than a profit-making corporation. If the Netherlands were a company, for example, then its current senior managers, the Purple Coalition, would long ago have been shown the door by its shareholders for their energetic pursuit of the process set in motion by their predecessors, the sale of communal property to the private sector. The post, railway, local public transport, all must be privatised in the name (as it is called in the supposedly neutral jargon prevailing in The Hague) of a "slimming down of the state".
In reality, privatisation, which has become an unchallengeable creed throughout much of the world, is an ideologically inspired shift of property to the private market. Nothing is spared, with even basic services such as social security made into objects of profit. Privatisation is a process through which the state becomes increasingly powerless, able to exert ever less influence on the quantity and quality of essential services, abandoning its role as social driving force. This is not only bad government, in the long term it isn't even good business.
The negative attitude of neoliberal politicians to the state's capabilities and their pleading for the introduction of the market system to ever more areas of policy – even those which have traditionally been the province of the state – is first and foremost short sighted. These politicians fail to appreciate that the state expanded in the first place precisely because people believed that there were many things which could be done better, more quickly and more cheaply if they were done together, rather than everyone fighting for their own interests. In addition, the state is able to take account of the long term and can, in the general interest, act out of an awareness of the broader context. To take a simple example, a person whose interest in the disposal of chemical waste is motivated by profit is more likely to be tempted to cut corners than one whose prime duty is to dispose of it in a socially responsible fashion. The question which all of the currently fashionable anti-state rhetoric raises is this: if a democratic state is legitimised through elections, what precisely is wrong with its performing the function of guardian of the general interest (both past and future) as well as of individual rights?
Once again, health care provides the best illustration of the folly and irresponsibility of believing that the market is invariably the best basis for the organisation of any system, whatever its purpose. In country after country, to one extent or another, under the guise of encouraging `personal responsibility', more and more aspects of our social organisation, which were until recently addressed collectively, are now given over to the individual. While many Americans come to Europe to see for themselves the socialised systems of health care which were constructed after the war, European governments are looking increasingly to the United States to see how these same systems might be dismantled.
The problem to which neoliberal critics of collective health care provision invariably point is that, as a result of both the ageing of the population and the introduction of new techniques, costs are rising. Yet is this necessarily a bad thing? Surely it would be bad only if the additional money were being thrown away or used inefficiently. If that is happening, then of course it must be dealt with; but that is not, in fact, what the neoliberals are trying to do. Their goal is simply to reduce costs, whatever damage may be done to the system; and spending targets are increasingly fixed with no regard for either structural or temporary increases in needs. The British Labour Party even pledged to stay within Conservative spending targets for the National Health Service, before it had had the chance to study the relationship between needs and available resources. And despite the fact that the Tories themselves had declared that their figures were guidelines rather than unbreachable limits.
The results of such attitudes, which are reproduced internationally, are clear. In the socialised or predominantly socialised health care systems of Scandinavia, the Netherlands, Germany, France, Italy, Belgium, the UK, Canada, Australia and many other countries the same complaints are heard. Lengthening queues for vital operations, introduction of or increase in point-of-service charges; specialists forced to substitute inferior materials for those which their professional judgement tells them are more suitable; doctors, nurses and ancillary staff working dangerously long hours. Such `savings' have almost invariably to be paid for later: cheap artificial hips are in use which have to be replaced after five years instead of ten, expensive equipment is left idle in empty operating theatres while waiting lists grow and people suffer unnecessary pain and even death. In 1995 ninety people in the Netherlands died from cardiovascular diseases because they were not treated quickly enough. A dramatic figure but one which is merely the tip of an iceberg made up of hundreds of thousands of people in many different countries who suffer deteriorating eyesight, persistent toothache, backache and a host of complaints ranging from the merely irritating to the potentially deadly. And all because the health care system into which they pay each month is increasingly under-equipped. The neoliberal answer, even in the face of this, is `less state, more market' – in other words: no more money for care, and the introduction of the market system.
Yet is there any evidence that such a move would make health care any cheaper? On the contrary, the evidence points so clearly to the opposite conclusion that the argument can be dismissed. The Americans spend 14% of their Gross Domestic Product on health care, the Netherlands 9%. Despite this, one in every four Americans is underinsured or even completely uninsured and thus cut off from the most basic provision. Many health insurance schemes are linked to people's jobs: become unemployed and you lose your rights.
So how do Americans manage to spend so much money on such a wretched system? Firstly, because healthcare is not inadequate for everyone. The rich can afford enormous luxuries, a fact which is as true when they are ill as it is when they are well. Their hospitals are veritable five-star hotels in which patients are looked after in minute detail, their every whim pandered to. From face lifts to breast enlargement, to a range of treatments for which no medical need exists, nothing in the land of unlimited opportunities is too crazy, provided you can pay.
Another factor is the enormous bureaucracy the system of private health care brings in its wake. Following an operation you can expect a bill from the surgeon, another for the hire of the operating theatre, another from the test laboratory, still more for food and nursing care, all of which you have to pay yourself before lodging a claim with your insurers. The insurance company will then query and negotiate each bill separately before it is persuaded that nothing is overpriced. The bureaucracy that all of this requires costs enormous amounts of money, money which is therefore unavailable to be spent on care. Disputes between insured and insurer are common, sometimes involving lengthy hearings, hearings that must also of course be paid for. Nor does it stop there. Because patients have to pay so much for medical services, they want quality. If it hasn't quite reached the point where people expect to demand eternal life, it requires only the slightest problem to send the patient scuttling towards the judge to demand compensation. The number of actions against hospitals and doctors has grown by a factor of 300 over the last twenty years. The exorbitant sums which are sometimes paid out as compensation and damages to plaintiffs have led to a situation where all doctors are obliged to insure themselves against this risk. Premiums can amount to as much as $50,000 a year, a sum which is obviously passed on to the patient.
All of this results directly from the shunning of a general, collective system of health care in favour of one that is owned and controlled by commercial interests. We must ask ourselves whether this is what we really want in Europe. Of course, there are no important western European politicians who openly propose the replacement of socialised provision with an American-style system. Yet the introduction of market principles into ever more areas is leading inexorably to precisely such a development. As public services deteriorate through under-funding, people begin to lose confidence in the system. Those who can afford it look to private insurance, private clinics, and treatments which can only be bought, or which can be had more speedily, because they are no longer available or are in short supply within the public system.
A good, properly-financed and efficient system of socialised health care in which everyone, rich or poor, can have confidence, engenders a sense of social solidarity and underwrites a healthy society. One which is incomplete, insufficient and unreliable leads to cynicism, a loss of confidence, resignation on the part of the poor and a search for alternatives by the rich. In the UK, private health care has had limited impact because middle-class people with a high standard of education have generally compared what it offers in terms of value-for-money with the publicly funded NHS. As the problems of the NHS grow, however, more and more are likely to change their minds. It is now commonplace for hospitals to hold fund-raising events not, as they have always done, to provide extra comforts for long-stay patients or toys for the children's wards, but merely to cover the cost of basic necessities. Sponsorship is also spreading, so that a new facility is less likely to be named after the royal personage who officially opened it than the supermarket billionaire who part-financed its building. In the Netherlands sponsorship is also becoming the norm, and private clinics are springing up. The pattern is repeated to varying degrees elsewhere, and it is one that threatens the continued existence of socialised medicine.
Collective provision can only continue at a high standard if the whole society can be seen to benefit from it: take better-off people out of the equation and you will be left with an under-funded, unloved, stigmatised ghetto for those who can't afford to go anywhere else. This can be clearly seen in America, with its Medicare for the old and Medicaid for the poor (both of which are hopelessly inadequate forms of assistance) and its religious and charitable `public' hospitals.
The most tragic aspect of this situation is its sheer irrationality. The American approach is both more expensive and socially divisive. Following logically from the idea that every individual is of equal worth, and given the fact that we are all vulnerable to illness and therefore that it clearly makes sense to share the risk, the inevitable conclusion is that what is needed is a collective arrangement. One in which (a) everyone can claim a right to necessary care which (b) is paid for by the state and for which (c) the state can demand a contribution from the citizen, in the form of taxation or social insurance premiums, concomitant with his or her ability to pay.
A common objection to such a system is that it fails to regulate costs. There are two possible answers to this: if the cost-increase is the consequence of demographic change and of new techniques in medical science, there is no reason to regard it as a problem, as all research indicates that people are happy to pay more for better care. If the rise can be blamed on wastefulness, then we must do something about it. One immediately effective measure would be to stop payments to surgeons based on the number of operations they perform. Separate the remuneration of all doctors and other health care workers entirely from the type and number of cases with which they deal or the treatments they offer, and make all of them salaried – a normal salary for a normal working week.

The irresistible rise of quangos

What goes for healthcare is also true for all the areas in which the state has traditionally played a leading role: from housing to social security, from consumer protection to public transport, everything is being given over to the market. In the Netherlands, former state-owned enterprises and services, such as the railway and post office, have become fully independent, with the former already listed on the stock exchange and making big profits while the latter waits in line for its turn. In the UK, every significant state-owned enterprise, with the sole exception of the post office, has been sold off, with disastrous consequences. Internationally, telecommunications systems are being farmed out to the private sector by governments who refuse to examine alternative means of raising the finance needed to keep up with the rapid pace of technological change.
It was in Britain that the term quango – ‘Quasi-Autonomous Non-Governmental Organisation’ – was born. Ironically, it was first used by Conservatives in their attacks on the `socialist bureaucracies' which had supposedly flourished under the Labour government of the 1970s, but it soon came to be seen as the perfect description of the type of organisation favoured by Thatcherism. Characteristic of such bodies is that they are controlled by government appointees either from the political sphere, major corporations, or international publicity and consultancy firms such as Coopers and Lybrand or the Boer and Croon Group. They often take decisions that were until recently the responsibility of democratically-elected authorities or at least bodies which were answerable to such. Rarely is even a semblance of an effort made to render them in any sense representative. Thatcherism and its sisters in other countries have made the token trade unionist, the token woman and even the well-meaning clergyman a thing of the past. QUANGOS are an important part of the market economy, and must be controlled by those who both understand and approve of its workings. The very top positions are generally taken by those who have used the knowledge gained in public life to pursue a second career in private consultancy and whose connections and inside knowledge guarantee them dazzling sums in payment for their labours.
That is the `beauty' of the market economy: for everyone who does not belong to the élite, the iron rule of the market dictates that wages must not get too high or working hours too short, because the competition is murderous. Yet for the élite the rules are precisely the opposite. Salaries must be high, because elsewhere they can earn more. If you want quality at the top you must dig deep in your pocket. The fact that your pockets almost without exception have been filled from the public purse, with money that comes from the taxpayer, is no hindrance.
This, of course, further contributes to the citizen's mistrust and helps to bring politics into disrepute. Yet the market knows no morality, and because of this, the neoliberals say, it is completely childish to attack it. Publicly question the honoraria paid to all these consultants and you will be viewed with contempt. As the headhunters who operate on this circuit say, "There's no use whining about that, it's just the price you have to pay these days for quality."
It is reasonable to ask if this is true. What in fact happens, time and again, is that ex-ministers and senior civil servants peddle information that they came by in the public service and which any reasonable code of ethics would indicate should not be used for private gain. Yet ignorance or deliberate flouting of such elementary morality is the logical conclusion of the invasion of every area of life by market forces. If the ex-mayors of Amsterdam and Groningen can be hired as advisers at almost £2,000 a day. If the ex-chairman of the Dutch Liberal Party (VVD) can be paid £5,000 a day for attending five or six meetings a year. If a D66 minister can hire a former PvdA campaign director for several thousand pounds a day in order to improve her image. If British MPs can charge £1,000 to ask parliamentary questions and not be expelled from Parliament. And if Euro-MPs can refuse to accept a rule which would have forced them to declare gifts worth above £800 on the grounds that such a figure is so low that it would include things of no significance. Then why pretend that there is still any division between government and the market? As former Dutch Labour leader Thijs Wöltgens put it in his book De Nee Zeggers (The Nay Sayers):

If market-thinking rules the state, then there is no longer any reason for the state to be set aside from the market. So the state is for sale, and the result is that what was once called corruption is now ordinary commerce.

The great public transport sale

In the last few years thousands of litres of printers' ink have been expended in describing the harmful consequences of the privatisation of public transport in the Netherlands. Since our railway system blazed the trail, ever more ticket-sellers have seen their jobs threatened by automation and more and more small communities have lost their rail services. Only if the state is prepared to compensate NS (the railroad company) for its losses is NS prepared to allow trains to continue to run. The more recent privatisation of British Rail is having similar consequences: such rural services as survived the already savage rationalisations of the '60s and '80s are once again under threat. In Britain, furthermore, matters have been made worse by the selling off of rights to run services to inexperienced and in some cases cowboy operators. Chaos has become the order of the day, as it did amongst local bus services when these were deregulated in the mid-eighties. Even the arch-advocate of privatisation, the Financial Times, admitted that there were "signs that the new entrants to the industry (...) do not know how to run a railway."
Despite the problems encountered by NS and BR, rail privatisation continues to attract new countries to its banner. This is because, as German MP and transport expert Winfried Wolf has argued, "it is not a matter of substantive arguments but of ideological demands – behind which are the very real interests of the motor industry." In Germany, because of the need for a constitutional change that would have required more than a simple parliamentary majority, the main social democratic opposition, the SPD, could have stopped privatisation, but the party dropped its opposition to it in 1992. Italy, despite its centre-left government, seems likely to be next in line, followed, possibly, by France. In Austria and Switzerland, changes in the relationship between the nationalised railway networks and the state, as well as reforms to the internal structures of the railways, are clearly designed to pave the way for full privatisation. In the Czech Republic, the rail system was split up in 1995 and franchises sold to private companies. In Sweden, infrastructure and services were divided in 1988, and some services sold off to the private sector; in Canada the railway system has been broken up into a mainline network and a system of feeder lines: the plan is to sell off most railway property and close unprofitable lines. In New Zealand the rail network was sold off, lock, stock and barrel to an American consortium.
The closure of unprofitable lines and reduction of services on others stands in stark contrast to the enormous investment planned by European governments in high-speed train (HST) lines. Encouraged by European Union policies which are in turn controlled by big corporations, car manufacturers and road haulage companies, state authorities from Spain to Sweden are besotted by huge infrastructure projects such as our own Betuwelijn and the Amsterdam-Paris HST line. The latter, only cutting 45 minutes off the journey, costs a total of over £2.5 billion to build.
The EU's objective is an HST network of around 70,000 kilometres by 2035. A number of priority links, all of them, with the exception of two lines in Spain, concentrated in the already infrastructure-rich region of Northern Italy-Germany-France-Benelux, are supposed to be completed by 2010. These will be built despite the existence of an alternative HST technology, based on tilting trains, which can employ existing lines. As Winfried Wolf put it, "The high speed trains need new lines that integrate either poorly or not at all into existing networks...The introduction of HSTs leads to the closure of local and regional lines."
The development of HSTs, coupled with the run-down of regional services, will accelerate urban concentration by favouring some, larger, cities over other cities, smaller towns and rural areas, with far-reaching, unpredictable and almost certainly malign social consequences. The huge cost of the HSTs and their inherent unprofitability will, to quote Winfried Wolf again, "divert necessary investment away from where it is needed more":

In 1995 the cost of Trans-European Network projects listed above, due for completion by 2010, was estimated at 72 billion ECU (about £50 billion). Between 1995 and 1999, 26 billion ECU (...) will be invested in these projects. According to estimates (...) up to 600 billion ECU will be invested in the 70,000 kilometres new high-speed lines (...) If a similar amount were to be invested in the existing networks and in the traditional technology (including the tilting technology), then the effect on rail transport, distances travelled and passengers carried, would be ten times greater.

Everywhere, passenger numbers are in decline, largely through the effects of privatisation or the structural changes that invariably precede it. At the time of the launch of the Netherlands' ambitious plan "Rail 21", NS calculated that the number of kilometres travelled by rail users would double between 1990 and 2010. This figure was used to justify a demand for a total investment of £4bn in new infrastructure and equipment. Since then the number of kilometres travelled has actually fallen, and the director of NS has let it be known that, as a result of privatisation, it would fall even further, so that far from having doubled by 2010 it will merely have returned to the 1990 level. The message is clear: if you want to run a railway as a thriving, market-oriented enterprise then its function as a public utility must suffer; but then this was always clear: it is why railways were almost universally taken into public ownership in the first place.
The same story can be told in the case of local public transport, though here the case against privatisation or deregulation is even stronger. In Britain the number of passengers declined in the nine years following deregulation of local bus services outside London by over 27%, while fares rose by 25%. If, compared to the UK, the system in the Netherlands has retained a degree of integration, plans are afoot which would bring this to an end. Piecemeal sell-offs, and the introduction of a "competitor" for NS in the Amsterdam region are the next steps. Of course, the alternative as far as the railway system is concerned is to allow NS to continue as a private monopoly, giving it dictatorial powers to increase fares. Because there is `no alternative' to privatisation, just as there is `no alternative' to the market system, passengers will soon be obliged to find their way through a labyrinth of small lines and timetables.
In addition to deteriorating service provision, working conditions are also worsening rapidly. The pressure of work on drivers, ticket collectors and maintenance workers has grown enormously over the last few years. Bus drivers are forced to drive for longer hours on irregular services, with damaging effects on their health. Train drivers have to cover the same routes more frequently and for longer periods, making their work dull and monotonous; and the number of accidents amongst line maintenance workers is rising due to poor coördination between independent NS subsidiaries.
The results of privatisation internationally are always the same: falling passenger numbers, lost jobs, greater dependence on cars. Over 3,000 kilometres of rail line were lost in Japan as a direct consequence of privatisation, while the car's share of motorised travel rose between 1975 and 1991 from just over a third to well over half. In roughly the same period the motorway network in Western Europe grew from 14,560 kilometres to 36,000 kilometres while the rail network declined by a total of 10,000 kilometres.
It is clear that a belief in the market, and the privatisation of public transports that is its consequence, do not bring us any closer to a solution to the problem of mobility. On the contrary, they stand in the way of progress towards such a solution. As a result of its demands, employment will suffer and more people will become sick and unfit for work. It is hard to find anyone who contradicts this analysis, but neoliberal dogmas forbid privatisation to be made conditional on its consequences. And of course, when they have finished with transport, the high priests of privatisation have no choice but to turn their attention to other basic services.

The market in gas, water and light

The consequences of privatisation and the introduction of the market economy into the energy sector can be seen, once again, in the United States and Britain. During the dry summer of 1995 the supply of drinking water to a large part of England was under threat. Hose bans and regulations limiting car washing were the order of the day.
The most important cause of the water shortage was of course the weather, but the problems were exacerbated by the fact that the privatised water companies proved inadequate to the task. As an inhabitant of Wrose in Yorkshire put it, "After privatisation the bosses gave themselves a handsome pay rise and then laid off loads of workers, so now they've got no-one to repair the leaks." Yorkshire Water was forced to admit that 26% of its water was being lost somewhere in the pipeline. Another private supplier, Northwest Water, estimated the loss at 33%. The regulatory authority OFWAT established that the problems surrounding the dry summer were to an important degree the firms' own fault. As a spokeswoman explained, "They found themselves in a situation where they didn't really have to be, if they had begun by managing their stocks better."
In America private individuals in many parts of the country have long had the chance to choose between competing electricity suppliers. In nearly all towns the energy supply is in the hands of one or more private firms. In contrast to what the prophets of the market would have us believe, this does not mean that energy is any cheaper. Tariffs for small users are generally higher where supply is in private hands than they are where electricity is a public-owned utility, as it is in Los Angeles. In addition, private firms have a reputation for cutting people off without regard to their circumstances: even in the harshest winter the gas and electricity will be cut off whenever the bill is not paid up, in full and on time, and people have been known to freeze to death as a result.
In conclusion, what I said earlier about public transport also goes for energy. Controlling the supply of energy helps the state to plan for the future. At a time when the waste of energy should be near the top of the political agenda, the privatisation of suppliers and the consequent introduction of the profit motive seem particularly ill-advised. Profit is always dependent on growth, and reduction of energy use is therefore hardly in the interest of a private undertaking. The recent European directive which obliges the member states to open, by 1999, a minimum of 22% of their markets to foreign bidders is aimed at giving big users access to (even) cheaper supplies. Because of this, any attempt by national authorities to establish an effective energy-saving policy is doomed to fail.

The nation, plc, does not exist

Privatisation, as is often said, deprives the state of the freedom to make coördinated and balanced decisions and therefore to influence the development of society in a desirable direction. For neoliberals, of course, this is precisely the point: should politics be about giving direction, or is it better to leave everything to the balance of market forces, shunning intervention by the state?
I believe that only one conclusion can be drawn from the facts that I have presented above: the state is not a firm, and whoever tries to run it as one will end up frittering away the public interest. Greed, for liberals, is the dominant driving force of humanity. Yet greed – if not kept in check by morals and values and an active state – does not lead to civilisation: it destroys it. If the state is not functioning as it should, then it must be changed, not abolished. There are more than enough people in every country who feel a sense of involvement and solidarity with their fellow beings. They have turned away from the cynical state and its political leaders and are active instead in organisations such as Greenpeace, Amnesty International, or even their local football association or residents' group. These people are not motivated by greed. They are not paid £2000 a day to write a few notes. They have nothing to learn from leaders who speak with disgust about the calculating citizen, but who endow themselves with commissionerships and consultancies.
The political and administrative world must extricate itself from the job-hunters and careerists to become a reflection of the whole society, instead of an élite dazzled by the chimera of the market. Only then will it be able to perform the tasks that should be the responsibility of the state. Providing those things that are necessary for the general good, the control and development of the non-material wealth that every nation possesses in the form of intellectual abilities and cultural riches, the guaranteeing of an honest division of wealth, and the offering of protection to those who need it.

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“Enough” Contents:

• Index
• Preface
• Introduction
• Chapter 1 The wondrous rebirth of liberalism
• Chapter 2 The death of social democracy
• Chapter 3 The disempowerment of the people
• Chapter 4 Poverty in the midst of plenty
• Chapter 5 The assault of the market
• Chapter 6 The unbearable lightness of commerce
• Chapter 7 A question of civilisation
• Chapter 8 The United States of Europe
• Chapter 9 The spectre of the world market
• Chapter 10 The inevitability of an alternative
• Preface to the 2006 - updated edition
• Chapter 11 Ten years later, in the Netherlands
• Chapter 12 2006: Another world is possible
• Chapter 13 New optimism