Wednesday, May 6, 2009

Gordon doesn't get it

Free market capitalism is in crisis, banks and even car manufacturers are being effectively nationalized, citizens in advanced democracies are skeptical of globalization and fearful of the future. This calls for.... the privatization of the Royal Mail.

Why, for pity's sake, privatize the Royal Mail? It is a public service which by its nature cannot make a profit in a competitive market. Its traditional role is bind the country together by delivering post at a fixed price to everyone, wherever they live. Increasingly its main role is to provide banking services to the many British citizens who are too old to deal with the complexities of modern banking, or too poor for our risk-averse banks (OK, I'm joking) to make a profit out of.

Above and beyond the merits of the case, the last thing New Labour needs at the moment is to start privatizing more public services. I think we have already got the picture that New Labour is not anxious to nationalize the whole economy, and that state control of the banks was a decision taken under duress. What Labour needs to prove right now is that it has an answer to people's fears about their economic future. Privatizing the post office is the weirdest way of doing that I can think of.

The 'public-private partnership' strategy made sense in the 1990s, when people still remembered the 1970s and Labour's famous 83% marginal tax rate on top earners. It makes no sense now, because for most people Labour ceased to be a socialist party long ago. Gordon Brown is fighting old battles. His moment of glory - the swift and intelligent reaction to last autumn's financial meltdown - has passed, and gives him his place in history. For a moment I thought that would be the making of his premiership. But it's increasingly clear he's not going to win the next election, so he should give someone else the chance to make the running right now.

For what it's worth, I think it should be someone who has been exposed to Marxism from an early age.