An exchange of views on ‘Public Sector’ vs ‘Private Sector’

The comment below to a previous post is almost perfect in illustrating the illusions that exist on the role of the state and for which the series of posts were written.  It is therefore worthwhile bringing greater attention to it along with my response:

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I would have reservations about what you say about the State and capital relationship. Both sides of the equation seem to be too general, categories that are not specific to time and place. I find the categories of the public sector versus the private sector a little more specific. The key thing here is that there has occurred over the last thirty years a major transformation in the relation between the two sectors. In short hand, there really is no public sector to talk about in the way we once did. One should preface talk about the public sector with the phrase ‘so called public sector’. The public sector has been taken over by the private sector yet throws over this capture an appearance of being in the hands of and being managed in the interest of the public. 

When you use the public health service it is easy to believe that you are being served by what used to be known as the public sector, when in fact your are not, most of the services are provided to the hospital you are using by many private companies. This is just one example of many. It is interesting to see how in Britain many of what you would once have thought of as classic public services are in fact in the hands of private companies like SERCO.

I read the policy documents of the World Economic Forum and everything is dressed up in the clothes of Public Private Partnerships, something designed to deceive. What we mostly end up with, are private companies extracting money from what used to be called the Public Purse. Even the Dole broadly defined is operated by private companies pretending they are public bodies.

In a nut shell it is important to keep up with changes that have only recently occurred, over the last 30 years, not to get stuck using doctrines about State and Capital that are so universal that they pass over the particularities that now prevail. 

RTE was once upon a time a part of the public sector, yet the funding came from both the licence fee and income raised from commercials. A model I have to admit I never liked, when I watch it I can’t stop moaning about the deluge of commercials, I have to sit through, more frequent than the those you get with British commercial television, four breaks for ads every hour. So the public broadcaster always had one foot in the commercial private sector. I wonder if State capitalism ever actually existed in the Republic of Ireland. When I travel from the North to the South I am struck by how more commercial the South seems to be, maybe this is too is deceptive.

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You write that the categories of State and Capital “are not specific to time and place” and that “the categories of the public sector versus the private sector [are] a little more specific”, and that the public sector gives “an appearance of and being managed in the interest of the public.” Of course, the opposite is the case.

“Public” and “private” in these contexts are empty abstractions designed precisely to obfuscate the real situation and to give appearances that essentially deceive.  So-called public sector organisations are presented as if they serve the public but experience illustrates otherwise, as the posts on RTE demonstrate.  The reformist left pretends that failures are due to the corruption of ‘public’ sector ownership by ‘private’ interests but the ‘public’ (however understood) does not own or control it; as we have seen from their sale and from the complete and utter lack of democracy and accountability in their operation.

Even ‘private ownership’ is no longer dominated by single ‘private’ capitalists but by collective pools of capital, including pension funds of workers, as well as pools of money of separate capitalist companies and ultra-rich individuals. Capital is being socialised but is still capital, so operates according to the laws set out by Marx, while the state is not the depository of the ’public’ or general interest but of the interests of the capitalist class as a whole.  Again as set out by Marx.

It is a body separate and above society, which, while it rests on society, has its own interests that are intimately tied to the capitalist system and to various fractions of the capitalist class or to individual capitalists.  Precisely in what way permits greater specification of their forms that are “specific to time and place”, which you see as the shortcoming of these categories.  The general abstractions of ‘public’ and ‘private’ go nowhere, while the Marxist categories of ‘state’ and ‘capital’ have engendered whole libraries of analysis and empirical studies.

As I wrote on Facebook about the controversy at RTÉ – ‘it wasn’t commercial interests that decided to pay one presenter over €500,000 per year. It wasn’t they who doctored the accounts to hide this. It wasn’t they who cut other RTÉ workers’ salaries and conditions, and it wasn’t these interests who wasted millions by, for example, buying thousands of euros worth of flip flops on ‘barter accounts’. So what is it with “public service broadcasting” that requires so much forgiveness and support?’

Illusions in the ‘public sector’ are deep.  Consider these facts:

During the Covid-19 lockdown everyone was invited to clap for the NHS in the North and in Britain when it had closed its doors to other services, with lasting effects we still suffer from, while it spent billions of pounds on useless equipment from the cronies of the Tory Party.  Everyone now complains that they struggle to get a GP appointment, and that the service is crumbling, while more and more are signing up for private healthcare if they can afford it.  If the ‘public’ sector really was there to serve the public none of this would be happening.  If it really belonged to ‘the public’ it could be stopped but it can’t in its present form of state ownership.

The NHS is a bureaucratic monster.  We recently learned of the neonatal nurse, Lucy Letby, who murdered at least seven infants and attempted to murder at least six others in her care between June 2015 and June 2016. The worst serial killers in British history have been ‘public sector’ employees paid to care for the public.  It would be possible to write these off as tragic anomalies were it not for the fact that such scandals are exposed on a regular basis and are certain to recur.  Only when workers and patients have the power to control and make accountable these services will this change, and this will only happen when these services are removed from bureaucratic state control.

You write that “most of the services are provided to the hospital you are using by many private companies” but this has always been the case. One of my first jobs was processing invoices from these companies in the NHS, from medical devices to food to pest control.  The use of agency staff, employed indirectly through private companies, has certainly increased, but this is because the terms and conditions are better in some ways so workers such as nurses would rather work for an agency.  In the last year millions of ‘public sector’ workers have gone on strike to get higher wages in defence of living standards ravaged by inflation, in the teeth of opposition by their state employers.  Many workers in the private sector have already achieved higher pay increases without even having to go on strike.

You are correct to say that many previous state services have been privatised and often this leads to attacks on workers’ terms and conditions as well as deterioration in services.  This often obscures the poor services previously provided under state ownership, as evidenced by telecoms in the South of Ireland.  Much of the left opposed the creation of a single water authority in the Irish State, forgetting the failure of the previous mode of state ownership.

While it is correct to oppose privatisation it is no alternative to champion ownership by the state.  The use of the term Public Private Partnerships, which you state is “something designed to deceive” is only true in one sense, for those with the illusion that state ownership is on behalf of the public.  The purpose of the capitalist state is to protect capitalist ownership of the means of production, which is a sort of partnership.  The use of the term Public Private Partnership is therefore not “something designed to deceive” but is actually a more accurate description of the relationship between State and Capital.

The alternative is workers’ ownership and not the belief that capitalist state ownership can be made democratic.  This, of course, does not prevent us furthering any democratic changes that are possible without illusion that they are adequate or any sort of solution.

5 thoughts on “An exchange of views on ‘Public Sector’ vs ‘Private Sector’

  1. Here is one thing I was reading a little while ago. It is a publication from 1995 by a defunct Trot group about what was taking place then : the quick dismantling of the Workers States, however degenerate you would like then to be. The publication can be found on the Marxist Internet, ‘ In defence of Marxism number 3, The Marxist theory of the State. I had a copy at home, though I don’t remember how I got it.

    The point is that it purports to explain the Marxist view of the State, while at the same time ‘refuting’ the propositions on the same matter of most of the rest of the Far Left i.e. Militant, FI, Workers Power etc.

    There is a very short chapter called Mechanical Materialism and the Theory of the State. A quote by Trotsky is provided ‘ The class character of the State is determined by its relation to the forms of property in the means of production and by the character of the forms of property and productive relation.’

    However the October revolution brought the working class to political power and for more than a few years the primary forms of ownership were largely in private hands. Indeed private ownership had even received a boost with the NEP. If the means of production were mainly in private hands how could the State be classified as a working class one? A good question.

    The answer provided is that the first definition of the Marxist theory of the State is too mechanical. What explains things more correctly is a dialectical theory of the State. ‘it is not merely a question of the existing forms of property but those which the state defends and then strives to develop’

    They then argue that ‘ despite the fact that between 1917 and 1918, the Bolsheviks ruled over a bourgeois economy, only economistic pedants would deny that the infant soviet regime was a workers state…the Soviet regime was committed to expropriating the bourgeoisie’.

    The intellectual strategy is to use this ‘dialectical’ account of the State to deal with the current demise of the Workers States and the restoration of capitalism. I don’t set out to be the examiner of all of what followed or to award it a plus or a minus to the arguments. What interests me is a couple of things, one the use of political concepts, what is the theory of the State about, is it not really about what is called the superstructure, rather about the society or economy, then what is a political regime, is this the same as the government, the term political regime originates in ancient times, Athens did not have a State if we mean a set of government departments staffed by permanent officials or a standing Army and Navy, was it therefore ever a State? The term State is of Roman origin.

    The other is the notion of there being a division of States, Bourgeois States versus Workers States and how to distinguish one from the other, especially if the supposed mechanical definition about property ownership is not definitive in all cases.

    I don’t think the issues that came up when this publication came out were ever settled, everyone moved on to the next big thing, the various wars undertaken by the USA. Aren’t we lucky to have US imperialism to focus on, with this we seem always to be are on safer intellectual ground to rant about.

    With respect to your on blog I don’t know for sure if you have dropped the purported intellectual division between bourgeois states and workers states altogether for the viewpoint that Socialism means a society without a state, even if it is posed as a transitional and temporary one. That can there is no such thing as a Workers state, the expression being a contraction of terms. This I think is the anarchist conclusion. If this indeed is the case what becomes of the Bolshevik revolution and the defence of the workers undertaken by Trotsky and his followers?

    Apologies for writing so many words.

    • I have a definite view on many of the questions you raise but would like to address them more systematically with the necessary time to do so.

      There are capitalist states and worker’s states, and socialism requires the latter to dissolve over a period. The premature character of the Russian and Chinese revolutions add additional complexity to the analysis and require more empirical presentation. I have done some of this already but have not written it up. As you say, the left moves on to the next big thing, and despite calling itself the memory the class it often forgets, and sometimes this means having to follow them despite the truly awful character of some of it; sometimes because of it.

    • What is missing here is any concept of transition, i.e. of dialectical development, and agency within it. In Russia, the revolution ripped up the social roots of the bourgeoisie. Its rue, as Lenin wrote, in Left-wing Childishness, that even after the revolution, the economy was characterised by a range of property forms ranging from state industries, to large-scale corporations (socialised capitals), to cooperatives, to small businesses, and still an overwhelming number of peasants and small commodity producers.

      But, the latter, as Marx describes can never form into a ruling class, because of their individualist and heterogeneous nature. A majority of the peasants were drawn behind the Bolsheviks in the revolution, during the Peasant War phase. The bourgeoisie itself was very weak, because a lot of the large scale capital was foreign owned, and such large scale capital implies, in any case a much smaller number of capitalists. In addition, during the revolution, the workers implemented workers control in those industries, which as Marx describes, in Capital III, is ion any case, objectively, their collective capital. There remains the question of the plethora of small capital, which indeed strengthened as a result of NEP, but that small capital, despite its numerical strength, is economically and socially weak, and dominated by the larger-scale, socialised capitals. To be clear, as Lenin describes, this remained, at that point a capitalist economy, and a socialist economy is only possible on an international scale, hence the opposition to the theory of Socialism In One Country.

      But, as Marx describes in Capital III, Chapter 27, socialised capital, be it that of the cooperative or joint stock company/corporation, is a transitional form of property, between capitalism and socialism. A workers cooperative, as Marx describes removes the antagonism between labour and capital, by making the workers into their own capitalist, but it does not change the fact that what they own is still capital, and the same laws and contradictions of capital and capitalism continue to apply to it. That was the case with the economy of the USSR writ large. The question was in what way that transition would move. By the late 1920’s, the question was settled, as Stalin moved to liquidate the bourgeois forms of property, and with it the foundations of the bourgeoisie itself. The state was dependent upon a development of that statised property.

      As for the state and the political regime, they are clearly two different things. In Russia, in the late 19th century, as Lenin describes, it had a capitalist state, that acted in the interests of a more effective development of capital. Yet, the political regime/government was that of Tsarism, and of the Russian landed aristocracy. In Chile, in 1973, the Popular Front government of Allende, even in seeking to advance the interests of Chilean workers, was found to be in contradiction to the interests of the Chilean ruling class, and its state, and was overthrown by that state. Liz Truss, was an example of the fact that the Tory Party has been captured by its petty-bourgeois base, and that there are limits to how far the ruling class will allow the interests of the petty-bourgeois to be pursued by its governments, just as the US state has acted to constrain the actions of Trump and his petty-bourgeois supporters.

  2. I have many things to say about what Marx and others who are said to be Marxists have to say about the State. I don’t elaborate on this because this is not my blog and I follow what you say rather than present an alternative doctrine of my own devising. If I elaborated further on what I thought it would only distract from what you thought and the purpose of your blog is surely not to convince me.

    When I comment on what you say I follow two maxims. First to say what I have to say using the minimum of words. Second I bring up matters that I believe you have not considered carefully enough.

    Just to quote one of your own admissions; ‘while it is correct to oppose privatisation it is no alternative to champion ownership by the State’. Why bother opposing privatisation if it is leading the working class to an objectively reactionary outcome?

    I think I know the answer to the question. The facts of the matter are that some and not all State ownerships that took place in an earlier historical period were objectively progressive, constituted serious social reforms that many working class people still would like to preserve and enhance. In Great Britain the obvious ones relate to socialised health and education. In Ireland they relate to the State provision of social housing, social housing is far more rent secure than the available private provision. I know this form my own street where the houses that were taken out of the social housing charge far greater rents, also the people living in the private rented homes are often desperate to get a move into the social sector.

    I have a conjecture as to your conversion to a version of Marxism that stresses a quite pronounced libertarian note, by libertarian I mean zealous hatred of anything that adds legitimacy to the ideology of State Socialism, I am referring of course to the history of Stalinism. I hold the view that when starting out on your blog you should have clarified your own Marxism by writing about what Trotsky had to say about Stalinism. You have of course argued about the madness of socialism in one country and even to some degree vindicated Trotsky on permanent revolution. To my knowledge you have not ventured a assessment about Trotsky’s defence of the Workers State and his vindication of the concept of doctrine of the Dictatorship of the Proletariat. I really don’t know what your verdict on Trotsky really is and it his my opinion that this clarification should of come first to avoid misunderstanding. Perhaps you think you did this earlier in your posts that I somehow missed?

    • Capitalism involves the socialisation of production, which is progressive, not least because it can form the starting point for a transition to socialism.

      The socialisation of health care is one form of socialisation of production, but state ownership is only one. In the UK, much of it is not provided by the state, including GP practices on primary care. Many hospital consultants work privately as well. One problem is that illusions in the NHS have blinded people to its relative failure compared to other socialised systems, which means they first believe it is a matter of the government putting more money into it. Of course, they also miss the fact that it is their money that pays for it through taxes, etc.

      As for opposition to the state, Marx and Engels expressed amusement at the new anarchism that thought it had minted this opposition, while it was commonplace among Marx and Engels long before. Not so now, unfortunately.

      I am writing some posts on permanent revolution, and reading on the nature of the old Russian and Chinese states, but posts on these will have to wait. Events such as the war in Ukraine inevitably intervene.

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