If only Owen Jones could join the dots….

So, everything should be nationalised and run as an economic democracy. This is the rallying call at least. The sadness here is that Owen Jones is failing at Chesterton’s Fence. Failing to ask why privatisation occurred in the first place.

Here’s another example: water. Even the City editor of the Financial Times – hardly a bastion of radical socialism – concluded that its privatisation looked like “little more than an organised rip-off”. Since privatisation in 1989, water companies have piled up more than £60bn in debt, while our water bills have continued to rise. Yet despite rivers and seas being blighted with raw sewage, and the loss of 1tn litres of water from leaky pipes in 2021 alone, shareholders raked in more than £85bn since this most basic of human necessities was flogged off.

You can put it that way if you want. We wouldn’t but then we’re we, not Guardian columnists. But, you know:

Investment in the industry has roughly doubled since privatisation in 1989, rising drastically in the 1990s. Average totex (total expenditure) has been consistently running at around £10bn a year since 2000, and average capex (capital expenditure – money spent on assets, such as such as buildings, equipment, and technology) has been between £5bn and £6bn a year, reaching the highest point in that range (£6bn) between 2015-2020.

Oh:

The water industry in England has been transformed. It’s easy to forget how bad things were. After decades of government underinvestment, water quality was poor, rivers were polluted, and our beaches badly affected by sewage. The water industry was not high on ministers’ list of priorities.

Since privatisation, investment of nearly £160 billion has seen strong, steady improvement, giving customers world-class drinking water. Leakage is down a third since the mid-1990s, two thirds of beaches are classed as excellent, compared with less than a third 25 years ago, and wildlife has returned to rivers biologically dead since the industrial revolution.

Lots has been invested by the capitalists. This has led to cleaner water from the taps, cleaner rivers and cleaner beaches. Which are the things we apparently desire and also what we’d hope to gain from lots of investment.

Capitalism isn’t perfect, no one’s going to claim that, but here at least it does seem to be better.

But there’s an obvious rejoinder. Which is that government could have done that. Which, in theory, it could have done. That rational central planner (stop sniggering at the back there laddie!) could have allocated tax revenues to perform those same tasks.

But, see, here’s the thing. They didn’t. Not for decades they didn’t under Labour and Tories alike. Largely on the grounds that there was always something sexier - for which read politically more salient, allowing Ministers to cut red ribbons etc - for taxpayers’ money to be spent upon. So, it wasn’t spent on the boring stuff like the drains.

When investment is being allocated politically then investment will be allocated politically…..

At which point Owen again:

Labour has committed to nationalising rail, but after the resignation of transport secretary, Louise Haigh – who genuinely believed in public ownership – what that will mean in practice is highly questionable, especially if an increasingly austerity-driven government starves it of investment.

Government does starve the system of investment. Because investment - the boring day to day grind of keeping a system going, not that glorious micturation up the wall of a new shiny shiny - is something that’s not politically salient. Therefore politics doesn’t allocate enough to such investment.

This was the very reason for privatisation in the first place. To divorce investing in the drains from whatever politicians prefer to spend the cash on to assure their re-election. Or, as Owen is worried about, trains not drains.

This is the problem that has to be solved. How do we gain that more investment given politics?

We’ve even a useful test. Celtic waters remained non-capitalist. Are the Celtic systems better - cleaner, cheaper - than the capitalist? If the answer is no, which it is, then we’ve proof against the contention that nationalisation will make England’s water better, don’t we? For the Celtic water settlement didn’t, in fact, solve the problem privatisation was an attempt to solve - how do we get people to care about the drains given that it’s difficult to get the politicians to do so?

Finally:

A democratic alternative is surely possible, where representatives of workers and consumers play a key role in running industries.

To remind of Venning’s Law: the correct answer to any assertion that includes the word surely is “No”.

The specific and particular problem of infrastructure is: how do we get people to spend billions on necessary things if it’s boring and not politically salient? For given the lack of political salience politics won’t.

Tim Worstall