In a small village in The Netherlands – you may not know it, but Google maps does: Ophemert – the streetlights have been infected with covid19 since May 2020: they’ve had such a high fever that usually they are lit day and night. The villagers have reported this to the local council, and they receive an e-mail within two weeks saying ‘your report has been resolved’; but the streetlights are still lit (it’s October 2020 now). Expect that the electricity bill will be added to next year’s council tax invoice. In the current privatised ‘public’ sector, there is nobody politically responsible for this, and from a business perspective, Ophemert is too small, and therefore too expensive to really take care of. A company serves but one master: money. And money never serves the public cause, just the private cause.
For a large portion of the twentieth century, social democracy ruled The Netherlands (and quite a few other Western nations). This led to monstrous state owned companies, where inefficiency was rule rather than exception. They employed expensive yet incompetent people who were glued to their position so tightly that no cruise missile could dislodge them. The answer to this was implemented in the 1980s under leadership of Thatcher, Reagan, following the teachings of economists such as (among others) Buchanan: neoliberalism. The ideal became privatisation of everything the state used to organise. This was supposed to bring, on the one hand, a smaller government and thus lower taxes. On the other hand these formerly state owned companies would have to become more efficient in a free market, which would give the consumers a lower price for a better service.
We all know the result of this: hospitals can now go bankrupt; instead of one Transporter with packages, four of them race down every street, every day; and the Rijkspostspaarbank has turned into a morally unacceptable corporation where corruption, environmental pollution and weapons deals have become the way to make money. People have even talked of privatising the school system, making private companies responsible for the education of our children. This would be awesome for the rich kids, for they would be able to go to schools that can afford teachers on a real salary. For the poor children, it would mean going to the CocaCola-school in Overvecht or the Schilderswijk, where teachers would get nothing more than a contribution for voluntary labour. And a tax reduction has only been implemented for the very rich.
In the neoliberalist model, it turns out that profit is private, but losses are public responsibility. When banks make a profit, the shareholders and the board of directors share those profits; when they suffer losses due to continues mismanagement and poor judgements on risk assessment relating to investments, the population of a country has to cough up the money to prevent the bank from going bankrupt. When the corona-crisis has destroyed the tourism industry, a booking-agency that has sent billions in profits into private coffers, now is asking the public – the government – for aide to pay the salaries of their employees. Of course I do not begrudge the people who work there their jobs. But if their salaries are being paid through tax money, I expect that the billions that were skimmed off the profits of hotels in the previous years are handed over to the government. Of course it’s a very complex puzzle – who deserves help, and who doesn’t? Companies that made no profit before the corona-crisis… Do they deserve help? Don’t they? What is, and what isn’t fair? To make that call, we need a large government, with many capable officials who do not apply a one size fits all remedy, but decide on individual basis what is reasonable and fair, and what should be done in return for the help.
When will there be a politician who has the guts to start changing this neoliberalist system? Piketty has shown that everything is a choice; there are several very smart economists who offer alternatives. My question that will determine my vote in next year’s general election in The Netherlands is this: who has the guts to stand for an alternative to neoliberalism? Who has the guts to really change our household books? Roughly forty years seems to be the life span of an economic model; it’s time for a change, and in 2060 we’ll look for something new again.
Do I have the answer? Not in the least. I’m not an economist. But here in Ophemert, I see that neoliberalism isn’t working any more. This obsolete system has had its chance (and has done good too), but it has proven that it doesn’t serve the public cause. A service engineer has to be employed all day; there can not be a day during which he has no malfunctions to fix. Liander (the company running our streetlights) has promised in early June that there would be a service vehicle available to fix our streetlights ‘within two weeks’. What this service vehicle has achieved is unclear; the lights are still on. Day and night. Because Liander doesn’t serve us; Liander serves the profits under the bottom line, 246 million profit in 2018. And the extra costs for electricity will be demanded from the local council by 2021. The profits of Liander is private, but losses are to be paid for by the people. And nobody is responsible for that.