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How Privatization Screwed Over Britain, According to Author James Meek

His new book argues that we must stop believing that naked self-interest is the only thing that gets people out of bed in the morning and that commerce is the only solution to all our problems.
October 2, 2014, 6:57pm

James Meek. Photo by James Pallister

The UK housing market is so prodigiously expensive that people are now paying to squat in London buildings. If you're one of those people who's had to serve as a "property guardian," you've probably wondered why rents are so damn high. You might have also questioned why it’s still cheaper to fly to Magaluf than it is to get a train from London to Newcastle, despite Britain having 19 train operators. Perhaps you’ve resented paying an “admin” fee because the council has sold your unpaid bill to a debt-collection agency. And maybe you wonder why your ever increasing energy bills are used to fund the baller lifestyle of a foreign energy magnate.

If you want to understand how things got this way, novelist James Meek has written the book that you need to read. His collection of six essays, Private Island: Why Britain Now Belongs to Someone Else, vividly describes how the infrastructure of the British economy has been flogged off over the years, and how its services are now getting sold back to the public at a higher price. Meek spells out exactly how this process has happened, whom it has enriched, and whom it has screwed.

You may have come across Meek through the essay in the book that tackles housing, which was first published online and in the London Review of Books as “Where Will We Live?” It became that most unlikely of internet phenomena—a long, long essay that went viral. Clearly he had hit a nerve.

Meek took readers through Margaret Thatcher’s Right to Buy scheme, the effective end of state provision of housing; the coalition government’s “bedroom tax"; its Help to Buy plan, and the inflationary havoc it wreaked on an already bubble-y housing market. The essay also drew attention to the relatively obscure mechanics of the volume house-building industry, a group incentivized to release the bare minimum of “product”—meaning houses—onto the market each year in order to keep prices up.

In the 1980s, the idea that privately run companies could be more efficient than state-run ones became popular. Both free market ideologues and people who wanted to make loads of money worked together—wittingly or otherwise—to move assets from the government to the private sector. In the process, the supposed cheerleaders for free markets had the tendency to become quite keen on monopolies once they had an industry within their grasp.

The problem is, according to Meek, that while some services—like pubs—work when the free market provides them, others—like housing, electricity, or water—do not.

“It is all very well to have this fantasy about that people coming in and out of existing [electricity] generation as if they were in Mexican restaurants or setting up a chain of clothes shops," he says. "But you have to plan a power system over generations."

And as national assets are sold, ordinary citizens are handed over to private firms. The firms can then charge pretty much whatever they want for services, because people can’t do without them, argues Meek. How much could your water company charge you before you decided not to pay and go without?

“Society now expects that everyone, every citizen—no matter how poor—has access to these networks,” says Meek. Meanwhile, companies expect to make a profit from them. So a service that people formely expected to have provided to them becomes something that everyone has to pay a private company for. In effect, it becomes a tax on the poor, transferring wealth to the already wealthy.

The mechanics are simple, he explains: "A big private equity group will gather together the investment advisers of these various pensioners groups from Canada, Australia, and the Netherlands, and say, ‘Look, here is an opportunity—we will buy this English water company. It is undervalued. The regulators from Britain thinks it is worth this, actually, but it is worth lots more. So we will buy it, get a steady income, and we will invest it, and ten years down the road we will sell it and make huge profits.’ So there has been a literal exploitation of British water bill payers.”

Many privatized utility companies are owned by companies spread across several countries—in the case of Thames Water, 13—making it difficult for people to complain directly to the people who own the utilities on which they rely. Meek argues that this causes a psychic disconnect, comparing it to renting from an absentee landlord.

“Your landlord may live over the road in a big house, but at least you know they’ll have to come out of the house once in a while and you can shout out at them and complain,” says Meek. “With the absentee landlord, the gates are locked and you’ve no way of reaching the guy, who is probably sunning himself in Monaco.” For Meek, this contributes to people’s feelings of somehow being screwed even if they can’t put a finger on exactly who is doing it, and how.

In the long run, says Meek, the public don’t even feel some of the supposed benefits like paying less taxes, because ultimately you end up paying more for the things you need anyway. “Of all the things that have happened in the past 20 years,” he says, “what has depressed me most is hearing people of my age group with children in their teens talk like Americans about university. All that they have gained from low taxes and the more has been taken away from them with these kind of fees.

“There’s the view that I have somehow failed as a parent if somehow I cannot scrape together few thousand pounds to put my child through university,” adds Meek. This in turn creates a more selfish society. “They [my kids] are going to have to take a different attitude towards their lives because they are going to have to be bit more greedy, a bit more selfish, and screw their peers a bit more in that sort of hustling American way, and climb over their bodies.”

Sound familiar? For anyone under 40, this climb-over-the-bodies analogy can be applied to pretty much any facet of life. And you can see how it affects society. If you know you’re going to be paying out one and a half grand a month on rent, why get paid less to be a teacher at a state school when you have the option to be a management consultant?

Meek’s answer to the problem is a more modest conception of how utility companies could operate and a change in attitudes that challenges the greed-is-good orthodoxy. “We should move towards the situation where these universal networks are not set up in such an exploitative situation," says Meek. "They [should be] set up to be run on commercial lines as far as possible but they are non-profit making.”

To get there, says Meek, we must first stop believing that naked self-interest is the only thing that gets people of bed in the morning, and commerce the only solution.

“I think that the first principle must be a sort of mental revolution. We need an attitudinal revolution with a consistent attack by the left on the idea that the businessmen are the new priestly class.

“We need to attack the idea that there isn’t such a thing as duty in public office, that there isn’t such a thing as doing a job because you want to do a good job rather than simply to make much money as possible,” he says. “It is just not true, yet that is the primary motivation that has been put forward by the powers that be for 35 years now, whether explicitly or implicitly.”

It's a conclusion that sounds quite uncontroversial, but it completely contradicts the way that the country is currently run.

Private Island: Why Britain Now Belongs to Someone Else is available from Verso.

_Follow James Pallister on Twitter. _

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