Capital's Public-Private Partnership

It suits the coalition's agenda to oppose the private to the public sector. Never mind the public sector provides the essential social and institutional core functions private capital depends on, as far as the Tories and the LibDems are concerned it is economically unproductive and represents an overall drain on the British economy. A recent letter from a Disgusted-of-Tunbridge-Wells-type on the ever-awful Ceefax letters page illustrates coalition thinking perfectly. The gist of it went something like this:

Making civil servants redundant is a good thing. If the taxpayer has to pay out Job Seekers' Allowance instead of exorbitant salaries then this is a worthwhile cut.

Leaving aside the lazy and ideological assumption that public sector work is all waste and produces nothing, it demonstrates the coalition's compartmentalised understanding of how capitalism works. The private sector is the source of wealth, and the public sector via the state drains it away. There is no recognition of how the two are conjoined and mutually reinforce one another.

Profits, salaries and wages are taxed to pay for a number of state functions, be it the cost of politics, welfare, hospitals, military, quangos, administration and what have you. That money percolates out the other end in the form of salaries and wages. After this too has been taxed the money is recycled back into the private sector when public sector employees do their shopping, go out, buy luxury goods, head off on holiday, get their hair done and so on. This is then transformed into the wages and profits of the private sector. And as for that little bit left over that some public sector employees squirrel away in savings, this is invested by their bank or building society. And don't forget the private sector firms whose existence heavily depends on public sector contracts too: their activities pay out wages to their employees and allows them to accumulate capital.

I think readers might see what I'm getting at. The relationship between the private and public sectors are a continuum, an intertwined metabolism that helps keep the wheels from falling off British capitalism. If we took the advice of our Ceefax correspondent above, less civil servants and more unemployed depresses spending power and with it the amount of money cycling back into the private sector, which means a lower tax take, redundancies, and so on.

Once you start picking apart the public sector, which is just what the Tories and LibDems are hellbent on doing, the fabric of capital's public-private partnership starts to unravel and the likelihood of renewed recession grows ever greater.