Acid

The problem faced by the first Thatcher government was a conglomeration of nationalised industries, associated unions, and the civil service. The problem today is different, though there is obviously some considerable overlap.

The civil service is a common thread, but the unions are less important (in large part because of changes to union law made by the Thatcher governments), and there are now, thankfully, few fully nationalised industries. But instead of the latter we have private industries and businesses that are so dependent on the state for their income, either because they provide goods and services to the state, or because they provide goods and services that are mandated by state regulation, or because they provide goods and services on the state's behalf. All are interesting, and the latter particularly so since the category encompasses the Private Finance Initiative (PFI), which is often thought of as being a type-specimen of the sacrifice of public interest in disadvantageous contracts with private capital. But seen in the larger context these contracts are revealed in a different light, namely as high risk acts entailing submission to state authority, and therefore paid at above market rates. In effect these are acts of self-nationalisation.

This process of absorption, typified by the PFI, is the heart of the so-called Third Way, and has resulted in an extension of the state that is in many respects more thorough and potentially more damaging than the transparent nationalisation of the Attlee period. No compensation payment is made in a lump sum, as was made for example to owners of coal mines, and self-nationalisation is much harder to unwind since the private capital thus in the process of being dissolved into the state's organism will actually defend the state even as it is being digested.