The Fat Cats Protection League

Wherever you hear the words “free market”, you’ll find massive state handouts to corporations

By George Monbiot. Published in the Guardian 4th September 2007

After my column last week, several people wrote to point out that the neoliberal project – which demands a minimal state and maximum corporate freedom – actually relies on constant government support. They are of course quite right. The current financial crisis, caused by a failure to regulate financial services properly, is being postponed by government bail-outs. The US Federal Reserve has reduced its lending rate to the commercial banks, while the Bundesbank organised a E3.5bn rescue of the lending company IKB. This happens whenever the banks suffer the consequences of the freedom they demand. But over the past week an even starker example has emerged.

In Britain the split loyalties of the major political parties has created a hybrid system of public provision. If it left public services intact, the party in power would be roasted by the corporate media, but if it attempted full-scale privatisation, it would be booted out of office. So the last Conservative government devised a plan which would keep both sides if not exactly happy then at least totally bewildered. They called it the private finance initiative, or PFI. Corporations would build and run our schools, hospitals, roads and prisons and rent them to the state. This, the Tories maintained, would enable costs to be cut, while ensuring that public services remained free of charge.

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