Between Northern Rock and a hard place

By Simon Barrow
January 19, 2008

The current fluster over how to solve the crisis at Northern Rock indicates the degree of economic fetishism surrounding privatisation and nationalisation.

Some weeks ago, several businesspeople and pro-free enterprise Liberal Democrat treasury shadow Vincent Cable observed that taking the troubled bank into public ownership, at least temporarily, was probably the best pragmatic solution. It would prevent the buffeting of the markets and financial rumour mills, achieve a level of stability, and enable a secure ownership structure to be put in place.

But it seems that the unfettered devotion of Gordon Brown and New Labour to "the market" is such that the government, with the acquiescence of the Conservatives, will go to almost any length to avoid the N word, nationalisation, let alone the reality.

This includes pouring vast amounts of public money into a bond scheme, to the significant advantage of private bidders (most notably Richard Branson, who was weaned off the Tories in the direction of Blair, though he sticks to the soubriquet 'non political'), but not necessarily to the shareholders or even, in the long run, taxpayers.

Markets make good servants and bad masters, especially when politics and principle become overwhelmingly money-driven. That is one of the implications of a critique of Mammon as the source of all 'realism'.

See also Ekklesia's theological and economic response to the British and Irish churches' report on 'prosperity with a purpose', Is God Bankrupt?

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