The Return of the Public
DAN HIND
This paperback edition first published by Verso 2012
First published by Verso 2010
© Dan Hind 2010
All rights reserved
The moral rights of the author have been asserted
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Epub ISBN-13: 978-1-84467-910-2
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The aristocrats of intelligence find that there are truths which should not be told to the people. As a revolutionary socialist, and a sworn enemy of all aristocracies and all tutelage, I believe to the contrary that the people must be told everything. There is no other way to restore them to their full liberty.
Mikhail Bakunin
Contents
Part 1: The Idea of the Public
2 Private Vices and Public Virtues
Part 3: The Return of the Public
11 A Public System of Knowledge
12 Reforming the Private Sector
Conclusion: A Commonwealth of Descriptions
Introduction
In a democracy public opinion is sovereign
Alexis de Tocqueville
FOR THE LAST 30 years American and British politicians have allowed powerful economic interests to manage their own affairs. Whether liberal, nominally social democratic or conservative, successive governments assured voters that their surrender to market forces served the public interest. Once freed from an intrusive state, self-interested investors would identify economic opportunities and deliver faster economic growth. Privatized companies would become dynamic and efficient. Finance could be left to regulate itself, while government became more business-like.1 The majority would benefit from government’s refusal to restrain market forces or to take action in the economy: whatever investors wanted was good for growth and so, by definition, was in the common interest.
In the summer of 2007 the financial markets, which had epitomized the way that private self-interest was supposed to deliver public goods, began to seize up. In the months and years that followed, governments around the world, led by the United States and Britain, committed billions to rescue failing financial institutions and lent billions more at very low levels of interest. The working majority, having been told for a generation that deregulated finance would bring them their hearts’ desires, discovered that they were suddenly liable for huge new debts. Though the profits of the preceding decades went disproportionately to the wealthy, the losses belonged to everyone. The financial sector had justified its vast profits as the fruits of prudent risk-taking in competitive markets. It was now clear that their private gains had accrued from the reckless exploitation of a public guarantee.
For a while, the bankruptcy of the conventional wisdom could be discussed openly. Speaking in October 2008 Alan Greenspan, the former head of the Federal Reserve, acknowledged that ‘the whole intellectual edifice’ for managing risk in the vast global market for derivatives had collapsed in the summer of the previous year.2 Greenspan admitted that he had found a ‘flaw’ in the ideology that had guided him during his tenure at the Federal Reserve:
I don’t know how significant or permanent it is. But I have been very distressed by that fact . . . I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.3
By the time the financial crisis broke, the ideology that guided Greenspan at the Federal Reserve had spread throughout the state administration. In Michael Sandel’s words, ‘for three
