Tuesday, 4 November 2008
An Interview with...Myself!!! Part 2
Q: The current government in Malta, led by Dr Lawrence Gonzi, has often argued against the concept of subsidising companies such as the Malta Shipyards Ltd. The government keeps saying that if a state-owned company is transferred to private ownership, the company will be much more profitable. What are your views about all this?
A: Unless I am mistaken, the European Union strongly limits the amount of aid that the State can give to one or more companies. That is not something about which I am very happy.
As far as Malta Shipyards Ltd is concerned, I totally disagree that this should be privatised. Let me explain further. A company's success or failure is usually determined by its management. In the case of the aforementioned company, it is quite clear that it has suffered from fairly inadequate management strategies for many years. This has led to the company's incurring losses for a fairly long period of time. The government has pumped millions of Euros into this company in order to sustain it, but the masses keep being told that all that money was wasted. Nowadays, we have heard about the necessity to privatise this company so often that few individuals seem to bother to ask: why has the Malta Shipyards company been incurring losses for so much time? Furthermore, it appears that an even smaller number of individuals has wondered whether there are any alternatives to privatisation.
When it comes to the provision of subsidies, I am totally in favour of this, as long as certain conditions are satisfied. In the past, whenever a state-owned company faced countless difficulties, the government simply pumped huge sums of money into those organisations in order to help them remain afloat. What is so wrong about that? When a human being is in serious trouble, millions of people around the world would agree that providing some form of assistance to that person is a highly admirable thing to do. Is one, therefore, to conclude that it is fine to help another individual, but totally wrong to attempt to rescue a state-owned company that is caught in the grip of a financial storm? Whenever people provide charitable contributions, they hope that that money will be used for its intended objective. Likewise, whenever tax-payer money is utilised to help a company, a country's workers hope that those contributions are going to be used to achieve the desired goals. If money is given to a company and it is not used wisely, then it is quite understandable that several people might prefer to cut the umbilical cord with that company. When subsidies are used wisely, a company can generate more income and job stability is retained.
Going back to the Malta Shipyards company, I still believe that if the government had really wanted to help this organisation to get back on its feet, the subsidies that were given to it for so many years could have been utilised in a much better way. A good management team could have been assembled to rescue the company from chronic losses. If it is true that there were too many employees, the management should have consulted the government and the unions so that a plan could have been drafted to transfer the extra employees to other organisations. All this was possible without the need to resort to privatisation.
Q: Why are you so sceptical about privatisation?
A: A private company is mainly interested in the maximisation of profit and the minimisation of costs. A state-owned company also wants to be profitable, but it also has other interests, such as providing stable and fulfilling jobs. Obsessed with profit, most private companies would not think twice about sacking countless employees if such individuals are not deemed to be "profitable".
It is also important to remember that the profits earned by a private company end up in the pockets of a relatively small percentage of the population (the shareholders). Any profits made by a state-owned company would benefit the entire population. In a discourse published in 1993 (Abuses of Socialism are Intolerable), Kim Jong Il said the following: "The renegades of socialism are converting socialist ownership into private ownership, claiming that the 'administrative command system' relies on the absolute dominance of state ownership. The socialist ownership which consists of state and all-people ownership and cooperative ownership forms social, economic foundations which enable the popular masses to occupy the position of masters of the state and society and play their role as such. It is clear that if socialist ownership is dissolved and converted into private ownership, the means of prodution, having been privatised, will be concentrated, sooner or later, in the hands of privileged people, speculators and a handful of other exploiters, no matter what the method of privatisation may be. It is not long since privatisation was carried out in those countries in which socialism had collapsed, but millionaires have already appeared while the vast majority of the working people are suffering because of unemployment and poverty" (p.141). Kim Jong Il has been criticised for several things, but his comments have been supported by historical events in many countries.
Q: Any comments about Dr Joseph Muscat?
A: I like the fact that he is a very good diplomat. His attempts to foster fraternal relationships within the Malta Labour Party are highly admirable. Having said that, I believe that he should be more critical when it comes to the neo-liberal ideology that has pervaded virtually all the countries in the Western world. I understand that it is not realistic to expect huge changes to happen in a short span of time, but I would love to see Dr Muscat talk about the plight of the suffering in this country more frequently.
To be continued...