The ‘We Own It’ fallacy

Some who have explored the internet recently may have happened upon what appears to be the left’s latest project, entitled ‘We Own It’.

At first glance, the website appears to be as creative as it is factually dubious, with the homepage alone riddled with statements that simply don’t stand up to empirical evidence. Anyone who understands economics or remembers the 1970s could very easily disprove their claim that ‘Privatisation doesn’t work’, for example.

While fact-checking the left’s attitudes to economic issues such as privatisation is important and, indeed, enjoyable – that debate is for another time. For one thing, any visitor to the website is struck by – its the name – ‘We Own It’.

Like Newspeak and doublethink from George Orwell’s ‘Nineteen Eighty Four’, the statement is imbued with meaning whilst having no real meaning at all. It is deliberately misleading, designed to direct the reader towards a false conclusion. Like any such statement, it can quickly be disproved with some scrutiny.

What is the statement ‘We Own It’ trying to say, exactly? The simplest explanation would be that we, the British people, on some basis have ownership of the services generously provided to us by government. Is this really the case? Let’s examine the facts.

First of all, what constitutes ‘We’ exactly? The statement, given the context, implies that ‘We’ means everyone who has access to, uses and pays for, public services. Since that is just about everyone, we can assume that ‘We’ refers to the British population at large. The UK population currently stands at around 63.7 million people.

Assuming each person has an equal share of public services, each person’s share would give them a 0.00000157 per cent stake in the public sector. Great, I feel empowered already.

So, now we have established that our individual share in public services is small to say the least, let’s thinking about what the concept of ownership entails. To own something usually implies that we in some form or another have a say over what is done with it.

The best way to illustrate this with the public sector is to contrast the concept of shareholding in those services with other entities where we are familiar with the concept of share ownership. Such an example is provided by joint-stock or public limited liability companies, in other words corporations whose equity is traded on stock markets.

If I own equity in a company listed on the London Stock Exchange, for example, I am entitled by law to the following privileges. According to the Companies Act 2006 I can, with support from five per cent of overall shareholders, call shareholder meetings where I can in theory initiate an election to remove directors by a simply majority.

I can also have a non-binding say on executive pay, initiate votes on changing the company’s constitution and vote on significant transactions such as mergers, takeovers and share buy-backs. The company I own shares in is also obliged by law to hold annual general meetings, which I can attend and vote on propositions.

You will notice that all these privileges are conspicuous by their absence in the public sector. The only real say any of us have on how public services are run is exercised in a general election, where I can vote between various different policy packages presented to me by political parties, of which only two have any realistic chance of actually winning the election overall.

I have no say in the formulation of those policies, I cannot decide who runs public services and I certainly can’t initiate a vote calling for their removal if I think they’re doing a bad job. In the private sector I can also examine, in detail if I wish, quarterly reports on finance that companies are obliged to produce and I can keep an eye on how my share of the company is doing simply by looking at its trading price on the stock market.

Given the behaviour of certain NHS trusts over the recent scandals relating to standards in hospitals, for example, it would be reasonable to conclude that public services tend to be far less open and transparent than their private counterparts.

If we accept the proposition that we do indeed have an, albeit small, stake in public services then it is clear to most people that a stake in private firms goes much further. In addition to the above, if a company is profiting and doing well, I am sometimes rewarded with dividends – a share of that companies profits. When I am obliged to hand over my money to the public sector, I don’t even get so much as a thank you.

Undoubtedly the left would come back at this with something along the lines of ‘Yes, but ownership in shares is so esoteric. At least we ALL have a share in the public sector.’ However, once again the facts suggest otherwise. Over 10 million people in the UK own shares directly, which equates to roughly around one in every four adults.

Not only this, but many millions more have an indirect stake in companies through pension plans, which usually invest in equity and bond markets to increase their value. Despite what the left may say, then, it is fair to suggest that a significant amount of the population, directly or indirectly, have some meaningful form of ownership in corporate Britain.

So it would seem that the statement ‘We Own It’ is actually rather hollow. As we have seen, any ownership we have in the public sector is extremely small and does not equate to what most normal people would regard as ownership. The left can argue based on abstractions all they like but, in reality, it seems the concept of us owning the public sector doesn’t count for much in the real world.