Like a fat cat out of Hell

There were helpful items in the newspapers over the weekend on how to make huge sums of money in no time at all. It was a clever ploy, because there are few subjects so certain to catch the attention of the casual browser. The key, it turned out, is that you have to be involved in the management buyout of a deadbeat company that subsequently proves to be staggeringly attractive to the operators of bits of a recently privatised utility.

Not many dealers, one imagines, will be in this fortunate position. There is simply not enough of the family silver left for get-rich-quick schemes to be widely available. Most, then, will have to settle for a get-moderately-comfortable-gradually scheme while keeping a nervous eye out for the next niche.

David Goldman of Sage, interviewed in PC Dealer a couple of months ago, said: 'We all started out because we needed to make money and survive and that's where it ends for most people.' To go beyond that is a bonus.

To go spectacularly beyond it must be like winning the lottery.

Rudyard Kipling, not interviewed in PC Dealer in recent weeks, said something along the lines of a free-born Englishman having a winning ticket in the lottery of life. Perhaps the rest of us should be satisfied with that. Much of the comment directed at the abruptly nouveaux riches on the TV and in the papers suggests so.

On the other hand, it is difficult to be comfortable with all the criticism of the fat cats. Those shareholders in the recently privatised utilities, for example. Like everyone else, they complain about the pay-outs their boards of directors award themselves. But when they bought their shares it would have been in the confident hope of getting something for nothing.

Their confidence would have come from the Government, with its advertising, its tawdry dreams of a share-owning democracy and its agreeable habit of pitching the price too low. The whole privatisation programme has been a kind of conjuring trick with old rope being transmuted into money in the miraculous crucible of the City. The Porterbrook sale is a suitable climax; if reports of its modest record in building new rolling stock are to be believed, it is literally a case of something for nothing.

Presumably it's the scale of the rewards that gets up most people's noses.

The Porterbrook transaction is not, after all, too different from the case of someone who purchased a council house and promptly sold it on the open market at the height of the house price boom.

But for small and medium-sized businesses in the real private sector, there is one aspect of the new breakaway superleague that must be particularly galling - the various legacies of the public sector.

While you and people like you operate in a genuinely competitive environment, often hindered by the regulations and requirements of the Government, those former public sector monopolies are eased into the private sector with liberal applications of lubricating oil. Where any competition exists, it is usually of such a token nature that regulators are necessary to maintain a check. Where operations have been broken up to promote competition, the newly independent and separate parts show every sign of recombining to increase their domination. Where they might carry forward liabilities, these are cunningly finessed in the course of the transaction. At a time of high unemployment, they shed labour with negligible compunction.

Meanwhile, those directors who upset their shareholders so badly by paying themselves handsome salaries talk about rates of remuneration commensurate with the private sector. Perhaps they are, after all, worth it. For years public sector management was a byword for ineptness, but now they emerge as financial manipulators of rare skill. Their firms make big money; they themselves rake it in too. What better proof of effective business performance could you ask for?

You have to conclude that there are two clear divisions in the private sector now: the Premier League, dominated by the privatised utilities with their world-class pretentions and their artificial turf, and the Endsleigh League, characterised by fiercer competition, tighter money and narrower horizons. Its is hard to see how this could have a beneficial effect on the morale of ordinary business people. Yet the Government continues to urge them to expand their horizons: the opportunities of Europe, for example, where the case of Escom demonstrates what a remarkably sharp double-edged sword that is.

All business is, to some extent, a gamble. Norman Mailer memorably defined a capitalist as a man who stakes his immortal soul on the gamble that it is part of God's purpose that he should seek to enrich himself at the expense of his fellow man. The present Government's treatment of the utilities, contrasted with its neglect of small and medium-sized businesses, makes it look as though the tables are rigged in the house's favour more than usual.