Profit, Privatisation, and Ratatouille

A simple formula to explain capitalism. (And it explains so much.)

The branches on my citrus trees are bending under the weight of ripe golden fruit. Meanwhile, the sausages at our local butcher are eye-wateringly expensive. I’m tempted to sell lemons at the front gate to finance our next barbecue.

Do you want to know something funny? I’ve learnt there’s a formula for selling lemons to buy sausages.(1) It’s this, where “C” stands for commodity (lemons, sausages) and “M” stands for money:

C1 → M → C2

I expect whoever buys my fragrant, flavourful citrus will use them for iced drinks, pancake toppings, and salad dressings. I will use the sausages for feeding hungry teen boys. So, the formula above describes an exchange involving use-value.

“Oh,” do I hear you say? “The free exchange of useful things between individuals. That’s capitalism.”

Nope. Lots of different economic systems are organised around the principle of use-value. Most small businesses even. Capitalism is organised around something different.

Not use-value, but exchange-value

Imagine the neighbour who buys my lemons has no use for their vibrant tartness and vitamin C. Instead, she drives to a fancy market, where she exchanges them for twice the amount she popped in my honesty box. She made a profit. Here’s the formula for her transaction:

M → C → M’

“M” still stands for money, but the ‘ symbol stands for more. My savvy neighbour wanted the lemons not to use them, but for their exchange-value. Go her.

“Oh, so THAT’S capitalism,” You might say. “I get it now.”

Almost, but not quite.

Grow, grow, grow, grow, grow, grow, grow….

The point of capitalism is not just to make a profit; it’s to make more and more profit all the time without stopping. To grow and grow. Because investors are racing to protect their investment money (their capital) from depreciation and inflation.

This is the formula for capitalism:

M → C → M’→ C’ → M’’→ C’’ → M’’’→ C’’’ → M’’’’…

If growth stops, our capitalist economic system will tip over. We’re shackled to it, every one of us. That’s why Governments blether on about growth all the time—even though its insatiable demand for energy and resources exhausts our little planet.

Credit: Me. A lemon tree in my garden today.

Capitalism hunts for profit anywhere and everywhere

Capital is always looking for new ways to profit. Values? Out. Morals? Negotiable. Justice? Not a thing. Who we are as a nation? Don’t make it laugh. Like a hungry rat that scuttles along a filthy sewer, squeezes through floorboards to scavenge the pantry, then climbs into your baby’s cradle to gnaw her fingers. It feels no disgust and respects nothing.

“You know, if you muscle your way past the gag reflex, all kinds of food possibilities open up.” - Emile the rat, Ratatouille

Capital:

• Looks for raw materials to take for free or cheap then sell, like rare minerals mined for batteries, spring water bottled for drinking, human creativity scraped for AI.

• Cuts corners to lower costs, even if product quality goes down.

• Doesn’t consider harm to society or the environment at all.

• Looks for ways to pay employees as little as possible, while exploiting them as much as possible.

• Lets infrastructure run down.

• Fails to innovate (for example, for clean energy or to produce a better product) unless it creates more profit.

Government regulations are intended to control how low capital will go for profits. In Aotearoa, the Treaty of Waitangi also offers protection(2). Otherwise, apart from competition, there’s no real limit to where the hungry rats of profit chasing will go.

Profit chasing, privatisation, and the gag reflex

In New Zealand we’ve been hearing a lot about privatisation and the selling of our public assets. So much political back and forth. Some argue against; others tout benefits that sound truly great, convincing even.(3) The issue can be confusing, especially if economics and business aren’t your thing.

Well, economics isn’t my thing either. I studied English Literature, for goodness sake.(4) But the fundamental principle of capitalism’s drive for growth isn’t complicated. And knowing that fundamental cuts through the noise of arguments, politics, and bias to figure out what privatisation means.

For instance, when a large company providing school lunches wants its profits to grow, which it must if the company is to survive, what will it do? What corners will it cut? What slop in a microwaveable container will that company expect growing children to thrive on? What will it fail to innovate or improve to benefit the children and the schools? What unreasonable pressure will it put on its staff, compromising their ability to deliver quality lunches? Employees at the company, even its executive team at the tippety-top, may need to muscle past their own gag reflex to open up new profit possibilities.

Or privatisation of healthcare. In the UK, public hospitals converted to private made more profit by only taking certain patients. They also reduced staff numbers. Most alarmingly, increasing privatisation also corresponded with worse health outcomes for patients.(5) It’s not surprising, is it? Because…hungry rats.

Where is hope for a future goodness?

Hope requires an honest assessment of our current situation, a picture of where we want to be, and a pathway to get there. In Aotearoa right now our public sector is underfunded and there is much chatter in Government and the media about privatisation. If it helps, here’s the picture I support for everyone in Aotearoa:

• Freedom from fear of ill health without good care,

• Freedom from poor education, which stops people from actively participating in society and thriving in their daily lives, and

• Peace of mind that my family and I will be supported if we fall on hard times.(6)

  
  

The proven way to achieve this vision is through well-funded, universal public services. And it’s affordable.(7)

While we have free and fair elections in Aotearoa New Zealand, we can use voting to tell our politicians if we do or don’t want privatisation.(8) We can support Te Tiriti, our nation’s founding agreement. And we can tell others what we know about profit and hungry rats.

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1. The formulas I share in this post I learnt from reading Less Is More by Jason Hickel. His explanation of capitalism (much more comprehensive than mine) was eye-opening for me, so I’ve relied on his structure heavily just in the first section. But I really do grow lemons, and the sausages at our local butcher really have increased in price by a lot!

2. The Treaty of Waitangi of 1840 is New Zealand’s founding document. It’s an agreement between tangata whenua (Māori people) and the Crown. Essentially, the Crown promises partnership, participation, and protection to Māori. There are swathes of tension and grievance around Te Tiriti, but understanding these three principles offers a working description for use here. Te ao Māori—the Māori worldview—comprises indigenous values like kaitiakitanga (guardianship) of our environment and utu (balance). Te Tiriti protects New Zealanders from rampaging profit-seeking because when Māori have a seat at the table, those indigenous values come to the table too. Aotearoa is unique this way. We’re so lucky! Unfortunately, too often Te Tiriti is not honoured. And, of course, anyone can be wooed by profit, values be damned. But the structure is there.

3. Especially if what’s being privatised isn’t working properly because it’s been underfunded for a long time.

4. Forgive me. I had to state my qualifications again. The fact that NZ’s Finance Minister also studied English literature as an undergrad is the gift to me that keeps on giving.

5. The effect of health-care privatisation on the quality of care, Goodair, Benjamin et al., The Lancet Public Health, Volume 9, Issue 3, e199 - e206

6. Ditto

7. Less is More by Jason Hickel, p177-178

8. New Zealand’s current PM says that if National wins this year’s election, that will tell him New Zealanders want asset sales: https://www.rnz.co.nz/news/political/540141/christopher-luxon-hints-national-will-campaign-on-asset-sales-in-the-2026-election.

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