Property to the People: the Leftist case for privatization

For those who may be interested, here’s a bit more about my troubles with the public utilities, and a reply to my friend Sergio Méndez’s comments.

A new router was ordered and arrived some days ago (you may have guessed as much from the increased volume of posts), and thanks to Microsoft Corporation decision to exit the wireless market, I managed to get a faster, more secure, and much more reliable wireless LAN (802.11g secured with WPA, nosy) in my house for fire-sale prices.

The water is back on, for the time being at least, and the power surges have—as far as I can tell—stopped. On the other hand, they didn’t stop before they had also fried my cable modem—meaning that for a while I was not only without a router, but not even able to plug my laptop in directly for Internet access for even a limited part of the day. Thanks, tax-supported utilities!

We’re renting the equipment from Comcast, so I took it into their payment center; they swapped it out for a new one with no questions asked and at no charge.

Meanwhile, the road outside of my house is still torn up, a month and a half after they ripped the pavement up.

I say this by way of an entre into replying to Sergio’s comments on my post. He quite rightly prods me about what is said and what is left unsaid in my post:

Charles, with all due respect…Do you actually think it will have been different if the public roads and electricity company was privately owned?

Short answer: yes. Longer answer: it would be a little bit different no matter what, but a lot depends on what is being envisioned as the form of private ownership.

I think that what Sergio has in mind here is something like the wave of IMF-driven privatization schemes for government utilities in Latin American and sub-Saharan Africa, and the Republicans’ idea of a programme for privatization in America (those Republicans, at least, who still harbor faint dreams of being something other than shameless lackeys for the Bush Administration’s economic royalism). I can sympathize with having a lot of misgivings over the idea of privatization if that’s the only kind that’s on offer; and in the present political environment (where brazen Mussolinism passes for free marketeering) it may very well be the only kind that’s likely to happen in the near future. But it’s worth remembering that privatization just means the transfer of businesses and resources from government control to control by individual citizens or groups of them—which does not necessarily mean selling them off in sweetheart deals to large corporations. It could mean something quite different, and something very much more humane and empowering.

I’ll have more to say about that in a moment. But first I want to note an important aspect in which even traditional corporate-driven privatization of utilities would have made a difference to the sort of crap that government providers put us through. One of the arguments that people give all the time when they are arguing for nationalizing utility services is that utilities need to be provided by projects that are accountable to the people, and not to the bottom line; thus, they should be entrusted to the elected government in a liberal democratic polity, and not left to the hard-bitten world of corporate commerce. But this neglects an extremely important point: the degree to which being accountable to the bottom line makes them accountable to the public—at least if the public here is taken to mean you, the individual person having to deal with them, and not some Rousseauian mystification of the the general will. (Since I entirely lack a general will, I’ll leave any questions concerning it to other, more enlightened commentators.)

Don’t get me wrong: corporations can be huge assholes. In this vale of tears, there are people who are foolish, short-sighted, irresponsible, avaricious, or cruel, and no small number of them seem to be in the world of business. I realize all this, and I want a radically different world; the red in my flag means socialism. But the black in my flag means anarchism, and I don’t see any reason to think that people in government bureaucracies would be somehow more angelic than those in corporate bureaucracies, so I think the important question to ask is one of incentives. And if you look at the incentives, the facts are that you, personally, can make a difference on the margin when you are dealing with a private company, whereas you can’t with the government. Think of it this way: who is going to be more accountable to you and more ready to help you with your problems—someone who could lose $60/month right now if you’re unsatisfied, or who has the power to take your money for the service whether you like it or not, who was appointed by some other person, who in turn might lose your one vote amongst the thousands or millions that determine whether or not they will keep their job—if you’re so pissed off that one or two or four years from now the crappy service from your public utilities happens to be the deciding factor for your vote? (And who, by the way, will suffer no marginal loss whatsoever of power or responsibility or income for having lost one vote that they had before….)

Let alone if you happen to live in a Black neighborhood (or a working-class white neighborhood), or if you are a woman, or a member of any number of other groups who are drastically underrepresented in the government and who are often dismissed or marginalized in the political process.

Of course, you might object that these are all reasons for democratic political reform: if it’s so hard for individual citizens (especially those without established political connections) to make any difference to how government-run utilities do business, then why not make politicians more accountable to the citizens, by instituting reforms like public comment periods, shorter election cycles, term limits, citizen recalls, voter initiatives, and so on? Well, fine—and I think these would all be laudable reforms. But if you get to change around the constitution of the government for hypothetical purposes, then I should certainly be able to put forward ideas based on a radically environment in terms of the coordination of businesses, private ownership, and privatization of government resources. If we’re talking about instituting fundamental reforms, then why not also talk about what privatization would be like with fundamental reforms to how services are privatized and who gets chances to buy up the resources?

Imagine what it would be like if privatization meant that you and your neighbors (organized into a neighborhood co-operative) owned the street in front of your house? If privatized parks meant selling land to the Trust for Public Land rather than corporate developers, or simply donating park land as public property (instead of government property: for the difference, see Roderick Long’s essay, In Defense of Public Space)? If privatized water meant that the local government would sell different parts and aspects its water works to a half-dozen local groups, including worker-owned union shops and not-for-profit co-operatives? If privatized electricity meant no more subsidies for huge, centralized fossil fuel plants and selling power wires to local neighborhood associations that work towards putting up small-scale solar energy production from panels on their roofs? That you and your neighbors were the ones who made the decisions about when your road needs to be fixed and who should be hired to fix it? That you can switch power companies if their service causes power surges and they refuse to compensate you for equipment destroyed, or switch water companies if they start turning the water off without warning for hours at a time? If it meant that utilities would be in the control of a vast, bottom-up network of individual people, voluntary associations, and local co-operatives making the decisions about what they want and need?

I can tell you one thing for sure: nobody on Olive St. would be paying for a bunch of assholes who leave our road torn up for a month and a half while they go work on other stuff.

If you want the services that matter to your life to be provided cheaply and reliably, with high quality and under your own control rather than the control of unaccountable bureaucrats, then the answer to Behemoth corporations is not a Leviathan state! The answer is a society based on local autonomy, co-operative production, and mutual aid—that’s cooperative, not coerced, and mutual aid, not the crumbs of tax monies that the sovereign deigns to drop from the table. Freedom makes your life better. And if it is done in a spirit of giving the people back their own, rather than in the spirit of cutting sweetheart deals with big corporate contributors, then it will especially make life better for people who have historically been oppressed and disenfranchised. That’s not actually the primary reason you should support it (your primary reason should be that other people are not your property). But some things are valued both for themselves and for their consequences; and as consequences go, this is as good a reason as any.

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3 replies to Property to the People: the Leftist case for privatization Use a feed to Follow replies to this article · TrackBack URI

  1. Sergio Méndez

    Charles

    Well, first thank you for including my blog into your website list of “allied nations”.

    Second, I did not expect that my post generated such a long answer. Although, the discussion about public property in an anarcho capitalist state was something we discussed on #thinkingcafe, and indeed you addressed concerns that I raised regarding that discussion, my comment to the “Bloody Hell” post was a bit more modest. I only intended to point that private or government held property, are equally vulnerable to natural accidents, like electrical storms. So it wouldn’t have made much of a difference if private agents owned the roads or the electric company, you will have experienced the same troubles.

    Now concerning your argument, I think you have a point when you signal that privatization can be thought in a complete different manner to the way it is conceived by the IMF and co. I also agree that state burocracies owning public property and controlling public services can be as dangerous as modern corporate ownership of those.

    But I do not think that it will make a difference concerning the issue of accountability. In time, the private ownership of goods that should be by their nature, public, can and will degenerate into monopolies, which will be used for the most ugly power struggles. Take for instance water and roads. Sooner or later a tiny minority of people will own the roads, since the possibility to construct roads is limited by the physical space available to construct them — and the large quantities of money required — and that will generate a power that can and will be used against the rest of the population (and the solution cannot be going to the next “provider of roads” since the construction of roads also requires the ownership of property on which they are constructed). With water the case is worse, since water resources are limited, and the idea of multiple water plumbing systems in a city is unpractical. I know that your argument implies that in state where only private property can exist, public property must to — just not simply owned by the state-. But what I am trying to point is that until we find a better substitute for the state in this matter, it is unrealistic to expect such vision can work. And since in the state there is indeed a form of accountability — democratic vote, legal action- and the state represents the people and not simple private particulars, I will support state ownership of public goods until a better idea comes around.

    Another objection I have goes around the idea that certain basic resources, like water, are the property of somebody. To reduce the world into the property that is “there” to serve the utilitarian interests of mankind is not only a practically dangerous idea, but also an ideologically dangerous (regardless if people who hold such views do it with the best intention, as I am sure you do). That does not mean that I think we shouldn’t use the world resources for our benefit, or that I reject the idea of private property. Rather than that, it means I object to the idea that private property is a solid ground into which we should base our ethical commitments, or even our basic understanding of how we should approach the coexistence of mankind in and with the world. I suggest you a read the Marxist critics of modern tradition, like the Frankfurt School thinkers concerning this issue.

    Anyways, thanks to you, I have learned to appreciate the anarcho capitalist critic of certain forms of leftism that rely heavily on using the state to achieve its means. The modern nation-state, is by definition, the creation of capitalism, not its anthi thesis. The more the left deposits its fortune into it, the more it will look like what it wants to fight.

    Thanks for your time, and excuse my poor english.

— 2006 —

  1. Turuk

    “[T]he idea of multiple water plumbing systems in a city is unpractical.”

    You think you just pointed a major flaw in a fully free water market, but you just showed lack of imagination. Free market advocates don’t have to solve all futur problems market might encounter.

    OK, just an idea: People, families, buildings, could have water tanks that would be filled regularly by companies delivering water with trucks.

  2. Rad Geek

    Free market advocates don’t have to solve all future problems market might encounter.

    I think this is a very important point that needs to be made more often. One of the central advantages of anarchism is that you don’t have to know everything in order to put it into practice; it’s centrally concerned with letting people come up with solutions to their own problems.

    OK, just an idea: People, families, buildings, could have water tanks that would be filled regularly by companies delivering water with trucks.

    For what it’s worth, what happens in Somalia, where they do have a privatized water system (not having any central government to provide the water) is that there is a network of pipes in urban areas, and rural folks get water from private contractors, who collect and distribute it in a lot of different ways, depending on what’s most feasible in the area. The World Bank, of all people, put out a report a couple years ago in which they were astonished to find that it tends to work:

    Public water provision is limited to urban areas, but a private system extends to all parts of the country as entrepreneurs build cement catchments, drill private boreholes, or ship water from public systems in the cities. Prices naturally rise in times of drought. Traditionally, destitute families have not had to pay for water, while the slightly better-off borrow funds from relatives.

    Tatiana Nenova and Tim Harford, for the World Bank (November 2004): Anarchy and Invention: How Does Somalia’s Private Sector Cope without Govement?.

    Coverage and affordability of water are generally excellent, in spite of frequent droughts. Currently the main problem with the water system is safety of the water delivered: distributors generally don’t purify the water that they deliver. Of course, water consumers can take their own steps to make their water safer by boiling, etc., and it’s likely that if Somalis’ living conditions continue to improve, they will begin to put more money into purification of the water beforehand.

    On a similar note, the electrical system has worked out very well (nearly all villages in Somalia have both running water and electricity), in spite of having no comprehensive electrical grid, mainly through decentralization.

    Entrepreneurs have worked around Somalia’s lack of a functioning electricity grid, payment systems, and metering. They have divided cities into manageable quarters and provide electricity locally using secondhand generators bought in Dubai. They offer households a menu of choices (daytime, evening, or 24-hour service) and charge per lightbulb.

    Tatiana Nenova and Tim Harford, for the World Bank (November 2004): Anarchy and Invention: How Does Somalia’s Private Sector Cope without Govement?.

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