Re: Privatizing the Public: Whose agenda? At What Cost?

[Ray Evans Harrell]

----- Original Message ----- From: "Ross James Swanston" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Tuesday, April 16, 2002 7:49 AM Subject: re: Privatizing the Public: Whose agenda? At What Cost? (snip)  I really feel the discussion strayed from the point > somewhat since I first wrote on this subject back in February.  For > instance, the latest discussion between Bruce Leier, Harry Pollard and Ed > Weick seems to have been more about competition and little to do with the > virtues or otherwise of  public provision versus private control.   I disagree.   I think Ed Weick's recent essay was exactly what you implied even though he thought he was being rude.   Rude in Canada maybe,  but simply speaking candidly in New York.   > As an aside, I can see that Harry Pollard is a great fan of competition  (snip)  fierce > competition will more likely make this exploitation worse as firms scramble > for an ever bigger share of the cake and ever bigger profits.  (snip) But that is another story.   I agree about the result.   I think competition is a basic element of the story put forward by Albrecht. >(snip)   > (1)  Should Public Utilities be Privatized?   It seems to be an issue of competition.    Both public and private eventually become either over-priced or inefficient.    The threat of privatization or simply privitizing can often restore balance to Public Utilities however when the pendulum swings it is useful to do the opposite.  Since utilities are at their hear monopolistic I think it helps to think of public and private as competitors for the job.   Sometimes one and sometimes the other.   > I guess it all depends on how one views the role of government (snip) > it all depends where our > priorities lie and what is the best way of providing for the 'common good'?   I agree, (snip) In the 1930s when this utility (electricity) > was provided by the Ministry of Works as an arm of government, hydro > stations were built by the government at enormous expense to provide both a > public service and help New Zealand out of the Great Depression by creating > jobs.  (snip)   Now >   this service is all provided by private enterprise as it is supposed to > be both cheaper and more efficient.  But is it?   That depends on the competition -- from the government. > When recent complaints were made to the government about electricity price > hikes we were told that new hydro power stations  cannot be built until > prices rise sufficiently to provide enough return to investors to make > building power stations viable.  So it seems that the system itself > encourages price rises.   In Hedrick Smith's "Rethinking America" he draws the same story from the chip-fab industry.   It was the conservative Ronald Reagan who invented Sema-tech which put government funds into building a laboratory that private industry would never support due to the cost.    That is also the economic problem of productivity lag or what we in the Art's call "Baumol's Disease." What it comes down to is this.   Do you want a Private Sector or not and if you do then what purpose does it serve?    We all need governments for basic services but beyond small businesses and the military, what do we need huge corporations for?   Toilet paper?   Automobiles?   How far do we need them and how much should we support them?   Why isn't the tax-payer the ultimate stockholder?   Especially today when we have such instant communications as it is theoreticvally possible to design a system where we would spend as much time examining the tax advantages as we do our stock options for retirement accounts.   > (2)  Where Do We Draw the Line Between a Public Service and Private Control? (snip)   > Here we are faced  by a conflict between social costs and social objectives > for in recent years public policy has been dominated by economic issues. > This means that many sections of society, especially the low paid and the > disadvantaged (eg the disabled and the elderly) have been left out in the > cold in the mad rush to liberalise, balance the budget, and squeeze as much > profit out of everything, including 'public' services.  (snip)   I think you are missing something here.   Lawrence Levine has pointed out the takeover of the serious cultural products by the culture of  wealth in the last 100 years in America. (His Massey Lectures at Harvard titled "Highbrow/Lowbrow,  the Emergence of Cultural Hierarchy in America" )     In America, wealth and the aristocratic cultural products were changed to be the trappings of prestige for people who were the "refuse" from Europe who escaped here.   They were the "walking wounded" of Europe and those who rose to the top in America wanted something to show for it other than just money and big buildings.  In order to do that they had to flip Aristocracy on its head.      The Aristocrats used the public entertainments of music, drama and musical drama as a way of gentrifying their peasants.   While the elite sat in the boxes, the peasants and in America the slaves as well, sat under the dripping candles in the Orchestra section.  It was known at the time as the PIT and is now called the Orchestra section.    In America the wealthy turned this entertainment into a holy rite for the wealthy and beginning in 1883 in Boston, began to take over the Highbrow cultural products of the nation.    Where the aristocrats gave the mob art, the robber barons took it away and gave them commerce.     My point is this.   The wealthy of the country do not WANT the middle and lower classes to compete with them for anything.   They have their culture, their friends and their property and they could care less about the things that you mention. Squeezing profit, balancing the budget are good because they keep these others "in their place."    Money and strategic games give meaning to their lives and sports gives them strategies for being good at strategic wealth.   They ARE the culture of America in all of the exceptional ways of Western Civilization.    I don't believe they should be, in fact I think it is decadent but the fact is that they are.   In order for them to be winners the rest of us must be losers.   That is their dance of life and according to them this is our dance of life.      On the one hand a public service is trying to build > community, establish relationships, create fairness, justice and so on > whereas the private sector is not concerned with any of these things  but > sees everything in dollar terms and attempts to put a dollar value on > everything.   No, for them, the "good" is stimulating activity even before creating profit.   In the "cultured folks" private business IS the social good.   Balancing the budget is the "business" of government but getting out of private business is also the business of government because big government is an impossible competitor.    They like the game of competition but are no interested in the possibility of their losing by competing with an impossible competitor (the government).    They are however, not above getting a good deal from the competition either.  Such as sweetheart contracts for minerals on government or Indian land or grazing their herds in National Forests.   As the Neo-conservatives have pointed out both in print and in the media, we are in a cultural war here in the US.   They don't want the government in business because the US government is a hopeless competitor with an army to back it up.      I believe that government competition is good for business because of the things you point out about the demand for higher prices at less service on the part of the stockholders.    Government keeps business lean and honest.   But not if business is allowed to get away from social needs like providing jobs to everyone who needs one.   It is exactly those needs that they want to escape through a smaller more impotent competitor. > > Take housing as an example on this one.  A few weeks ago there was a > terrible row in Auckland when the City Council decided selling off Council > housing as part of a strategy to slice about $24 Million (NZ) off the > Council budget.  The new mayor, John Banks,  said that it was not the job > of council to provide cheap housing so the flats would be sold as they > became vacant to private landlords.  This provoked a storm of furious > protests and several council meetings were reduced to chaos as placard > wielding protesters invaded council meetings.   This is the same as rent control in NYCity except they determine the amount that private employers can make in order to provide housing for service people who otherwise couldn't afford to live in these areas.   That makes it easier for service people to live close to those they serve thus keeping down service wages which would go through the roof if they couldn't get housing closer to their jobs.  That constitutes a tax on landlords but with the high rents throughout the city, it is not a hardship except on those of us who cannot get rent controlled housing and thus have to pay higher prices without the security of stable leases.   When the governmental policies create business opportunities everyone scambles to make a windfall but the truth, in my opinion, is that there are no such things.   Someone always loses.   It basically comes down to a bunch of gimmicks to get a sector of the society that is too externally motivated (lazy) to work at all, much less productively, unless they are threatened, cajoled or kissed on both cheeks.    That is the real reason for competition.   Lazy people who will not work because they have something significant to do but only for cash and the promise of future monetary winnings.    Marxism didn't fail because intelligent design in government is impossible but because intelligent people are impossible to design. > > As a result the government has now introduced legislation to make it harder > for councils to sell off pensioner housing.  Several strict conditions must > be now met before pensioner housing can be sold.  (snip)   Thank God the pensioners have the vote, otherwise they would be in the street.     REH