Ours to own, not theirs to profit

It seems the public sector is under attack from all directions these days. Despite historically low public financing costs, despite proven efficiency and innovation, the public sector gets a bad rap in the public eye—something all manner of politicians from hardened right-wingers to cosmpolitan neoliberals take advantage of, letting markets further seep into the very functioning of health, education and other basic services.

I have two guests today to talk about the threats to public services and how to combat them. First, Chris Parsons, Coordinator of the Nova Scotia Health Coalition, talks to me the problems with public-private partnerships (P3s), and takes us on a tour of bungled P3 schools in Nova Scotia. Second, Adrienne Silnicki, National Coordinator of the Canadian Health Coalition, discusses the state of public healthcare in Canada, both the threats from the private sector and the ways to fight for a better public system.

As always, remember to subscribe using the links below the player to get new episodes as they appear (you can also donate to help keep the show going).

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How not to fund infrastructure

Recycling is supposed to be a good thing, so when the federal Liberals quietly announced that “asset recycling” would be part of their strategy for meeting their much-ballyhooed infrastructure promises, not many eyebrows were raised. They should have been. Asset recycling is an obscure code word for selling our public goods for private profit. It’s privatization by another name.

Don’t have the taxes to pay for new buses? It’s okay, you can sell your electricity utility to pay for them instead. In fact, this is precisely what the Ontario Liberal government is doing. Already 30% of the profitable Hydro One have been sold and another 30% will be sold before 2018. A public Hydro One could more directly fight climate change, lower energy costs for the poor or work with First Nations on whose lands generation often happens. A private Hydro becomes an instrument for profit first with other goals secondary.

What the Liberals have started in Ontario will soon be rolled out across Canada. Here are the problems with these schemes. (more…)

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Pension tensions and power privatization

Two guests today: Kevin Skerrett on the changing way pensions function today and Sheila Block the impending privatization of Hydro One in Ontario. Sadly, the two are linked: large pension funds are increasingly active in privatizations. My first guest, Kevin Skerrett, is a pension researcher at the Canadian Union of Public Employees. Don’t let the word pensions scare you off, this is a conversation that gets to the heart of how workers relate to the market and to each other in a changing neoliberal economy. See this article by Kevin and the linked videos of a speaker series for more.

From pensions, the episode moves to privatization with my second guest, Sheila Block. Sheila is the Senior Economist at the Ontario office of the Canadian Centre for Policy Alternatives. We spoke about the impending privatization of Hydro One in Ontario, a cynical and financially senseless sell-off of an important public asset. Sheila’s recent article on the topic is here.

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Beyond social democracy: new institutions, new subjects

So many of the debates on the contemporary left come back to the legacy of social democracy. The Swedish experience came closest to fulfilling social democratic ideals in the post-war era and so speaks to these debates in a unique way. Earlier this year, I talked to Petter Nilsson of Sweden’s Left Party about the legacy of social democracy in his country and its broader meaning. This was one of my favourite interviews of the year and one that stuck with me for a long time. I’ve transcribed it here for it to be shared more widely. It’s been edited for length and clarity.

Michal Rozworski: Sweden is still seen by many around the world as a model for the welfare state but it has changed dramatically over the past couple decades. Can you give a quick summary of what it means to look at Sweden, as you’ve put it, “without illusions”?

Petter Nilsson: There’s this joke on the Swedish left that everyone would want the Swedish model and the Swedes would want it perhaps more than anyone. What’s considered to be the Swedish model peaked in maybe the late 70s, early 80s and has since gone through quite the same developments as the rest of Europe with the neoliberal wave. Because Sweden started at a high level of wage compression and equality terms of gender, it is still very equal compared to other European countries. Yet, at the same time, we have the fastest growth in class differences within the OECD.

When the Social Democrats turned rightwards in 1986 or so, a lot of the developments that had taken place in other European countries came to Sweden in a few swift blows. In just a few years we had huge increases in class differences and this affected our universal welfare system. This system was always based on the high wage compression, which included the middle class in same welfare system as the rest. Its members felt that since the quality of welfare programs was so high, they were prepared to pay taxes to finance them. But as soon as financing for the welfare sector is cut, then quality drops and the middle class opts out for private solutions. (more…)

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No to pipelines, yes to Site C?

Here’s a piece I wrote for Ricochet after getting riled up by *some* of the arguments against Site C. The full piece is here.

As the movement against pipelines rapidly grows, more and more often you can hear the question, “We know what you’re against. What are you for?” The debate over the future of power generation in British Columbia offers some lessons for how to answer this question and not fall victim to a privatized green vision.

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Tuesday the B.C. government decided to give the long-delayed Site C dam the green light. The dam would be the third on the Peace River in northeastern B.C. It will produce enough electricity to power nearly half a million homes (or one or two liquefied natural gas plants), flood around 50 square kilometres of land and cost almost $9 billion.

The decision has reinforced the polarized tenor of debate over Site C in B.C. On one side are local groups, First Nations, and environmentalists; the governing B.C. Liberals and business organizations stand opposite.

At first glance, Site C is what the left has been going on about for a while: major, green, public infrastructure. Not only does Site C fit this billing, but it could power further green initiatives like a mass electrification of transportation. It would also be very efficient: relatively little land would be flooded given the power generated, because the Peace River is already twice dammed.

Of course, the picture is not so simple. First, the proposed dam has not seen a transparent and independent review process; in fact, it has been exempted from the standard BC Utilities Commission review process. Second, the territory to be impacted is First Nations treaty land and hosts farming communities. Not only would construction of Site C inhibit farming, hunting, fishing and other uses of the land, but Canadian courts have recently confirmed the necessity of respecting and accommodating Aboriginal title. Finally, Site C has been so beloved by the Liberals and the business community because it could eventually supply cheap power to planned liquefied natural gas and mining industries — clean power for dirty industry.

Of these three, the liquefied natural gas industry looks to be on increasingly shaky ground. Critics point to concerns about what will be done with the power generated by Site C given much lower demand outlooks without LNG. Yet while mass electrification of transportation is not on the horizon, projects like Site C are built for decades. The major issue is lack of First Nations accommodation and due process. Without a transparent and democratic process, it is small wonder that the proposed dam has been a flashpoint of anger and protest.

Taking a wider view, Site C is emblematic of something much broader that has relevance across Canada: how do we support genuine green alternatives? This question is about much more than how we generate electricity; it’s about the narrowing of choices and a necessary response that reaffirms the public sphere.

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Some thoughts on social democracy starting from a Fraser Institute graph

I’ve been meaning to post something on a chart from a Fraser Institute report for a while but slept on it. The chart comes from Fraser’s annual Consumer Tax Report and is supposed to show the different paths taken by how much households pay in taxes and how much they spend on basic goods like food and housing. 141209 fraser chart

In one way, this chart represents a good news story for the right. Capitalism is fulfilling one of its major promises: the cost of the basic goods is decreasing relative to household budgets – in the aggregate, which given an increasingly unequal distribution of income means that many budgets feel this very differently. Not only that, but the welfare state is slowly shrinking. Looking closely at the chart (showing the Fraser Institute’s version of the data), we see that the relative tax take is falling since about the turn of the millennium. Of course, the chart is riddled with errors (in short, the Fraser Institute either uses too many taxes or too little income in its measures) but better OECD data shows roughly the same trend, at least for taxes.

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Ironically, while a story about lower spending on necessities could be a success story (capitalism works!), of course, that’s not the point of the exercise. Instead, the chart is intended to incite anger about taxes. The big caveat being to ignore the services these taxes actually pay for: the much-lower tax bill from 50 or 60 years ago is before universal healthcare, the Canada Pension Plan and other major elements of Canada’s welfare state. Yet in its ideological fervour, the Institute might be on the right track, because what the chart shows is in fact not just a success story but the changing nature of consumption. It illustrates how what economists once called the “subsistence wage” – where subsistence is not like a fixed number of calories, square feet and so on but culturally-relative and so varies according to time and place – has changed: most strikingly, what part of consumption is privately-provided and what part is socialized and provided by the state. (more…)

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No thanks Uber, I’m not signing your petition

So the ride-sharing app Uber is urging Vancouverites to sign a petition on its site to put pressure on the City to allow Uber to operate. An ad for the petition invaded my Twitter feed and I decided to take a closer look. Here’s the petition with my commentary. Spoiler: no, I’m not signing.

Uber begins by laying out “the situation”:

British Columbia and Vancouver are home to the quintessential winter playground, shining examples of liveable cities, and a launching pad for countless innovators and trailblazers across many industries.

That’s why so many residents are disappointed by Vancouver’s limited transportation options. To make matters worse, the Province of British Columbia, at the behest of the taxi industry, isn’t putting consumers first or thinking about how new innovations can create better transit solutions for all.

The ridesharing industry is a very new one, but cities all over the world are embracing it as a way to address the shortcomings of mass transit, reduce congestion and emissions, connect previously isolated neighborhoods, and overall bring cities together in a way never before imagined. These are benefits that people are experiencing right now in more than 220 cities around the world — but Vancouver isn’t among them.

Why thanks, we are quintessential innovators…wait a minute. Once we get past the sweet talk, Uber here points to a real problem, but offers a false solution. Transit shortcomings? Better transit is a worthy goal, only the natural solution would be more buses, lower fares and better service rather than deregulated taxis. The context for transit shortfalls is the systemic offloading of costs from the province government onto cities and an unwillingness to cover increased demand by taxes — at the same time as road infrastructure is rapidly expanded.

Isolated neighbourhoods? Granted, but again this is more a failure of urban planning than something that be solved by an app that helps people catch a cab. This is a perfect illustration of the hubris of Silicon Valley: the gap between pressing problems and technological quasi-fixes that enrich the Valley’s venture capitalists. The environmental benefits too may be overblown: ridesharing is certainly better than single-passenger driving but there is evidence that as Uber cuts prices, drivers have to spend more time driving looking for passengers. A car will always be much less environmentally-friendly than a bus or a subway and any system based on more cars will naturally push for more road infrastructure. Vancouver’s history at least has shown this can come at the cost of transit improvements.wpid-wp-1417653452329.jpeg

Uber isn’t interested in better transit or better public infrastructure: it’s interested in getting market share for its app. Its rationale for entering a city makes even more sense when other options are bad: the shittier the transit, the worse the regulated taxi industry, the better. And all the talk about a taxi lobby that has politicians in its back pocket is a bit rich for a company that hired its own prominent lobbyists in BC, likely only the beginning. In short, Uber is fighting a public funding shortfall with privatization, public policy failures with undersize techno-fixes, lobbying fire with lobbying fire.

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Strategy, or escape from the privatization matrix (Canada Post, Part 2)

The endgame of the current rounds of cuts at Canada Post is some form of privatization. In the previous post, I argued that privatization proceeds differently depending on context. Many factors – I focused on whether a public service provider is exposed to competition and is profitable – can have an impact. The result of replacing public with private provision can be reached through a rapid sell-off, a slow attrition of services, or anything in between. Fortunately, the path to be taken by Canada Post is not yet drawn. Yet while privatization is not an inevitability, the window to effectively prevent it will not stay open for very long. Here are some thoughts on the privatization strategies possible at Canada Post and the anti-privatization strategies to fight them. (more…)

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Diagnosis, or into the privatization matrix (Canada Post, Part 1)

There is little doubt that Canada Post’s recently-announced plan to eliminate home delivery, raise prices and lay off thousands of workers is not aimed solely at streamlining operations, but is likely a prelude to future privatization of postal delivery in Canada. Canada Post is ripe for the picking: it is a profitable, socially-useful public enterprise with n updated, nation-wide infrastructure of retail outlets, other properties, vehicles and IT systems. One bad year in 2011, when the post office recorded a loss  due in part to rotating strikes and a 2-week lockout, has been used to create an image of unsustainability and justify the current cost-savings plan.

Any future privatization attempt can play out in a number of ways. While we typically think of privatization as a sell-off – the government transferring ownership of a public service provider into private hands – the exact nature of the transition between public and private service provision can take on a number of unique forms. Breaking a concept as broad, and at times nebulous, as privatization into more concrete and discrete strategies not only makes it easier to analyze particular episodes, but also aids in developing effective opposition.

I propose one way to differentiate between privatization strategies that is simple and universal. Four possible strategies emerge based on answers to two questions. First, are the majority of operating expenses of the public service to be privatized covered by internal revenue or government funds? Second, is the public service provider exposed to private competition before privatization? Looking at these two questions simultaneously produces the following grid of privatization strategies that can be used to assess what may lie in store for Canada Post and compare this to other privatizations, in particular those of postal services in other countries.

Figure 1. A privatization matrix.
Figure 1. A privatization matrix.

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The in-and-out trick: Thoughts on Canada Post, CPP and your child’s breakfast

The past few days have not been great for public services in Canada. Canada Post will be phasing out home delivery of mail. Expansion of the Canada Pension Plan was scuttled at the finance ministers’ meeting. In the grand scheme of things, however, these are not extreme cutbacks. It’s not as if Canada Post is to be dismantled completely or our public pension fund to run completely dry. This government has long brought us death by a thousand paper cuts and those from the past days are just a continuation of the strategy.

There is a particular common thread that runs through all such small cutbacks. Corey Robin’s recent article in Jacobin, “Socialism: Converting Hysterical Misery into Ordinary Unhappiness”, helped greatly in seeing and naming it. Let us call it insourcing.

This kind of insourcing refers to taking a collective public service and making it into an individual responsibility. Perhaps James Moore recently summed up the insourcing philosophy best, “Certainly we want to make sure that kids go to school full bellied, but is that always the government’s job to be there to serve people their breakfast?” Serve your own breakfast, get your own mail, don’t wait too long to die.

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