Privatisation

We Make Our Own History: Discussion and Book Launch

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The launch event takes place in Connolly Books (East Essex St, Temple Bar) at 6 pm on Wednesday 9th December.

How are social movements doing in Ireland? What kind of real change might be on the cards, here and in Europe or further afield? What are the key issues that we should be thinking about if we want to see it happen?

Co-written with Norwegian researcher on Indian movements Alf Gunvald Nilsen, my book We Make Our Own History: Marxism and Social Movements in the Twilight of Neoliberalism (Pluto, 2014) draws on the Maynooth tradition of activist research in social movements to read Marxism as a reflection of the learning of popular struggles and uses this approach to explore how movements grow out of the struggle to meet human needs, how they develop, how the collective agency of the powerful and wealthy works and what all this means for the struggle against neoliberalism today.

Launched at the London “Historical Materialism” conference, the book has raised interest wherever movement struggles are intense (reprinted in South Africa, translated into Turkish, with Indian editions and translations under discussion) and we have been invited to discuss the book at Ruskin College Oxford’s International Labour and Trade Union Studies MA, the European University Institute’s social movements research centre, the Collège d’Etudes Mondiales in Paris, the University of Gothenburg’s Forum on Civil Society and Social Movements, Reykjavík Academy / Radical Summer School, the University of Bergen, and in South Africa at the universities of KwaZulu Natal, Johannesburg, Wits and Rhodes among others.

It’s been reviewed among other places in Counterpunch, Working USA, Marx and Philosophy, Radikalportal, Trade Unions and Global Restructuring and Social Movement Studies, along with mentions on Pravda.ru and … the Huffington Post. Excerpts and related essays have appeared in Ceasefire, Progress in Political Economy, OpenDemocracy, Reflections on a Revolution, Discover Society and E-International Relations.

For the Dublin launch, rather than focus exclusively on the book there will be a discussion about the state of movements and our possible futures. Chaired by John Bissett, there will be short talks from Margaret Gillan, Andrew Flood and Fergal Finnegan to open a wider debate.

The launch event takes place in Connolly Books (East Essex St, Temple Bar) at 6 pm on Wednesday 9th December.

By way of an appetiser, here are some excerpts from what the book has to say about working-class community activism in Ireland

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Racing Public Transport to the Bottom

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The decision by the National Transport Authority (NTA) to franchise out 10 percent of Dublin Bus and Bus Eireann routes for private tendering, which could cause industrial disruption, signals the start of the race-to-the-bottom in the public transport sector.

One of the more interesting aspects is that the NTA did not model their proposals, did not produce a business impact-assessment, did not undertake a cost-benefit analysis to justify the need for, or benefits from for franchising.  Now just think on that for a moment.  If a private sector company decided it was going to franchise or outsource 10 percent of its business, there would be cost-benefit analyses and business –impact assessments all over the place – upsides, downsides, alternatives.  Any senior management attempting to railroad such a franchise initiative through without such analyses would be clearing out their desks by noon.

What the NTA did do was commission Ernst & Young (E&Y) to provide an analysis.  And in keeping with that time-honoured tradition of providing the conclusion that the commissioning agency desires, E&Y did not disappoint (just as they didn’t disappoint Anglo-Irish Bank).  So what was E&Y’s main argument?  That franchising delivers efficiencies and cost reductions.  What did they base this on?  One academic study.

The OECD’s Privatisation and Regulation of Urban Transit Systems which E&Y relied on is certainly a comprehensive study, gathering evidence from a range of countries that purport to show the efficiency of privatisation of public transport systems.  The problem with this approach is that you can find academic studies producing a number of conflicting and contradictory conclusions over the same proposition.

For instance, the OECD study claimed that in Sweden between 1987 and 1993, following privatisation, total bus transport costs fell by 13 percent.  However, a more recent study found there is no evidence that the Swedish model of competitive tendering has reduced costs. Rather, the cost per passenger trip increased well above the rate of inflation while efficiency levels fell by over 30 percent.  This study was available to E&Y; they decided not to present this information.

Or how about this: a wide ranging international study of bus services covered 73 cities with different types of bus operators in Europe, North America, Latin America Asia and the Middle East.   It found no significant difference in efficiency between public or private operators:

‘Statistical tests do not show any significance as regards relationship between efficiency and the type of operator….The efficient cities … are spread over different continents and public administration styles – Anglo-Saxon, Nordic and bureaucratic – and they are not concentrated in any specific type of operator.’

I could go on an on – but you get the point.  Pull out an academic study that supports your preconceived position, claim this is what the ‘experts’ find, and ignore all other studies and experts who show something different – that approach hardly instils confidence.

Actually, E&Y gave the game away in a wonderful paragraph:

‘The key advantages associated with a move . . .  to competitive tendering stem from elementary economic theory in relation to the effects of competitive pressures and market discipline. In essence, by putting the contract out to tender, market forces are brought to bear to reveal the most economically efficient provider, thereby leading to lower costs and – all things equal – a reduced requirement for subvention.’

There are two things here:  first, is ‘elementary economic theory’.  There you have it – ‘my ancient neo-classical economics professor said competition is best, so let’s privatise public transport – and ,hey, why not primary education . . . ‘  Never mind that this elementary economic theory is highly disputed – especially in public services;  if you repeat it enough times you don’t have to bother with evidence or facts.

No wonder E&Y didn’t include the new wave sweeping through Europe – re-municipalisation of transport systems and public services in general.  Local /regional governments – Germany, France, UK to name some – that had previously privatised their public transport are taking them into public control because of poor service and high fares.  These places tried elementary economic theory – it didn’t work out.

But it’s the ‘reduce subvention’ argument that is the stunner.

 ‘A comparative analysis of subvention levels across Europe indicated that levels of public transport subvention vary between 35 and 60 percent of revenue. When all State interventions are taken into account, the level of subvention to Dublin Bus is at the upper end of the range.’

This is an outrageous assertion.  The fact is that Dublin has a rock-bottom level of public subsidy.

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Water Charges and TTIP!

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The water charges can and must be defeated by resistance and non-payment but water, as a human right, must also be secured as a publicly owned and controlled resource universally available. Remember, we had to fight water charges in the 1980’s and again in the 1990’s so let’s make this win a permanent one.

The origin of the present water charges lies in the EUs Water Framework Directive (2000) which provided for full cost recovery for water use and whose Article 9 states:

Member States shall take account of the principle of recovery of the costs of water services …’

It also required Member States to have in place water-pricing policies by 2010. The Directive was transposed into Irish Law in 2003.

So, the origins of these punitive charges, this time around, are the Water Framework Directive which seeks to commodify water provision through the establishment of the principle of recovery of the costs of water services. The EU took advantage of the ‘bailout’ to make it a condition of the ‘loans’.  This will open the way for the sale of Irish Water either in whole or in part, ostensibly to complete the single market or to promote competition ‘in the interests of the consumer’. This is just one reason why there is such resistance to a constitutional referendum to permanently retain Irish Water in public  ownership – the other is TTIP.

The Transatlantic Trade and Investment Partnership (TTIP), is currently being concluded in secret by the EU and US. Both sides have made clear their intention to use TTIP to get access to what is described as “public monopolies;” that is, public utilities including water. These services would then be vulnerable to greater outsourcing and private tendering for service delivery and eventually, to privatisation.

TTIP would open up public procurement contracts to the private sector, meaning that social, environmental or “public good” goals in public procurement would be removed. A private monopoly can fix its price at an unaffordable level, as Bechtel did in Bolivia, leading to a popular uprising; the termination of the contract and replacement of the government.

It would also make the nationalisation (or renationalisation) of services or resources virtually impossible, as incredibly, corporations would be able to sue for loss of future and expected profits. This is facilitated by the inclusion of an (ISDS) Investor – State Dispute Settlement clause in TTIP.

 

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No Easy Victories

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The campaign for the Right2Water in Ireland is rapidly growing in strength and confidence. Working class communities have been staging determined and inspiring protests to prevent the installation of water meters in their areas, the best of the trade union movement has mobilised to help support and coordinate these efforts at the national level and the Irish political left has rallied to the cause. In response to the growth of the movement, the Irish State has let loose its dogs of war. As a result of which recent days have witnessed heavy handed and provocative policing from An Garda Síochána, concentrated mainly in Edenmore, Donaghmede and Coolock.

Footage of Gardai man handling women and minors, and generally trying to intimidate and bully peaceful protestors has emerged. Many protestors have reacted to this with dismay, and believe that the Gardai are in breach of their “oath” because of the way in which they are trying to force through the installation of unwanted meters. This idea that the Gardai are acting abnormally ties into other quasi-legal arguments within the movement about the need for “consent” to be liable to pay the water charges and related matters.

As the movement grows in strength, it is important, also, that its energies be focused, so with that in mind it seems right to dispel some of the misconceptions about the role of the law, and the police, in the struggle for the right to water. The movement and campaign for the Right2Water is the most electrifying and significant development in Irish politics for some years, but in order for it to reach its full potential we should heed Amilcar Cabral’s advice that we ‘tell no lies. Expose lies whenever they are told. Mask no difficulties, mistakes, failures [and] Claim no easy victories’. By dispelling some of the appealing, but ultimately unhelpful, arguments swirling around the movement, it will be possible to move forward in a more determined, focused and effective manner.

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Perverse Economics and Water Charges

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If you’re into perverse economics, then you’re going to love the debate in the run-up to the budget. Already we have Minister Simon Harris calling for income tax cuts (didn’t the Taoiseach tell Ministers last year to shut-up during pre-budget discussions?). Of course, there is almost no discussion regarding affordable childcare, reducing education costs or introducing universal pre-primary education, providing affordable pay-related pensions to all workers, reducing health costs, reversing the high levels of deprivation and poverty, etc. Almost no discussion at all about how we can improve our living standards.

But of real interest to fans of the perverse is that while Ministers and interest groups line up to demand tax cuts, the Government will be introducing an extremely regressive ‘tax’ on almost all households – and there is no discussion about how this can be avoided. I am referring to the water charge.

While there has been considerable discussion about the costs to the average household (measuring showers, baths, brushing teeth), there has been little reference to the distributional impact of the charges; that is, the impact on different income groups. Let’s see if we can start to fill this gap.

Of course, we don’t have a history of water charges to measure so let’s look at waste collection charges. User charges, like sales taxes (VAT, excise) are generally regressive – they impact more on low/average groups. This is in the nature of the tax as lower income groups consume, whether goods or water or waste, more of their income than high income groups. The CSO Household Budget Survey provides information on waste collection charges from 2009/10.

waste

There are two things worth noting about the above chart.

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Scapegoating During a Time of Crisis

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The following piece is based on a much longer article ‘Scapegoating During a Time of Crisis: A Critique of Post-Celtic Tiger Ireland’, co-written by Micheal Flynn, Lee Monaghan and Martin Power. It is available here.

Austerity and Scapegoating: two sides of the same coin

Class war is in large part a propaganda war; it is in no way confined to formal political life, but  works its way through all the institutions of society. For the most part it is the ruling class that is advancing – most obviously through the commercial media, which so often serves to divide, disempower, demoralise and dis-benefit the working class.

Only a few years ago it was generally accepted that bankers, developers and speculators destroyed Ireland’s economy. In the wake of the collapse, Brian Lenihan’s claim that ‘we all partied’ was rightly understood as an attempt to deflect blame from those actually responsible. Most understood that it was the recklessness of the investing classes, coupled with the political decision to socialise private bank debt that had forced hundreds of thousands on to dole queues and/or through airport departure gates. For a time, the anger of the population was focused squarely of those that had destroyed the economy.

Yet, notions of collective responsibility have been carefully fostered ever since. The idea of a specifically Irish lust for property (or even a ‘property-owning gene’) appears to have become the common-sense of our time. The commercial media, with the help of the trendy economists elevated to celebrity status, such as David McWilliams, reason that everything went askew because of a ‘cult of property’. We Irish gave in to a ‘mass delusion’ – or as Indakinny so eloquently explained ‘we all went a bit mad with borrowing’.

Consequently, and very conveniently, the role of developers, speculators and politicians – their systematic destruction of alternatives to crippling mortgage debt, the role of section 23 tax breaks, the endemic planning corruption revealed by the Mahon tribunal, are all put out of sight as blame is socialised. This makes it far easier to justify the on-going socialisation of debt, which in turn helps to rationalise the ‘tough decisions’ that government insists are unavoidable. The subsequent apportioning of blame to specific targets is likewise done in a manner consistent with the distribution of austerity.

As expected, cuts to the public sector have gone hand-in-hand with attempts to demonize public sector workers. With the public sector now on the chopping block, ‘over-paid’ and ‘under worked’ public sector workers have been identified as unbearable burdens on the public finances. Rather than remain focused on where the billions are actually going, attention is paid to a ‘privileged’ public sector. This cultivation of resentment gives licence to savage cuts and softens the public up for privatisations. Even better, damage done to the highly-unionised public sector also damages the trade union movement, which when weakened makes for more effective attacks on pay and conditions down the line.

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H2Whoa – What We Don’t Know About Water Charges Could Really Hurt Us

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Keep these people in mind when reading this post:  Mary, a single parent working a part-time minimum wage job as a cleaner in Dublin hotel; John, a long-term unemployed construction worker who manages to get a few days’ work a month; Moira and Barry, she lost her job and Barry lost hours – raising two children and falling further into mortgage arrears.  I’ll come back to them at the end of this post.

The Government has finally announced its plans for water charges.  Minister Hogan was on RTE Prime Time and RTE News and provided the following information:  the average single person consumes 78,000 litres of water a year; they will face an average bill of €138 per year.  By taking water expenditure off the books (i.e. it is no longer considered a Government expenditure, it now belongs to a public enterprise company) the Government will save €700 million per year annually (but not next year, I’m assuming).

Apparently, the Government has done its own surveys – it would be helpful if they released this data so we could get a greater insight into consumption patterns for different household types, ages and income-levels; but don’t hold your breath.  So let’s work with what we’ve got (these calculations are different from what appears in the Irish Times – they use average per capita and family household – but they are close enough; these are all just estimates).

It would appear, from the above information, that a litre of water will cost a little less than a 1/3 of a cent per litre (0.0029).  This is derived from 48,000 litres of water that will be billed (the average single person’s consumption of 78,000 minus the free allowance of 30,000).  This comes to about €2.65 per week.

Now let’s look at some issues.

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Danger, Danger: The Government’s Health Insurance Model

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There are many issues to be sorted with the introduction of the Universal Health Insurance:  will it be a competitive private insurance market (a la Netherlands with its rapidly rising health costs) or will it adopt a single-payer model; what services will it include; will it contain truly free GP care and will it include considerable subsidies for  prescription medicine?  And then there is the issue of whether an NHS-style system (most EU-15 countries finance their health systems out of general taxation) would be more cost-effective – that is hardly featuring in the debate.

Here I want to look at how it will be financed based on the Government’s current proposals.  It seems clear that people will be required to purchase a basic health insurance package (contents unknown) from one of a number of competing health insurance companies.

But there is a real danger that the Government is intending to introduce a finance model that will be regressive (i.e. impact on low-average incomes more than higher incomes) and contain no obligations from employers to make any contributions.  Both these elements fly in the face of social health insurance models that exist in Europe.

Regressive

First, the method of financing will be regressive.  We don’t yet know the cost though the Department of Public Expenditure and Reform is reportedly claiming that it could be €1,700.  In the Netherlands, which is supposed to be the Government’s template, the cost is €1,478 for each insured adult with reliefs for low-income earners.

Let’s assume, for this argument, that the package is €1,500.  The Government is committed to exempting low-income groups (unemployed, etc.) and subsidies for the low-paid, though we don’t yet know the threshold.  This helps, of course.  The problem lies with income groups above the threshold – in other words, those that don’t receive a subsidy.

We can see immediately that a flat-rate payment will be more expensive – as a proportion of gross income – for those at the lower end.   For instance, if you are on an average income of €36,000, the health insurance will be approximately 4 percent.  If you are on €100,000, the health insurance will be 1.5 percent.  That doesn’t seem very equitable – because it isn’t.

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Irish Water – How Many Dodgy Numbers Does it Take to Start a Debate?

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We’ve had some pretty brutal debates where evidence took a back seat to unsubstantiated assertion, misleading projections and just plain fabrications:  public sector pay, social protection rates and fraud, taxation, government spending, deficit reduction and on and on.  I didn’t think it could get any worse but that just shows what I know.  For along came the claims on staffing levels in the Irish water services.

Monday morning we woke to claims that Irish Water was employing far more staff to run water services than was necessary – over twice as many.  This would end up costing €2 billion which would be imposed on households through higher charges.  This was due to ‘sweetheart’ deals between trade unions and the Government.  Isn’t all this typical of a ‘state monopoly’ which will pay staff for doing nothing?   By Monday lunchtime there was an avalanche of commentary – all condemning the latest manifestation of a bloated public sector.

There was only one problem with this debate; it wasn’t based on any evidence.  And the final twist in this sorry story is that by Monday night the person who started all this buzz, who made the claim of over-staffing and €2 billion in additional costs – Dr. John Fitzgerald – admitted he was not sticking to his own figures.  Oh, my.

Let’s go through a couple of numbers to show how irresponsible this day-long debate – which was wholly dependent on manufactured numbers – was.

How Many Numbers:  the 1,700 Figures

The latest estimate is that there are approximately 4,278 water service employees, of which 80 percent are called ‘front-line’.  This number is expressed in whole-time equivalents and dates from 2011.    It was suddenly claimed that we only need 1,700.  Ergo, we have approximately 2,600 staff surplus to needs.

First question:  where does this 1,700 number come from?  It didn’t come from Irish Water, or a departmental report, or the detailed reports by PwC, or local authority management.  According to Dr. Fitzgerald:

‘There was a story in the Sunday Business Post  . . . ‘

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The O’Leary-isation of the Public Sector

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At the Reform Alliance national chit-chat Ed Walsh popped up to talk about what the Health Services need.  You might remember Ed Walsh – former President of Limerick University and the one who spread nonsense about the number of ‘welfare-tourists’ in Ballyconnell (you can read it about here and here).

Anyway, he made two calls at the weekend: 

Mr Walsh called for greater privatisation of the health service, with other speakers calling for the “O’Leary-isation” of the sector to achieve efficiencies and better management.  Mr Walsh also said it took Ryanair’s Michael O’Leary to make Aer Lingus more competitive and efficient, and said a further €3 billion health cuts are needed.

Let’s deal with the latter point first – the call for a further €3 billion in health cuts.  Since the start of the crisis, Health expenditure has been cut by 12.6 percent, with the Government pencilling in another 2.6 percent cut this year.

So Ed, seeing that the health budget has been cut by over 15 percent, is still not happy.  He wants to cut another €3 billion out of the health budget.  That would mean additional cuts of 22 percent.  Sure, what’s another round of even harsher cuts?

But Ed has an idea:  the  “O’Leary-isation” of the health services.  Now I’m not going to even try to summarise the ‘better’ management of Ryanair.  Acres of newsprint and websites have been devoted to Ryanair’s organisational culture.  But this is a good encapsulation:

‘A former member of the cabin crew for Ryanair has blown the whistle on the working conditions at the budget airline company . . .Sophie Growcoot revealed the details of her employment contract with the company Crewlink, which acts as a contractor for Ryanair.

[She] explained that Crewlink forced her to take three months of compulsory unpaid leave a year during the winter months, when air traffic is slower. During that period of leave, the contract forbid her from taking additional employment yet provided no compensation.

Other grievances Growcoot listed included making her pay about $540 for her uniform and another approximately $2,700 for a required safety course. They also only paid her for the hours she was “in the air,” which didn’t include pre-flight briefings, turnaround time between flights, sales meetings or time on the ground resulting from delays or flight cancellations. In addition to the restrictions on when payment was received, the salary was only about $20 an hour without contractual review for three years.

Ryanair paid for only four days of work a week, though on the fifth day, Growcoot was expected to be on call to arrive within an hour of being notified, and these standby days were unpaid unless she was actually called in.

Growcoot recounted an incident when she was on standby and received a call to come in at 4 a.m. to work on a flight departing from Liverpool to Dublin. She paid about $15 for a taxi to the airport because public transportation wasn’t running at that hour. When she arrived, she was informed that the flight had been cancelled because too few passengers were booked on it, information that would have been available to the airline prior to calling Growcoot in. She claims she was then sent home without payment or so much as an apology.’

This is not necessarily the worst case (but it’s pretty bad); it’s just that this found its way into the House of Commons.  I leave you to imagine how our health services could be reconfigured into the Ryanair way.

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Report: Unmasking Austerity: Lessons for Australia, on the disastrous economic and social effects of austerity in Europe and North America

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UNMASKING AUSTERITY: Lessons for Australia, by Dexter Whitfield

This new report, Unmasking Austerity: Lessons for Australia, documents why austerity failed and its disastrous economic and social effects in Europe and North America and highlights why Australia should not adopt these policies. Government debt continued to increase, reduced demand intensified the recession, negative or weak growth prevailed and the private sector failed to invest. The cost of lost output, reduced wealth, mass unemployment and government intervention runs into trillions in any currency. Public spending cuts and closures increased poverty and widened inequality as working people and the poor were made to pay for the failure of the banks, financial markets and wealthy elites. Austerity advocates were equally committed to embedding neoliberalism in the public sector and the welfare state and reconfiguring the role of the state.

Prepared for the Don Dunstan Foundation and Public Service Association of South Australia and published by the Australian Workplace Innovation and Social Research Centre, University of Adelaide.

http://www.adelaide.edu.au/wiser/WISeR_unmasking-austerity.pdf

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Childcare: On the Verge of Losing Another Social and Economic Opportunity (Again)

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We are on the verge of avoiding the fundamental issue regarding the childcare crisis; namely, that a private sector model of delivering childcare will keep the service beyond the reach of most parents (except at an exceptionally high cost) and will undermine the quality of care for children. Fintan O’Toole gets it:

‘Preschool education is a vital public good. There is an overwhelming public interest in the provision of high quality early education to all children, regardless of their family circumstances. . . Childcare is a public project, an expression of a shared social commitment to common values. . . .This was recognised in the commitment of public resources to the provision of one year of free preschool education. But that commitment is trumped by a very different imperative – the logic of profit. Instead of childcare being a collective public project, it has been turned into just another business. . . The outrageous practices of some of the biggest commercial childcare providers are not throwbacks to the past. They are harbingers of the future.’

In the weekend media there was a fight back against any idea that childcare should be a public affordable service accessible to all parents regardless of means. We had Brendan O’Connor with these bon mots:

‘What was most evident from last week’s discussions is that the State is not even able to get it together to properly inspect crèches. How this proves it should be running them instead is beyond me.’

Ooookkkkaaaayyyy – let’s see if I get the logic of this. Public sector inspections cannot keep up with the negligence of certain commercial childcare providers. This is proof that we must continue to rely on . . . those same commercial childcare providers. Geez, it must be great to write for the Sunday Independent.

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