How privatizing public services serves the few at the expense of the many

Post by Eric Mang in

9 comments

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The civic workers’ strike in Toronto has prompted some to call for private delivery of public services, particularly garbage collection.

This despite indications that private collection did not work well in the former municipality of East York and that in Etobicoke, where garbage is privately collected, it is neither cheaper nor more expensive. In fact, it seems that private collectors in Etobicoke earn less than their public counterparts, have fewer benefits, work longer hours and have unpaid sick days.

How is this better for our communities?

Local governments are best positioned to deliver local services because they are the closest government to citizens. Further, in order to engage their democratic purpose, local government must be responsible for the provision of myriad direct services. To hand over those direct public services to the private sector should be perceived as an abrogation of democratic principles.

Further, a public good must benefit the public, not just taxpayers and particularly not those who can afford a service. Think of a public service as essential as water where privatization can lead to increased prices and decreased access.

The public good recognizes interdependence in the reliance on and distribution of resources where a benefit for one is a benefit for all, that citizens cannot be excluded from sharing resources and that a benefit for one doesn’t come at the expense for others (Hood, 1986).

We can see the same principles applied when considering the services offered by Locals 416 and 79.

But the shouting and yelling by those opposed to the union action (I’ll admit that there are many who are upset because they are inconvenienced to varying degrees. And I think many of us on the left and who are pro-union can empathize) are from a vocal group pushing for the privatization of services.

This group, led by lobbyist organizations such as the Canadian Federation of Independent Business (CFIB) and the right-wing think-tank, CD Howe Institute, are preying on people’s fears. They know the current unemployment rate, frozen wages and flaccid benefits experienced by many in the private sector create the perfect storm to manipulate fears.

The first step is to create division.

A garbage collector isn’t “worth” as much as the CEO. The CEO probably did laudable things like behave in school, went to university, worked his way up the corporate ladder. The garbage man probably smoked joints, skipped class and bullied the nerd who became the CEO. In other words, the CEO is celebrated because he “tried harder”.

It’s playing on this element of aspiration – we all want to earn big bucks like the CEO and not have to lug people’s trash like the garbage collector.

Then the issue of pay and benefits is posited. “Hey,” they say. “You worked harder to get where you are than garbage guy did, so you deserve more. Right? But they earn more than you and get better benefits!” Cue the histrionics.

First, the CFIB and friends operate under many assumptions in their attempt to prove that public sector workers earn vastly more than those in the private sector.

Second, the right uses this false salary gap as a pretext to call for privatization of services, because in their parochial view of the world, the private sector does a better job (they like to produce the “monopoly” canard. But they fail to present it in the context of delivering public services for the public good. That is, garbage collection is quite different than an unnecessary service like cell phone coverage; that is, we can get by without a cell but not without garbage pick-up).

But in pressing for public-private partnerships (P3s) or alternate service delivery (ASD) arrangements, they don’t provide us with evidence of P3s or ASDs providing good service for less money, distributed equitably to all citizens so no one suffers or is left out. All undertaken with the level of accountability and transparency politicians quite rightly strive for.

As noted above, private delivery of waste collection in East York and Etobicoke have been failures or no different than public service delivery.

Do I hold out much hope for the public to begin seeing through this fantasy conjured up by the CFIB, CD Howe and right-wing city councillors? Yes. But it will start when we recognize that we’re all in this together.

Some urban theorists contend that local groups wielding the greatest influence, particularly in reformed local governments, are businesses. As cities face more demands they must become more pluralist, but Keating (1991) also recognizes that a globalized society forces cities to compete for business resources. Businesses have more resources, are better organized, control the means of production, pay taxes, and usually develop land. Businesses know that cities need them and in a globalized marketplace can threaten cities with departure if demands are not met.

But in catering to business, I fear that democratic principles may be breached. The function of any business is to augment its bottom line and be accountable to shareholders.

This is why all of us must think about what we want out of our cities and communities. Should our lives be run by corporations or should we ensure democratically-elected officials are held accountable for the decisions they make?

Should we allow valuable public services, services that we all rely on whether rich or poor, to be taken out of our control? Or do we believe in the importance of redistributive policies and that improving our communities for everyone means that we have to stick together to fight for each other, whether your neighbor works in the private or public sector?

Keating (1995) examines the structural and cultural elements of redistribution. Cultures that emphasize solidarity and collectivity are more likely to support generous or equitable redistribution policies than those societies that place a premium on “individual self-gratification” (p. 131). He also raises the point that fragmented societies cannot support solidarity, leaving them with a diminished capacity for redistribution.

Let’s stop those who represent the wealthy and well-off from fragmenting our communities. They don’t care about you and they don’t care whether you have access to a particular service. There is absolutely nothing altruistic about wanting to privatize public services. By manipulating your fears and by failing to provide sound evidence, the CFIB et al’s push for privatization rewards their friends and puts our public services at risk.

If you want to buy into the nonsense that public services should be privatized, ask yourself why. And then determine if once those services are privatized whether they are cost-effective, better and serve everybody (and I mean absolutely everybody) equally and fairly.

References:

Hood, C. (1986). Administrative Analysis. Brighton, UK: Wheatsheaf.

Keating, M. (1991). Comparative Urban Politics. Brookfield, VT: Edward Elgar Publishing.

Keating, M (1995). Size, efficiency and democracy. In Judge, Stoker and Wolman (Eds). Theories of urban politics (pp. 117-134). Thousand Oaks, CA: Sage Publications.

9 Comments

Eric,

Have you read this article?...I'm sure you'll have something to say about the privatization of services in the City of Winnipeg.

http://publicprivate.corank.com/tech/framed/city-council-should-say-no-to-P3-on-wa


Residents of Toronto, with festering piles of garbage outside their windows, are probably very carefully considering the benefits of uninterrupted private service right now.

I'm surprised to read such socialist musings on citycaucus.com!

I'm surprised to see the term socialist thrown around so casually on citycaucus.

Regarding the privatization of public services, I have big news for you. As a resident of Surrey, I am very pleased with our garbage and recycling pick up services. Prompt and pleasant staff. Same when I lived in California. It makes absolutely no sense the have civic employees with their big contracts performing jobs that can be done better by the private sector.

Hey Bob,

Thanks for sharing your experiences.

But as noted in my post, I'm not as interested in anecdotal comments and would like to see evidence if one is "better" than the other.

“Further, a public good must benefit the public, not just taxpayers..”

Greetings.

Who is it that would pay for public services if not the taxpayers? Redistribution is the single biggest weakness of the left. I share some of your opinions of unions – the defense of bullying towards individual members and pride..even the guarantee of workmanship are admirable. But stealing from the productive by those that feel they can better allocate resources to those that portray need is the ruination of society. Using the carrot – encouragement of collective ideals, community spirit...and philanthropy is a much better way to reach societal goals.

I enjoy your writing (and appreciate your great local research,) but this radical left thinking re your take on the Toronto strike seems to be gaining momentum in the general CityCaucus editorial positions.

Jason,

I would hardly characterize redistribution as being the single biggest weakness of the left. Redistribution is rather common in our society - think of health care, education, welfare, roads, parks, largely subsidized public transit, etc. All of these services are based on the principle of redistribution and can be accessed by all regardless of income level. Even neo-con and paleo-con governments don't terminate all publicly-funded services (they might try, but they won't get re-elected)

As for the ruination of society, here we are in one the biggest economic collapses in decades, thanks in large part to neoliberal economic policies. Let us not be so hasty in forgetting why or how this recession happened; after all, the recession is being used as the reason for clamping down on locals 79 and 416.

Further, I'm pleased that you enjoy my writing and you'll know that I write from the left. We don't want CityCaucus do have a homogenized viewpoint.

Finally, I wouldn't say anything I've written is particularaly radical. I've asked several times now that those who advocate the privatizing of public services must back up their assertions with evidence (and not anecdotes). This is what I'm interested in: evidence.

So far, not one person has been able to prove that privatized services are "better" (ie cost-effective, equitably delivered, no barriers to access based on income level, accountable and transparent to the public, democratic, efficient.) My challenge, like Christopher Hitchens' "moral challenge", remains unanswered.

Hello,

I think it is a coincidence that this blog post was published the day before my Globe oped (http://www.theglobeandmail.com/news/national/toronto/free-the-garbage-hostages/article1222309/), but I think it would be helpful to respond to your queries, since you do ask.

First, on the Canadian evidence. The measured costs savings of private garbage delivery is about a 20% operating cost reduction relative to public delivery. They also serve more households per worker. See McDavid, Canadian Public Administration (2008).

What matters the most for costs is the process of determining whether public delivery is the best route - at least based on what the international evidence shown in Bel and Warner (2008). Private companies and public unions have essentially the same costs when the two are competing head-to-head. But when the public sector does not have to compete with the private sector, the costs are higher.

Anyway, I hope this is the sort of thing you were looking for. I hope you read the Essay too! What I'm trying to get across is that privatization isn't necessarily the answer, but that not questioning a monopoly (whether public or private) is the root of the problem.

Although I'm sympathetic with your overall point of view on this, I'm curious as to why you think the example in Etobicoke is a failure?

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