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Discussion
Privatization of Public Services
Pressure to Privatize and Refusal to Seek a
Human-Centred Alternative
- Workers' Centre, CPC(M-L) -
 
The objective conditions of a capitalist system in
crisis pressure the owners of capital and their political
representatives to
privatize public services and extort concessions from the working
class. Instead of seeking a human-centred solution to the crisis,
owners of capital cling to their outmoded system and lash out at the
working class and the public services it provides.
The wrecking of Canada Post and privatization of public
services in general are rooted in the economic conditions. The trend of
the
rate of return on investments to fall coupled with the economic crisis
with its attendant problems in the equity and commodities'
markets has resulted in a situation where a glut of capital has no
place to invest at what owners of capital expect as a suitable rate
of return. A recent item in the financial press speaks of the
unprecedented amounts of cash held by the largest U.S. corporations.
Another item in the New York Times, "Banks Flooded with Cash
They Can't Profitably Use," exposes the same problem.
Privatized public services, when accompanied with
guaranteed contracts and lower claims by the working class, offer some
relief for
investors within the conditions of an economic system that is obsolete
and in need of renewal away from its capital-centred core
towards a human-centred alternative. With political representatives of
owners of capital in control of all levels of government, their
solutions to privatize and extort concessions from workers make the
situation worse for the people and their economy.
When privatization of public services is examined in its
aggregate form, individual owners of capital under the present
conditions
can increase their claim on the regularly produced social product by
occupying space formerly held by governments and the collective of
owners of capital. Importantly, while changing a sector or enterprise
from public to private, similar to bankruptcy, the restructuring
offers owners of capital a unique opportunity to extort concessions
from workers.
Regarding Canada Post, at one time it would have been
preposterous to suggest that individual owners of capital would make a
direct
claim on the added-value produced from moving mail around the country,
other than from selling supplies and machinery to the public
enterprise. A direct claim was unacceptable because the added-value was
needed within the post office for its own expansion to every
town across the country and to keep postal market prices low for the
collective of owners of capital who all used its services. Market
prices for postage were kept low for the benefit of the collective of
owners of capital. Market prices have traditionally been less
than the price of production of moving mail. With postage market prices
below the price of production, some of the added-value,
especially for business mail, goes unrealized and finds itself claimed
indirectly by the collective of owners of capital in the form of
lower postal rates. This is distinct from the production of commodities
where a certain quantity is unsold (unrealized) and the
added-value contained within the unsold commodities is lost to owners
of capital and the economy. The entire added-value produced by
postal workers is poured into the economy. Some of the added-value
(revenue) is used to subsidize higher prices of production in
Canada's far-flung cities, towns and villages, while some is passed on
indirectly to business users in the form of postal market prices
lower than the average price of production.
Part of the equation in prices of production comes from
the claim of workers on the added-value they produce. As postal workers
organized themselves into defence collectives after the Second World
War and fought successfully for a greater claim on the added-value
they produce, the added-value left for owners of capital in the form of
lower postal rates came under pressure. Higher wages and better
working conditions cause owners of capital to introduce machinery to
reduce the work-time necessary to produce a product, in this case
the transportation of mail. Canada Post became heavily mechanized,
which benefitted those capitalists involved in production of postal
machinery. However, higher productivity has the contradictory
consequence of reducing the price of production and the amount of
added-value available for claim by owners of capital. (This is the
objective basis under capitalism for the law of a falling rate of
return.) Canada Post has to pay for the machinery so postage prices
must reflect the cost and had to be raised. The added-value
available to keep business postal rates low became more limited both
from better wages and working conditions and from less available
added-value compared to the overall volume of delivered letters.
Productivity lowers the average work-time necessary to deliver a
letter, which lowers the proportion of added-value produced per
delivered letter but increases the proportion of cost of production
from the use of machinery.
Better wages and working conditions, increased
productivity from mechanization, upward pressure on business postal
rates together
with the absence of places to invest have driven owners of capital to
abandon their earlier support for a public Canada Post and to
organize for its privatization. The subjective side of privatization is
the absolute refusal of owners of capital to consider a
human-centred alternative and new direction for the economy. This
regressive subjective outlook arises spontaneously from their
objective position as owners of parts of the socialized economy.
During the formative period of Canadian nation-building,
similar situations with regard to the necessity for public enterprise
existed with rail and air transportation, urban transit, electric
power, sewer, water, waste removal, other infrastructure, steel, coal
etc. The Canadian capitalist economy at that time would not have
developed without public ownership of many sectors. The situation has
changed in the sense that the capitalist economy has degenerated to the
point where the law of the falling rate of profit has reduced
places where owners of capital can invest and receive a return that is
compatible with their egocentric aim to become richer as fast as
possible. The need for public services has not diminished in the least,
but those who control Canada economically and politically have
become wreckers of what the working class has built and a block to what
the working class is capable of building. Individual owners of
capital within their collective consider their current needs for a
place to invest more pressing than the existence of public services
that the people and society require for their existence. Owners of
capital see in privatization a weapon that can "take back" the claim
of the working class on the added-value they produce within the public
sectors, and allow a place to invest in existing facilities with
a guaranteed rate of return. Their egocentric aim precludes them from
imagining the destructive consequences of their actions for the
working class, economy and society.
The maturing of the productive forces into a global
socialized economy with its attendant laws such as the falling rate of
return on
investments, and the development of the working class movement in
defence of its rights have brought forward a situation where the
socialized productive forces cannot function within the confines of
private ownership without wide scale wrecking of the existing
forces of production, downward pressure on the standard of living of
the working class and war among the competing owners of capital.
The aim of the owners of parts of the socialized economy is in
contradiction with both its individual parts and the whole. The
situation has degenerated to the point where owners of capital feed off
the existing productive public services as parasites.
Privatization is one weapon in this battle to claw back the claims of
the working class and force the socialized economy to serve the
most powerful owners of capital and their monopolies. The most dominant
investors use the state power to guarantee higher market prices
and lower claims of workers. The state has become more efficiently
organized to pay the rich, openly attack the working class and serve
the most powerful investors at home and abroad.
For privatized public services, owners of capital must
eventually charge higher prices within those sectors and lower the
claim of
the working class. For example, Air Canada workers and the travelling
public have gone through a painful two decades of a privatized
Air Canada with reduced and more expensive services and lower claims of
the working class.
The market prices of privatized public services must
eventually float higher to equal or surpass the price of production and
workers' claim on what they produce is forced down with increasingly
violent direct state intervention on the side of owners of capital
against the working class. This may give some relief to certain owners
of capital that seize the privatized public service but greatly
damages the working class and economy, as workers' claim on social
product is forced downward and the people and other owners of
capital have to pay more for services. This accelerates the
concentration of wealth and power in fewer hands and makes the economic
crisis more severe, widespread and prolonged. The solution is to build
a powerful Workers' Opposition that can reverse this downward
spiral, defend the rights of all and society, and eventually usher in a
human-centred alternative.
November 5, 2011 Bulletin • Return to Index • Write to:
editor@cpcml.ca
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