corporate interests behind new public management helene bank, special advisor, campaign for the...
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Corporate Interests behindNew Public Management
Helene Bank, Special Advisor,
Campaign for the Welfare State, Norway
ESF 2010 Istanbul
Response to Crises
”What I really need of you is Market access”– Robert Zoellich, former USTR ( Cancun WTO ministerial 2003)
”I will never rest until all the water of the world is privatised”
– Rebecca Mark, Former CEO of the Multinational Azurix water company (2000)
”Increased competition between private and public sector will strengthen Norway and the private sector through the crisis”
– P.C. Rieber, President of the Norwegian Business Council (2009)
Financial Crisis is not New
Post 1929 – strong financial regulatory regime – policy space for various political systems
Post 1945 – Rebuild production capacity, Keynes model of production gives policy space for Welfare states to develop
1970ies – Financial crisis (market saturation: over-production, unemployment, profitability crisis, loan pushing to the South)
Export the problems to the South and to public sector – Neoliberal, Washington consensus, Thatcherism
1990ies – Financial collapses in the perifery, Real economy could not meet the profit demands of capital
Fundamental changes in global governance – market rule and financial liberalization in an unipolar world
Financial versus Real Capital
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1980 1995 2000 2005 2006
GDP Globally
Financial valuesTri
llions
$
World Economy 2007Daily trade, billion US$ (Source IMF)
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120
Mrd USD
World Trade 40
GDP World 120
Trade in bonds andstocks
….
World Economy 2007Daily trade, billion US$ (Source IMF)
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Billion US$
World Trade 40
GDP World 120
Trade in bonds andstocks 120
Derivatives andcurrency speculation5510
Financial Crisis was never solved
2007 – 2008 - ? Credit crunch. Financial bubbles, money values were not rooted in real values
– Nationalization of financial sector debt, no regulations. – Counter cyclical spending
– within neoliberal frame of minimum state and market rule
2010 - ? Sovereign debt crisis. – Still unregulated financial institutions speculates against state bonds
and currencies – Post crisis prescriptions equals EC and IMF pre-crisis policies– EC and IMF use the crisis to increase their momentum. – Workers and welfare pay the price, especially in the €-perifery
Capital Response to Financial Crises: EXPAND MARKETS!!!!!!!!
Market access in developing countries Expand what is regarded as markets Appropriation/Prıvatısatıon of commons Financial de-regulations Expand lending (Risks and debt nationalised)
TOOLS: WTO, GATS, IMF, EU/EEA, OECD, G20, NPM …
Expanding market into public sector and the commons
Let market govern! – Priviatization, tendering, outsourcing (1980ies -> )
New Public Management NPM – Stepwise reforms to force and cheat the unions( 1991 -> )
Product-market reform
Labour-market reform
Financial sector reform (1998->)
G20 …will implement measures ….G20 declaration, annex I, para 13, June 27. 2010
Product, service and labour market reforms in advanced economies, particularly those economies that may have lost some productive capacity during the crisis.
Labour market reforms might include: better targeted unemployment benefits and more effective active labour market policies
It might also include putting in place the right conditions for wage bargaining systems to support employment.
Product and service market reforms might include– strengthening competition in the service sector; – reducing barriers to competition in network industries, – professional services and retail sectors, – encouraging innovation and further reducing the barriers to foreign
competition.
NPM Objectives:
Undermine power of the labour unions
Privatize public assets and create a straw for private companies into public budgets
NPM- Ideology
Competition as ideology
«Competition is good, both in sports and in the school. It contributes to create winners, not loosers as the leftists argue.»
(Torger Ødegaard (Conservative Party), Minister og Education, Oslo City)
NPM-IdeologyView on the role of Public Services
”The only role for public sector is to ensure education for those who can never become a profittable market, and who become even more marginalized in a society where the rest of its members continue their progress.” OECD
NPM-IdeologyView on Public Workers
Public workers act solely out of self interest- >Citizens needs are secondary- > Skewed vision of public workers
Dis-belief any motivation by - >professional ethics - >professional interest and challenges- >loyalty and solidarity
Respond through -> top-down governance, -> increased controls, -> out-dated management systems from industrial mass production
NPM- A five headed Dragon
Budgeting welfare as expenditures – not investments
Tendering: Compete with wages and work conditions (Pirat sector – social dumping)
Accounting Std (from public (Kameral) to private sector hybrid)– Pension ( favorise Pay as you go)– Property
Bureaucratic conrol regimes Distrust workers and users
Favorise private companies, undermine unions, and create a paradise for consultants (who makes the rules and standards)
New Public Management (NPM) ideology
= governance through distrust
Tests and bureaucratic reporting routines Competition: means of creating disciplin Wages as motivating factor, individual and local bargaining
( Carrot and stick) Centralise power, decentralise responsibility Distrust in workers Split sectors into units that can be outsourced ”core
activities”
Preparing for outsourcing/privatization
NPM Measuring and reporting
Purchaser/provider split Explosion in reporting requirements Shift focus from welfare to what can be counted in terms of
work operations Change of language Quality, professionalism and etichs is secondary Private sector accounting, basis for comparison with private
sector Build on distrust and need for top down control Takes time from the real welfare services Increase work load for the public workers and individualise
their struggles for doing a good job
NPM – stepwise privatisation
From Public Governance to business Examples from Sweden, as presented in a Norwegian green paper (2000)
1. Create market-like systems within the public unit. purchaser/provider split, result units etc.
2. Units financed through entirely public funding: Tendering, eventual dis-allow public unit to participate the tendering.
3. Units are outsourced from the public control, eventually to a government owned company, The establishment can happen through the above steps.
4. The company can be owned by the government, or as a next step, be privatized.
Privatize and Outsource!Example Norway ( independant of colour of government)
IMF advice to 2002 Norwegıan reforms IMF 2007
”Product-market -reform” will strengthen private sector
Increase deregulation and privatization
Reduce the voluminous share of public ownership
Cap any growth in public sector spending
2002: Road construction, Postal Services, Railway, hospitals becomes companies with independent boards.
Private sector models for organizing public sector
2005: 10 state units to be governed by private sector accounting
Commend the gvt for its ”product-market reform.
Suggest continued reforms securing increased competition between public and private sector
Continue management reforms to facilitate privatization
From Resistance to Counterpowers
Bumpers – that created so-called ”late reformers”: Strong labour unions Large welfare states Universal rights to welfare services Labour laws - Right to participate
Resistance – from global to local: Broad alliances against privatization and GATS Monitoring big companies Monitoring their ”agents” (IMF, WB, WTO) Global solidarity actions Challenge the neo-liberal paradigm
Counter power and alternatives
Bolivia water war
Scotland re-nationalised hospitals
Norway – Unions secures decisive influence in quality development of their municipalities
Toulouse Urban and inter-city transport back to public ownership
East Africa Legal Assembley ( Parliament) took over the WTO
Numerous examples from all over the world
Scotland re-nationalised their health sector
Hospitals and health services 100% public
Abolishment of private sector organisation and management (was not needed to compare with private sector when the development should happen within public sector)
Bulk financing Overall quality goals – indicators linked to to equity in health Budget disciplin and improved fulfilment of political objectives
It all started with labour mobilization and strikes
Norwegian municipalitiesNorwegian municipalities Quality development from within
Quality reform – preconditioned no outsourcing and privatization
3-partite agreement - democratization Research followed development/programme Developement of quality- and process indicators Bottom up governance – nedded exemptions from some
national regulations Proud to be a municipality worker
It started as a union resistance against privatisation
Opportunities of the Crises
Another view on people Democratic control with banking and finance Securing the real economy Restructur production and consumption to social and
environmental sustainablilty A Trading and financial system that re-distributes just and fair
– Private -> public– Rich -> poor– North -> South
Requires active and solidaric social movements North and South that cooperates, and not let themselves into competition by economic power interests
Another view on people
Human beings are social and in solidatity with other human beings
Human beings are interdependant
When social movements gain power, they organise societies in a solidaric way
Therfore: WE must strengthen the citizens, users and employees democratic control
«..nothing of this will happen without an enormous pressure on our politicians in these important times. No polite lobbying, but that peoples take to the streets again and start the types of direct actions that led to the New Deal of Roosevelt in the 1930ies. If not, we will have just superficial changes before everything is back on old tracks.»
Naomi Klein, 26.9.2008.
Welfare State – limited market activities
The visible features– Public Institutions– Budgets and financing through taxation – Universal services/access
The invisible factors behind– Power relations between capital and labour– Capital control– Common goods – are ”Commons”
Result of social struggle Not first priority of labour unions, but capital response to
the alternatives -> The class compromise
Controlling the market – pre crisis
Gold standardCapital control
Credit control Conditionalitieks to investors
Labour laws etc. Substantial public sector
Society with a given distribution of the wealth
The Neoliberal Offensive
Labour laws etc. Substantial public sector
Society with a given distribution of the wealth
Democratise finance, production and markets?
Democratic control Natural ressources and knowledge
Capital controlShield production and societies
Reconstruct prod. and consumption to social and environmental sustainability
Consession rules on companiesAntitrust regulations against monopolisation
Labour law etc.Solidarity with foreign workersDemocratisation/right to participate
Stor offentlig sektorBolverk mot videre Konkurranseutsetting
Local societiesGlobal struggle