Highway privatization is highway robbery

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by Richard Mellor

Afscme Local 444, retired

Marx pointed out that a capitalist is a capitalist by virtue of the fact that unlike a miser, who aims at increased riches by saving his money, by keeping it out of circulation, a “capitalist gone mad”; the rational capitalist knows that to get rich he has to constantly throw his money in to circulation despite the risk that it might not come back pregnant with profits. The end result, branch of industry or object of this transaction, is incidental, “The restless never-ending process of profit-making alone is what he aims at.”, says Marx *

The more the risk of losses can be averted, all the better. If it can be avoided altogether, why, that’s pure heaven. And one way risk can be avoided is to ensure that if the transaction is not profitable, the profit is guaranteed by public funds, the taxpayer picks up the tab.

This is as clear as day in the sports business as I pointed out in a previous commentary. Owning an American Football franchise is the dream of most of these coupon clippers and for practically all of the stadiums throughout the US, it is the taxpayers that foot the bill, 71% of the costs on average according to Bloomberg BusinessWeek

What a deal that is.  The private sector boasts of the efficiency of the market, but “efficiency” to them is all about profits, not services, the human needs that are met, or how socially useful something is.

Over the past 20 years or so we have seen increased privatization of public services.  Not simply buses and light rail, we have seen an increased private sector investment in construction and maintenance of highways, bridges, parking facilities and related services. I drove on private freeways in Indiana and Illinois.

The problem is that these investments are not producing enough profits for investors; they need more incentive if they are to part with cash; after all they’re not communists, to quote a famous line from the Godfather. They don’t invest in roads simply so people can drive on them.

Initially, the general idea was that charging people tolls to use highways would cover the investment and produce a nice return but since 1995, things have soured for those who like to make money without working. Some eleven highway projects have been struggling to produce enough profits for the investors, according to Bloomberg BW , so the private companies involved are, ”persuading states to make fixed payments” BW writes. No fixed payments, no capital, they’ll put their money somewhere else, after all, that’s what freedom means in a capitalist society isn’t it.

Florida has agreed to pay investors $66 million a year to renovate one of that state’s highways and add some toll lanes. If the private group can get this done by June of next year, the investors could receive another $686 million.  Anyone whose worked construction knows what that means, cutting corners on safety, keeping costs down and unions out or cooperative.

In order to attract this private capital Illiniois, Indiana as well as the Port Authority of New Your and New Jersey are offering investors fixed payments that can guarantee returns.  “We are seeing more of that because investors are a bit more skittish about the US market.” Says one academic involved in Cornell University’s infrastructure program.

This is a much better deal for investors and more and more private infrastructure projects will be through up front fixed payments.  Six toll-road projects being discussed are will be financed this way.  As Business Week puts it, “…it’s taxpayers who roll the dice.”

What an inefficient way to build social infrastructure------to provide mass transit.  First of all, investment should be in other forms of mass transit other than the auto.  But leaving that aside for the moment, it’s the taxpayers handing over more money to the 1%. The above projects under discussion not only guarantee investors profits, cash has to be handed over to Price WaterhousCoopers, a firm that provides consulting services to companies building the highways.  “For the financial community, it makes it much less risky and less costly” says a PriceWaterhouse spokesperson.

Meanwhile the bankruptcies continue to grow as investors abandon what they though might be a quick safe buck.   We are not privy to the actual details and dealings of these corporations but we can be pretty sure bankruptcy favors their position. 

Throughout US history, moneyed interests have plundered the wealth of the country, first the land of course and then its use.  The railroad companies getting free land 20 miles either side of the tracks across a continent made a few people rich we know that.  It wasn’t hard work; you can’t get rich through hard work.

What we have here is a crucial social need being tuned in to a business venture.  This is why we have the worst medical system of all the advanced capitalist countries and the least social benefits.  An important aspect of the attacks on public services by the two Wall Street parties is the undermining of the public sector.  We are to believe that the private sector is more efficient in providing human needs but it is not. Any successful and efficient operation like the US Postal Service or the parks, the fire department etc. has to be undermined as it undermines the 1%’s propaganda that the market is the answer to all things.

A manager of the Florida Department of Transportation gives us an example of this propaganda that has a major influence on mass consciousness when, according to BusinessWeek he says, with regard to the above highway project in his state, “Without private investment, the state couldn’t have finished the project until the late 2020s,”

What nonsense is this?  I am sure he believes this because he has been programed to believe it, to believe that there is no money except “their” money.  It reminds me of Christopher Hill’s reference to the English revolutionists who brave as they were could not overcome their own belief that King Charles was king by God’s will, that he was God’s representative on earth.  Hill referred to it as a “Stop in the mind”. Cromwell suggested they cut off Charles’ head and see what happened.  Voila, a new day was born and progress made.

The state bureaucrat has a stop in the mind.  He believes it’s god’s will that a group of individuals can own society’s wealth and that what we need to live a productive, secure and decent life and that our homes, our health, our food and how we move from place to place is ultimately determined by whether or not this small group of individuals can profit from it.

The dominant ideas in society are the ideas of the ruling class and these ideas are brought to us through their mass media, their schools, their universities etc. We have to overcome this stop[ in the mind.  We produce the wealth and plenty of it, it is simply a matter of how the wealth we produce is allocated, not whether or not we can coax the 1% to part with it.

Imagine being in the desert and only one person of a large group had ample water and that person refused to share it if we didn’t pay them for it.  We’d find a way to get that water, we’d gang up on him and make him an offer he couldn’t refuse. He can share the water but he can’t profit from it as we die of thirst. And there is a way to provide the finances for our social needs. The first step in this process is resistance.  We must reject that there is no money in society and we must reject the idea that public services are wasteful we must also reject their austerity and view of the world.  Recognizing that capitalism is wasteful and that a genuinely democratic socialist society and economy is the alternative is a good step in the right direction.

*Capital, Vol. 1 chap 4.  The General Formula for Capital