By Robert Kurz
[This article originally published in: Neues Deutschland August 2003 is translated from the German on the World Wide Web, http://www.krisis.org.]
The greatest power failure in the history of electrification was a lesson in several respects. Firstly, it was a lesson about the US, the last world power. A few days before the power supply collapsed for 50 million people in North America, the chief commentator of the New York Times, Thomas L. Friedman declared after an Iraqi visit: "How can we best show our power in Iraq? We start with our power supply." How funny! This story published by Spiegel was spread with relish in the European media. In the second part of the lesson, the malice doesn't reveal any economic insight, only anti-American resentment, the secret joy that the power show-off is made a fool at home and in Iraq. The economic core of the lesson should make people wonder on this side of the Atlantic.
The gigantic blackout (that will certainly not be the last) was a direct consequence that the US is so "exemplary" in the special neoliberal disciplines "privatization" and "lower costs". As everybody knows, errors of economic policy and management have been imitated in Europe for a long time. Neoliberalism isn't a specifically US affair but a worldwide consensus of crisis capitalism overarching the parties. In Germany, red-green and black-yellow seek to trump one another with savings- and privatization-policies. To see what results, one doesn't need to look at the US with a swaggering smirk. Enough examples for the irrationality of this procedure exist in Germany.
From a purely economic management perspective, the praxis of lowering-cost radicalism reveals the inner self-contradiction of capital. The guideline of profit maximization for the "investor" at any cost leads to an abstract cost-cutting pressure that is counter-productive. An intensified performance-race results for employees. This race is planted in the anti-social rationality of capital and is connected with losses of contact aid a deteriorating business climate, increased sickness and so forth.
The cost-cutting mania increasingly seizes organizational, technical and material necessities of the operational course. The completely immaterial logic of money is indifferent to the substance of its "incarnation" and to the real production course. Repairs are delayed, substitute parts are not reordered, security regulations loosened, unusable (but cheap) material provided, necessary organization times cancelled and so on. The many little disasters of the brave new economic management are everywhere, can be seen every day and intensify altogether the economic crisis.
What leads to mad conditions on the individual firm or department plane is disastrous on the scale of the aggregate social infrastructures. Here the connections cross. The chain reactions grasp the whole reproduction of capital, not only the narrow circle of the firm. Even Adam Smith, the founding father of economics and economic liberalism, realized that the infrastructures could not be left to the "invisible hand" of the market since the infrastructures are framing conditions for all market enterprises and are not market enterprises themselves. With the unscrupulous unrestrained privatization policy and driven by the emergency of the state financial crisis, neoliberalism has thrown this insight overboard. If the infrastructures act as profit enterprises, they will become factors of social insecurity for capital itself through the crisis-induced cost-cutting policy come hell or high water.
The privatized power supply in the US shows another dilemma of privatization policy. The infrastructure redesigned for profit maximization is still subject to a political regulation. This infrastructure may not raise the price of electricity. This has good reason. The indebted US economy only runs with cheap energy to which customers have grown accustomed. Profit only occurs through "saving" necessary investments. The energy supply of the last world power is now at the level of a third world country.
The alternative would be an increase of the electricity price that stalls the already weak economic motor. What is your decision: blackout or expensive energy or both? This is the alternative not only in the US and not only with power supply. This is also true for water supply, the public health system and all other infrastructures. The train becomes increasingly expensive and is idle or derailed more often. Postal service and telecommunications also experience their blackouts while prices climb. The sewage system becomes antiquated everywhere. Most sewage systems were built at the end of the 19th century when the commons could pay for them. Now they are frozen or numb. With private operators, they will either be finally run down or demand prohibitive fees.
If this continues, our Mafia will sell drinking water in bottles while cities literally stink to the skies and lights go out more often. Every day there is a little apocalypse for the everyday customs of the wonderful market economy. What lessons are drawn by the policies of all parties? Even more privatization and more cost cutting! What a learning process!