How Small, Mostly Conservative Towns Have Found the Trick to Defeating Corporations
As the Right pushes privatization as a solution to the economic collapse, one organization is teaching communities how to defeat corporations.
February 4, 2011
California’s treasurer just announced that the state may need to begin issuing IOUs if the governor and legislature can’t close the budget gap. And California’s not the only place that’s hurting. The Great Recession, hit not only businesses and individuals, but governments as well. The National Conference of State Legislatures estimated that 31 states are facing a combined shortfall for fiscal year 2011 of nearly $60 billion.
So, what’s being done? “Cities and states across the nation are selling and leasing everything from airports to zoos — a fire sale that could help plug budget holes now but worsen their financial woes over the long run,” the Wall Street Journal reports. “California is looking to shed state office buildings. Milwaukee has proposed selling its water supply; in Chicago and New Haven, Conn., its parking meters. In Louisiana and Georgia, airports are up for grabs.”
If this seems shocking, it shouldn’t. For the past 30 years, there has been a deliberate effort to deregulate industry and to choke off federal support for public services and public spaces, paving the way for greater corporate control. The push to privatize is nothing new, it’s just that our economic crisis is the latest opportunity. This fire sale is ignited during times of crisis — what Naomi Klein referred to in The Shock Doctrine as “disaster capitalism,” courtesy of Milton Friedman and his Chicago school disciples. “For more than three decades, Friedman and his powerful followers had been perfecting this very strategy,” she wrote, “waiting for a major crisis, then selling off pieces of the state to private players while citizens were still reeling from the shock, then quickly making the ‘reforms’ permanent.”
The goal is the same as it’s been for decades: “The elimination of the public sphere, total liberation for corporations and skeletal social spending,” writes Klein. One of the places where this strategy can be most detrimental is the corporate takeover of public water sources and infrastructure, which is elemental to our survival.
But there’s a glimmer of good news. Across the country, small, disparate groups of people are wising up and taking action to combat corporate control by using a new strategy. And these citizens are winning. One of the first rallying calls has been against the privatization of public water infrastructure and attempts by corporate water bottlers to pilfer spring water, as well. Communities are welcoming “Democracy Schools,” run by the Community Environmental Legal Defense Fund, into their towns, in an attempt to better understand the laws that protect corporations and the ways to defeat them.
It’s too early yet to call these small revolutions a movement, but something is afoot, mostly in America’s rural towns, and if it continues to grow it may very well prove transformative.
Water For Sale
Falling on hard times, Coatesville, Penn. decided to sell off its drinking water and wastewater infrastructure in 2001 and invest the money in a trust fund to be used for city services. But privatization hasn’t been the economic boon the city was hoping for. After even tougher economic times hit Coatesville, the trust has already been drained by two-thirds and residents have seen their water and sewer rates jump 85 percent since American Water, the larger water corporation in the country, took the helm. Last year the company even proposed a 229-percent rate hike for sewer services, forcing the city to cobble together money for legal fees to fight back.
The story of Coatesville is a wake-up call of sorts. Most of us don’t think too much about where our water comes from, and it’s usually one of our least expensive monthly bills. And right now, the vast majority of us (80 percent) get our water from a public utility. But this figure has multinational water corporations drooling — the U.S. is a huge market that could be exploited if Americans can be persuaded (or tricked) into giving up control of their most important resource.
For decades private companies, mostly multinational corporations, have made inroads in the U.S. (and they’ve had great success elsewhere in the world). But their progress hasn’t been major and an inspection of municipalities that have gone from public to private shows that consumers usually end up seeing higher rates and crappier services. And while those facts don’t seem like they’re changing anytime soon, more and more communities are contemplating privatization, thanks to disaster capitalism.
In a new report, “Trends in Water Privatization,” Food and Water Watch found that from 1991 to 2010, private companies bought or leased about 144 public water systems — an average of about seven deals a year. But since the economic collapse, things are changing. As of October 2010, at least 39 communities were considering whether they should sell or lease their water infrastructure. And the reasons for privatization are changing. Corporations used to swoop in to try and “rescue” communities when they couldn’t afford expensive upgrades, but now, even cities with well-functioning, in-the-black water systems are looking to sell or lease them in hopes that privatization will bring an influx of cash to pay for other programs.
Sadly, that’s not usually how it pans out. “It’s always the same false claim: Private is more efficient than public. The public unions are impossible to work with, they’ll say, and we have a corporation that can save us dollars,” Jack E. Lohman, author of Politicians: Owned and Operated by Corporate America, wrote in the Capital Times. “Rarely is that true, especially after they add all of the exorbitant salaries, bonuses, shareholder profits, marketing and political bribes that must be passed on to the taxpayer. These costs usually far exceed government waste, unless offset by egregiously low salaries that further harm the economy.”
Any sane financial adviser would know that selling off a recurring revenue stream for a one-time boost to the budget doesn’t make sense in the long run. After looking at the 10 largest sales and concessions of public water systems, Food and Water Watch found that rates went up an average of 15 percent a year in the 12 years following a privatization deal.
Not only it does it end up being an economic loss for residents and their governments, but it is a huge abdication of power. Water is the lifeblood of our communities. By turning this over to corporations, whose first responsibility is to shareholders, how can we guarantee safe and affordable drinking water for everyone? Should corporations, whose short-sighted drive for profit brought our economy to its knees, really be trusted with our most vital resource?
From big cities like Atlanta, Georgia to small towns such as Felton, Calif., communities have fought back to regain public control after water privatization deals went sour. But it’s not just drinking water infrastructure that has towns concerned — water bottling companies, run by multinationals like Nestle, have also been targeting rural communities’ spring and well water.
In the small town of McCloud, Calif., a former mining town in the shadow of Mount Shasta, Nestle quietly signed a 100-year deal to bottle 200 million gallons of spring water a year and unlimited amounts of groundwater without any public input and without an environmental impact statement. Concerned community members joined together to fight back, and six years later they succeeded in sending Nestle packing. While residents may have been successful in McCloud, their battle was resource- and time-intensive. Across the country, similar fights were also going on, as small towns worried about depletion and degradation of their water resources fought back against bottling companies, but only sometimes emerged victorious.
Thomas Linzey knows of an easier way to do things. Instead of trying to beat out corporations by fighting the regulatory system, Linzey has helped people to see a different path forward. A founder of the Community Environmental Legal Defense Fund, Linzey and his colleagues help “communities to draft and adopt legally binding laws in which they asserted their right to self-govern,” according to the organization’s Web site.
“We think today’s contemporary activism is the wrong frame, and in addition it is aimed at the wrong thing,” Linzey said. “Most of it’s federal and state activism. We think those things are pretty much dead. The only place where there is a window to operate is at the local level and then that can be used to up-end the state and federal to build a new system of law, which I think our communities are recognizing is needed.”
Essentially, Linzey believes, the last 40 years of environmental activism hasn’t accomplished very much, and by fighting within the regulatory system, we’ve been barking up the wrong tree.
His colleague Gail Darrell, an organizer in New England, explains, “Under the regulatory structure you’re not allowed to say no to anything permitted by the state — water withdrawals, sewage sludge, biomass plants, toxic waste dumps, landfills — all of that is regulated and permitted by state agencies and they issue permits to industry guided by their regulatory statues that allow them to cause harm to the environment within in certain limits. But that structure doesn’t allow a municipality to say no to any of those practices. Your feet are cut off at the beginning. When an industry goes to the regulatory agency and gets an application, once that application is administratively complete that permit must be issued by right.”
Combine this regulatory bias with corporate rights being ingrained in our Constitution (yes, long before Citizens United) and the tables are stacked against ordinary folks. “Corporations have the same rights as people — the first, fourth, fifth and fourteenth amendments,” said Linzey. “They also have rights derived from the Commerce Clause of the Constitution that allows them to sue communities to overturn laws dealing with commerce.” Before Citizens United there were 80-100 years of cases ingraining corporate rights, he said.
To even the playing field a bit, CELDF has helped around 120 communities pass binding ordinances that give them the ability to say no to corporate control. Ordinances they’ve helped to draft have given towns the right to eliminate corporate personhood — to say no to water bottling companies drilling for water in their towns, for instance — and to assert the rights of nature.
“Any citizen can stand in the shoes of that river or other piece of nature and advocate for it — we don’t have to own that piece of property” said Darrell. “And if there is a gas spill that happens from a tanker crossing the bridge and it dumps into our river, we can use our rights of nature language to force that corporation to recover the damages and those are paid to the town to restore the river.”
Most of this work has been successful in small, rural towns. The organization has its roots in Pennsylvania, working first with communities that wanted to ban corporate factory farms and then with towns that didn’t want sewage sludge being dumped where they lived. Later the work branched out to help communities fighting water bottlers, like Nestle, and most recently with towns concerned about the natural gas drilling process of hydraulic fracturing, or “fracking.” The towns where they’ve been successful, Linzey says, are not liberal enclaves by any stretch; in fact, it’s been just the opposite because it started out as a rights issue — a conservative Republican issue.
“The hardest places to work are the liberal progressive communities because they think we have a democracy and they are intent on working within the existing structure to try to find a remedy rather than tossing it and working on something from scratch,” said Linzey. “What’s been fascinating to me is when you have south and north-central Pennsylvania towns passing binding local ordinances that refuse to endow corporations with constitutional rights in their communities. But in the liberal progressive bastion of Berkeley, they were passing non-binding resolutions urging Congress to do something about it. I think that difference in approach has become clear to me over the last decade. Here are rural conservatives passing things saying we won’t let our rights be taken away and are using a local law as a municipal, collective civil disobedience tool to actually push up against the state to say ‘fuck you.’ Whereas in Berkeley people get in a huff and do some hand-wringing and pass a resolution which begs and pleads Congress to do something about corporate rights, which is never going to happen, at least in the next 20-30 years.”
While most of CELDF’s work has been in small towns, this fall the city of Pittsburgh became the largest municipality they’ve worked with to ban corporate personhood, establish the rights of nature and tell gas drillers interested in fracking to get out of town.
This big victory comes on the heels of many smaller wins that have gone under the radar.
Darrell lives in the town of Barnstead, New Hampshire. After spending years watching a neighboring town try to prevent a bottling company from extracting water in their community (it’s going on nine years now), folks in Barnstead got together to find a different solution. They ended up working with CELDF, attending the organization’s Democracy School, and passing an ordinance that protects them from bottling companies and corporate control and also establishes the rights of nature. Soon, other nearby towns followed suit.
The idea is pretty simple, but it’s also radical. “We’re the first folks to talk about really the need to rewrite the Constitution itself, to create a new constitutional structure and most folks aren’t touching that,” said Linzey. “You can’t talk about it in polite company. People talk about amendments, we think the thing is archaic in many ways other than the Bill of Rights. We need a new constitutional structure that recognizes community local self-governance as well as the rights of nature. We can’t get there with the document we have which was written in the 1780s. The question is, will enough people come together across the country to actually rise up to demand a new structure?”
Linzey and Darrell both believe the answer is a long way down the road — perhaps 20 or 30 years. “We need a complete revolt of sorts from the local level,” said Linzey, adding that communities in Pennsylvania and New England were already teaming up to try to influence change at higher levels. “I think all that is positive but it is too early, I don’t think it’s a movement at all, it’s just disparate people in disparate places trying to grapple with what this structure delivered to them and figure out what they need to do to fix it.”
As the campaign of disaster capitalism marches on, we may begin to see a groundswell of communities rising up to reclaim the rights of people against the advances of corporations. In many places it may spring from a desire to protect what is most critical — such as water — but it always, Linzey says, “takes real imminent harm — that’s the only thing powerful enough to get people to rip off the blinders.”
Tara Lohan is a senior editor at AlterNet and editor of the new book Water Matters: Why We Need to Act Now to Save Our Most Critical Resource. You can follow her on Twitter @TaraLohan.
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