Corporate Interests behind New Public Management

1. Corporate Interests behindNew Public Management Helene Bank, Special Advisor, Campaign for the Welfare State, Norway ESF 2010 Istanbul

2. 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)

3. 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

4. Financial versus Real Capital Trillions $

5. World Economy 2007Daily trade, billion US$ (Source IMF)

6. World Economy 2007Daily trade, billion US$ (Source IMF)

7. 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

8. 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 …

9. 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->)

10. 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.

11. NPM Objectives: • Undermine power of the labour unions • Privatize public assets and create a straw for private companies into public budgets

12. NPM- IdeologyCompetition 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)

13. 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

14. 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

15. 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)

16. 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”

17. Preparing for outsourcing/privatizationNPM 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

18. NPM – stepwise privatisationFrom Public Governance to businessExamples from Sweden, as presented in a Norwegian green paper (2000) • Create market-like systems within the public unit. purchaser/provider split, result units etc. • Units financed through entirely public funding: Tendering, eventual dis-allow public unit to participate the tendering. • Units are outsourced from the public control, eventually to a government owned company, The establishment can happen through the above steps. • The company can be owned by the government, or as a next step, be privatized.

19. Privatize and Outsource!Example Norway ( independant of colour of government)

20. 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

21. 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

22. 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

23. Norwegian municipalitiesQuality 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

24. 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 Tradingand 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

25. 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

26. «..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.

28. 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

29. Conditionalitieks to investors Credit control Capital control Gold standard Labour laws etc. Substantial public sector Controlling the market – pre crisis Society with a given distribution of the wealth

30. The Neoliberal Offensive Society with a given distribution of the wealth Labour laws etc. Substantial public sector

31. Consession rules on companies Antitrust regulations against monopolisation Reconstruct prod. and consumption to social and environmental sustainability Capital control Shield production and societies Democratic control Natural ressources and knowledge Labour law etc. Solidarity with foreign workers Democratisation/right to participate Stor offentlig sektor Bolverk mot videre Konkurranseutsetting Democratise finance, production and markets? Local societies Global struggle