Under the capitalist system water is seen as an opportunity, never a plight. The political philosophy of neoliberalism assumes that people are best served by a system of government that promotes the maximization of profits under capitalism. Neoliberalism rose to domination in the 1980’s to the point where resources like water were viewed as an economic commodity, not as a public good or human right. The problem with this philosophy is that it didn’t work. Profits did not lead to more investment and the situation for human consumption and water use deteriorated. The only ones who benefited were the corporations and their shareholders.
Neoliberalism ignored and continues to ignore our ecological and moral dilemmas. The environment and our biodiversity are at risk when watersheds are mismanaged and alterations made to the natural flow of water. Also, when water becomes a commodity with a price tag, many people are also not be able to afford it, with the unpleasant consequences that flow from that.
Despite the failings, the neoliberal belief system persisted. This led to corporations pressuring governments with the argument that the public control of water was an expense taxpayers couldn’t afford. Supposedly the market would find a solution. Privatization would be the answer to a public sector that is failing and lacks money. Of course, this viewpoint does not take into account when governments deliberately defund the public water system in their budgets, in order to set the stage for the privatization pitch.
The first transfer of water to the private sector took place in the United Kingdom in the 1980’s. Corporations were given 25 year contracts, limited oversight, and billions of pounds in funds. The profits amounted to just under 10 billion pounds, while prices went up twice the level of inflation. Whatever the obvious injustice of these results, the privatization model still became popular around the world. Huge profits for corporations and inflated prices for the consumer became the norm. The country of Chile is another good example of the consequences of privatization at this time. Prices rose 15 percent while profits for corporations rose approximately 197 percent.
There are other examples from around the world: Cochabamba, Bolivia, Dar es-Salaam, Tanzania, and privately managed water systems in Jakarta and Berlin. And at this point in time, approximately 783 million people still do not have access to clean and safe water. So, the question of whether privatization can bring down the costs of water while delivering it to those previously deprived seems obvious.
Water infrastructure is another problem area with the market again not living up to expectations. Corporations are willing to take responsibility for water distribution where there is a profit to be made, but shy away from investing in infrastructure which would improve water quality. Keep in mind this is the very complaint corporations had with the public water system.
In summary, privatization is a part of the wider neoliberal agenda which challenges water democracy. It achieves this by taking water from local, democratic and government control and placing it in the hands of corporations. For many countries water actually ends up being funded by foreign capital.
On a positive note, the city of Cochabamba, Bolivia is an example of community that fought water privatization and won. Movements such as these are critical all across the world and are perhaps the only answer to taking a stand against the privatization of our water.
But returning water to democratic control will not be enough as we move forward. The capitalist system itself is what requires a makeover. A system that commodifies a resource as important as water threatens our democracy, social justice, and our planet. We need to start using what we know to bring about change!