Saturday, January 8, 2011

Cattle Car Cronyism

Editor's note: Cross posted on the Polish student's site Kontra - thus the occasional Polish student reference and Polish links

Thanks to the internet and Orwell's Animal Farm, I've always thought of people being like sheep, sheeple having become a common blog buzzword and the tendency of people to move in flocks like, well, sheep. On the train somewhere between Warsaw and Poznań though I decided we're more cattle than sheeple. It was my fourth train of the holidays and second in which I'd paid for the pleasure of being transported hundreds of kilometers across Poland standing shoulder to shoulder with dozens of my fellow passengers. A nation's railways offers a physical manifestation of the building of its infrastructure and national unity and likewise offers a powerful symbol as society is broken up and sold off to the highest bidder. The trick of course is to make people think they want the changes so they practically drive themselves down the Chisholm Cattle Trail. Among the fifteen of us herded into the small space between the doors and the bathroom, there was strong evidence this battle has already been won, "PKP, (enter own expletive here)!" - no F-words of course like in the world without the N-word, just lots of k...a "peppered" about; or "This is the last time I'm ever taking a train, we're buying a car". Seems the "craving for bananas and pornography" that western capitalism promised to satisfy in exchange for the security and stability (more or less) guaranteed by the Communist regime wasn't so much a noble struggle for freedom and justice as a race to give it all away to the rich and powerful.

Faces squashed up against the window as a couple of ladies make a vain attempt to reach the bathroom - "Zamknięte!" Not only closed but it stayed that way the whole trip, four hours for me (scheduled three) but for all I know the whole width of Poland, a nine-plus hour odyssey from Białystok to Szczecin via Warsaw and Poznań. Catching glimpses of a similar scene in the next cattle car it was clear to see that the management of PKP had chosen to run a train which supplied about half of the demanded seating; six wagons would have served better than three. Passengers with tickets become branded bovines and the more heifers, bulls and calves squeezed in per car, the more money there is to be made. What was once a public utility to serve our needs has become a hideous hybrid of corporate/government control to serve one paymaster, profit. Under a European Union directive the state owned railway - Polskie Koleje Państwowe (PKP) - was splintered, dividing transport service from rail system management and founding separate companies able to sell their service outside the rail business.

While PKP SA remains the dominant company in PKP Group maintaining 100% share control and full responsibility for the component companies for the government, several of the pieces are now in private hands. This my friends results in Candide's nightmare, the worst of all possible worlds, where profits are privatized and losses are socialized. In other words, when gains are realized, they fall into the hands of the lucky few whereas when setbacks occur, we all have to pay. Not just in money but efficiency as the scheduling of trains must be coordinated among many parts with competing interests. The 2011 Polish Railway Timetable was to be published two weeks before implementation (making it hard to book a couple of months in advance for discounts) wasn't released until early December and even then still had significant differences between the times that the trains were running according to the printed timetables and the times that the trains actually run. In Germany they must and are published six weeks ahead of time. The chaos is predictable as it's impossible to figure out who's in charge of what when such an intricate web of station, platform, power, train owner/operators has been created to disguise the money flowing around the system.

Being so cramped, it was hard to turn around and get a look at everyone while trying to remain upright as there was even less foot space thanks to the holiday luggage lugged aboard. This forced me into the awkward lean over the bag onto the wall position for much of the trip, alternating between resting on my forehead and hands. An observer would laugh watching the contortions and dance steps required to be coordinated with overhead duffel bag passes as people tried to get off and on at each stop. Mostly off, thanks to the lack of space and our door guy. Of all the 14 people, I'll remember him and his girlfriend most fondly. When three people got off, he made sure only three got on. Plus his girlfriend and him looked right out of an American college; I'd have mistaken him for a quarterback and her for a cheerleader if they weren't speaking Polish, mostly about cars and school from what I could make out. There was the young lady left be-hind/side of me who insisted on reading almost the whole trip and the largish teenage girl to my back right who was more partial to eating.

Being poked in the ribs with a Carlos Ruiz Zafon hardcover while getting an earful of Snickers lip smacking couldn't be all that different than getting hoofed by Daisy while listening to Elsie chew her cud. We also had a couple of young guys just behind them into their phones and gadgets while further back a couple of older guys were more into their bottles of beer. Their ringtones mixed with the rest of the wagons' to mimic the lowing of cattle in my imagination while I tried not to think about how cattle feel standing in each other's excrement. That would have meant not wondering if the old-timers' livers were swollen enough to avoid needing to refill their bottles - nor about the other hundred or so people without access to a bathroom! A couple of older ladies around the bend next to the compartment door were the only other co-passengers who were with me the whole trip while dozens squeezed in and out temporarily staying or in transit. Of them I only caught their reading material, unsurprisingly gossip magazines filling their imaginations with stories of Hollywood stars, cows grazing in the pastures of ignorance while people filed by on and off, to and from the slaughterhouse.

In just twenty short years since the fall of communism, Polish society has made amazing gains. People needn't stand in day long lines to obtain the necessities of life and are free to join in the democratic process. Yet there seems to be little difference between this behavior under communist authoritarianism and that under market authoritarianism. Democracy gives us the right to vote in our leaders as long as we cross one of the offered boxes, thus putting in power someone who was in fact chosen for us. These leaders in turn determine which state assets should be sold off and how they are auctioned off in a process that buys off political and economic influence. Therefore the majority of those aforementioned gains have been disproportionately distributed in an economic system that favors the rich and powerful in such a way to make it easier for them to take an ever greater slice of the pie.

While most believe the most amazing feature of today's world is the speed at which technology is changing our lives, what dizzies me is how quickly things become normalized into culture. Just the last decade has brought an onslaught of both. Take the mobile phone (please!). People peering, tapping, listening and shouting into phones, sharing news and views with everyone within earshot and even more amazing, our ability to (try to) ignore it has become a normalized ritual; what's more we happily pay a slice of our earnings to have the device control our lives and need to lay out for an upgrade at least every couple years. To drink water we happily buy petroleum-based plastic bottles to add to our expanding landfills. It's normal to participate in an endless, unwinnable war by sending 2600 Polish troops to Afghanistan where they are "just kind of hanging around"; whatever, only 22 have been killed.

When people think of the loss of biodiversity over this time, most think about species extinction which makes losing a quarter billion (do the math) species somehow normal. Yet perhaps the most significant diversity loss, among our seeds to grow food, had been avoided thanks to the EU. Today the last barrier to a GMO world moves ever closer to devolving decisions to its member states to decide whether or not to complete the transition to a world where food is only grown with genetically modified seeds, a market 90% controlled by Monsanto. Like the war on brown people, another US government initiative, thanks Wikileaks. The country whose farmers are most in support of GM seeds? Poland. Not only should we worry, but don't, that we're increasingly relying on fewer strains of staple crops and driving Indian farmers to suicide but we should also remember some of their products from the past. Maybe you remember Agent Orange, bovine growth hormone and PCBs? And like Americans, when they take over, our choice will be taken away as we won't even know we're eating GMOs. Additionally, we not only use food like corn to produce ethanol but subsidize its production in a cycle of kickbacks. Anything to keep us burning fossil fuels. Heck, the decade even saw us increasingly believe oil company propaganda that scientists warning about climate change is simply fearmongering even as we completed the hottest decade on record while CO2 levels race past 390 parts per million. Did I mention the IPCC warnings in the past decade of increased climate volatility has normalized what's been happening from Moscow to Queensland?

Voices of complaint swearing it's the last time they'll take a train, they ARE buying a car. Everyone's happy, right? The train company can continue to increase their profit by stuffing the rest of us cattle, er, I mean losers without a car, into fewer and fewer wagons; the car companies get to sell another car and the oil companies sell more gas from which the government will earn some taxes; a financial institution, or two, maybe a bank and a specialized car financing firm, will also make money on the interest paid on the loan to buy the car. Little attention is paid to the fact god car costs more lives than even the other gods, a metal death box to cut them off from the rest of the world so as not to have to worry about the bikes they've forced off the road and pedestrians off the sidewalk so they can drive and park. Nor about the planet being forced to absorb and people having to breathe the noxious exhaust fumes or the soldiers and innocents dying in far away lands to ensure a steady supply of gas. The money spent by our government to maintain the infrastructure allowing them the pleasure to drive and park that could be put into alternate/public transportation. Think pedestrian over/underpasses, sidewalk snow removal and of course trams, buses and subways. This doesn't happen thanks to god car. EU directives forcing rail privatization are adhered to here in Poland while those requiring spending on a sustainable transportation infrastructure, 40% to rail and 6% to road, are ignored. Between 1998 and 2009 Poland spent about 108 billion zł on national roads and only 17.5 billion zł on the rail - 14% to 86%, easier math than counting cows, not crows, especially when they're falling dead out of the air everywhere, no matter how normal they tell us it is.

Privatization sounds great. Allowing capitalism and the invisible hand of the free market to make the world a better place. The problem is it doesn't always work; there are areas of the economy where the market delivers less efficient results than the state. These tend to be in areas where the public good delivered is greater than its monetary value such as health care, education and public transportation. Not even Margaret Thatcher, the iron lady scourge of state enterprise thought privatizing British Rail was a good idea. Its time had to wait until the neoliberal model was firmly entrenched, 1996, when British Rail was restructured into more than 100 separate businesses and sold off. A homogeneous bureaucratic structure became an interconnected array of contracts linking not only companies accountable to their shareholders but also to a complex regulatory framework set up to oversee the privatized system. With the private provision of infrastructure, however, there is a potential problem: introducing and maintaining competition. This potential problem can arise because of the so-called natural monopoly character of many infrastructure projects because a single firm can produce goods and services more cheaply than multiple firms (multiple ports, bridges, etc. at the "same" location are not economically feasible). Private monopolies must be controlled by public authority; but control means interference with private business, and interference begets corruption. Avarice inevitably leads to cases like the one in the UK where a privatized rail company was resold six months after being sold to investors. Nothing wrong with that, except the investors made a £300 million profit thanks to the government selling to friends for less than market value.

However, these are hard times financially. The lure of instant gratification is strong and there's a lot of cash to be made in these times of austerity, total proceeds to the UK government of the privatisation were UK£5.3billion. Yet one needs to look at the long range costs, not only in terms of service and comfort, but financial. Again in the UK, privatization has led to an increase in the cost of subsidies to keep the railways running, so much that the £5.3billion earned only paid for about three years of the increase! The theory seems to be that raising ticket prices will lower the subsidies as British rail passengers pay about 50% higher ticket prices than the rest of Europe which has led to a doubling in fares paid by the cattle since privatisation to £5 billion. But the total subsidy has risen even faster, reaching £6.3 billion by 2006, four times what British Rail received in a typical year when it was state owned. Other benefits seen: lower punctuality and reliability, neglected more dangerous stations, safety issues and possibly more rail crashes and deaths. Bring back British Rail, all is forgiven.

Now, what does an overcrowded train and the experience of British Rail have to do with Polish students today? Well, it could be nothing if one believes hard enough like Dorothy in the Wizard of Oz, or, more likely, it should serve as a warning of what's to come in Polish education, particularly as related to university fees. For those students in their second year or beyond, did you notice any change in your class sizes this year? Next year will bring even more students per class as the new normal of austerity takes hold and universities are forced to deal with dwindling funding. It won't take long for the national conversation to come around to the subject of charging tuition to attend state schools and once that taboo is broken, whispers of complete privatization won't be that far behind. Already, the growth in private higher education enrollment far outstrips that of public schools here in Poland. Again, the UK blazed a cattle trail for Poland to follow as with the release of the Dearing Report in 1997, their public universities introduced means tested tuition fees the following year. Fees were bumped a bit in 2004 and then the new Conservative government turned to John Browne, the former chairman of BP, apparently because they know so much about creating a sustainable future (!?!), for advice on the future of education. The Browne review led to a near tripling of fees to a maximum of £9,000; perhaps you saw something about this on the news last month as this sparked student riots in November and December that even, horror of horrors, saw Prince Charles' Rolls Royce get paint splashed on it. Remember, governments can afford to bail out banks but the cost of education is somehow beyond their reach.

Unsurprisingly, according to the 2010 Global Higher Education Rankings (PDF), in terms of affordability and accessibility Finland comes out first while the UK languished near the bottom even before the latest round of tuition increases. A once proud nation that offered free universal higher education, the UK will become an even more class-ridden society where somewhat ironically, only the rich are able to afford the education which is key to income mobility. Imagine that, a system designed to keep the rich rich and the poor, well, poor. I don't suppose you noticed the years when British Rail was privatized and tuition introduced to universities? 1996 and 1998. Hmmm, makes on wonder if one thing could have possibly had any bearing on the other. Or if the movement toward privatizing NHS in the UK is related to the whispering of hospital privatization here in Poland. Just underfund the hospitals forcing doctors to take bribes or stop working, then maybe the cattle will see the light and actually demand private health care so the corporations can get a shot at the billions to be bilked, or should I say milked. Even more ominously, British Education Secretary Michael Gove said the changes in his country amounted to the "fastest rate of education reform in English history" as the number of secondary schools with academy status has nearly doubled since the ConDem takeover last year, representing 11% of the nation's schools. Opening up teenage education to the profit motive should seem even stranger right after private firms demonstrated their ability to destroy the global economy just two years ago or how their drive for profits leads to corners being cut by companies like Mr. Browne's BP which are speeding up our destruction of the planet.

Unfortunately, the unsustainable gains of the past couple of decades may not only cost our future on this planet but have also created an equally unsustainable public debt which represents a theft of the financial future of today's youth. Paradoxically, we are more likely than ever to blame those who have fallen outside of mainstream life and contributed little to the threat for our economic problems while exalting the elites who have done the damage while receiving most of the benefits.With a tip of the hat to Naomi Klein's Shock Doctrine, it's past time to alert the cattle to the future they're being herded towards. Disasters, whether economic or environmental, man-made or natural, are the perfect cover for ideologues, be they neoliberal or neoconservative, to push through their policies while the public is distracted as they are forced to react to the conditions caused by upheavals. While Poland has been largely immune to the latest economic crisis, she has not only built up debt of her own but is also part of a larger unit, the EU, which is confronting a threat to its existence and therefore at the mercy of those who wish to gain from her plight.

We've been aware since at least Eisenhower's dire warnings of the industrial military complex of the threat posed to society when the public and corporate sphere collide and have only recently been hearing about a similar relationship between government and the financial industry. Yet we are still largely ignorant of the fact that society as a whole is becoming more and more subservient to corporate control through a growing symbiotic (or should I say parasitic) arrangement found everywhere we look in political and economic life. Milking us dry of the wealth that was built up by society and putting us more at risk; the snow removal problems in New York City underscores how reliance on contracting out work to private companies results in disaster. Even being aware of the growing influence, nothing is being done to halt the revolving door between the military and government contractors or the financial world and the policy makers so how are we to protect ourselves from the subtler shifts happening elsewhere? I'm not only talking about trains anymore, the technocrats are running the show and putting themselves and their buddies in place to be the only ones to profit on everything from the Euro 2012 football championships to the university classroom.

When Donald Tusk's PO party swept to power in 2007, one of the first things it promised to do was to embark on an ambitious privatization program. Their privatization plan for 2008-2011 came before the economic crisis hit the world, a crisis that saw Poland emerge as the soul European economy not to fall into recession. Yet the crisis has changed the playing field, capital available for investment has dried up thus lowering potential income to be earned from state sales while at the same time government finances have come under pressure. While other countries have opted for austerity, the Polish government seems to be aiming to improve its finances through growth and that means selling assets, no matter the price. It seems it only took a  global financial debt crisis for the country to trade its fear of Russia snapping up strategic assets for a fear of the financial debt sharks. Selling assets now, including last months successful stock float of PZU insurance company, Tauron energy and the Warsaw Stock Exchange, allows the government to temporarily plug the ballooning deficit gap which reached 7% this year. Being Poland, privatization still has a banana and pornography lure. Krzysztof Walenczak, chief economic advisor to Aleksander Grad, the Treasury minister who is spearheading the privatization campaign uses phrases like “it is about getting rid of the legacy of Communism” - “It is about completing our post-Communist revolution” and “It is about changing the economic ownership of the country, completing what Poland started 20 years ago.” The real question becomes, where does it all end? Once an asset is sold it's gone and while it may have temporarily fixed the problem, the budget deficit is still there so you've got to fix your finances or find something else to sell.

Worse, while the government is painting these sales with the brushstrokes of transparency, many are questioning just how clean the palette really is. While Poles may be enured to a process rife with corruption, they are told that if they really want to play in the international market they can't afford even the appearance that state-owned companies are being sold to firms controlled by politicians. Yet that is exactly what happened in the $1.3 billion initial public offer last year by power utility Tauron Polska Energia, during which state-controlled copper miner KGHM Polska Miedz bought 5% of the shares for an equivalent of $125 million. This was followed by the bid by state-controlled utility PGE to buy shares in its peer, Energa, for an equivalent of up to $2.5 billion. Recently, the Czech Republic's EP Holding offered the highest bid for a 51% stake in Enea SA, nevertheless, they have been eliminated from the process. German energy giant RWE, pulled out of talks, claiming that the price was too high while others expressed doubts about Poland's economic future after the country's government revealed that public debt was soaring.

Though Poland's economy seems to be thriving despite itself, posting a third quarter GDP gain of 4.2%, it's hard not to see that the country is careening towards the same economic disaster much of the rest of the world experienced just a couple of years ago. The headline in the newspaper heralds the 100,000 new investors who took part in the sale of the Warsaw Stock Exchange but forget to mention that their new investments only partially compensate for the New Year's Eve government resolution to shift private pension funds to social security in a "temporary" move to give more to the ZUS social insurance board. After all, the debt threat is like a bomb, tick, tick, tick. If you happen to be in the center of Warsaw you can even check out the new Polish debt clock.

Last year wasn't pretty for Polish transportation. The tragedy of Smolensk was the low point of a miserable year. It also saw the former Deputy Transport Minister, Eugeniusz Wróbel, most likely murdered by the hand of his son, dismembered, wrapped in wallpaper and thrown into the Zalew Rybnicki reservoir. We may never know as the case has been dropped against Grzegorz W., as he has been pronounced insane at the time of the murder. Less tragically, Deputy Infrastructure Minister Juliusz Engelhardt was dismissed by Prime Minister Tusk on December 21st which was quickly followed by the firing of the president of Polish Railways (PKP), Andrzej Wach on December 30th. Of course these moves won't do anything to stem the tide of privatization as we move towards a two-tier world of haves and have-nots. The profitable parts of the rail system will be sold off to friends and supporters while the rest of the system will be left to rot; babcia Krysia and wujek Józek traveling from Pcim Dolny to Wąchock will be out in the cold while the rich will be able to travel in high speed trains by the end of 2012 (just in time to miss the Euro championships). The 400 million price tag will be born by the tax payer but the benefits will surely accrue to the few. I've had the pleasure to watch this in Spain, where the introduction of the high speed AVE trains have had the side effect of pushing the cattle onto the buses as train ticket prices are now priced out of reach.

We seem to be caught in an Orwellian dystopia where we think we can turn off the telescreens but instead are constantly being sold the illusion of choice while our options have in fact been narrowed down to one. A tsunami of information is overwhelming our ability to process it all forcing us to shrink our field of vision and destroying our ability to concentrate. Private is more efficient than public, the unions are impossible to work with - only the corporations can save us money. Fundamentalists, both religious and the free market type, are the enemy of critical thought. We have been indoctrinated to believe that the free market, capitalism as it was once known, offers us more efficient results when in fact the opposite is often the result after adding in all 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. In America, privatized Medicare Advantage costs taxpayers 17% more than government Medicare, which provides care to 80% of their seniors. Privatized Blackwater troops in the Mideast cost five times what U.S. troops cost. But Blackwater executives give campaign dollars and regular troops don’t, so what else would you expect?

Preying on our fears and manufactured desperation, the world is fast becoming a Market-State, where the public is being privatized, from the banks, energy and telecommunications to transportation and education. The rest is gifted to the global elite and the multinationals in the form of concessions from water rights to motorways. They’ll take state assets, say, roads, and lease them to a private company, which will then add tolls and recoup their investment in 10 years and pocket the profits thereafter. And part of those profits will go to the friendly politicians. Or the politicians will sell state-owned buildings and then lease them back so the private company can make the profits from the taxpayers. Monetizing every piece of our society's wealth for us to pay for, completely transforming the relationship between the citizen and State to citizen and the Market. A market absurdly composed in large part by the goods that the citizen was the owner - we are paying for structures and services that have already been paid for by us, our parents and our grandparents. The wranglers and night riders aren't jeans or talking cars but the corporate and government cattle herders driving us towards a future where we'll be choosing our firefighter and police services like our dry cleaners or take out pizza. The only escape is to muster the courage to completely change one's lifestyle and bolt from the herd which could be the flash of lightning, crackling of a stick or wolf's howl that starts the stampede. We better hurry though as we're being driven ever faster to the end of the cattle trail and I don't think we don't want to find out if ground beef tastes anything like Soylent Green.


Anonymous said...

Great site.

Saw you on CD.

Stick around, it would be great to hear your views.

Don't love the black background though.

Peace and Love

Shane said...

Thanks for stopping by jd. I'm an habitual lurker on Common Dreams, only making the occasional comment, it's a great site. Have had complaints about the white on black before, one of these days i'll do something about it, thanks for the input.

cft said...

Have had complaints about the white on black before, one of these days i'll do something about it../

Am I the only one who actually prefers white on black? Staring at a computer screen isn't easy on the eyes, and I find that all of the white backgrounds further harshes my mellow (I've really just always wanted to use that expression!).

I love it when bloggers use black backgrounds. I often tire of the black-on-white layout that is in such widespread use—particularly when reading lots of prose onscreen. As a Mac user, I increasingly find myself using the CONTROL-OPTION-COMMAND-8 key combination to invert the colors.

In any event, I admire your heterodoxy in matters of blog layout, and I will be sad to see it go if it should come to that!

Shane said...

Cool. So glad to hear feedback supporting the choice of layout - love it when I don't have to do anything - laziness promotion is a good thing. Fear not CFT, your comment has ensured that no changes are in the works.

cft said...

...laziness promotion is a good thing....

Wow. How nice it is to get what one wants simply by appealing to another person's rarefied sense of laziness. I can tell that you are a highly intelligent and cultivated individual!