Tuesday, 17 May 2011

The Street That Cut Everything

The BBC's The Street That Cut Everything, last night was one of the worst instances of kitsch, docu-journalism I've seen. What was it trying to say, let alone prove? Its main purpose seems to have been to try to make the old Conservative arguments about why Socialism is impossible. Not surprising, given that Nick Robinson was once Chair of the Young Conservatives. On the one hand, it seemed to be trying to make the point that workers cannot run things for themselves, as Socialists claim.
We are just a bit too thick, and don't understand all the complexities of running modern enterprises. We have to depend, the Conservative argument has always run, on Capitalists and bosses to organise things for us, and tell us what to do. Of course, Conservatives usually prefer that to be private capitalists and bosses, but where that is not the case they would still prefer State Capitalists, and bosses to be in charge than workers themselves. The second thing, it seemed to be saying, was to repeat Maggie Thatcher's claim about there being no such thing as society. It tried to make that point, by attempting to show that the natural tendency to individualism means that people will not act collectively, and when important issues surrounding the needs of individuals arise – for example, over the payment of Housing Benefit to a member of the Community who requires support – then this will cause a fracture within the group, as each individual looks to their own separate interest. But, despite all of the rigged nature of the situation the people in the street were placed in, it succeeded in proving neither of these points.

The basic idea, of the programme, was that a Street agreed to have all of its, Council provided, services taken away, for a period of six weeks. In return, the residents were provided with a refund of six weeks Council Tax, so that they could provide these services for themselves. But, this is where the first obvious objections to the programme arise. The residents received back just over £1,000. Now, I don't know how many houses' Council Tax this was supposed to represent, but it seems a very, very low level in respect of what I would expect the Council Tax for an entire street to be for six weeks. My Council Tax is £180 per month. In other words on a six week basis my Council tax comes to about a third of the Council Tax that this entire street was refunded! Put another way, even if the residents paid only half the Council Tax that I pay, then this £1,000 would amount to only about six houses, which hardly constitutes a Street. That is important, as every economist knows because of what are called Economies of Scale. That is the larger the production level, service provision etc. engaged in, the lower the marginal costs become i.e. the lower is the cost of producing another unit of production/service.

But, the second, most obvious objection to this way of proceeding is that Council Tax accounts for less than half of most Council's income used to provide those services. The rest of the income comes from Central Government, and from charges levied by the Council itself. So on that basis even the £1,000 was less than half the money that should have been returned to these residents. They should have received back the equivalent of all the Income Tax, National Insurance, VAT, Excise Duty, and on and on that Central Government collects from us, and which it then passes on to Local Government to cover the provision of those services.
But, in addition to that Council's charge us for parking to visit the shops, the charge us individual prices for using facilities such as Leisure Centres, and so on. Although, its a fact that, if you look at the accounts of say most Council run Leisure Centres, they will appear to make a loss, that is due to two main things. Firstly, many of these facilities are very old, and so require large amounts of money for repairs to be spent on them. But, secondly, because of the way Local Government Accounts are set up, each cost centre such as a Leisure Centre, has to bear the costs of the Council's overall bureaucracy, management, and administration. This is done via a series of recharges of these Central Support Costs to Departments, which is then shared out. The importance of this can be seen from the fact that, whilst most Council run Leisure Centres run at a considerable loss, over the last 10 years or so, every major town has seen a profusion of private leisure centres spread, all of which make good profits.

The fact, that the residents, even using the £1,000 figure as in any way a realistic figure for the Council Tax for a street, only got back half of what they were entitled to have been refunded, is again very significant. In order to make the point about decisions over how to spend this very limited sum leading to divisions between the residents, and to make the point that ordinary workers are incompetent to provide services themselves, compared to State Capitalist bureaucrats, a number of financial burdens were placed on the residents such as a request for several hundred pounds to cover Housing Benefit for one resident, who was also claiming for taxi fares for her daughter to attend extra-curricula activities, and a request for payment again of several hundred pounds to cover the care costs of another resident's father, who did not even live in the street!
Up to this point, the residents of the street, despite the most difficult conditions for them to have done so, had been able to fairly quickly organise themselves into a democratic decision making body, and to make arrangements to cover for themselves the services no longer provided. These financial requests went over the small amount they had to spend on such things. But, in reality had they had all of that tax, and other income back that they were entitled to, they would easily have covered these other costs, and had around £500 left over. In other words, they would have replaced the Council Services that had been taken away from them, and done so for around 75% of the previous cost.

But, even this understates the savings the residents could have made by organising things for themselves. Take the issue of the taxi fares for the girl attending music lessons. This is an instance of the consequences of economies of scale referred to earlier. There are a whole range of alternatives that a community could take in such circumstances. Firstly, a community could ensure that demand from a number of children for music lessons could be met by a music teacher coming to its school.
Secondly, even a reasonably small community could group together to buy a Community Minibus, which could provide all of its residents with Public Transport. It could also provide one or more of its unemployed or partly employed members with a job, driving the bus! And, if this community owned its own housing via a Housing Co-op, then this contribution of labour-time, could be the means by which such members of the community repay the Benefits received to cover their Rent etc.

If we take the first option, this leads into another means by which such a Community could reduce its costs, and expand the services it receives at the same time. Fifteen years ago when I became a County Councillor, I was pleased that the Council was proposing turning its schools into Community Schools, so that instead of shutting the gates at 3.30 p.m., the school would remain open to meet the Community’s needs for playing fields, use of computers and other facilities. But, of course it never happened. The only people you saw using the school facilities outside school hours were the kids who'd climbed over the fences.
But, a Community that actually owned and controlled the School would utilise it for the extremely valuable asset that it is. Every school has a Library of sorts, and a rational Community would expand it so that it could act as a Community rather than just School Library. The same goes for the Hall to be used for Meetings, lectures and so on, or just a Community Hall. This is how the schools set up by the Co-op in the 19th century operated within working class communities. Moreover, many people in the more deprived areas spend large amounts of money eating, or buying in food from the local McDonalds etc. Many more people have turned eating out into a leisure activity in itself. A Community School could use the canteen facilities needed to provide the kids with their midday meal, in order to provide the whole community with nutritious and cheap meals, at all times of the day.
Again this is what used to happen with the restaurants established by Co-op shops in the 1920's and 30's. In so doing, it would resolve another of the problems presented to the residents that of having to dispose of fridge freezers. If you had such good quality restaurant facilities in the middle of the community, it would remove the need for individual fridges/freezers because everyone could treat themselves to eating out every day rather than just on special occasions.

The other problem the street was presented with was having its street lights turned out. This highlights two things that were wrong with the underlying argument of the programme. Firstly, no community that was going to take on the job of providing for itself would do so in this way. It would plan out in advance what it actually required, what it could do itself, and what it needed to buy in. It would not decide to provide its own street lighting, and simply ask for it to be turned off, before it had made alternative arrangements. But, that applies to all the other services that were just taken away overnight. If we take the example of street lighting, then again a reasonable sized community could provide itself with efficient alternatives.
In Spain, many estates – called Urbanizations – do not have street lights, but every house or villa has external lighting that replaces it. But, even street lighting could be provided efficiently by the Community either creating its own, or buying in, from a producer co-operative, electric and heat, produced in a Combined heat and Power Station. In the 1980's, I wrote an article for “Socialist Organiser” on Energy Policy that set out how CHP could provide efficient power. A CHP station is smaller than a conventional power station, and produces both electricity and hot water for a local community. Because hot water is produced as a by-product of the electricity generation, it can effectively be provided to the community for free, and is pumped to each house via pipes to be used for central heating, and domestic hot water.
Moreover, when electricity is transmitted over the National Grid, around 30% of the electricity is lost over the wires in heat lost to the air. Because a CHP station is based close to its community, the electricity only has to travel short distances, so much less is lost in transmission. Of course, Capitalist enterprises be they private or State Capitalist, have no incentive to do that, because their main concern is to reduce their own costs, and maximise their own profits.

At one point in the programme, Nick Robinson claimed that not everything had been cut, because the Police had not been taken away. But, no Police were seen in the Street! I suppose that is typical, however. But, the Police were not there when the programme arranged for yobs to come to play car radios loud one night, nor were they there to prevent about twenty dog walkers, specifically drafted in to get their dogs to crap all over the street. But, in fact, the answer was simple. There was no need for Police, because the residents provided their own much more effective solution to the yobs. One bloke rang a couple of his mates who came round, and when they threatened to take a crow bar to the car the yobs moved on. After all, if there were no police, the yobs could hardly complain to them could they?
In fact, as the workers militias set up in Egypt have demonstrated, workers can police their own communities much better than the Police. Drug dealers, and other petty criminals, would soon be removed from these communities, if workers organised themselves to patrol and police themselves, suitably tooled up with baseball bats where necessary. And where that is not sufficient, then a workers militia under democratic neighbourhood control could do the job, by bringing to bear superior firepower to that of the criminal gangs.

It is true that under the pressure that the Community was placed under, because of the rigged way the experiment had been set up, friction arose between some of the residents. But hold on, frictions sometimes arise even amongst members of a family. The fact, is that the friction was quite minor, and at the end of the day, if people do not wish to remain in a particular community, they are free to leave. In fact, I thought the way the people, having been thrown in at the deep end, responded, by helping each other out, and organising themselves into a democratic, legislative and executive body was extremely hopeful for the establishment of such Collectivist, Co-operative bodies in the future, which will form the basis of Socialism.

But, this is the final part of what I think are the more obvious criticisms of the experiment. If it was supposed to be some kind of comment on the Tories idea of the Big Society, based on volunteering, then it might have some validity. But, a community can organise itself without a reliance on State Capitalism, and without having to rely on volunteering too. The simple answer to the Tory argument against Socialism that workers cannot run things themselves, is that in reality it already IS workers who are running these companies, and providing all the goods ans services we require.
The Capitalists in the main sit back, and just draw their profits from the workers efforts. Where higher managements – often hugely, excessively paid, to tie them to the Capitalists – do play any kind of active role, it is usually only to receive reports, and make decisions upon those reports, drawn up by lower tiers of management, down to levels of managers who are themselves essentially workers. A Co-operative Community could simply commission all of the services it currently receives from a Monopolistic local State Capitalist, from producer Co-operatives set up by the workers who now currently already provide those services. It is likely that such a Workers Co-operative, providing say a Refuse Collection Service, would not waste money on things such as spending £30,000 on Consultants to advise on a change of Council logo, which the Council in Preston had done.

I don't know if the people in the Street did only get the £1,000 back for their Council tax, or if they were recompensed in other ways for taking part. If not, I would be asking the BBC to refund the rest of the money that was owed for the services they had previously paid for out of their other taxes and duties.


Boffy said...

I've just read the Guardian's comments on the programme, and was amazed to find the following, but it does rather confirm what I said above. They write,

"However much people might talk up their community credentials, when given the financial choice most are only really happy to pay for the services they believe they benefit from directly and not for those they might one day need or are required by the more vulnerable. So a civilised society depends on a state which removes that choice, as otherwise everyone would be at each other's throat."

In other words Socialism is impossible, because workers could not possibly discuss such issues rationally, and come to a reasonable, and progressive conclusion. But, in fact what the Guardian's argument amounts to here is even worse, because in essence what it is an argumen for is the establishment of some kind of benevolent Dictatorship, that could take these decisions that we are supposedly incapable of oursleves without being at each other's throats.

Wasn't that one of the arguments that some misguided people originally put forward in favour of the regime of Il Deuce?

Simon said...

Boffy, as I understand it the £1000 was for two weeks, which works out about right. Of course you're right about central government grant money and money derived from central fee-charging services.

Boffy said...

I'd have to check again to see whether I misheard the thing about the £1,000. I'd have to say that even were that right, £3,000 seems a bit low to me for an entire street. At average Band C that would still be only about 20 houses. My point about economies of scale clearly still apllies, along with the point you restate about Central Govt. Grant etc.

I notice other people elsewhere have made the point that these people along with all other wqorkers in the area would over many years have paid into the accumulation of the Capital owned by the local State, such as the purchase of buildings and equipment, and that is only amortised over a long period. They should then have received back an amount equal to their contribution towards the Councils Capital Accumulation - Capital they could now no longer use.