There seems to be a real possibility that Thames Water, the UK’s largest water company, will be taken back into public ownership. The story behind its catastrophic privatisation is a complicated one, but included in the key words are monopoly and environment. I wondered whether Ayn Rand, who in her novels largely ignored the latter, had anything to say about it in her more directly political (or, as she would label them, ‘philosophical’) writing. It turned out that the environment and environmentalists were the subjects of one of her longest public lectures. It was delivered in Boston in 1970, lasted 57 minutes, and was followed by an hour-long question and answer session.
Like the offerings of Thames Water, it was full of bile.
It also, from the very first sentence, employed what could well be considered her favourite tactic, which was to set up an obviously absurd ‘straw man’, divorced from any reality, which could then be demolished. That is worth a blog in its own right (and is very likely to get one), but here it is her approach to the environment, in the context of the Thames Water scandal, that is being considered.
Raw sewage outflow. Photo Sky News
As her founding text, around which she based her lecture, Rand took Newsweek, January 6 1970. It was an edition that was, as she emphasised, generally favourable to the environmental movement, but in which she found plenty to criticise. In doing so she set a very high bar for the authors of articles such as those it contained, by questioning the very concept of an ecosystem. She wrote, quoting Newsweek, that
An “ecosystem” is defined as “the sum total of all the living and non-living parts that support a chain of life within a selected area.” How do the ecologists select this area? How do they determine its interrelationship with the rest of the globe, and over what period of time? No answer is given.
To which a very simple answer might be, that whole books have been written that answer those questions, and it is a rather tall order to demand they be provided within the very limited compass of a magazine article. This is, again, a ‘straw man’ argument; Rand was effectively claiming that because her selected text did not provide answers, there were answers.
However, she went on to say something truly remarkable, striking at the heart of the beliefs of those of her dedicated followers who believe that the US Constitution should be amended as on the last pages of Atlas Shrugged, with “Congress shall make no law abridging the freedom of production and trade . . .”. In this lecture Rand can be found endorsing laws that do just that. After admitting that ‘filthy rivers are not good for men’, she wrote:
………., there are laws — some of them passed in the nineteenth century — prohibiting certain kinds of pollution, such as the dumping of industrial wastes into rivers. These laws have not been enforced. It is the enforcement of such laws that those concerned with the issue may properly demand. Specific laws — forbidding specifically defined and proved harm, physical harm, to persons or property — are the only solution to problems of this kind.
The underlining is mine. Coming from Rand, this was an astonishing admission. She went on to say
…………………………………….. But industry is not the only culprit; for instance, the handling of the sewage and garbage disposal problems, which is so frequently here denounced, has been the province of the local governments.
Which brings us back to Thames Water.
It was not until 1973 that the Conservative government’s Water Act ended local responsibility for both water supply and sewage disposal, creating instead ten regional authorities based upon river basins.. Although there was some grumbling about loss of local control, and in some large councils, such as that of Birmingham, there were muted protests about the ’seizure’ by central government of assets that had been paid for locally, it was generally agreed that water supply, as a natural monopoly, was best handled in this way. It can have occurred to very few of those who supported the change, that just a years later the newly created water authorities would be sold at subsidised prices to private companies whose legal obligations were to their shareholders, not their customers. That certainly did upset the people of Birmingham. As Ann Clwyd put it in Parliament on 23 April 1986,
Birmingham city council, which invested in reservoirs in Wales during the last century and was perfectly happy to see those assets managed by a public authority—in this case the Welsh water authority—is not happy to see those assets sold to line the pockets of the Government’s friends and it is demanding compensation—either £270 million in compensation or a portion of Wales, the Elan valley? Which will the Government give to it?
The government, of course, gave it neither, and we are where we are. Institutions that were free of debt when privatised are now loaded with debt, while the infrastructure for which they are responsible is falling apart because of lack of investment. The solutions proposed by the companies are twofold. Massive increases in water charges to customers, and the further relaxation of regulations that have up to now barely been policed at all. On 15 December 2017, the BBC reported that :
The Environment Agency prosecuted Thames Water over the pollution and, in March this year, the company was fined £20m – a record for such an offence.
At Aylesbury Crown Court, Judge Francis Sheridan said there had been “inadequate investment, diabolical maintenance and poor management”.
Assessing incidents as being in the “reckless” or “borderline deliberate” category, Judge Sheridan concluded: “Knowledge of what was going on went very high indeed.”
Thames Water accepts that there was a failure of management, but denies that there was a link between the sewage pollution and high investor returns. The company points out that there have been “significant management changes” since that time
My underlining again. Compared to the billions of debt Thames Water has accrued over the years, £20m is a vanishingly tiny amount, while in the seven years that have followed this judgement , the fabled ‘management changes ‘have brought no discernible improvement. Is it possible that, despite Ayn Rand’s astonishing conversion to government regulation, in some areas it is not enough? That if something is an inevitable monopoly, and it directly affects the public as a whole, it is better that it is run publicly than privately?
Rand woluld never have admitted this, but then, it is much easier to knock over straw men than to investigate illogicalities on one’s own beliefs.