Difference between revisions of "Plat du jour"

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(Created page with "Dear Ms Plibersek, Mr Turnbull <br><br> I am addressing this letter to you rather than the leaders of your respective parties because I do not have any confidence in Messrs Ab...")
 
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Dear Ms Plibersek, Mr Turnbull
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'''Re: Mobile telephony vs rural water supply'''
 
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I am addressing this letter to you rather than the leaders of your respective parties because I do not have any confidence in Messrs Abbott or Shorten as leaders of a western, liberal democracy. Of course, by writing directly to you, I do not mean to question your loyalty to them. My impression is only that my concerns and views are an anathema to Mr Abbott, and given they may not be supported by recent polling data from marginal seats, will not interest Mr Shorten. I share very few of Mr Abbott’s values, and Mr Shorten seems to have very few values to share.
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If you want to look at a natural experiment, why don’t you check out Anambra State in Nigeria, where there are no public water services of any kind (last time I checked).
 
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My concern is that the Government is attempting to dismantle the fundamental institutions that our democracy is based on. Specifically, I am concerned that
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Water services are provided by borehole and tanker, by entrepreneurs / private operators, often under contract with town councils. The private sector does not appear to be interested in laying piped networks, although it is clearly a more efficient way of delivering water than by tanker. Why do you think this is the case?
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* Our Prime Minister can suggest that the Government should achieve its aims “by hook or by crook”, when discussing allegations that civil servants and defence personnel <i>broke our own laws</i>
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* Our Government can attempt to pass laws which allow a Minister to simultaneously act as prosecution, defence, judge and jury for crimes that Australian citizens are accused of overseas
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* That our Prime Minister – the Prime Minister of Westminster-style, liberal, parliamentary democracy – can actually say (and presumably think) that the “problem” with prosecuting <i>alleged</i> criminals in the judicial system is that “they might get off”
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* That our Government passes laws to stop Australian citizens discussing with other Australian citizens what is done with our taxes, and more seriously, to jail Australians who disclose breaches of the law committed by our Government.
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* That our Government thinks it needs to cover our ears when some crackpot speaks out against Western values on the ABC, but simultaneously seeks to establish the right to publically vilify and humiliate people on the basis of race. The consistent principle here is not free speech, or western values; it’s agreeing with the Government’s views.
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Of course, you know the context of these developments: Boat people, foreign fighters, detention centres and racial discrimination. There is one common thread: <b>the threat from out-groups</b>.
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Imagine a different context. Mr Turnbull, imagine what your political opponents could do with these laws. Imagine that instead of enforcing these laws, you were subject to them.
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I’d propose some things which are striking about this “natural experiment” in rural (and urban) water provision
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1. It’s low capex / low fixed cost, high opex / high variable cost<br>
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2. What capex there is can be moved (apart from the borehole casing). Pumps, gensets and trucks are all mobile assets.<br>
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3. It’s a profitable business which attracts investment and makes full cost recovery (plus profits)<br>
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4. It’s competitive and delivers a good service for customers (who all have the number of a tanker driver)<br>
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5. It’s economically inefficient and has few economies of scale, customers all need water tanks etc.<br>
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Here is an idea:
 
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Imagine what gagging laws and politically run television do to transparency and disclosure. What a political discourse controlled by the ruling party means. What acceptance of public racial vilification and humiliation means for a multi-ethnic society – imagine that it was you, or if that is too hard - your children, who were being racially vilified. Imagine how ordinary people will behave when they see that their leaders – their government – holds both the law and the judiciary in contempt.
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Mobile telephony has high capex / fixed costs, but note that assets are mobile. You can actually disassemble and move towers (albeit at a cost). The expensive (I assume) parts of the kit (generators, transmitters, etc) are also mobile.
 
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“By hook or by crook”, and pretty soon our democracy becomes hooked on crooks.
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Perhaps the inhibiting factor in piped water supply is the pipe? The device which offers considerable economies of scale and productivity gains also massively increases the risk for the operator, because her “capital” is buried and uneconomical to remove (and liquidate). So piped water supplies are very vulnerable to expropriation / political predation.
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Because of this, private investors simply don’t build them, despite the high returns to scale.  
 
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Both of you know this, of course. However perhaps you imagine that there is no political mileage to be made in fighting the liberal case?
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Another potential reason is that mobile assets offer better security for financing. However I can’t imagine many formal financing institutions are involved with these suppliers, and informal finance could probably be mobilised for pipes if there were demand for it. I suspect supply of finance / security is not the problem here.
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Pitting the in-group against out-groups clearly offers political rewards. But what about the costs? Are you working towards the sort of society you want to live in? Or are you simply fighting for power, at the price of slowly undermining the unique legitimacy that a liberal democracy has?
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Our values and institutions are the only thing we really have. They are collective myths – there is no such thing as a human right (just ask George Brandis – he doesn’t believe in them either). It’s something we made up. But it’s a great and powerful idea. All of our wealth and our time to devote to our families, interests, passions, all of these life-enriching things, we owe to our invention of the concept of an individual endowed with certain rights.
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Of course, public investors can (and do) build piped networks – but public institutions suffer from principal-agent and patronage problems which (usually) defeat them.
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Saying that we should “focus on service quality” misses the point that these institutions cannot focus on service because they do not employ people based on their ability to deliver services, they employ people based on who they are (patronage). They do not attempt to resolve principal-agent problems because service delivery is not their raison d’être – patronage is.
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Everyone in the sector knows this – but because it’s not something that outsiders can fix we like to focus on (i.e. invent) “problems” we can fix. This keeps us employed, after all (speaking of principal-agent problems…).  
 
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Over the past two thousand years, we have slowly built up an array of institutions and values based on the novel, and absurd, idea that individuals are worth something. That we are not the property of our rulers, our elders, our families, parents or husbands, as we once used to be. A liberal democracy backs <i>individuals</i> against the natural groups that lay claim to them. By the same measure, a liberal democracy starts to talk in terms of groups at its peril.
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I don’t think this is about the weight of water, capacity, training, lack of finance, logistics, supply chains etc. None of those things stop coca cola (or mobile telephony), or the many profitable water operators of Anambra State and elsewhere.
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We are all, of course, members of groups by default – our families, clans, ethnicities, religious affiliations. These institutions all pre-date the modern state, and are ever-present rivals to it.
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Our ability to live together, in a modern state, in peace, depends on this concept called the individual. You don’t need to travel very far outside of the West to get a glimpse of what life is like without our weird ideas about individuals. Lots of aspects of illiberal societies are wonderful, and fuel a sense of nostalgia among people like Mr Abbott. But there is a reason westerners have spent the last 800 years fighting for the idea of the individual, why the industrial revolution happened in the West, and why refugees come to the West instead of leave it. It’s not because the concept of the individual is some sort of moral decadence or weakness. Quite the opposite: it’s our only asset.
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It’s about a public institution (government or a CBO) actually being able to deliver a service itself, or allowing a private operator to invest in pipes without the threat of expropriation (what you refer to as an “enabling environment”). Neither of these problems – which would allow effective public or private provision – can be solved by outsiders.
 
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When you embark on a political strategy that is based on groups, and in seeing people above all as members of a group, you start to unravel the myth. You start tugging at the curtain, like Toto did.
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So, given we can’t seem to leave this problem alone, what could we do to help?
 
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As you know, some Western countries have renounced liberalism in the past. Instead of receiving refugees, we manufactured them in their tens of millions.
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Have you (or has anyone for that matter) ever tried funding the risky part of the investment (the pipes) for existing private water suppliers? Just pay for some pipes for an existing borehole guy (in South East Nigeria, say) and see what happens. It might be that repairing / replacing the pipes doesn’t happen because of the long payback time / risk of expropriation.  
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So… when I am arguing for the right of the would-be dual national terrorist or ISIS psychopath to a trial, or for a crackpot to speak on the ABC, or for transparency and access to information about how we treat the individuals who seek refuge here, I am arguing not in favour of any of these “groups” as the Government would have it. I am arguing that we should not renounce those liberal ideas that are our only real assets. When I am arguing that we keep Clause 18C of the racial discrimination act, it is because humiliating and vilifying on the basis of racial groups denies the existence of individuals and blinds us to them.
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But then we would at least know what we are up against – a question of property rights and political predation. Community work could then be focused on defending property rights rather than (say) workshops on O&M or book-keeping. There are millions of small businesses with electro-mechanical assets in Africa that run perfectly well without ever having attended an O&M or book-keeping workshop… To give one example, a miller I met in Nigeria explained his O&M (and return on investment) cost model: “One third of revenues for the machine, one third for the owner, and one third for me”.
 
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Liberal ideas are constantly under siege from pre modern-state institutions, and their respective moralities. Of course we can renounce them – and as elected officials you will always be under pressure to renounce them for some chimera of security or wealth. I know that <i>you</i> know it’s a terrible idea.
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It doesn’t really need to be more complicated than that, and so I don’t think “capacity” is the problem here, but “capacity” is what we outsiders bring and so we are keen to make it the problem.
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Please take the time to say so. Please remind people that we’ll never get anything in exchange for our liberal values except misery. Our way of life depends on our liberal values. When your voters understand this, they will understand that we can’t give one up to protect the other. They are the same thing.
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Revision as of 08:26, 13 October 2016

Re: Mobile telephony vs rural water supply

If you want to look at a natural experiment, why don’t you check out Anambra State in Nigeria, where there are no public water services of any kind (last time I checked).

Water services are provided by borehole and tanker, by entrepreneurs / private operators, often under contract with town councils. The private sector does not appear to be interested in laying piped networks, although it is clearly a more efficient way of delivering water than by tanker. Why do you think this is the case?

I’d propose some things which are striking about this “natural experiment” in rural (and urban) water provision

1. It’s low capex / low fixed cost, high opex / high variable cost
2. What capex there is can be moved (apart from the borehole casing). Pumps, gensets and trucks are all mobile assets.
3. It’s a profitable business which attracts investment and makes full cost recovery (plus profits)
4. It’s competitive and delivers a good service for customers (who all have the number of a tanker driver)
5. It’s economically inefficient and has few economies of scale, customers all need water tanks etc.

Here is an idea:

Mobile telephony has high capex / fixed costs, but note that assets are mobile. You can actually disassemble and move towers (albeit at a cost). The expensive (I assume) parts of the kit (generators, transmitters, etc) are also mobile.

Perhaps the inhibiting factor in piped water supply is the pipe? The device which offers considerable economies of scale and productivity gains also massively increases the risk for the operator, because her “capital” is buried and uneconomical to remove (and liquidate). So piped water supplies are very vulnerable to expropriation / political predation. Because of this, private investors simply don’t build them, despite the high returns to scale.

Another potential reason is that mobile assets offer better security for financing. However I can’t imagine many formal financing institutions are involved with these suppliers, and informal finance could probably be mobilised for pipes if there were demand for it. I suspect supply of finance / security is not the problem here.

Of course, public investors can (and do) build piped networks – but public institutions suffer from principal-agent and patronage problems which (usually) defeat them. Saying that we should “focus on service quality” misses the point that these institutions cannot focus on service because they do not employ people based on their ability to deliver services, they employ people based on who they are (patronage). They do not attempt to resolve principal-agent problems because service delivery is not their raison d’être – patronage is. Everyone in the sector knows this – but because it’s not something that outsiders can fix we like to focus on (i.e. invent) “problems” we can fix. This keeps us employed, after all (speaking of principal-agent problems…).

I don’t think this is about the weight of water, capacity, training, lack of finance, logistics, supply chains etc. None of those things stop coca cola (or mobile telephony), or the many profitable water operators of Anambra State and elsewhere.

It’s about a public institution (government or a CBO) actually being able to deliver a service itself, or allowing a private operator to invest in pipes without the threat of expropriation (what you refer to as an “enabling environment”). Neither of these problems – which would allow effective public or private provision – can be solved by outsiders.

So, given we can’t seem to leave this problem alone, what could we do to help?

Have you (or has anyone for that matter) ever tried funding the risky part of the investment (the pipes) for existing private water suppliers? Just pay for some pipes for an existing borehole guy (in South East Nigeria, say) and see what happens. It might be that repairing / replacing the pipes doesn’t happen because of the long payback time / risk of expropriation. But then we would at least know what we are up against – a question of property rights and political predation. Community work could then be focused on defending property rights rather than (say) workshops on O&M or book-keeping. There are millions of small businesses with electro-mechanical assets in Africa that run perfectly well without ever having attended an O&M or book-keeping workshop… To give one example, a miller I met in Nigeria explained his O&M (and return on investment) cost model: “One third of revenues for the machine, one third for the owner, and one third for me”.

It doesn’t really need to be more complicated than that, and so I don’t think “capacity” is the problem here, but “capacity” is what we outsiders bring and so we are keen to make it the problem.

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