Capital, Accumulation, and Crisis

135 Pages·2013·1.32 MB·English

by  Michael Lang

Capital, Accumulation, and Crisis: Surveying the Neoliberal Waterscape of Municipal
Privatization in Canada

by

Michael Keith Lang
B.A., Kwantlen Polytechnic University, 2011

A Thesis Submitted in Partial Fulfillment
of the Requirements for the Degree of

MASTER OF ARTS

in the Department of Sociology

 Michael Keith Lang, 2013
University of Victoria

All rights reserved. This thesis may not be reproduced in whole or in part, by photocopy
or other means, without the permission of the author.
ii
Supervisory Committee

Capital, Accumulation, and Crisis: Surveying the Neoliberal Waterscape of Municipal
Privatization in Canada

by

Michael Keith Lang
B.A., Kwantlen Polytechnic University, 2011

Supervisory Committee

William K. Carroll, Supervisor
Department of Sociology

Peyman Vahabzadeh, Committee Member
Department of Sociology
iii
Abstract

Supervisory Committee

William K. Carroll, Supervisor
Department of Sociology

Peyman Vahabzadeh, Committee Member
Department of Sociology

While the outright privatization of water services has declined globally, it has
been replaced with public-private partnerships (P3s) in the government procurement and
delivery of water services, and increasingly at the local level. This research finds that
such initiatives are on the rise in Canada, and considering the overall record of failure
that has amounted from varied types of water privatization thus far, it seeks to analyze
this expanding waterscape from a critical perspective. More specifically, by historically
situating the privatization of Canadian municipal water in a political-economic context
that identifies its relation to contemporary (neoliberal) capitalism, this research examines
how the focused state commitment to water P3s is indicative of the processes of
neoliberalization. I argue that regulatory and budgetary changes since the economic crisis
of 2008 have formed an institutionalized policy apparatus that essentially forces needy
municipalities into long-term contracts with private firms, therefore establishing
sustained sites for capital accumulation. This thesis concludes with a discussion
concerning the implications that such a “partnership” will have for municipal autonomy,
organized labour, and the environment, particularly in light of the intensifying state focus
on international free trade.
iv
Table of Contents

Supervisory Committee
 ...........................................................................................................
 ii

Abstract
 ......................................................................................................................................
 iii

Table of Contents
 .....................................................................................................................
 iv

List of Figures
 ...........................................................................................................................
 vi

Acknowledgments
 ...................................................................................................................
 vii

Dedication
 ..............................................................................................................................
 viii

Chapter
 1:
 Introduction
 .........................................................................................................
 1

Methodology
 .......................................................................................................................................
 3

Chapter
 2:
 Political-­‐Economic
 Context
 .............................................................................
 7

Neoliberalism
 .....................................................................................................................................
 7

Neoliberalism
 as
 Ideology
 ..............................................................................................................
 8

Neoliberalization
 ............................................................................................................................
 12

Neoliberal
 Canada
 ..........................................................................................................................
 16

Capital
 Accumulation
 ....................................................................................................................
 22

Contradictions
 of
 Accumulation
 ...............................................................................................
 27

Capital
 and
 Crisis
 ............................................................................................................................
 29

Canada,
 The
 Crisis,
 and
 Austerity
 .............................................................................................
 33

Chapter
 3:
 Water
 Governance
 and
 Public-­‐Private
 Partnerships
 ..........................
 38

Introduction
 .....................................................................................................................................
 38

Section
 1:
 Water
 Governance
 .....................................................................................................
 38

Traditional
 Water
 Management
 in
 Canada
 ...........................................................................
 38

The
 Development
 of
 Neoliberal
 Waters
 .................................................................................
 39

Commercialization
 and
 Corporatization
 ................................................................................
 42

Water
 Privatization
 .......................................................................................................................
 43

The
 Global
 Effects
 of
 Water
 Privatization
 ..............................................................................
 46

Summary
 ...........................................................................................................................................
 49

Section
 2:
 Public-­‐Private
 Partnerships
 in
 Canada
 ..............................................................
 50

Why
 Not
 P3s?
 ...................................................................................................................................
 53

Not
 P3s!
 ..............................................................................................................................................
 58

P3s
 as
 Privatization
 .......................................................................................................................
 64

The
 Waterscape
 of
 Canadian
 Municipal
 P3s
 .........................................................................
 66

Summary
 ...........................................................................................................................................
 68

Chapter
 4:
 Post-­‐Crisis
 Policy
 Change
 and
 Water
 Sector
 Neoliberalization
 .......
 71

Introduction
 .....................................................................................................................................
 71

P3s
 Since
 the
 Crisis
 ........................................................................................................................
 71

The
 Neoliberalization
 of
 Municipal
 Governance
 .................................................................
 79

P3
 Policy
 and
 Municipal
 Water
 .................................................................................................
 84

Summary
 ...........................................................................................................................................
 88

Chapter
 5:
 Water
 P3s
 and
 Private
 Capital
 Accumulation
 ........................................
 89
v
Introduction
 .....................................................................................................................................
 89

Municipal
 Water
 P3s
 as
 a
 Spatial-­‐Temporal
 Fix
 ..................................................................
 89

Accumulation
 by
 Dispossession
 or
 Public-­‐Private
 Expropriation?
 ..............................
 92

The
 Implications
 of
 International
 Trade
 ...............................................................................
 94

The
 Impact
 on
 Labour
 ..................................................................................................................
 97

The
 Secondary
 Contradiction
 of
 Municipal
 Privatization
 ................................................
 98

Resistance
 to
 P3s:
 Abbotsford-­‐Mission,
 BC
 ...........................................................................
 99

Alternatives
 to
 Privatization
 ....................................................................................................
 102

Conclusions
 ....................................................................................................................................
 104

Future
 Research
 ...........................................................................................................................
 106

Bibliography
 ..................................................................................................................................
 108
vi
List of Figures

Figure 1: Degree of Private-sector Involvement in P3s
 ................................................................
 53

Figure 2: P3s in Municipal Water, Per Year
 ....................................................................................
 67

Figure
 3:
 Canadian
 Municipal
 Water
 P3s,
 2008-­‐2013
 .............................................................
 69
vii
Acknowledgments

I want to first thank the individuals working in the sociology department at UVic
for their support though this whole process. Particularly Zoe Lu, for her quick and
lighthearted feedback at many stressful moments, and my supervisor, Bill Carroll, for
taking me on while he was abroad yet still providing valuable insight and direction as this
thesis came together. I am also grateful to the cohort of 2011 and the other friends I have
made here in Victoria, who have helped to ease the uncertainty that has accompanied this
experience from the beginning.
Thank you to my old friends for the campfire debates that helped me to situate my
beliefs and learn to stand by them, and to Pam and Carl, for their love and support from
the first day their daughter brought me home. I am truly indebted to my parents and
family for their tolerance and encouragement as I drifted about in my early twenties
before the surprising return to school, and for their ongoing love throughout. Finally, I
want to thank my partner, Kim, for her relentless encouragement, her patience, and her
sacrifice in joining me in Victoria while I pursued this education. It would not have felt
right without you at my side.
viii
Dedication

This thesis is dedicated to the memory of Professor Ken Hatt (1938-2012).
Chapter 1: Introduction

Equitable and effective water management is of growing global concern, as
decisions regarding how best to meet increasing social demand intersect with political
and economic structures which govern this activity. The use of market-based governance
techniques has come to characterize contemporary water management practices in much
of the world (Anderson & Leal, 1988; Winpenny, 1994), as governments struggle to
provide these basic needs for their citizens in an increasingly austere waterscape. The
privatization of water services1 has been a common result of this challenge (Bakker,
2010); a shift that is indicative of the general escalation of neoliberalism and the
overshadowing presence it has for water resource management in particular (Furlong,
2010).
In recent years, private-sector involvement in water services has been re-packaged
in the form of public-private partnerships. P3s, as they will be referred to here, are joint
ventures in which public infrastructure and/or services is delivered by both public and
private stakeholders, with varying degrees of finance, development, ownership, and
responsibility (Loxley, 2010). In Canada, P3s are becoming the chosen method for public
infrastructure and service procurement, and are increasingly recognized by proponents as
a necessity because of funding shortfalls (Brubaker, 2011; Dupuis & Ruffilli, 2011). This
state commitment to P3s has been ill received by some due to the overall inability of P3s
to achieve their purported benefits, often resulting in higher social and economic costs
than traditional procurement (Loxley, 2010; Vining & Boardman, 2008). As this thesis
will discuss, there is a growing state focus on expanding P3s into the Canadian municipal
water sector, an activity that warrants further analysis considering the general opposition
that surrounds the increasing private-sector involvement in water services (Bakker, 2010;
Pigeon, McDonald, Hoedeman, & Kishimoto, 2012).
With the post-2008 neoliberal economic crisis as a focal point, this thesis will seek
to determine the underlying rationality for the privatization of municipal water and to

1 In this context, “water services” refers to the treatment and delivery of drinking water and the treatment
and disposal of wastewater.

2 Following Bakker (2010), governance can be understood as the “practice of coordination and decision
2

conceptualize P3s as sites of capital accumulation. Integral to the sustainability of
capitalism, accumulation requires renewed investment in order to ensure future growth
(Marx, 1990). In moments of capitalist crisis, the mechanisms through which recovery is
achieved shed light on both the resilience of capitalism (Panitch & Gindin, 2010) and its
techniques for maintaining accumulation (Harvey, 1978). So, viewed in light of the
collective failure of previous privatization initiatives to meet the water-related needs
around the world (Prasad, 2006; Budds & McGranahan, 2003; Hall & Lobina, 2012), I
aim to critically examine the expanding for-profit market of Canadian public-private
partnerships, and to explore how this increase can be recognized as an enterprise of
capital accumulation.
To these ends, this research will be guided by three research questions.
Understanding the connections between neoliberal governance, economic crisis and the
response of the Canadian state is important in determining, in general, how the increase
of P3s in Canada can be understood as a site of capital accumulation. This provides a
foundation for investigating recent neoliberal policy and budgetary changes which help to
institutionalize a supportive apparatus of what can be recognized as the incentives to
private-sector involvement in Canadian water services. We will then be in a position
to better recognize what contradictions may arise in relation to this activity, and how
these contradictions provide a lens through which to view resistance and
alternatives to P3 water privatization.
Chapter one will provide a detailed account of neoliberalism and the processes of
neoliberalization, followed by a theoretical review of capital accumulation, crisis, and
contradiction. This will support a concluding discussion concerning how the lack of
funding for social spending – arguably the main catalyst for the post-crisis increase of
P3s in Canada – is justified, as a product of neoliberal governance2 and the discourse of
austerity. In chapter two I discuss water management, detailing the shift to governance
practices that epitomize neoliberalism and facilitate accumulation, before examining

2 Following Bakker (2010), governance can be understood as the “practice of coordination and decision
making between different actors, which is invariably inflected with political culture and power” (p. 8).
While she appears to use this term in a relatively apolitical way, so to discuss water management practices
from multiple perspectives, I recognize its applicability in critically characterizing the institutional and
ideological practices that are part and parcel of neoliberalism.