Thursday, April 28, 2005

Susan Eagle makes the case for privatization — but she doesn't know it

As usual, social activists inadvertently provide the best advertisements for privatization. From the London Free Press:

Social advocates are crying foul over the London Hydro board's refusal to accept their input into a controversial security deposit. […] "I don't know how they can decide public policy in secret," Coun. Susan Eagle said. "They need to have input from the people who are affected by this policy. That's how good public policy gets made."
The sale of a commodity is public policy? Why on earth would London Hydro want the input of social activists to set terms of doing business? Activists' field of expertise is the pilfering of peoples' money, not financially sound corporate policy.

But this is Canada, where no exchange can lawfully — either in actual law or by dint of the raised voices of the beggars' unsolicited proxies — be considered private. London Hydro, a distribution company incorporated under the Ontario Business Corporations Act and owned by the City of London, isn't about to start letting sound business principles get them on the wrong side of bad-decision-making advocates:
In its report to board of control, London Hydro appears to have backed off slightly on its requirements for a security deposit equal to two-and-a-half times a person's average monthly bill. In March, it sent notices to 6,440 customers asking them to pay security deposits equivalent to 2.5 times their average monthly bills because of spotty payment records.

Advocates for the poor appeared before the utility board to ask the commission to ease up on the new policy requiring that customers pay deposits amounting to hundreds of dollars in some cases. They said residents trying to get by on minimum-wage jobs, part-time work, welfare, inadequate pensions and low disability benefits can't afford such deposits.

The revised policy requires a deposit of twice the average monthly bill, and is more lenient in allowing for two bad cheques, instead of one, or two collection visits in the previous 12 months before a deposit is required.
In the real world, unlike London, one bad cheque should be sufficient to a rational person for tightening up the stream of credit, and a large security deposit is a reasonable safeguard for a company to avoid abuse. Stumping for people who suffer misfortune would be great if it lent itself to private charity and didn't shackle the otherwise potentially prudent decision-making hands of services that paying customers use. And too often social activists end up stumping for cheats, thieves and people who otherwise fail to live within their means.

But the potential for prudent decision-making is compromised when businesses are owned by the public and accountable as much or more to political considerations than to sound practices. If electricity was properly privatized and deregulated, for which no political party in Ontario has had the stomach, we wouldn't necessarily be spared the activists' strident calls for interference in private business, but if we were lucky we would see less of the general love affair with the confusion between commodities and human rights.