Reclaiming the Australian Commons

In 1990, while finishing off my economics degree at the University of NSW, I wandered to Randwick for a bite to eat with some friends. I was learning a great deal about economics at the time, and I was convinced that what I was learning would make not just myself but Australia wealthy; ensuring Australia's international competitiveness at a point when national economies were becoming increasingly interconnected.

Some of the ‘economic wisdom' of that era has tarnished with time. To begin with, we studied the Bond Corporation as an example of a successful organisation that would remain competitive because it was highly leveraged. My economics lecturer convinced us that this extremely indebted corporation would be disciplined in its dealings to ensure that it maintained shareholder value.

Illustration by Bill Leak

Thanks to Bill Leak

The most memorable ‘theory of study' was the issue of government provided services and the ‘crowding out effect'. It was argued that governments were large, inefficient and unresponsive bureaucracies that wasted money and were managed by ‘public servants' who did not care about their ‘clients'. Even worse, by providing services in place of the private sector, such as banking and telecommunications, they ‘crowded out' private investment and stifled innovation.

In 1990 the Hawke-Keating government was in a privatising frenzy. One of the key policies in their platform was the privatisation of the Commonwealth Bank of Australia (CBA).

I never really considered what all this meant until that day in Randwick, when I looked at the derelict shopfront that had replaced the old CBA branch. I stood in front of the building reflecting on some graffiti which read ‘Are you still in love with privatisation?'

Who owns the common wealth — not just the CBA?

There is a lot more to privatisation than simply the CBA, but it does provide us with an important starting point for considering who owns Australia's common wealth.

While for many the CBA is just a bank, its history is much greater. The CBA was an organisation built by generations of Australians through various governments. It ensured that certain communities had access to banking services even when the ‘return on investment' was below the market rate. As a community, we cross-subsidised branches, because in the long term we all benefited by knowing that all sections of Australia had access to financial services.

While the CBA was a public institution, the government did not own it. The CBA, like other assets of the Commonwealth, was owned by past, present and even future generations. Assets like the CBA were part of our common inheritance – held in trust by current generations on behalf of past Australians, for the benefit of future generations. The process of ‘nation building' is in fact another word for the wise stewardship of public assets to ensure that this inheritance grows over time.

Of course there may always come a time when the best way to grow this inheritance is to let go of some assets and invest in others, and sometimes there are better options than direct government ownership for ensuring that ownership of ‘public goods' is vested in the community.

But the sale of common assets like the CBA, Telstra, the NSW GIO or even Qantas, with no attempt to add to the inheritance in other ways, is inevitably an act of political hubris. It assumes that the short-term wish list of the government of the day is more important than building wealth over the long term. Governments in love with privatisation are like children who inherit their parents' belongings, hock them off to the local pawn shop, and then go down the pub to drink the proceeds.

The commons and the commonwealth

This leads us to a central issue that is coming to dominate the Australia's contemporary political landscape, who shall control the commons? The ‘commons' refers to those resources that the Australians ‘collectively own', but which are increasingly being enclosed through privatisation.

The commons comprise a wide range of both tangible and intangible assets. Tangible commons include natural resources on public lands, as well as the broadcast airwaves, public facilities as parks, stadiums, and civic institutions, public assets like the CBA or Snowy Mountains Hydro, roads and transport systems, social services like Medibank, public utilities like electricity, and even public space.

Intangible assets include the ‘democratic commons' such as public education that promotes knowledge, civic duty and critical thinking, or the non-government organisations, media and public institutions who guard against the abuse of power by either public or private organisations or individuals.

A third broad category is what I describe as the ‘social commons'. These are the social aspects of our community to which participants freely contribute time, knowledge and energy. Think here of volunteer fire fighters, life guards, volunteers at organisations like Greenpeace, Mission-beat and Aid/watch, blood donors, those working in community gardens as well as those working with refugees and other vulnerable sections of our society. This is a commons of shared trust and hope, and while no money exchanges hands, this kind of commons is both economically valuable and essential to a functioning community.

The tragedy of enclosure

According to David Bollier, the process of transforming commons into resources to be privatised, traded and used to maximise profits can accurately be described as ‘enclosure' because it resembles the private commandeering of once collectively owned resources which took place in eighteenth century England with the enclosure of the land commons.

The modern-day enclosure of the commons is worrying for a number of reasons.

The enclosure of the assets that make up the ‘tangible commons' dramatically changes who benefits from these assets. Rather than the benefits being shared by all of us — both the wealthy and not so wealthy — privatisation disproportionately benefits those who can afford to ‘buy in'. Common wealth for all is replaced with ‘private wealth' for the few.

Paradoxically, the enclosure of the natural commons promotes resource abuse at one end by disregarding scarcity (e.g. water, soil, and forests), while also promoting artificial scarcity at the other end (e.g. by patenting rice strains bred over generations).

The enclosure of the ‘democratic commons' creates a democratic deficit, particularly in education. Rather than education — be it primary, secondary or tertiary — being seen as promoting civic duty, it is now something that merely prepares students for the workforce. For universities, the ongoing push to implement fees, remove campus services through ‘voluntary' student unionism, and add restrictions on ‘additional' subjects for students' means that they have little time to become citizens and simply focus on graduating and getting a job to pay back the debt.

All types of enclosure can threaten the way our community functions. Communities rely on more than economic exchange, but many intangible acts of reciprocity. From donating blood to volunteering, these are based on a belief that a ‘better society is possible'.

If all aspects of life are to be enclosed, sold off and traded, then this hope for a better world will have nowhere to go. The broad river of our social aspirations will be diverted into the narrow channel of individual material aspirations. Any gain experienced by the Australian community will peripheral to our goals.

Reclaiming the commons

The line then, between a functioning community and a group of individuals merely chasing the next unique investment opportunity, is very fine indeed. And only through working together can we ensure that we do not just become economic units instead of citizens.

The only way to do this is to begin to protect, reclaim and establish new commons. This does not mean that there is no place for the market. However, as a community, we need to draw a line in the sand between what should be governed by the market and what should be considered beyond the market.

It may seem strange to describe a bank as a commons, but it is important to place banking services within the broader perspective of the communities they serve. When a bank closes its branches, the local community must go elsewhere to deposit funds, discuss loans and manage their finances. This has implications for the interactions of the local community, be it financial or social, as people begin to travel elsewhere to do this. Nowhere is this more important that in rural towns, but urban communities are also affected.

According to the Reserve Bank of Australia, over three thousand communities have been affected in this way since banks began to close branches between 1990 and 2005. This is a 40 percent reduction of branches down from almost 7,000 in 1990. According to a speech delivered by Tanya Plibersek in 2004, when a branch closes the local community can lose some 40 percent of its retail trade.

And such figures do not include the intangible loss of confidence that a community feels when a bank turns around and states, ‘sorry, you are not profitable enough for us'.

This is the very reason why the CBA no longer has any real social objectives, but exists solely to achieve shareholder value.

Some positive responses have emerged with the increasing popularity of community banking such as Bendigo Bank as well as non-banking institutions including credit unions and the revival of ‘friendly societies'. Bendigo Bank's community-owned branches now exceed the company-owned branches 165 to 153. When institutional commons are abandoned by governments, communities will often move in to fill the gap, and their resourcefulness in the face of policy neglect should be celebrated. But it must be remembered that there are limits to the capacity of isolated communities to step in to fill the shoes of governments. Roads, public transport, hospital systems, and universities — these are all beyond the reach of even the most active community.

The role of government then, is to uphold that ‘line in the sand' which the community draws between commodities and commons. As the custodians of our common inheritance, governments have a responsibility to maintain and grow the assets which they hold in trust for current and future generations. At the very least, if governments choose to ignore or neglect the commons, they should create policies to enable the community to reclaim and establish our own.

The time to reclaim the commons is now, for as the reaction to the selling off of the Snowy Hydro demonstrates, we are no longer in love with privatisation.

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