“Private monopolies belong in government hands”
Last week Herman Wals defended his highly topical historical dissertation on Amsterdam’s utilities. Originally these were in private hands, but were later transferred to the government. Now we see the opposite and the municipality is back to square one, courtesy of neoliberalism.
Your dissertation “From concession to municipal operation. Utilities in Amsterdam 1878-1914” is about “utilities”. We don’t really know what those are. Please explain.
“They were utilities like (coal) gas, dune water, electricity, telephone, and the horse-drawn streetcar. They were general utilities that had to be available to anyone who wanted to pay for them. It was private entrepreneurs who operated these utilities and thus made a profit, but democracy was not necessarily served by them since there were plenty of people who could not afford them. So for them, those utilities were not accessible.”
A ride on the horse-drawn streetcar was only for the elite?
“Yes indeed. The horse-drawn streetcar came about on the initiative of well-to-do gentlemen from the Plantage neighbourhood who wanted to go to the Stock Exchange together every day because they found it entertaining. The Amsterdamsche Omnibus Maatschappij (AOM), which operated the streetcar, maintained its elitist character simply by running only beginning at nine o'clock when workers had long since left for work. The AOM also refused to build lines to working-class neighbourhoods, constructing them only to the richer neighbourhoods around the Vondelpark.”
Those utilities came into municipal (government) hands around the turn of the century. What had gone wrong?
“To begin with, a different breed of councillor came into the Municipal Council. It was mainly radical liberals who gained seats. They saw a greater role for the government in these kinds of utilities. Profiteering by private utility companies was not one of them.”
“Besides, the social democratic SDAP entered the city council in 1914 and they needed a lot of money for all kinds of social policies. By transferring utility companies to the municipality, they could use the profits of those companies for their plans.”
“There were also several issues at play that made it logical to place the utilities in municipal hands. In the summer, for example, the upper floors of homes often got little or no water. This was due to too little pressure in pipes since not enough water was being brought in from the dunes by the private Dune Water Works. By transferring the water supply to the municipality, alternative solutions could be sought, including obtaining water from the river Vecht.”
Did these problems also occur in other cities?
“In a certain sense they did, but because of the size of the city, the scale of the problem was greater in Amsterdam. The political dimension also played a greater role in Amsterdam than elsewhere, where issues revolved more around resolving practical matters.”
And then utilities were all held in municipal hands, a situation that has been completely reversed in the last thirty years.
“In that sense, we have gone back to the 19th century. Look at the supply of electricity. The Municipal Energy Company was privatized in 1994 and became the Nuon company. With that, a lot of knowledge disappeared from the civil service. But the municipality must ensure that there is sufficient street lighting and be able to control that. You can't just leave that to the market, so the municipality was forced to buy the street lighting back from Nuon for 74 million guilders.”
“Meanwhile, Nuon has been transferred to Vattenfall, a commercial company on which people depend, but if it does not supply enough electricity, the municipality is unable to do anything about it. The ‘public works’ system no longer exists, so a municipality can no longer offer a proper counterweight to the market.”
Should utilities be back in government hands?
“I think so, yes. We already see this beginning to happen, too. Climate Minister Jetten, for example, wants to bring the heating systems back into government hands. Then as a government, you have control over it. The power companies are now up in arms against this.
They don’t want that to happen, because it would cost them money since the government will regulate the price. But I think private monopolies belong in government hands.”
The Dutch title of Wals’ dissertation is called Van concessie naar gemeente-exploitatie. Nutsvoorzieningen in Amsterdam 1878–1914.
