A recent story published by Dan McGowan about a report by the National Resources Network included the possibility of privatizing the water system in Providence for $372 million. Furthermore, a recent report by The Real News Network emphasized how disaster capitalists, to use a phrase coined in The Shock Doctrine by Naomi Klein, would utilize the heightened awareness about lead plumbing following the disaster in Flint, Michigan to gentrify historic black and brown neighborhoods through a mandatory plumbing replacement ordinance.


Kevin Carson of the Center for a Stateless Society has been analyzing and writing on these topics recently in these articles:

He has developed a novel concept in dealing with efforts to privatize the water supply that could hypothetically be enacted here in Rhode Island.

“I’m trying to advocate for things like mutualist ownership of former government property, ownership by the consumers or by the workers [by] transforming them into stakeholder cooperatives… Water resources strike me as something that’s ideal for ownership as a public commons and administration through stakeholder cooperatives,” says Carson.

With regards to the costs of renovations to the system including the necessary plumbing replacements, “[Renovations can be financed] by shifting funding to people who impose the most costs on the system that are currently protected from paying their fair share… If you look at Flint and Detroit, for example, and the kind of stuff that’s being done by Emergency Managers, generally the big commercial [and] big corporate water users pay much lower rates. Most of the water purification costs are imposed by industrial users but spread out over the rate payers at large and now that they’re cracking down on accounts in arrears, it’s almost entirely residential water users that are being shut off while there are commercial accounts that are hundreds of thousands or millions of dollars in arrears that haven’t been shut down because politically they’re the real owners of the system.”

Would such an operation be complicated for the municipality? “It seems like a fairly straightforward thing to me to transform the representation on the board of directors and the senior management, you just make the management of the local water system responsible to the rate payers with maybe worker representation as well instead of being appointed either by the municipality or by a private corporation… I don’t see any need to purchase to the extent that the water resources themselves are a natural commons already owned by the public rightfully and to the extent that the infrastructure has already been funded by the ratepayers, I consider it legitimately their own property already.”

And how could this cooperatizing be financed? “I’m a big advocate of mutual credit systems… I’m all for larger economic organization where it’s possible to do things like upgrade water systems without paying usurious rates of interest to get it done… Under the system we have now I just say ‘let’s see how much we can do in terms of shifting the payment of rates itself in the direction of fairness and how much that boosts the revenue and, if necessary, set the rates high enough to cover the renovation costs with the people that actually impose the costs on the system, the commercial and industrial users’.”

Click the player below to listen to my full interview with Carson!

Cooperatized utilities are not uncommon in this country. In the South, there are a good number of public utilities that were introduced to the region when the New Deal brought modern plumbing, telephone, and electricity to these states. Some that still exist today, according to Wikipedia, are:

  • Electric Cooperative Association
  • Rural Electric Association
  • Rural Electric Cooperative
  • Rural Electric Cooperative Corporation (RECC)- Mainly used in Kentucky
  • Electric Membership Cooperative (EMC)- Used in many states, such as Indiana, North Carolina, Georgia, Tennessee, Alabama, etc.
  • Rural Electric Membership Corporation (REMC)
  • Electric Power Association (EPA)- Mainly used in Mississippi
  • Power Cooperative
  • Energy Cooperative

Mutual savings banks are chartered by a central or regional government that has no capital stock and is owned by members that are subscribers to a common fund. Here are several such bank networks in Europe:

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The other alternative funding source of such efforts would be your neighborhood credit union. For example, Cranston Municipal Employees Credit Union is made up of that municipality’s workers as members and PGE Credit Union, located across from the central Post Office, serves federal and state government employees. Now if there were only some organized force in Rhode Island, currently engaged in a fight against gentrification, privatization, and other neoliberal austerity measures, that would encourage its worker-members to pool their monies in one financial institute.

It would be important here, after referring to Tom Sgouros’s book Checking the Banks, to create security mechanisms to prevent this from becoming a Ponzi scheme. The union would need to be legally prevented from getting involved in Wall Street-backed retirement and investment instruments that would grow fat cat wallets by hurting members. But cooperative banks have the capacity within their charters to be hindering such activities.

The website of the Rhode Island Secretary of State features two cooperative organization forms, one for consumers and one for producers, who in these contexts would be the utility workers. If churches, mosques, synagogues, and other civic organizations were to aid in a membership drive, it would be fairly easy to get all ratepayers onto the membership rolls rather quickly.


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