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Much Obliged

Quality-of-life services shouldn't have to turn a profit




The gas station attendant came outside. Wow, I thought, full-serve! Ignoring me, she flung a magnetic price decal on top of the price per gallon. Regular unleaded had gone up 20 cents in the time it took me to drive from the curb to the pump.

"You're kidding me," I moaned.

"It's 3 o'clock," she shrugged. "Just got the new price."

There has to be a better way, I thought. And there is.

It isn't drilling in the Alaskan wilderness.

It sure isn't John McCain's plan to offer $300 million to the first person to come up with a longer-lasting car battery.

Gas prices could hit $7 a gallon before long, but Americans take a little comfort in the fact that Europeans have paid more than that for years. But Venezuelans pay a mere 19 cents per gallon. It's 38 cents in Nigeria. Turkmenistanis might not have electoral democracy, but they only shell out $4.50 to fill a 15-gallon tank. Before we replaced Saddam Hussein with . . . whatever they have in Iraq now, Iraqis paid less than a dime for a gallon of gas.

One of the things that these countries have in common, of course, is that they're oil-producing states. Iran, Saudi Arabia, Egypt, Burma, Malaysia, Kuwait, China and South Korea are just a few of the countries that keep fuel prices low in order to stimulate economic growth.

But they also share something else: common sense. Strange as it might sound to Americans used to reading about big oil windfalls, these nations consider cheap gas more of an economic necessity than lining energy company CEOs' pockets. They don't consider energy a profit center. To the contrary, government subsidies (Venezuela spends $2 billion a year on fuel subsidies) and nationalized oil companies keep gas prices low.

Unlike corporations, governments don't care about turning a profit. They care about remaining in power. Like the rest of the world, Venezuelan consumers have been squeezed by rising prices, and even shortages, of groceries. In 2007, Venezuela's socialist-leaning government decided to do something about it. First it imposed price controls on staple items. When suppliers began to hoard supplies to drive up prices, President Hugo Chavez threatened to nationalize them. "If they remain committed to violating the interests of the people, the constitution, the laws, I'm going to take the food storage units, corner stores, supermarkets and nationalize them," he said. Food profiteers grumbled. Then they straightened up.

Not even international corporations are immune from Chavez's determination to put the needs of ordinary Venezuelans ahead of the for-profit food industry. Faced with severe shortages of milk earlier this year, Chavez threatened Nestle and Parmalat's Venezuelan operations with nationalization unless they opened the spigot. "This government needs to tighten the screws," he said in February 2008, promising to "intervene and nationalize the plants" belonging to the two transnational corporations.

Miraculously, milk is turning up on the shelves.

When it works, nothing is better at creating an endless variety of reality TV shows than free market capitalism. But when it doesn't, it isn't just that extra brand of clear dishwashing liquid that goes away. Businesses fold. Banks foreclose. People starve. And no one can stop it.

The G8 nations met in Osaka recently to try to address soaring food and energy prices, a double threat that could plunge the global economy into a ruinous depression. But the summit ended in failure. "Any hope that the G8 meeting would result in coordinated monetary action—or concerted intervention in foreign exchange markets—to counter rises, principally in commodity prices, was dispelled by their failure to agree on the phenomenon's underlying causes," reported Forbes.

The problem isn't the weak dollar or the nonexistent housing market. It's capitalism. A sane government doesn't leave essential goods and services—food, fuel, housing, healthcare, transportation, education—to the vicissitudes of "magic" markets. Nondiscretionary economic sectors should be strictly controlled by—indeed, owned by—the government.

Consider, on the one hand, snail mail and public education. The Postal Service and public schools both have their flaws. But what if they were privatized? It would cost a lot more than 42 cents to mail a letter from Tampa to Maui, and poor children wouldn't get an education.

Privatization, particularly of essential services, has always proven disastrous. From California's Enron-driven rotating blackouts to for-profit healthcare that has left 47 million Americans uninsured to predatory lenders pimping the housing bubble to Blackwater's atrocities in Iraq, market-based corporations' fiduciary obligation to maximize profits is inherently incompatible with a stable economy and a decent quality of life.

No one should pressure industries that produce things that people need in order to live to turn a quarterly profit. No one should go hungry or remain sick because some commodities trader in Zurich figured out some nifty way to take an eighth of a point arbitrage spread between the price of a hospital stock in New York and in Tokyo.

P.S. If you're reading this in Caracas, please mail me some gas.

Ted Rall is the author of 'Silk Road to Ruin: Is Central Asia the New Middle East?' an in-depth prose and graphic novel analysis of America's next big foreign policy challenge.

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