Privatization of utilities failed because the fundamental issue of having only one infrastructure was never resolved and means that however you sell it, it’s still a monopoly, just sold by a number of different sales departments.

When you use a car you have two options. You can buy one outright and fund any maintenance and repair during the lifetime of that car, or you can lease one.  The utilities are in a position where they both own outright and lease back to the people.  You would not expect to pay maintenance on a leased car.  This puts the utilities companies in an invisible moral hazard. You’re paying for something you don’t own and for which you have no choice.

Just like us, wards cannot exist in isolation.  There are  interconnections between neighbours and we need to consider how, given the property ownership of infrastructure that   we now have, how we can work with our neighbours to ensure we all get the best service, for the best price.

Fundamentally, the ward could arrange all these services given land and resources, maybe a spring or a well for water, a chemical disposal system for brown waste, and solar panels (dare I say a wind-turbine) for electricity. A ward can in Smallism, at a legal and fundamental level, be self sufficient and even cut itself off from the rest of the world.  This is not to say this is necessarily a good outcome, but may well suit remote villages with little infrastructure and farmers who are used to managing their own infrastructure.

This desire for autonomy seems to be in the heart of every Englishman, as the success of the TV show The Good Life testifies.  Of course, the concept of The Good Life would not have been possible without home ownership and the respect of property rights.

But for most of us this level of autonomy is impractical. My family home has always been a three bedroom inter-War end of terrace house like that owned by a huge number of home-owning people in the UK and it may adversely affect my neighbor's right to be left alone, for me to run my own cesspit and chemical disposal systems.

As my neighbour and I have the same needs, the sensible option is for my neighbour and I to get together and, with others in the area, find someone who can do it for us for a fee, and to agree a maintenance method. The costs of the service are divided up by whatever method we choose at the local level.  For some groups of people, in say high density populations, an equal share of the bills might make them happy, for others a per-unit system might be in place depending on local conditions and priorities and management style.

Over time successful companies will grow their networks and incentivize others to improve the service and products.

Each service should be approached separately, and services bought from one collective for one utility might not be the same collective for the purchase of another, leading to a pick-and-choose approach to services[1] that keeps competitive pressure on providers while keeping the market open to new entrants and promoting local employment.  Keeping business local helps maintain a connection with its consumers and the local environment.

Creating Collectives of wards provides leverage for volume purchase of services and allows provider businesses to expand, which again links back to local employment.

We now need to bring our ward into a modern setting and this requires providing electricity, water, gas and network infrastructures. 

 

Again let us be reminded that the fundamental difference in the ward, is that the ward ‘owns’ its own resources and therefore, once again, it is the ward that decides which providers they use and the service level appropriate for their needs.

To go back to Paul's electrical company we find he has managed the Wards electrical system well and the ward is happy with the service and price, however, the ward next door has not been so successful.  A wide range of options are available. The neighbouring ward could simply contract Paul to look after their Wards electrical needs in addition to his current workload.  Paul could then either take on additional staff, or take over whatever existing resources that ward has and thus can grow his business.  His business will grow until either his operation becomes unmanageable when he will start to lose business, or another electrician comes makes a successful bid for some of Paul's work.

The budget is agreed by the ward and, because the costs are split, the budget can allow for better quality rather than cheapest cost and be managed by standard Service Level Agreements (SLAs). Insurance can be used to protect against unexpected problems.

For example: A ward has a sewerage network that will become entirely the responsibility of the ward, likewise the interconnections of water and electricity between wards.  As it now all belongs to the ward, the incentive for maintenance and repair is directly proportional to utility and perceived value of service.

 

This compares to the current system where the people in charge of maintaining services (contractors hired by councils) have no local connection (they may not live or work in the area) and therefore have no incentive to get the work done any sooner or at any particular level of quality, in fact most often a service chosen by lowest price is provided to the dissatisfaction of all, when the job needs doing again.

Disagreements between wards will be resolved financially in terms of the costs to alter a process to disbar the offending ward from the use of services and this is made possible by the element of competition between wards.  If one ward goes rogue,(2.91 Bad Neighbour Wards and Direct Action) business and contracts can be moved to another ward offering the same service.

Given that we have a network of wards with connected sewerage, how do we ensure that every ward does their part? For this, the companies that maintain the pipes would trade waste flow between each other, lowering costs for the ward and encouraging fresh investment to improve the trading possibilities.  At the end of the session, costs are netted and the remaining balances paid, much like the telecoms industry does with trunk bandwidth.

The key to ensuring service provision and funding for the business is to package shares in the service providing companies with property contracts.  So when you buy a house, you also get shares in the local utility companies as part of the package.

In a section that will come later in the development of smallism we will discuss how local ownership of service providers by consumers instead of workers demonstrates Marx's greatest failing.


[1]  Of the style that the EU is so passionately against but would actually be quite a useful way of transitioning states far behind the standards required, but that’s a story for another time.