PUBLIC-PRIVATE COLLABORATION isn’t a new idea. It just got scaled up, accelerated and more creative during the plague.
Of necessity, fresh collaborations between for-profit investors and publicly-funded government agencies moved forward, together, to solve our most pressing issues. Companies fast-tracked vaccine research and the production of PPE, using public dollars; everyone pulled in the same direction to get what needed to be done quickly.
In our time of crisis, a middle way was found. Private-public collaboration delivered. So why don’t we do more of this?
Because it’s hard.
Finding a pathway through public and private requires transparent alignment on priorities, and citizen trust in those shared values.
By directing some light on the tricky spots—the murky areas where doubts & cynicism foment in these collaborations—we create the conditions for middle way options (a fuzzy business strategy) to become more publicly accepted. And more creative in a novel middle way (which we shall explain farther along in this blurt).
What holds us back from even more public-private collaboration?
Trust, or rather, a lack of trust.
Many citizens prefer that for-profit companies and public money be kept at arm’s length. While it’s fine for private companies to invest their own cash into legal business enterprise, take risks and earn profits (for instance, the “smartest guys in the room” who caught the keys last year as the major petroleum producers headed for the exits on oilsands development), citizens understandably get edgy when investors want to access public dollars to pursue corporate self interest.
Crony capitalism is the reason Canadians are frustrated with government bailouts of SNC Lavalin. We smell a self-interested rat. And in Alberta, people are whispering about what’s going on with ATCO right now. Why is one of Alberta’s homegrown, family-run, private companies being investigated by the Alberta Utilities Board (the electricity regulator)?
The regulator’s allegations are quite stark:
“ATCO Electric’s deliberate concealment and misrepresentation of its true motive for and other material information concerning the direct-award contract to Backwoods, is an unprecedented offence against the AUC, its regulatory process and the fundamental relationship of trust that must exist between the regulator and the utility.”
Electricity in Alberta is complicated—that’s an understatement (Donna had responsibility for the electricity file during her time in government)—but these are serious allegations to the effect that ATCO deliberately stole money from ratepayers and misled the regulator in the process. To suggest that this is all too complex for Albertans to understand is, frankly, offensive. It insults our intelligence, and especially at a time when ratepayers, particularly those in rural Alberta, are paying the highest delivered energy costs in North America [these same ratepayers are in the ATCO service area].
ATCO, and other regulated utility providers, occupy that tricky space where the public sector and private sector converge. Ratepayers, taxpayers and the public in general have to be confident in how these private-public interests come together. Corporate ESG commitments—no matter how ambitious—don’t mean anything in the absence of trust.
WHAT WOULD ADAM SMITH SAY?
Adam Smith—yeah, that guy. The oft-cited patron saint and apologist for Capitalism offered up some very pragmatic ideas for commerce in his 1200-page magnum opus, The Wealth of Nations (1776). But you can’t grasp the full meaning without reading his earlier book, the one he wrote when he was only 36 years old—The Theory of Moral Sentiments (1759). Read both books, or neither; that’s our advice.
We believe Adam Smith had wise things to say about butchers, bakers & brewers, but much of what he said has been torqued.
Free market thinker Milton Friedman reframed Smith’s bon mots and found a champion in the U.S. presidency of Ronald Reagan. Holding court as one might in the 1980s, Friedman, the go-to economist at the time proclaimed “the social responsibility of business is to make money,” a mission statement that turns a blind eye to Adam Smith’s over-riding concern. Namely: humans are naturally self-interested; we have to make sure we look at how we do business with a moral overlay. It’s not all about short term profits for shareholders.
Larry Fink, the CEO at BlackRock Inc., is pitching “stakeholder capitalism,” warning business leaders they will be left behind if they don’t pay attention to big threats, like climate change. Some critics are calling Fink out as a “cuddly capitalist” pushing a social agenda, and others are implying more sinister motives. All this green-washing and virtue-signalling is a way to make even more money!
For sure, the plot of capitalism needs some shoring up.
Alberta is not immune to capitalists looking for corporate welfare and mining subsidies. These protagonists risk co-opting what should be public conversations about public investment in infrastructure, and decide what is best, frequently framing their investments as benevolent legacies.
On behalf of our children and grandchildren, Albertans need to figure out better ways to have a voice in these conversations. When is it in the public interest for private investors to be protected from the downside risks of an “entrepreneurial” investment—while giving these investors all the upside?
WHY DO ALBERTANS MUTE THEMSELVES?
Wouldn’t it benefit all Albertans if these issues were openly discussed, and not buried in regulatory & legal bafflegab & political processes designed to obfuscate (good word, eh)? Why do Albertans choose to hit the kill switch and say nothing when issues of this heft are in plain sight?
We keep asking people these questions. The answers are disturbing. Sadly, intimidation tactics works: there is fear of retribution (being buried in litigation, for example); the fear of losing opportunities; the fear of being ostracized. The fear of being more afraid.
The more cynical believe no change in the culture is possible; they simply shrug their shoulders and admit defeat.
We get it; the world is in chaos:
- Our powerful neighbour, the United States, is over-extended in too many ways to mention;
- Russia is taunting NATO with troops on the Ukraine border and cybersecurity attacks and smells opportunity;
- China is reshaping “Capitalism with Chinese characteristics”; and the CCP (Chinese Communist Party) is racing to build extraordinary technology to do its bidding; here’s a hint…
- AI (artificial intelligence) has just outsmarted the best human poker players.
We need to do something, now, to shore up institutional and corporate enterprise capacities in Alberta. Kicking a clatter of cans down the road rewards the present-day mediocre and the compliant, and weakens our capacity to respond to the political, economic & cultural asteroids heading our way.
THE MIDDLE IS NOT THE MIDDLE
Plotting a middle pathway is often construed as a sign of weakness: Faking a compromise in a polarized debate; a mushy place awash in diluted values; that lowest-common-denominator strategy that won’t offend anyone.
Nothing could be farther from the truth.
It takes everything you’ve got to negotiate a middle way, a pathway forward through a fraught situation, all the while understanding and respecting the values of the many.
The middle—think of a third and unanticipated option—is what a generation ago in hockey was considered implausible. The middle way now is akin to scoring from behind the net. Or at the face-off, scoring before the puck hits the ice…
During the pandemic, we saw business and government come together, very quickly; everyone understood the shared imperative and made it work. Transforming other service delivery models in the future—for education, health care, energy, tech-training and a myriad of other needs—will arguably require hybrid models that don’t fit neatly into traditional sector buckets. There’s an enormous upside to being able to provide higher-quality products and services to more people, and with increased efficiency and resiliency. Business as usual isn’t maximizing the value of our corporate or public resources.
Stewardship is the ultimate in leadership. It requires leaders to think well beyond themselves and be in service to others and to the greater good; it’s the art of the long view—what the Chinese are adept at now—a perspective that may span beyond a lifetime and even generations. A stewardship mindset requires transparency about aims, and durable trust-building between reciprocating partners.
That’s precisely what is required in Alberta, right now. Not legacy-seeking and benevolent queens & kings or patriarchs & matriarchs, but Albertans, moving forward together toward a better future.
This column is the consensus opinion of the writers Donna Kennedy-Glans & Don Hill. If you haven’t already, please subscribe to BEYOND POLARITY — scroll down on your phone or tablet, or look to the right in the panel beside this post. Enter your email to FOLLOW, a wheel spins, hamsters get fed.