Recently, RTE aired ‘Ireland’s Great Wealth Divide’. Though there were some problems with the analysis (ignoring the wealth of data published by the CSO, the confusing conflation of income and wealth, the unsubstantiated assumption that Ireland was ‘good’ at wealth generation) and the prescriptions (there wasn’t any) it at least gave an airing to a subject that doesn’t get much airing: inequality.
A major gap in the programme, however, was a failure to acknowledge one of the biggest wealth divides – that between public and private wealth. First, let’s define wealth. It is the value of all assets, whether those assets are held by households, businesses or states. It can comprise physical assets such as buildings, land, machinery; liquid assets such as cash; and intangible assets – assets are not physical and are hard to value (e.g. a brand’s goodwill). It is on the basis of this wealth that we generate income.
Private wealth is owned privately – by individuals or businesses. Wealth indexes – like the Credit Suisse report featured in the RTE programme – measure the wealth that is held by households. Public wealth, on the other hand, is held by a public agency: Government Departments, public agencies, local authorities and commercial enterprises. These, too, generate income, create economic and business activity and are used for individual and social need (e.g. a local authority house).
The amount of public capital is vast and under-appreciated. Let’s run through a list that is far from exhaustive:
- Commercial, residential and heritage buildings – in use and derelict
- Hospitals, schools, prisons, clinics, galleries, museums, libraries
- Waterways – rivers, lake, canals, on-shore and off-shore
- Roads, bridges, rails, airports, docks and seaports
- Assets of commercial public enterprises
- Financial assets: Strategic Investment Bank, cash balances, Central Bank, retail banks
This is a vast portfolio of assets that generate income, business activity and living standards. Much of it difficult to value - how do you measure, in Euros and cents, Lough Ray or the off-shore seas (though this can be done if the property can be privatised; anyone want to buy the Shannon?).
How did this wealth come into being? Apart from natural resources, these came about because of investment. Public decisions in the past to invest in infrastructure, businesses, public services and capital assets form the basis of our public wealth today.
In fact, there is so much public wealth around us that sometimes we take it for granted without understanding how absolutely important it is – and what role it can play in future wealth and income generation for all of our benefit.
- Dublin City Council owns a considerable amount of under-used land – either empty or with derelict buildings; this at a time of major housing shortages. An exhaustive audit of all under-used land in the greater Dublin area owned by public agencies – local authorities, OPW, CIE, other agencies –might find vast spaces to launch a major non-profit housing drive.
- In the 1940s the ESB launched the rural electrification programme, or the Quiet Revolution, rolling out electricity to towns and villages throughout the country. This resulted in publicly-owned electricity grid being built – that is, public wealth. Now the ESB, in partnership with Vodafone, is wrapping fibre around those same electricity lines to bring 1 GB broadband to those same areas. The public wealth of the grid built in the 1940s to modernise local economies is being used again to modernise our digital technology.
- What a boon to a business to have the branch structure of our local library system – 359 branches along with 18 mobile libraries. This is a vast wealth holding; other countries are examining how to upgrade, modernise and re-think the way that library systems can be used in our modern information and communication age.
- A first step in a progressive strategy to boost the indigenous sector would be to call together public enterprises to plan out ways to expand current business activity and launch new ones – on their own, with each other and with private sector companies. This would use the public wealth in these companies to generate income and employment – which, in turn, creates new pools of wealth.
Even something as every-day as a residential road; we drive or walk down it as part of transportation flow. However, some residents close off the road once a year or more to hold street festivals and massive lunches; this creates and reinforces local social networks (a part of social capital, or wealth, which would need another blog or two to explore). But it can go further – there is innovative work being done with solar pavements and bikeways to generate energy for local public lighting or signs; street surfaces that generate their own lighting; automatic snow-melting and real-time information hubs on traffic and conditions (this can also come from street lights).
There are a number of inventive ways to use our public wealth – even in places which are considered dead space such as motorway underpasses that are being used for parks, swimming areas, business centres, etc.
Public wealth can also function as a means of inequality-reduction and redistribution. Take two households where one owns a car and the other doesn’t. The former is ‘wealthier’ than the latter – all things being equal. However, if there is a good public transport system – buses, roads, tracks, trains – the non-car household will have the same mobility at a reduced cost.
Here’s a personal example. One day walking from the North Inner City into O’Connell Street – a walk of 20 minutes – I noted all the assets owned by public agencies:
- Road, pavement, street lighting, electricity wires and pole, bridge, traffic lights
- Canal, rail tracks, and a CIE depot
- Three major derelict local authority areas (empty space and two derelict buildings)
- Substantial social housing estates – some units void
- A school, library, derelict IDA business centre, and a VEC college and training building
- Two public parks and a recreation centre
And that's a 20 minute walk. These are all public-owned, part of public wealth and are only there because of past investment. In other words, this belongs to us. How do we make people aware of this democratic ownership as a first step to creating more popular participation in the use of this wealth?
In the first instance, civil society groups in the local area – whether that is a city, town, suburb, estate, village, rural area – could conduct an audit, compiling a people’s catalogue of assets that are publicly-owned. This would engage people in the process of cataloguing our public wealth, bringing them into contact with the entire range of public agencies in the area, establishing ownership of land, buildings, commercial equity, etc.
This would be the first step in creating a process of engaging people’s own ideas over the best way to maximise the benefits of those assets. New housing? A community garden? A social/leisure centre? A small business park or training centres? Refurbishment and regeneration? This would begin to popularise the concept of public wealth. People could come to the issue with their own experiences which could be supplemented by research into how communities throughout the world are using their public wealth (and with the internet we can find out what’s they’re getting up to in Andong, South Korea). A step further would be to link with academics and researchers who focus on smart cities and smart infrastructure.
There is a world of ideas out there. There is vast store of public wealth here. To bring them together in dynamic democratic layers (communities, workers, planning, experimentation) is something that would cost little initially but could be an incubator for new ideas about living, working and wealth creation (investment) for the future.
After all – and to paraphrase the great Wood Guthrie - this public wealth is your wealth, this public wealth is my wealth.
NOTE: Image above by Rand Carlson of the Citizens Artist Collective