Berlin to Athens: Do as we say, not as we do.
Berlin to Athens: Do as we say, not as we do. Anastasios71 /

The bailout agreement that Greece has been forced to accept requires the country not only to pay its debts but also to continue a program that privatizes large sections of its public works and services. A part of this program is the privatization of water utilities in the country's most populous cities, Athens and Thessaloniki.

There are several problems with the de-municipalization of these water systems. For one, the cities of Berlin and Paris tried it, didn't much like it, and have re-municipalized their water. Also, the privatization of water in Bolivia ended in complete political failure. As for Atlanta, Georgia, it gave it a shot and it predictably flopped—no savings, more dirt in the water, and so on.

But it was not so much that these programs were failures. Access to water isn't a strictly functional matter but a moral one. In fact, there is even a reasonable-sounding argument that favors privatizing water: The more expensive it is, the more care customers take in not wasting the vital resource.

Governments make water too cheap, the argument goes, and therefore the public has a weak appreciation of its true value. This might be correct in one sense, but it completely misses an important point: Why should we make water expensive for the benefit of profits, which always end up in a few hands? Why shouldn't the benefits of expensive water go to other public operations or institutions, like universities or government-funded research and development programs?

But even before we get into the arguments about efficiency or discipline, the question about water is a moral one. Is it right or wrong to make a resource that is so universal, so necessary to life, into a commodity? Most feel it is wrong, and it is this feeling that counts. It is wrong to deny someone water because no profit will be made from the transaction. But the system of the market only works if there is a return on a transaction. Therefore, there is a serious incompatibility between the morality of water and market rationality.

But here is another thing about the privatization of Greece's water: What does it have to do with its debts? Why is one concern being connected to the other? The only answer: The loan is not just about repayment of debts but about restructuring a society into a form that is consistent with the concerns and values of the market.

In the early days of the IMF's notorious Economic Structural Adjustment Programs (ESAP), these additions to loans, called conditionalities, addressed economic matters like budget deficits and current account imbalances. But then, as the South Korean-born economist Ha-Joon Chang explains in Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, there was "mission creep," and loan conditionalities began to address areas not only all over the economy but also outside of it. Their purpose, then, became less and less about growth or performance and more and more about being a weapon to weaken the power of a competing social structuring mechanism: democracy. Conditionalities override public decision-making institutions, which have other commitments and priorities.

This process happened in African country after African country in the 1980s (read the first 25 pages of Joseph Stiglitz's Globalization and its Discontents). It happened to Southeast Asian countries in the 1990s, and it has now arrived at the gates of Europe in 2015.

“It’s not any more a democracy or equality in the European Union. It’s a kind of business,” said George Argovtopoulos, the president of the Thessaloniki water company trade union.