From the Neoliberal Project to Bottled Water

This section locates this thesis as the second part of an investigation looking at the rise of the bottled water industry and the bottled water paradigm (Greene, 2018) in Mexico.

This section then discusses the bottled water industry as a hegemonic project that forms part of the broader need of capitalism to traverse limits and expand into previously decommodified spaces. This is followed by a discussion of the industry’s rate of growth and the need to understand this as a rapidly unfolding global reality. Section 1.2.3.

introduces its iteration in Mexico.

In previous work, carried out from 2013-14, for the completion of a master’s degree in Global Policy Studies (Greene, 2014; and subsequently published as Greene, 2018), I examined the rise of the bottled water industry in Mexico. This work revealed the industry as part of a hegemonic project currently being carried out by a handful of transnational corporations.

The intentions of these corporations have not been hidden. Gleick documents how bottled water companies have declared war against public tap systems and gives numerous examples of the discourse reflecting as much. Particularly suggestive are direct quotes from industry leaders. Pepsi Co. Chairman Robert Morrison once stated [as quoted by Gleick (2010, p.

11)]: “The biggest enemy is tap water. We’re not against tap water – we think it just has a place. We think it’s good for irrigation and cooking.” Morrison concludes, if there is really a war between tap and bottled water, based on the industry’s growth, “the bottled water companies have been winning.”

Elmore (2012) reminds us corporations have long used the strong arm of the government for their own ends. In the piecing together the history of Coca-Cola’s rise on the international scene he shows how they became primary proponents for government investment in standardized water treatment. They then ensured their ability to expand in these new markets, locating their bottling plants next to the municipal water treatment facilities.

“Revisionist historians interested in challenging the myth of corporate autogenesis have largely overlooked municipal public waterworks expansion in the Progressive Era as a critical state intervention that reduced supply-side costs for mass-marketing firms” (2012, p. 12). Instead, Elmore’s history tells us that in the first half of the 20th Century Coca-Cola was married to US national and international development policies, steering public resources to the development of public water supplies, first in the United States and then in Mexico, which then allowed them to “externalize expenses related to hydrological resource extraction and transport” (Elmore, 2012, p. 26). The logic changed throughout the 20th C.

Whereas in 1932, executives argued that “any water which is pure enough from a sanitary point of view to be used by cities and communities is pure enough for the beverage industry,”

(2012, p. 42), by the middle of the century they were seeing the “deteriorating quality of municipal water supplies and increasing awareness of environmental problems would be forcing factors in the future growth of the bottled water business” (2012, p. 50-1). The company had moved full circle, from promoting public water supplies as a way to lower their business costs to planning how to capitalize on the economic crisis of a lack of investments in public water systems. Even in 1971, Coca-Cola executives were predicting an, “the future quality of public water supplies in the U.S. will continue to deteriorate, thereby generating for bottled water an increasing quality advantage” (2012, p. 51).

Over the past two decades, bottled water’s worldwide growth rate has been the envy of many investment sectors. Beginning in the early 2000s annual reports from Coca-Cola, Danone, Pepsi and Nestle all began to report high earnings and massive investments and expectation for this new development (Coca-Cola, 2002; Danone, 2008; Nestle, 2003, 2004; Coca-Cola FEMSA 2002-6; Castano, 2012). While the initial growth was slow in absolute terms, high returns to initial investors created a rush to scale. As Holt (2012, p. 249) writes, “once bottled water became a key profit center these companies did everything in their power to sustain the institutional underpinnings of the market.” Gleick explains the growth in the so called “developed world” as occurring because of increased perception that tap water was impure during a time of increased awareness of health. “Those of us who live in the richer nations of the world are buying more and more bottled water because we increasingly fear or

dislike our tap water, we distrust government to regulate, monitor, and protect public water systems adequately, we can’t find public fountains anywhere anymore, we are convinced by advertisers and marketers that bottled water will make us healthier, thinner or stronger, and we’re told that it is just another benign consumer ‘choice.’ If we let our tap water systems decay, however, soon bottled water won’t be a choice – it will be a necessity as it already is in countries without safe tap water,” (Gleick, 2010, p. 170).

Since then the industry has grown exponentially, particularly in Lower and Middle Income Countries (Cohen & Ray, 2018) since the late 1990s to its current state representing hundreds of billions in annual sales. In an increasing number of countries where networked drinking water is compromised by low quality and poor service, bottled water (and packaged water in general) has become the primary source for entire populations. The WHO and UNICEF Joint Monitoring Programme for Water, Sanitation and Hygiene (JMP) produced a report in 2017 showing the populations in 15 countries now relying on packaged water as a source of safe drinking water. Most of these countries are small (like Belize (55%) and the Dominican Republic (79%) but bigger countries also made the list (Honduras 39%, Lebanon 49%, Jordan 43%, Ecuador 21%, and Mexico 73%). The industry is currently in a global expansion phase and a brief review of annual reports from the four multinational corporations dominating this industry makes it clear that Latin America and South East Asia are frontier markets with almost limitless growth potential. By reaching 73% of Mexico’s 120 million citizens, as reported by the WHO and UNICEF (2017), if not 97% (as reported by Kantar Worldwide in 2017, (El Universal 2018), the industry has proven it can serve larger populations and hopeful marketing strategists have their eyes set on the nearly 300 million Chinese who lack access to basic improved water sources. Business Monitor International (2013) cited 100 cities as China facing severe water constraints and increasing concerns with contamination as the rationale for why “bottled water, therefore acts as a necessity.” The rise of the bottled water industry in small countries, while noteworthy, is insignificant compared to the absolute growth in countries like India, Indonesia and China. In China alone, between 2010 and 2015 the industry doubled growing from relative obscurity to becoming the world’s largest consumer of bottled water in absolute terms (Rodwan, 2020).

Notably lacking from the bottled water literature are ethnographic studies looking at the impact the rise of this industry has on the household. This present work follows these earlier investigations (Greene, 2014), returning to the field in Mexico from 2016 through 2020, to investigate how bottled water and the industry itself has become a cultural phenomenon, territorializing the waterscape. It did not answer, as Holt (2012) asks how patterns develop in which consumers “orient their lives around consumption.” While my earlier work shows this as a manifestation of neoliberal restructuration of the water management, it did not answer how this global phenomenon is reified on the ground through an individual range of specific contexts and the differentiations within those contexts, focused on how this form of water access impacts humans and their environment.

This study complements the previous work (Greene, 2014; 2018) in several regards. First it takes the previous study, which was supply side focused and returns it to a conversation

about demand and looks at the impact on households and communities. Secondly, while it sees the corporate-state actors as actively reproducing this space, it simultaneously rejects the view that the households and communities that are affected are passive recipients of this development model. While many authors (Barlow & Clarke, 2002; 2003; 2004;

Gleick, 2010; Elmore, 2012; Holt, 2012; Jaffee & Newman, 2013; Pacheco-Vega, 2019) have shown the bottled water industrial players to be agents actively shaping the context, even constructing the social-political landscape; this study shows how those who live on the other end of these policies and developments, are also active agents. New assemblages of reality are not (only) instrumentally or mechanically implemented from above but instead must be seen as a flux of constant negotiations through processes of translation, reproduction, contestation, and ultimately transformation of social realities (Long &

Villarreal, 1993). Bottled water as a main source of drinking water is a new reality – and proof that realities are in a state of constant reconfiguration resulting in a myriad of configurations.

Finally, this work returns to the previous work in a search for the discourses which promoted this specific vision this growing present reality. While the previous work traced the story of bottled water to an assemblage of factors – from a financial crisis, to an earthquake, a cholera epidemic, scientific advances in plastic packaging, political capture, etc. (Greene, 2014), this work traces the discourses around water that surged through the 1990s, promoting the epistemology of water as an economic good. Thus, this thesis evaluates the present moment, through case studies and surveys in Mexico, as the outcome of the different visions that were projected as the solution to the water crisis. Economists and water managers envisioned democratic societies utilizing cost benefit analysis and econometrics to arrive at a societal optimal, or an efficient, use of water (Discussed at length in Chapter 4). Instead, by tracing the discourses to the present reality, this thesis shows that the only definition of efficiency that the bottled water paradigm achieves is pure profit – which as Friedman (1970) would tell us, is the only true measure of efficiency and the true business of business. In this sense, this thesis shows that while the intentions of those who argued to make water an economic good hoped it would lead to efficient management for the benefit of society, to fix leaks, to reduce costs, and protect the vulnerable, it was instead the most contaminating, labor intensive, polluting, expensive and potentially dangerous paradigm of water economization that won the day.

In the course of the research, it has become apparent that a separate and relevant development has contributed to the current crisis unfolding in Mexico. This crisis is not just a crisis in water contamination but one in which masses of Mexicans, 20 million in the last two decades, have been relocated into the urban periphery where water services are inadequate and where contamination and other risks are present (Marosi, 2017). This mass movement of the population into the periphery was led by the government’s initiative to deregulate the construction and financing of public housing. For this reason, it was decided that at least part of the research for this investigation needed to examine the role of these neoliberal social-housing policies in Mexico, major factors contributing to the demand for the bottled water paradigm.

In order to grapple with this new reality, it is necessary to identify the nature of the state and the corporation. This thesis stands firmly on the work of Stephen Hymer (1982) who shows the development of the corporation as an outcome of a highly evolved productive human organizational structure. Beginning with Smith, Hymer retraces the division of labor from the small workshop to the factory to the multi-national firm. His argument is that as an evolved form of human organization the multinational firm has brought about not only a highly specific division of labor (from headquarters taking care of strategy in the global capitals, to the accounting firms, the marketing firms, to the off-shored production facilities and the extraction of raw materials) but a highly capable form of capital accumulation that is able to defend itself and project its needs onto the social sphere. The importance of this analysis is that it demystifies the corporate essence and presents it as an actor constantly trying to redefine the present as well as intent on creating the social and material conditions necessary for its own reproduction. This thesis as well relies on the works of Sassen (2006; 2014) locating the state within this evolution. She argues that the nature of the civic state has changed as corporations have moved beyond state boundaries. In this context, she see that states represent the needs of international actors over the needs of their own populations. In her 2006 work she shows clearly the evolution of governing institutions to their present state of providing virtual citizenship, rights and representation to these TNCs. Her 2014 work, echoing that of Harvey (2007) Dumenil and Levy (2005), Lazonick and O’Sullivan (2000), shows a distinct shift in the organizing logic of the relationship of corporations to society, happening at the same time as the neoliberal era began (1980). The change has been a shift from protecting national economies to the pure unrestrained logic of extraction and dispossession (Jingzhong et al., 2019). Harvey (2007, p. 10) describes it as a shift away from the social-economic compromise reached after the Great Depression in the form of the modern welfare state as the “key guarantor of domestic peace and tranquility. States actively intervened in industrial policy and moved to set standards for the social wage by constructing a variety of welfare systems (health care, education, and the like).” As Crucifix and Morvant-Roux (2019) show, reconfigurations in relationships between states and their populations result in continuously new transformations in society, which challenge the traditional formations of hierarchy even within communities. When community is seen as both antithetical to capital and as a base from which it extracts (Caffentzis & Federici, 2014; Federici, 2004;

James & Dalla Costa, 1972; Wood, 2002; Moore, 2016) the reconfiguration of networks and relations, in response to these external forces, can be seen as both threating the social reproduction of families and workers as well as offering new potentials. Long and Villarreal (1993, p. 158) suggests that what is important in these situations is not to understand change and potentials for change as some ideal-type force imposed from above, but to try to come to grips with the multiple and differentiated responses by individual and groups as they “make room for maneuver” in order to “create a space for change.”

The shift in both governance and corporate organizing logic has been characterized by a withdrawal of the state in key sectors while privatization and private sector participation has been both promulgated and subsidized. The logic of the individual incorporating neoliberalism into their very being (Foucault, 1979) coupled with the idea of market freedom

(Harvey, 2007) was promoted as the locus of the modern experience, and thus was born the individual as the source and solution of all societal ills, including poverty, inequality, climate change and of course, the water crisis. Bottled water as a solution to the water crisis exemplifies this.

The global bottled water market is projected (2019 projections) to reach $350 billion by 2021, more than doubling from 2013. The industry now represents over 30% of global beverage sales by volume (alcohol by comparison is only 22%). As Jaffee and Newman (2013) described, bottled water represents an expansion into new territories as capital crosses previously unfathomed frontiers. In this understanding, bottled water becomes

“the perfect commodity,” as it is juxtaposed against the background of inadequate, failing or non-existent, unsupported and unfunded public water systems. They warn, “Bottled water currently represents the cutting edge of water commodification, and its extraction and manufacture involve processes of accumulation by dispossession that are more extreme, far-reaching, and long lasting than those at work in the privatization of tap water” (2013, p.

23). It should be noted that the industry continues unabated, and has doubled, since those words were published.

Image 4: Global financial institutions portray the water crisis as an opportunity for investors with bottled water offering the highest return

Jaffee and Newman continue: “without the political-economic and cultural developments that have facilitated bottled water’s rapid rise—lifestyle shifts driving demand for convenience, neoliberal economic globalization and deregulation permitting the expansion of transnational firms, and weakened states increasingly incapable of defending public goods—it would likely not be nearly as ubiquitous today” (2013, p. 24).” Numerous writers have attacked subject from different vantage points, such as Elmore (2012) who looks at the expansion of the industry through the eyes of company strategy; Jaffee and Newman (2013) who look at the industry as overcoming barriers to capital accumulation, Wilks (2006) who looks at it as a consumer choice issue or even Bakker (2010) who looks at it from a networked water provision perspective. As Wilks (2006, p. 307) argues “the progressive expansion of water as a commodity is as much the result of a failure of governments to fulfill public obligations, as it is due to the craftiness of the marketers of bottled water.”

And indeed the industry is ubiquitous. Bottled water consumption globally is expected to reach $43 USD per capita worldwide somewhere between 2021 and 2024. The strategy of commodifying water is resulting in a situation where power and capital are accumulating because of a particular model of water delivery that is rapidly reordering the access to water landscape. In Greene (2018), examining the growth of this industry, it was argued that this industry represents a new water paradigm. “There is an important, even synergistic, relationship between expansion of the private commodity of bottled water and the deterioration of public tap water systems. The fate of these two modes of water provision are closely linked,” (Jaffee & Newman, 2013, p. 24)

The evidence is mounting, showing that this paradigm is not only persisting but also rapidly accelerating and repositioning itself in contrast to governance failures. Many researchers have, I argue, mistakenly, neglected this industry as a so-called “transitionary” development.

This alleged transition lies within a Rostowian version of modernity and it locates the most evolved social structures as belonging to societies where water is provided by a centralized network that monitors for quality and leaks. This evolutionary version of modernity fails to see the relationship between the health of the economies where these modern water services exist and the productive and extractive activities in these peripheral areas where the bottled water industry is so rapidly growing. Instead, following the arguments of Jaffee and Newman (2013), as well as the historical dialectical materialism of Wood (2002), Harvey (2007, 2014, 2018, 2019) Fraser (2012), and McGregor (2018), this development stands out clearly as the most “efficient” management of water yet dreamed up by capital, and thus, inevitable.⁴ It is sufficient in this case to present the current state of development of this particular form of extractivism as failing the social system it is dependent on (Jingzhong et al., 2019), and of the impact this particular alignment of economic interests and political failures has on the poorest members of society. Lack of water is, of course, a form of poverty and the lack of access to regulated, affordable, sufficient water is a form of inequality.

Through the course of the investigation undertaken for this thesis I have come to understand that water has always had some degree of commodification and privatization.

4 This thesis examines throughout the definitions and uses of efficiency.

The management or finance of infrastructure has always involved some level of private

The management or finance of infrastructure has always involved some level of private