Privatization, a child of the Chicago School of Economics, is a blatant attempt by national and multi-national big business to undermine and shrink any aspect of government that has a vague chance of making a profit. Its first practical application was by Thatcher in Britain and was applied to everything that moved or had an income, including the water Brits drink and the hopelessly unprofitable railways they use to get to work. Nobody opposing it has much of a say because the media act as the guardians and gatekeepers and ignore the complaints and the downsides. Ownership and advertising revenue reign!
The government services, such as telephones and airports were paid for by taxpayers and were owned by them. These taxpayers were ripped off by the simple expedient of reducing the price of each service to one which some well-connected businessman was happy to pay for and make a first-rate return on capital. Guess what? The prices paid for these huge enterprises were a pale shadow of the investment put into them by the taxpayers.
The outcome? Some Brits got rich at the public expense. If you wanted to invest in British Telecom you were allotted a small handful of shares as a telephone subscriber (I know, I tried!). The big tranches of shares went to the financial sector companies, to Conservative Party supporters and those who contributed to party funds. The newly privatized British Telecom retained ownership of the infrastructure and could thus dictate pricing to new "competitors".
Then of course, the rest of the world cried "What a wheeze!" and bundled in, copying the British. The World Bank, which at one moment wanted every government to own a cement plant, suddenly became passionate converts to the sale of every public asset in sight. The possession of a PhD does not invariably denote a capacity for independent thought. Thus the virus spread world-wide as the panacea for growth and alleged productivity.
What they did not tell the public was that they would reduce staffing (and thus service) to a level that gave them enhanced profit but left the users and subscribers paying more for less service. If you add up the collective time waiting for someone to answer a phone, to turn up for train driving duty (there is now no spare capacity built in to privatized railway operations), to correct a mistake or to send a document (I could go on!), the real cost to the economy would be startling.
The world now suffers greater real inefficiency, more corruption, more price gouging and less service, a fact hidden by the mavens of un-regulated capitalism. It constitutes a plot against the common man.
Privatized companies can be efficient. More often they are unresponsive to the public and undemocratic. British Gas is the most incompetent corporation west of the Urals. British Airways wouldn’t listen to their customers if you held a gun to their heads. Water costs, dictated from France, go up exponentially every year with no added service. The most extraordinary of the privatizations has been the privatization of American jails, where companies cut costs, provoking deaths, disturbances, physical and sexual abuse from poorly trained staff and no rehabilitation. This is an abuse of human rights and the exponents of the system are profiting from the misery caused.
Meanwhile in Britain, which started it all? The National Health Service, the jewel in the crown, is being privatized by stealth by a "Labour" government, intent on pleasing special interests. So far it has spread only to specialized health services, like blood analysis for instance, but the process continues. Soon the National Health will be as inefficient and costly as the privatized American health system. The Post Office, still nominally a public service, is being groomed for privatization and is closing hundreds of branches, especially in the countryside where people rely on their Post offices for a score of services. In the heart of London where we live they have closed four local branches and have given the remaining one only a single extra member of staff to cope with the resulting queues forming out of the door and down the street. Economists laud the “productivity”; the consumer pays the price.
We have Tony Blair, heart-on-sleeve Catholic convert and spokesperson for the masses to blame for all this.