Thursday, November 24, 2016

Privatization and the emerging Trump Administration

"Privatization on every front looks to be the order of the day in the Trump administration." - Josh Marshall, Must Reads on the Coming Privatization of Everything TPM 11/23/2016

Privatization is a key part of the neoliberal gospel, as Wendy Brown describes it from a critical perspective in Undoing the Demos: Neoliberalism's Stealth Revolution (2015):

Neoliberalism is most commonly understood as enacting an ensemble of economic policies in accord with its root principle of affirming free markets. These include deregulation of industries and capital flows; radical reduction in welfare state provisions and protections for the vulnerable; privatized and outsourced public goods, ranging from education, parks, postal services, roads, and social welfare to prisons and militaries; replacement of progressive with regressive tax and tariff schemes; the end of wealth redistribution as an economic or social-political policy; the conversion of every human need or desire into a profitable enterprise, from college admissions preparation to human organ transplants, from baby adoptions to pollution rights, from avoiding lines to securing legroom on an airplane; and, most recently, the financialization of everything and the increasing dominance of finance capital over productive capital in the dynamics of the economy and everyday life. [my emphasis]
The must-reads to which the title of Josh's article refers include these three TPM articles, undated but apparently recent (accessed 11/23/2016):

A wonky piece from 28 years is by Paul Starr, The Meaning of Privatization Yale Law and Policy Review 6:1988

Colin Crouch in The Strange Non-Death of Neoliberalism (2011) gives this background on why privatization looks so interesting to the One Percent:

... contracts to provide services, demand for which is completely guaranteed for several years by government, give firms a highly attractive sellers' market. At a time when markets in general are becoming increasingly competitive on a global basis, public contracts have major attractions for firms. This also explains the strong pressure being exerted by representatives of private business on governments and international organizations to encourage privatization of public services. This has been so successful that the European Union (EU) and the World Bank, among other international institutions, now try to insist that governments must open their public services to private profitmaking providers.

British governments responded enthusiastically to this by establishing public-private partnerships (PPPs), known in the UK as the Private Finance Initiative (PFI). An important motive of a government for doing this has been to fund building projects that it regards as important, such as new schools and hospitals, without distorting its budget by raising taxes or increasing government borrowing. The private sector finances the project, and therefore owns the facilities. In theory, the firm also takes over the risks involved in handling the capital, though in the UK following the financial crisis of 2008-9 government had to underwrite the financial risks of its PFI contracts, so anxious was it that, otherwise, firms would lose interest in PFI deals. ('Please, accept us as your customers!') [my emphasis]

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