Tuesday, October 25, 2016

Privatization ‘Disproportionately Hurts Poor Individuals and Families’ | The Nation

Privatization ‘Disproportionately Hurts Poor Individuals and Families’ | The Nation: "In a compendium of privatization disasters, the watchdog group In the Public Interest (ITPI) concludes that “government privatization disproportionately hurts poor individuals and families.” By shifting social costs onto the public, the market logic of “personal responsibility” serves as a pretext for a self-perpetuating spiral of social disinvestment.

One way privatization fleeces the poor is by making basic public services cost more. "


Privatization is not all good or all bad. Selling off government-owned enterprises, like car companies, airlines, and steel mills, may have worked pretty well in Europe, but privatization in Russia was a massive disaster that created the oligarchs and destroyed the Russian economy. It went from being a major industrial powerhouse to a third world exporter of petroleum products. The big question is how you measure success. Advocates of privatization always talk about economic efficiency, but this is often just rhetoric. In reality, many times all they do is fire government employees and replace them with lower-paid private employees who don't get decent benefits. Then they pocket the savings instead of passing them along to the taxpayers/consumers. And you have to consider accountability--how do you make sure the function is performed properly. So I realize that this report from ITPI is rhetorical as well--the organization is funded by public employee unions, but we do need to look hard at these fast-tracked, take-it-or-leave-it, privatization deals that so many people think are the solution to all problems.

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