November 2005
Crazy Like a Fox
How corporations are fighting
to keep things private
by Si Kahn & Elizabeth Minnich
Privatization may not sound to you like a threat to democracy. It’s not a familiar word, and it isn’t often used by people who are struggling for democracy, for freedom, for justice. People haven’t usually stood up at rallies and made rousing speeches either for or against privatization.
That’s because privatization is the kind of word economists and policymakers use. What it means in practice, its purposes and effects both internationally and in the United States, are hidden by such dry language.
We believe not only that privatization is a threat but that it is the threat to democratic commitments to the public good. It is a threat to the commonwealth that sustains us all, in the United States and around the globe.
We believe that we fail at our peril to see that the possibility of public provision for our basic human needs, safety and security, our basic human rights, and our high aspirations to liberty, justice, and equality are under concerted attack by corporate privatizers and the officials who do their bidding from inside government. We believe that efficiency in pursuit of profits is not at all the same thing as effectiveness in providing for and protecting democratic values and dreams of liberty, equality, and a decent life for all.
So, then, what is privatization?
Privatization as an agenda for the United States has been described by the Wall Street Journal, a generally reliable reflector of corporate thinking, as the “effort to bring the power of private markets to bear on traditional government benefits and services.” Translation: Privatization is letting corporations take over and run for profit what the public sector has traditionally done.
Privatization as an international agenda is usually described this way: “The privatization of state-controlled industries in countries that have had heavily nationalized economies is a necessary step in their progress toward a free market economy.”
Translation: Same as above, only more so.
Neither definition makes privatization sound like a threat to democracy. There’s that powerful word free, the familiar, friendly sounding market, the use of private that evokes the Western value of private property. Such language makes privatization sound like an economic policy that is true to the democratic way, the road everyone should take to become free and prosperous like the United States.
But this familiar rhetoric hides too many realities. For one, it slides right over the awkward fact that income and wealth inequalities and poverty rates in the United States are actually among the most dramatic of the more developed nations. On a larger scale, it avoids entirely the important questions of just how free today’s capitalist economies actually are, whether they really do serve political freedom, and whether it is always progress to join, or be forced to participate, in them.
These dry, common definitions just don’t reveal that “privatization of state-controlled industries” means selling off a nation’s natural resources — oil, coal, natural gas — for exploitation by privatizing corporations. In many countries, state development of natural resources has provided the funds for essential social services, such as public health care and education. The usual definitions of privatization don’t make it clear that those services will not be provided or financed by the corporations that under privatization schemes pocket profits from the natural resources and national industries they take over. Financially weakened national governments cannot afford to provide for the common good. Nor can they stand up to and regulate the huge corporations that are strengthened by privatization, or the individuals who become enormously wealthy by buying and reselling that nation’s resources.
The usual descriptions of privatization don’t say outright that the possibilities of such enormous new sources of wealth readily lead to national and international corruption and lawlessness. But, by the record, they do. For one example, in a scenario that is strikingly reminiscent of recent corporate scandals in America, the U.S.–based “accounting firm of PricewaterhouseCoopers repeatedly signed off on the books of the Russian central bank, even though auditors knew that the bank was sending its dollars abroad to FIMACO a shell company in the British Channel Islands with no employees.”
Did this make any difference to the Bush administration? You can bet your stock options it didn’t. In fact, U.S. officials turned to one of the powerful overseers of Russia’s privatization, Boris Yeltsin’s Minister of Finance Yegor Gaidar, to advise them as they set out to privatize Iraq’s state-owned resources and enterprises. Gaidar has been called an economic shock therapist for his advocacy of “instantaneous, nonevolutionary transformations, wholly indifferent to the human cost of the policies they imposed.”
The transfer of wealth and power from nations and their governments to private corporations is not a benign step on the road to freedom and progress. It doesn’t just happen as economies and governments and people “mature,” as societies “evolve” and “develop.” Privatization is an agenda more or less forcibly imposed on governments that lessens their powers in favor of the largest corporations.
It needs to be said: This transfer of wealth and power from governments to corporations, and from the commonwealth of the people to the global oligarchy against which commentator Bill Moyers warns us, is precisely not the triumph and spread of democracy. It is the triumph and spread of dominance by privatizing corporations for which national boundaries, along with provisions and protections for the people, are nothing but barriers to their pursuit of profits.
Excerpted with permission from THE FOX IN THE HENHOUSE: How Privatization Threatens Democracy, by Si Kahn and Elizabeth Minnich. (Berrett-Koehler, $15.) Info: bkcurrents.com.
![[Send]](http://consciouschoice.com/sendlink/send.gif){kind=small}
Recommend this page to a friend
Top Ten pages recommended to friends:
