The Nonsense of Privatization
Michael Fisher wrote: “I work for a trade union in London which is involved in campaigning against privatisation. I am looking for good radical/progressive critiques of the theory and practice of privatisation.”
Here is my quick, rambling response:
First of all, you might look at
On the other hand, I don’t think you need a radical/progressive critique of privatization, anymore than you need a radical/progressive critique of the belief that the earth is flat. I think the onus should be on those who support privatization.
Privatization proved to be an enormous source of inefficiency and waste of money in Iraq and Hurricane Katrina. In England, I am under the impression that privatization led to more railroad accidents. In Atlanta, water privatization had to be reversed.
Privatization does have its advantages. Privatized schools do not have to pay janitors high wages or benefits.
The big problem is what economists call the principal/agent problem. How can you specify what a privatized school should do unless you can specify every aspect of its performance. If a public agency can produce a detailed blueprint of full performance standards, then it would be capable of running the operation efficiently.
Also, keep in mind, that privatization is typically associated with sweetheart deals.