There is an enormous history of privatization which shows that while it is sometimes beneficial, often it does not give the results its proponents claim. Privatization is often a form of crony capitalism, and often results in a different and less desirable product.
- Education (40 links)
- Libertarians strongly oppose public education: they wish to eliminate tax-funding for education, regulation of education, and make education independent of government. Libertarians favor privatization and corporatization of schooling. This despite the obvious market failures in education and the international successes of state-run education.
- Private Limitations Of Liberty (26 links)
- Libertarians like to claim only government limits liberty. But that's not what people experience. First world government is actually a minor source of repression and loss of liberties. Private organizations, particularly business, employers and the workplace are the major sources of repression and limitations of liberty that we experience most frequently and heavily. For example, all lynching was private. See also: Corporate Threats to Liberty.
- Water (4 links)
- Conversion of public resources to private property is called enclosure, and that's what is happening to fresh water today around the world. Water resources and water systems are natural monopolies, and their privatization is another step towards corporate ownership and dominance.
- 15 Months in Virtual Charter Hell: A Teacher's Tale [More...]
- Virtual Charter Schools are the latest ALEC-sponsored attempt at undermining public schools through corporatization of education. They target communities of color or poverty which are dispossessed and disempowered.
- A Dim View of Libertarianism, Part IV: The Privatization Panacea [More...]
- "They believe this unproved dogma despite an abundance of practical historical evidence to the contrary. And they are endeavoring to impose this dogma in place of regulations and social programs that have been tested, implemented and proven through several twentieth century administrations, both Democratic and Republic."
- Arbitration (8 links)
- Libertarians promote privatization of justice through arbitration. Supposedly it is more economical, but it is obviously biased towards employers who require workers to give up rights to take disagreements to court. It is also a common method for business to keep customers out of courts.
- Cap And Trade (5 links)
- A very successful "deregulation" strategy that replaces government regulation and Pigouvian taxes on harmful externalities with government-limited, salable rights to externalities. In other words, government power can create markets and use market mechanisms. This brings market efficiency to regulation; thus businesses hate cap and trade.
- Conservatives Can’t Decide If Nordic Socialism Is a Totalitarian Nightmare or Actually What Is Living and What Is Dead in Social Democracy? [More...]
- "The common theme and universal accomplishment of the neo-Keynesian governments of the postwar era was their remarkable success in curbing inequality... It was social democracy that bound the middle classes to liberal institutions in the wake of World War II..."
- Crony Capitalism (11 links)
- Capitalist corruption of government for private gain. Sometimes mislabelled Corporatism. Libertarians use this term to describe any government/capitalist relationship they do not like and to excuse bad behavior by capitalists. But all capitalism is fundamentally crony capitalism because government favors owners with systems of property. Corporations, with their special privileges, are an especially clear example. Crony Capitalism is one type of Privatization of Power, and is practiced by the major funders of libertarianism.
- Dismantling Public Education: Turning Ideology into Gold [More...]
- "Nowhere is the toxic effect of privatization on America’s public wellbeing more evident than in the sphere of education." How, through lengthy propaganda, public education is being transformed into a cash cow for the wealthy.
- Electricity privatisation in Australia: A record of failure [More...]
- “Privatisation, corporatisation and the creation of competitive electricity markets were supposed to give consumers lower prices and more choice, promote efficiency and reliability, and drive better investment decisions. But after twenty years the evidence is that none of these promised improvements have been delivered."
- Ferguson is our “libertarian moment,” but not in the way some libertarians want you to believe [More...]
- Libertarians identify Ferguson as needing police reforms: but the problem is in large part that libertarian proposed reforms from Robert Poole 30 years ago have caused the problems.
- Five Steps to Privatizing Everything [More...]
- "At the heart of privatization is a disdain for government and a distrust of society, and a mindless individualism that leaves little room for cooperation. Adherents of privatization demand ‘freedom’ unless they need the government to intervene on their behalf."
- Free Banking (1 link)
- The idea of replacing central banks by allowing banks to issue their own currencies, with or without various backings. An idea revived by Friedrich von Hayek, with a literature of supposed historical examples. Free banking has many problems.
- Highway Robbery: How "public-private partnerships" extract private profit from public infrastructure projects. [More...]
- "Public-private partnerships" are a rebranding of privatization and the result of a long ideological campaign against public-sector unions and “big government.” They shift profit to private companies and risk to government.
- It is Not a School Problem
- Diane Ravitch used to be a supporter of school reform. But now she is the author of Reign of Error: The Hoax of the Privatization Movement and the Danger to America's Public Schools. The problem is poverty and segregation.
- Markets do it better and cheaper than government. Not. (1 link)
- A common propaganda claim from Milton Friedman. Patently untrue for a number of market failures. An additional problem is that the products would be different, sometimes in undesirable ways, because markets have no incentive to create positive externalities
- Police Policy For Sale [More...]
- Lexipol, a private for-profit company, has quietly become one of the most powerful voices in law enforcement policymaking in the country. As a result, a large portion of American police policy is now being drafted by a little-known private company with no public oversight.
- Private Mossad for Hire [More...]
- Covert operations can be purchased for commercial and political puposes.
- Private Prisons (9 links)
- There is a reason why prisons were changed from private to publicly operated as a reform long ago. Private imprisonment has corrupt incentives from the top on down, anywhere a profit can be made from an enslaved prisoner.
- Private Roads, Public Costs The Facts About Toll Road Privatization and How to Protect the Public [More...]
- "Though these privatization deals seem to offer state officials a “quick fix,” they often pose long-term threats to the public interest. By privatizing roadways, officials hand over significant control over regional transportation policy to individuals who are accountable to their shareholders rather than the public.
- Privatisation is deeply unpopular with voters. Here's how to end it [More...]
- "It is striking that, given the near-universal political consensus in favour of neoliberalism, and particularly privatisation, that the public has never embraced this idea. Indeed, far from becoming accustomed to privatisation, voters have become more resolutely hostile, as numerous Australian governments have found to their cost."
- Privatization of Power (5 links)
- What libertarians call liberty is actually privatization of power. Taking power that the state holds and transferring it to individuals. That might sound good until you realize that the state power protects us individuals from each other's power. Privatization of power would result in the wealthiest having the most power and the poorest having none.
- Retirement Privatization (4 links)
- Privatization of retirement has failed to benefit retirees everywhere it has been tried. Programs such as 401k savings plans have been colossal failures that fleece investors to benefit the financial industry.
- Social Security Reform: Henry Aaron [More...]
- Henry Aaron's 1998 testimony to the US Senate on why Social Security privatization proposals would be bad policy.
- The Fallacy of Tuna Fish Economics [More...]
- Andrei Shleifer caught propagandizing for privatization at Harvard. "Of all people, Professor Shleifer should know that contracting out and privatization do not always work as advertised." He was the director of the corrupt privatization of post-Soviet Russia.
- The Free-Market Al-Qaeda: Neoliberal Think Tanks and the Harm They Do [More...]
- How a a small group of “free-market” ideologues consciously set out 40 years ago to marketize everything public. Includes a list of 12 right-wing philanthropic foundations that set out in the 1960’s to overturn a century’s accumulation of progressive public policy.
- The hidden costs of road privatization [More...]
- “When infrastructure is privatized (or corporatized), the decisions about its size, shape and placement are driven by market demand. The private partners are interested in elements of infrastructure that can yield the longest and strongest streams of privately capturable revenue not the ones that yield the largest public benefits.”
- The Myth Behind Public School Failure [More...]
- "In the rush to privatize the country’s schools, corporations and politicians have decimated school budgets, replaced teaching with standardized testing, and placed the blame on teachers and students."
- The Myths of Social Security Crisis: Behind the Privatization Push [More...]
- "Privatization of Social Security would not make the elderly and disabled go away. But it will end a system that requires high earners to help out low earners without forcing low earners to undergo the stigma of welfare."
- The Privatization Backlash [More...]
- "Yet the public impression of privatization as a panacea for the inherent inefficiency of government has been tarnished in the intervening years. From Halliburton to Healthcare.gov to private prisons and welfare systems, contracting has often proved problematic."
- The Strategy To Privatize The Public Domain [More...]
- There is a coordinated and decades-long effort to privatize the public lands of the United States, controlled by a network of corporations and conservative foundations and think tanks intent on gaining control of the public domain.
- Uncertainty And The Welfare Economics Of Medical Care [More...]
- Kenneth Arrow's classic 1963 article that details the differences between the medical care industry and competitive market models. This is why privatizing health care does not work well.
- Varieties of Institutional Failure [More...]
- James Acheson describes failures of resource management by markets, private property, government, and communal management. Libertarian emphasis on the first two only is inappropriate.
- When Firefighters Were Actually Violent Gang Members [More...]
- "From the mid-18th to the mid-19th century, American cities tended to rely on volunteer groups or groups hired by insurance companies. Both methods turned out to provide exactly the wrong sort of motivation for serious firefighting."
Over the past two and a half decades, the poor in privatized urban schools have been successfully harnessed to the delivery of reliable profits to investors and munificent salaries to executives.
Alex Molnar, "Dismantling Public Education: Turning Ideology into Gold"
I know there are those who genuinely believe in privatizing everything. They are called profiteers.
It’s always worth remembering that when it comes to health care, it’s the private sector, not government programs, that suffers from stifling, costly bureaucracy.
Paul Krugman, "Medicaid on the Ballot"
The invisible hand of the market makes a very good pickpocket.
Urban street gangs in under-policed neighborhoods, mafias in under-taxed countries, and groups like Hezbollah in Lebanon invariably step in to fill the void where government fails. When the Japanese government wasn't able to adequately help the population after the earthquake and tsunami, the yakuza helpfully stepped in to do it for them. The devolution of local authority and taxation into the hands of criminal groups willing to provide a safety net in exchange for their cut of the action is the invariable pre-feudal result of the breakdown of the government-backed safety net. It happens every single time. The people will want a safety net where utter chaos doesn't prevent it: they'll either get it from an accountable governmental authority, or from a non-governmental authority of shadowy legality. Both kinds of authority will levy their own form of taxation, be it legal and official, or part of an illegal protection scheme.
David Atkins, "The "No True Libertarianism" fallacy"
Williamson borrowed from Coase the concept of "transactions costs" the idea that the market price in any transaction may fail to incorporate the full costs to the seller or buyer because of the very conditions of exchange. In particular, whenever there is uncertainty or the need for long-term relationships, the parties to a transaction are unlikely to be able to write contracts complete enough to cover all the contingencies or hidden costs. Furthermore, incomplete contracts encourage one or the other party to behave opportunistically, deliberately withholding information or broadcasting disinformation to get a better deal. In such cases, the transaction is likely to occur under a single roof, inside a "hierarchy" (that is, firm). This solution "internalizes" or reveals to the decision makers those otherwise hidden costs. Williamson showed that there are, even in pure theory, situations in which the inefficiencies of bureaucratic organization are offset by the greater predictability of the outcome. This is showing quite a lot, at least to academic economists. It says that under rather common circumstances it is efficient (maximizing of profits, minimizing of long run average costs) for explicit rules, regulations, commands, organization charts, and social contracts to replace the invisible hand.
Bennett Harrison, "Where Private Investment Fails"