Monday, June 11, 2007

A quick recollection of the history of privatisation

In relation to a recent post, a friend asks if I'd include the privatization of basic public services (water, energy, public transport etc), in fact the privatization of the public realm in the Habermasian sense, into "the institutionalization of greed"?
She adds: "If I'm correct, the mainstreaming of this privatization started with Maggie Thatcher and the liberalization of money markets".

My response:

The fashion for privatisation started with a New Zealand Prime Minister in the 1970s (sorry, I can't recollect his name at present).

The "success" of that measure inspired Reagan's Proposition 13 in California (if I recollect the name aright) which was the precursor to privatisation taking hold as a philosophy in the USA

Mrs Thatcher overlapped/ followed Reagan - and the dovetailing of their policies was not limited to privatisation, which is why there were cartoons in which the famous Gone With The Wind film poster had Reagan carrying Thatcher, in a romantic pose similar to that of Clark Gable and Betty Davis, but with a mushroom cloud in the background...

Anyway, the impact of these 3 privatisation sweeps in the Western world was "only" the reduction of the middle class by some of them elevating themselves into the ranks of the rich (good for them, say I) and the decline of others to the lower classes

However, this set in train the fashion for privatisation around the world, in which publicly-owned assets were sold for a song to members of the dictatorial elite in countries such as Russia and China, so that the dictatorial elite became even richer at the expense of the public, to whom the elite threw the sop of surviving a bit better than they had done earlier if they were ready to join the new working class - though a few among the masses who were more intelligent, better organised and more agile, were able to benefit from the relatively free market economy and so could become, compared to the new working class, relatively rich.

Even a cursory analysis of purchases of real estate in the West by the Chinese and Russians between say 1990 and 2000 (or later) will indicate clearly that the primary beneficiaries of privatisation was the dictatorial elite which was in existence in such countries immediately prior to the collapse of the Berlin Wall

This should not be a surprise. Elites always look after themselves. What is a surprise is the ease with which they were able to dupe their masses (and the West) into believing that their version of the market economy was introduced for the sake of the masses and was good for the masses. When and if we understand this, we understand also the continuing appeal of Communist (or "nearly-Communist") parties in all the ex-communist parts of the world where the masses are permitted to have political preferences

In brief, my answer to your question is: Yes.
And the practical consequences of privatisation will be enormous but will be seen clearly, I suspect, only in about 10 years


-----Original Message-----From: kaarin [] Sent: Montag, 11. Juni 2007 10:19To: Marie-Claire Cordonier SeggerCc: 'Stephen Marglin'; Guptara, Prabhu;; councillors@worldfuturecouncil.orgSubject: Re: request for feedback/input

Dear Councillors,

thank you Marie-Claire for reminding us of the cornerstone of unilateralism:
"The American Way of Life is not up for negotiation..." - it would be
interesting to learn, by the way, what is the correct definition for "the
American way of life" - how many cars, or how much of what?

My main reason for wanting to join the discussion was to ask you economists, Sphere: Related Content

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