What is Privatization?

WHAT IS PRIVATIZATION?

By Jorg Huffschmid

[This article originally published in: taz, February 2, 2004 is translated from the German on the World Wide Web, http://www.attac.de/texte/idg/privatisierung.php.]

Privatization is the introduction of profit-oriented control in areas oriented in the past to criteria of public interest. Privatization occurs in different forms: as the transfer of public into private enterprises as with the postal service, as the private transfer of public services – like education or culture – and as the delegation of social security as in the health system to private financial markets or as transformation of parts of nature like water or genes into private property.

Privatization is justified in the general public in that private enterprises under competitive pressure work more efficiently than public monopolies. Actually privatization often replaces public monopolies with private monopolies.

The core of the problem is that individual economic profit is decisive for the conduct of private enterprises, not the public interest. This causes them to destroy jobs again and again through drastic cost cuts, to worsen working conditions, to ignore the quality and security of provisions and to try to conquer market shares through advertising. Past experiences show that insuring public interest standards by private enterprises through political control is very difficult.

Privatization is an essential pillar of the neoliberal globalization strategy that has largely gained acceptance worldwide in the last two decades. Its economic background is the search for profitable investments for private capital. Therefore, privatization aims at opening up ever-larger areas of society for private profit maximization. Those who don’t have enough money are excluded from essential public goods. This leads to de-solidarity and social polarization.

As a result, social security, education, health care, culture and other areas necessary for the functioning of a democratic and solidarian society should be withdrawn in principle from private pursuit of profit and organized and financed publically.