A Corporate Government is a Wasteful Government

By Robert Miranda

“The Law doth punish man or woman who steals the goose from off the common, but lets the greater felon loose who steals the common from the goose.”
--Anti-enclosure saying, 18th Century England

Privatization is not simply a change of ownership. It is a change in the role, responsibilities, priorities and authority of the county.

As governments around the nation look to privatization as the model for saving taxpayer money, those governments that have chosen this path have shown that privatization and deregulation have been the cause for bankruptcies, scandals, and ineffective and inefficient government.

Supporters of government reform and deregulation state that the goal of privatization is to establish a reliable, economically efficient competitive government that saves the consumer (taxpayer) money by hiring corporations to operate and manage government services.

Water privatization, for example, has been a disaster for those governments that privatize their water services. Over the years, rates have soared and pollution has increased. Those families and small businesses, who cannot afford the new rates, have had their water supply disconnected. Privatization has transformed clean water from a human right to an “economic good” which one day could be priced out of reach of the poor.

Yet, despite its lack of popular support and its inability to deliver on promises, privatization in its many forms has become the accepted wisdom amongst some governments and corporate leaders.

The sale of government enterprises, the introduction of corporate management practices, the contracting out and private provision of activities within public services, the introduction of user charges, and the deregulation of essential services are all initiatives designed to weaken government, subjugated to serve the corporate elite.

Proponents of these measures argue that introducing competition and commercial concerns into public service would expose the newly privatized firms and corporatized government enterprises to the disciplines of the market so that they would become more efficient and rates would be reduced. They argue that it will also raise revenue for governments, provide new sources of investment capital for expensive infrastructure and further reduce the role of government in the economy.

Those elected to hold office in government are entrusted with carrying out the will of the people, protecting public assets, and resisting being coopted by all manner of devises. These plans range from the sophisticated persuasion of corporate-funded think tanks to the less than subtle pressures exerted by generous financial contributions to the campaign funds of political parties, individuals. They also offer future career opportunities for retired politicians and bureaucrats.

Privatizing versus the welfare of citizens

However, for some politicians, the promise of treasure and a bright future is too much to resist. As a result, the transfer of ownership and control of government assets to private companies is done with little interest in the welfare of citizens.

Planning and long-term forecasting of demand, as well as the upgrading of worn-out infrastructure, is an essential part of providing a reliable public service. The need for long-term planning and coordination are reasons why government controls services such as water, telecommunications, transport and water.

In a government that has accepted privatization, the need for planning and maintenance takes second place to the business-driven campaign to commercialize public services. Following privatization, the planning function of government bureaucracies is abandoned altogether and surrenders to market forces.

In practice, the market has turned out to be a rather poor mechanism for ensuring adequate supply and reliable service. For services, such as water, poor consumers cannot afford higher prices, and the expansion of networks (that is, the provision of water to poor neighborhoods) is not commercially viable.

Editor’s Note: For an in-depth study of the evolution of American democracy over the last 30 years, read “Has America Become an Authoritarian State at: http://www.alternet.org/has-america-become-authoritarian-state

Editors Todd Alan Price; John Duffy and Tania Giordani explore the privatization of public schools in the new book, “Defending Public Education From Corporate Takeover.” Discussed in depth are the topics of the voucher system, corporate takeover with the implementation of charter schools, and other attacks on public schools. Robert Miranda contributed a chapter regarding Milwaukee’s fight against privatization. For more on this book, please visit: http://www.becksbooks.com/rent-buy-sell/book/0761860495-9780761860495

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Last edited by tyler schuster.   Page last modified on January 30, 2013

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