Some thoughts on privatisation…

Some thoughts on privatisation…

I can’t remember if I’ve written about this before but it’s a topic that I keep returning to. Privatisation – the selling off of public assets to private companies. It’s been standard economic fare for a long time now, beloved by neoliberals and their ilk. The basic theory of it goes a little bit like this: public organisations are bloated and wasteful. They are dominated by unions and can’t run efficiently. Because there is no desire to turn a profit – because the funding comes from the government and doesn’t go into investors pockets – there is no desire to eliminate ‘waste’ and improve ‘efficiency’.

All of that makes a simplistic kind of sense, and I can see the attraction of privatisation, purely from an economic point of view. There is also a moral attraction. I know, I know, morals and neoliberal economic policy don’t exactly go well together, but in this case let’s be tolerant. The moral argument goes like this; funding for these organisations normally comes from taxpayers, and so we’ve got to make sure that taxpayers dollars go as far as possible (well, within reason – more on that later) and so if it is more efficient for a private business to run the organisation, then surely that’s what we should do.

So what’s the problem?

Strangely enough, the problem is the same one that means communism doesn’t work. Basically, you can’t trust humans. They’re greedy. And the moment you dangle the chance to turn a profit in front of a CEO or a group of investors, you know that it’s only a matter of time until corners are cut, safety is neglected and someone ends up getting fucked. Let me explain what I mean: most savings made by privatisation are based on cost-cutting. Remember, a public companies primary responsibility is to its shareholders – it has to make decisions based on what will give the biggest profit to the shareholders, and all other considerations (besides the law) are secondary to that.

And that’s the fundamental difference between private companies and the public service; it’s actually a much bigger difference that that. It’s a difference between fundamental views of society. I think that public services – health, transport, education, civil service – should not be run with profit as the primary decision. In fact, I don’t think that profit should enter into the discussion at all. Instead, they should be run as a social and civil good. Sure, it might not be efficient to run bus routes that very few people use – but the fact that those people are part of civil society means that they have a right to those services – and that’s why we should run them.

There is actually a lot of evidence that this has economic value, too, but it requires a mind willing to look beyond the three or four year election cycle. Communities that have higher social and cultural capital – that is, communities that are connected with each other and within each other are far more likely to have higher social, educational and health outcomes. The way we live our lives is based upon the opportunities we have to engage with each other – and that requires publicly funded infrastructure, not cost-cutting private industry.