Quote of the day: Evils of privatizing the commons


From The Privatising Industry in Europe, a Transnational Institute report by Sol Trumbo Vila and Matthijs Peters:

The evidence shows that state companies are consistently undersold and even end up costing governments extra money (undermining the argument that privatisation generates revenue). Particularly in Greece, state assets have often been sold for prices far below their true market value. Research also shows that privatisation has negative implications for labour rights and what consumers pay for public services.

Due to the different, complex levels of financial and legal advice and the many parties involved in privatisations, the processes tend to be very susceptible to different kinds of corruption and conflicts of interest if they are not strictly supervised and monitored. Whereas cases involving flagrant corruption occur relatively often in countries accused of loose transparency and accountability like Greece, conflicts of interest also take place in countries that serve as global hubs for financial and legal services, like the UK.

The question remains therefore why the Troika insists on making privatisation a cornerstone of the austerity packages it has imposed on European debtor nations. Not only do the privatisations fail to deliver the revenues and efficiency that justify them, they are also fuelling nepotism, corruption and profiteering by small privileged groups at a time when the social costs of austerity are more blatant than ever. They are therefore exacerbating a social crisis of growing inequality and leading to social unrest and growing disaffection with the political system at national and European levels.

The fact the EU institutions are responsible for overseeing the implementation of privatisation programmes makes their capacity for good governance an additional concern, especially in the current circumstances where there is an increased transfer of sovereignty from member states to bureaucrats in Brussels.

The fact that the European Commission (and the Troika) persists in its privatisation agenda despite the evidence of its failures and the growing economic and social costs suggests two possible motives. One, that the European Commission is so ideologically wed to neoliberal policies that it unwilling to even consider the concrete evidence of the economic, social and political costs of privatisation for its own member states. Or two, that there is such a powerful corporate industry at work in support of privatisation, from the advisers to the corporations that buy up state assets, that it is impossible for the EU institutions to reverse course. Either motive or the likelihood that both are true reflects very badly on the European Union. It also goes along a way to explain the growing disaffection and popular resistance to the privatisation agenda and more broadly to the whole European Union project.

One response to “Quote of the day: Evils of privatizing the commons

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s