By Steve Painter
Sell-offs, contracting out, liberalisation, deregulation, community provision — privatisation has paraded under a number of guises and slogans over the past decade, but in the end they all mean the same thing: theft.
Privatisation is the handing over of public assets to private operators whose main purpose is to use them for their own profit rather than service to the public. It is usually carried out in the name of greater efficiency and smaller government — both terms which have assumed distorted meanings as the primitive terminology of Thatcherism has come to dominate discussion among capitalist economists and opportunist politicians.
Privatisation is often promoted as a way of reducing taxes, but that doesn't mean the public emerges better off. At best, it might mean a shuffling of costs, as lower taxes are offset by higher charges for services.
The experience of British Telecom is by now quite well known. Since it was privatised in 1984, its profits have risen sharply. So have charges, by around 40% for most consumers. Public telephone charges have risen by 100%, many services have been removed on the grounds that they are "uneconomic", and many old people no longer have access to telephones because of the cost. As well, there have been many complaints about a drop in the quality of service.
Efficiency
More efficient? To an old person wondering how to contact the doctor in an emergency, it might not seem that way at all. But private owners are now pulling in a very large profit where before a government service merely made a healthy profit. That's the definition of "efficiency" of the academic economists of the Austria-Chicago School, who can now be satisfied that things are once more operating according to the natural order after the nightmare decades of welfare statism.
Privatisation has been studied most thoroughly in Britain because that's where the latest wave of it began, under the Thatcher government around 1979. In Australia and a number of other countries, the privatisation drive goes on despite the fact that numerous studies have turned up little support for claims that private industries and services are more efficient than public ones, provided both are competently managed.
In fact, there is a good deal of evidence that privatisers usually target the most efficient (and profitable) government services and make them less efficient over time. The privatisation wave is just about finished in Britain because the most profitable government services have already been sold and only the least profitable remain. c Chicago Schooler doesn't expect any private company to take them on.
Public services can be more efficient. The NSW Labor Council cites the contrast between the heavily privatised US health service, which consumes about 12% of GDP to provide a notoriously poor service, and the largely public Australian health system, which provides a far higher quality service on about 8% of GDP.
Privatisation often adds up to little more than a temporary windfall for a diddling contractor (as in the present TrackFast scandal in NSW) or a very large handout for an already large corporation, sometimes with the added bonus that an important competitor is removed.
Most of the efficiencies supposedly accompanying privatisation flow from reducing work forces, often with serious long-term social costs, and cutting services deemed marginal even though these might be important to large numbers of people. Social issues are usually marginalised in the privatisation discussion because the whole issue is part of an ideologically driven attempt to evaluate almost all human activity in capitalist market terms.
Thatcherism
The Thatcher privatisation drive was the main initiator of what became a political wave that most capitalist ideologues hope will continue well into the '90s. The ideology served real economic needs of business which arose in the stagnation and recession of the early '80s and which continue today.
With markets saturated and profit rates declining, the world's multimillionaires need new outlets for investment. What better investment could there be than to buy up potentially profitable social services, with their guaranteed markets?
Now huge resources are on the auction block, and most will be sold well below their true value, at least partly because there is a glut of such resources up for sale.
Aside from the Soviet Union and eastern Europe, where the privatisation process will take decades if it continues, governments are committed to big sell-offs in countries including Mexico, India, Pakistan, Sri Lanka, Brazil, Cambodia, the Philippines, New Zealand and Australia.
Interestingly, European Community countries such as Italy and France have not followed the Thatcher lead, and seem convinced that state sectors producing more than 30% of GNP are not inefficient. In choosing to follow Thatcher, Australia is unusual among advanced capitalist countries, and there are good reasons to question the relevance of the British model.
Quite apart from the fact that the antisocial motivations of tremely crude economic and philosophical foundations, should rule it out for Labor governments, Australia has never had a public sector anything like the size of Britain's, and faces quite different economic circumstances. Nevertheless, many Australian politicians continue to drift in the eddies of Thatcher's wake.
The Unsworth Labor government in NSW led the way in the mid-'80s with bargain basement sell-offs of high-tech engineering equipment at the Newcastle state dockyard and the Eveleigh railway workshops. These were nothing more than handouts to rival engineering outfits, with dubious long-term economic effects for essential state services. New boats for Sydney Harbour ferry services have been plagued with technical problems, and there is less restraint on contractors supplying the State Rail Authority now that the authority's options for doing its own engineering work are more limited.
The Victorian Labor government has also done its share of flogging off state assets and, perhaps more importantly, placing state services such as railways at the disposal of private companies in deals that are often kept secret. For its part, the federal Labor government has begun selling off parts of the Commonwealth Bank, Telecom, Qantas and Australian Airlines.
Airlines privatisation was rammed through Labor Party forums largely on the argument that the government couldn't afford to pay for new planes and equipment, and that it would be preferable for private companies to borrow the necessary funds.
Why this might be preferable must be one of the world's great mysteries in view of private companies' record of going broke through excessive borrowing and reckless speculation. In Victoria, WA and SA, Labor governments' entanglements with such companies brought the states themselves to the verge of bankruptcy and set up the Labor Party for what seems certain to be a series of electoral disasters.
Efficient services such as Qantas survived and grew for decades as government bodies, financed by government borrowing when necessary. Suddenly, government ownership became unfashionable, and Australian politicians fell over themselves joining the rush to privatisation ... and private debt and bankruptcy.
For a decade, while huge amounts of capital wallowed uselessly around stock markets and other speculative institutions, Australia's hospitals, public transport and freight services, housing, schools, universities, the ABC and other utilities and services were all deliberately starved of funds in the name of efficiency. Governments held back on borrowing to avoid "crowding out" creative, efficient private borrowers — the ones now thronging the bankruptcy courts and doing it tough in places such as Hong Kong and Majorca.
While all this demonstrated a touching devotion among Labor politicians to the abstract concept of the market and the concrete wishes of business, many Australians now face a wasteland of bankrupt everely reduced or non-existent public facilities and services. Tens of thousands of jobs have disappeared as the privatisation wave swept away much of the rail network, shipyards, abattoirs and many other state industries, or sections of them. Never did the private replacements for these industries create enough alternative jobs.
But if Labor politicians were Australia's leading Thatcherites in the mid-'80s, more recently the Greiner government in NSW has surged to the front. At present it is at the centre of a storm over plans to flog off Newcastle's public bus network and some of the more profitable routes in Sydney, as well as the important regional hospital in Port Macquarie. It has also moved farthest in privatisation of roads, with the new F4 tollway to Sydney's west causing widespread anger.
Close behind Greiner stands the federal Liberal Party, with a good chance of grabbing office at the next elections. The union movement and community groups are now taking up struggles against privatisation, but in doing so they're taking on the whole political culture promoted by Australian Labor and other ruling parties around the world for a decade.
The struggle will be tough, but it's also an important one, because it's a fight to establish genuinely social measures of human activity. The market only measures profits, and that's not even a beginning.