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JHB's Journal
JHB's Journal
June 14, 2016

The Hidden History of the Privatization of Everything

Crossposting from Good Reads

Note From The Editor

Introducing Our Feature Series On Privatization
Josh Marshall
Today TPM is kicking off a richly reported four part series on privatization and the privatization movement in the United States. We’ll begin later this week with a detailed look at the history of the privatization movement, particularly its ideological origins in post-New Deal America, as intellectuals who feared the growth of government searched for ways to limit its growth. Later, their work combined with that of conservative political strategists who saw privatization as a way to eliminate key political constituencies supporting government spending. By the 1980s and 1990s, these principally ideological and political projects came together with a range of corporations, some new and some old, eager for access to the business opportunities privatization had and would continue to create.

From there we will look at public-private partnerships and particular industries like the corrections industry to see how privatization works in practice. Public debate on the issue often focuses on costs and savings. Does privatization really reduce costs to tax payers or simply enrich private businesses? Our series will look closely at that issue. But we will also focus on the way privatization often limits the scope of democratic government itself - taking key public policy decisions away from democratically elected or accountable authorities and handing them over to private corporations, whose methods and practices are either hidden from public view or are actually trade secrets they own.

Part 1
The History of Privatization
How an Ideological and Political Attack on Government Became a Corporate Grab for Gold

Donald Cohen

Rising discontent with government during the 1960’s and 1970’s created fertile ground for privatization advocates like Savas and Robert Poole, founder of the Reason Foundation. Not only did they see opportunity for increased contracting out, but they seized the moment to recast existing municipal practices as living proof that their ideas were correct. Local governments had considerable experience contracting for basic services. San Francisco, for example, began contracting with private companies for trash collection in 1932.

The urban fiscal crises of the 1970s offered the perfect opportunity to create a rationale for contracting out public services. Cities across the country were facing declining revenues as middle class families and manufacturing companies fled to the suburbs and Great Society welfare programs increased costs. The lengthy 1973 recession pushed cities into crisis and toward Savas’ solutions. Privatization was no longer only a right-wing attack on popular government services, but increasingly becoming a managerial response to tight city budgets.

By the end of the 1970s, the table was set. Cities were in fiscal crisis and a new conservative think-tank infrastructure (Reason, Cato, Heritage, ALEC, and others) that embraced privatization as a core strategy to downsize government was ready for a frontal assault.

And then a new president was elected.

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