The Violence of Privatization

THE VIOLENCE OF PRIVATIZATION
Hal Pepinsky, pepinsky@indiana.edu, pepinsky.blogspot.com
January 16, 2010

I had been thinking about the violence of privatization in the wake of news stories about Xe, formerly Blackwater, in the heart of CIA and military operations in Afghanistan. Before I got around to blogging about it, a story on NPR’s Morning Edition on January 12 topped news of US privatization from abroad:
Short Of Cash, Arizona To Sell State Buildings

STEVE INSKEEP, host:
Starting today, $5,000 will buy you a piece of Arizona's government. We're not talking about buying access to legislators here. We're talking about the buildings that they meet in. More than two dozen state buildings are for sale and that includes the House and Senate and the governor's office. NPR's Ted Robbins explains.
TED ROBBINS: It's a bit unusual to sell a state capital, state hospital, prisons and park visitor centers, but when you have a billion and a half dollar deficit to make up between now and July, Arizona Department of Administration spokesman Alan Ecker says you do unusual things.
Mr. ALAN ECKER (Spokesman, Arizona Department of Administration): The proceeds will be going to - straight into the Arizona state general fund to offset the budget crisis that we're dealing with.
ROBBINS: The total - $735 million, Arizona would then lease back the buildings over 20 years. Investors would buy $5,000 certificates of participation and get an estimated four to five percent interest a year. The question is, how safe is an investment in the state of Arizona? Its credit rating was downgraded just last month because of its budget crisis. But Alan Ecker says, in this case, we're talking about buildings which have to operate if Arizona remains a state.
Mr. ECKER: So the state would be very, very unlikely to ever default on payments and walk away from those facilities. So investors should have a strong piece of mind.

And a couple of weeks earlier, the governor of California defied the guards’ union and proposed to cut back on prison staffing, adding insult by proposing to re-invest in cheaper private prisons. By the time I moved out of Indiana, the governor there had privatized prison food services and medical services, the Indiana turnpike…a slew of state services. The jail I opposed in Bloomington in 1984 was built by a private leasing corporation established for the purpose, whose attorney, the county attorney besides, made $90,000 from sealing the deal in 1984—this for a 30-year lease which allowed the county to go into deeper debt than Depression-era bonding limits allowed.
Haiti is back in the news. President Obama has delegated former presidents Clinton and Bush II to coordinate national relief efforts. Bush I sent in the Marines to topple arguably the only democratically elected president, Aristide. President Clinton allowed Aristide to return to office with the understanding that Aristide would accept IMF terms for further privatizing the Haitian economy, enhancing foreign for-profit investment. This privatization was said this week to have culminated in Bill Clinton’s success in getting foreigners to invest in a couple more tourist hotels. Even so, President Bush II had US forces kidnap President Aristide and drop him off in Africa, where he remains (although he now is determined to come home, some hope to become a rallying point for earthquake mobilization).
Privatization to the left of us, privatization to the right of us, privatization in front of us, privatization behind us. I first noticed the contemporary wave of privatization when Jill, Katy and I lived half a year in 1983 in Sheffield, England. We were at the local union bar hall as news came through that Maggie Thatcher had won re-election as prime minister, and when she broke unionism’s back in shutting down the coal strike. Prime Minister Thatcher thereafter sold off this and that public service from telephone service to maintenance of train tracks. Then as now, the rationale was that state assets were needed to pay public obligations, and the myth that the private sector could provide more cheaply and efficiently than did government bureaucrats and coddled workers.
The promise of privatization is a lie. It promises extra cash, but once the extra cash is spent, only greater private indebtedness is left. Yes indeed, it amounts to living off the backs of our children, a recurrent subject of discussion on public indebtedness these days.
Privatization is inherently violent in two respects. First, it is pretty much legally recognized that managers of for-private corporations have a primary duty to maximize profits for shareholders, that is, to maximize the gap between what, as perfect bureaucrats, managers give and get. In the public sector, we call this “corruption” of power. (When I think of “bureaucrats,” I think of uniformly dressed workers making decisions in privately monitored and controlled office cubicles before public workers come to mind.)
Second, private businesses who are given state monopolies are publicly unaccountable. (I say “businesses who” because my country’s supreme court has declared corporations to be “persons” by law, entitled to the same constitutional rights as individuals.)
When a handful of prisoners escaped several years ago from a private prison in northeastern Ohio, state legislators who knocked at the gate to inspect the prison were turned away. Public records or freedom of information laws have come along in my country in my adult lifetime. There is no public right of access to private business data unless governments make public access a condition of state contracts, except by court-ordered discovery in a legally recognized “cause of action.” Privatization violates the first principle of making peace with violence: transparent honesty.
Privatization is public violence. In the game of public violence, impoverishment, darker skin tone, feminization and infantilization compound suffering. I recommend the January 15 broadcast at democracynow.org for a review of how the first black American nation to be liberated in name from slavery in 1804, Haiti, became the most privatized, occupied, exploited nation in the Western Hemisphere, vulnerable to natural disaster almost beyond imagination.
I mourn violence we suffer by selling public assets for private gain. Love and peace--hal