Questioning the privatisation obsession

Addressing the World Economic Forum in Davos, Australian Prime Minister Tony Abbott used as his principle theme the need for international trade to expand in order to increase prosperity all round and lift millions of people in the developing world out of poverty.

That’s something we can all subscribe to – providing the benefits of trade are distributed fairly among populations by their respective governments.

A secondary point, urging smaller government and increased outsourcing of State functions to the private sector, seemed almost as non-controversial. After all it has been the mantra of the right-of-centre and centre-left since the days of Reagan and Thatcher.

The concept that Abbott and many before him are supporting is that anything run by a government is inherently clunky, its employees too numerous, indifferent and uninspired, while in the real word of the private sector the profit motive results in sleek, lean service-orientated operations where motivated staff work hard to provide, in the words of biz-speak ‘world’s best practice outcomes’.

And yet.

Leaving aside the outpouring of papers from right-wing think tanks whose ideologically hand-picked experts fulfil the demands of their paymasters, I am still in search of one reputable, independent, rigorous piece of research that supports this proposition.

Of course there are many examples, most commonly from Stalinist and former Stalinist States, of impossible five-year plans, fudged figures, and rampant corruption, but there are also many thousands of private business failures each year, and at least a proportion of these result from just the inefficiencies and poor planning that are regularly blamed on the public sector.

The move towards privatisation is unrelenting, no matter which side of politics is in power; the International Monetary Fund and the World Bank demand slashing cut in the public sector of governments that have suffered greatly in the Global Financial Crisis – somewhat ironic considering the crisis resulted in the first place from gross mismanagement by private sector banks and other lending institutions.

I was interested to read that in the United Kingdom there is a growing chorus calling ‘enough’. A cross-party group of Westminster MPs is backing a Private Members Bill which would make public ownership the default option, give the public a say over whether services are privatised and make private companies running public services more accountable.

MP Elfyn Llwyd, who is supporting the Bill, says public opinion is on its side.

“Outsourcing companies need to be held to account and privatisation should not go ahead unless the public supports it,” Llwyd says.

The MPs are supported by a grassroots movement called We Own It, whose Director, Cat Hobbs, says people are “sick of the endless stream of sell-offs and outsourcing deals”.

The Bill has no hope of success in a Parliament where both major parties are devotees of privatisation, but the subject could well be an issue when the next election comes round in 2015.