To the Privatization Elite: Prove It Works, or Get Out of Town!

They’ve gotten away with this for far too long, living off the fantasies of their snake oil slogans, as well as their lies. Now is the time to call them on it all. If privatization of everything—-from prisons and schools to energy and water, and from health care to Social Security---is so great, let’s see you prove it.

There are enough examples out there now, some running for decades. Show us the money you saved. Show us the efficiency of the private sector, the magic of the marketplace in providing better and more affordable health care, cheaper energy, better schools at lower costs. Spare us the platitudes. Prove it. Prove that privatization works.

The time is right to make this demand because privatization has suffered what looks so far like it’s first major defeat. As Paul Krugman says in his column, Bush’ plan to “reform” Social Security was seen for what it was, as privatization of public insurance, turning it into a risky investment benefiting bankers rather than a guaranteed social safety net earned by every American worker for their old age.

Krugman draws some general lessons. For example: “But the campaign for privatization provided an object lesson in how the administration sells its policies: by misrepresenting its goals, lying about the facts and abusing its control of government agencies. These were the same tactics used to sell both tax cuts and the Iraq war. “

The lies continue, he warns, as Bush officials lie shamelessly about the vulnerabilities and design of Social Security. But the “public's visceral rejection of privatization” should embolden Democrats to go after the Bushers for their “pattern of deception” on this and other major matters, Krugman says.

But there’s another opportunity here, which is to bring the debate on the whole mythology of privatization into a sharp focus, and finally demand that if proponents believe that privatization works so well, it’s time to prove it.


The policy of privatization emerged as one of the major mantras and most destructive changes that began in the 1980s and still threatens America’s future today. Privatization is another way that America turned itself inside-out, reversing what had been public with what had been private.

Privatization became policy in the Reagan years, when the relationship between big money (individuals and corporations) and politicians (mostly Repub and ultra-conservative, but not exclusively) stopped being kissing cousins and started on the road to blatant incest.

While big money worked its wonders behind the scenes, buying politicians, media outlets and making media stars (either merely subservient or wholly owned), the campaign succeeded politically through a new rhetoric: disguised as good old boy common sense, it was insidiously effective advertising sloganeering, so slippery and yet so outrageous that it left opponents speechless.

Privatization followed the so-called taxpayer revolt of the 1970s, which cut municipal and state taxes so severely that public schools, public health and public infrastructure gradually but decisively deteriorated. It also followed Reagan’s federal tax cuts and budget cuts, which further reduced public funding to these state and local programs.

Then came the heavy guns of rhetoric. How were all these public services going to be financed with less tax money, opponents wanted to know. Easy—privatize them! They were just wasting the taxpayer’s hard earned money anyway, full of fraud and abuse. That kind of thing would never go on in a private company! Private companies have to be efficient, they have to deliver. Let them compete and free the magic of the marketplace. Replace the pencil-pushers with hard-nosed can-do entrepreneurs, the kind that made America great.

After the junk bond scandals of the 80s, and certainly after Enron, which privatized energy and rippedoff California’s taxpayers for billions to pay for electricity at prices that had no basis in any reality except the deception and greed of corporate criminals and their political supporters, that such arguments would be laughed off the stage. But they are still being made, every day.

The latest arena is water. Municipalities all over North America (as well as in the UK and virtually everywhere globalization reaches) are under pressure to sell their water systems to corporations. Who, they claim, can deliver water more efficiently at a better price to consumers, while relieving taxpayers of the burden.

Water is just about the last major public utility to survive in America. Despite all the bottles of water everyone carries, and all the pollution and chemical poisons that efficient private industries have poured into the rivers and lakes, and leached into the water table (for getting others to pay for your waste is part of being efficient), America’s municipal water systems are still quite good. They deliver reasonably high quality and healthy water to every home reliably and at low cost.

Not in Atlanta, however, when it turned to a private company to supply its water. The company withdrew from the market after several years of disaster, including violation of federal drinking water health standards. Ten regional water systems in the UK were privatized, resulting in 50% price hikes, and soaring disconnection rates, thanks to efficient meters that automatically shut off the water when a customer failed to “pre-pay.”

Most other privatizations have been equally disastrous or worse. Even the war in Iraq has been privatized, with privately contracted torture management and Halliburton’s efficient use of food service funds to provide soldiers with spoiled food while creating sumptuous feasts for company executives and their cronies.

The time is also ripe to use the “prove it” demand to change the health care debate. The US privatized health care system is in effect nothing less than barbarous. The burden of proof should not be for proponents of public funding for universal health care, but for the supporters of the current system to prove that it shouldn’t be dismantled immediately, and the officers of HMOs forced to get all their medical care in emergency rooms.