What happens when public goods are privatized?

Studies in Political Economy

Volumn , Issue 74, 2004, Pages 45-77

  Altvater, Elmar ^a  

^a FREIE UNIVERSITÄT BERLIN   (Germany)

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EID: 13844277092     PISSN: 07078552     EISSN: 19187033     Source Type: Journal    
DOI: 10.1080/19187033.2004.11675137     Document Type: Article

References (56)

1. This text was written as part of a research project about the effects that global transformation has on human security and public goods. In addition to the author, Birgit Mahnkopf, Dagmar Vinz, and Beate Andrees took part in the preliminary work. Their ideas have become an integral part of this paper.
2. Inge Kaul, Pedro Conceicao, Kattel Le Goulve and Ronald Mendoza, Providing Global Public Goods: Managing Globalization (New York: 2003).
3. United Nations Development Program (UNDP), Human Development Report (New York: 1994).
4. Commission on Global Governance, Our Global Neighbourhood (Oxford: 1995).
5. Commission on Human Security, Human Security Now (New York: 2003).
6. Elmar Altvater and Birgit Mahnkopf, Globalisierung der Unsicherheit: Arbeit im Schatten, schmutziges Geld und informelle Politik (Münster: 2002).
7. Fred Hirsch, Die sozialen Grenzen des Wachstums (Reinbe: 1980).
8. Roy Harrod, "The Possibility of Economic Satiety: Use of Economic Growth or Improving the Quality of Education and Leisure: Problems of United States Economic Development," Committee for Economic Development 1 (1958), pp. 207-13.
9. Elmar Altvater, Der Preis des Wohlstands oder Umweltplünderung und neue Welt(un)ordnung (Münster,1992);
10. Elmar Altvater, "Die Ordnung rationaler Weltbeherrschung oder: Ein Wettbewerb von Zauberlehrlingen," PROKLA: Zeitschrift für kritische Sozialwissenschaft 95 (1994), pp.186-226.
11. Karl Marx, Grundrisse der Kritik der politischen Ökonomie (Berlin: 1953).
12. Paul A. Samuelson, Foundation of Economic Analysis (Cambridge, Mass: 1953).
13. Robert A. Musgrave, Finanztheorie (Tübingen: 1969).
14. Inge Kaul, Isabell Grunberg and Marc Stern, Global Public Goods: International Cooperation in the 21st Century (New York: 1999).
15. Sabine Nuss, "Download ist Diebstahl? Eigentum in einer digitalen Welt," PROKLA: Zeitschrift für Sozialwissenschaft 126 (2002), pp. 11-36.
16. In a tersely worded news release: "According to the US development authority USAID the Iraqi harbour Umm Kasr is under civil administration. On Friday it was put under the supervision of the US-American company Stevedoring Services of America, it was said" ( Tagesspiegel, 25 May 2003, p. 5). The US military managed to take the public infrastructure out of the hand of the resulting Iraqi state and transfer it to the "civil administration" of a private US company. The expropriation of private property, no matter by whom, has always triggered the most enraged protests, political demarches, and even military intervention, but when a defenceless state is dispossessed for the benefit of private US companies, nobody lifts a finger, there is not even a verbal protest against this outrage.
17. Altvater, Der Preis des Wohlstands oder;
18. Altvater, Die Ordnung ratiionaler Weltbeherrschung oder
19. William K. Kapp, Volkswirtschaftliche Kosten der Privatwirtschaft (Tübingen: 1958).
20. Elmar Altvater, Gesellschaftliche Produktion und ökonomische Rationalität - Externe Effekte und zentrale Planung im Wirtschaftssystem des Sozialismus (Frankfurt: 1969).
21. Adam Smith, An Inquiry into the Nature and Causes of The Wealth of Nations (Chicago: 1976), Book 5, Ch. 1.
22. Ibid., pp. 244-82.
23. Ibid., p. 245.
24. Ibid., p. 247.
25. Ibid., p. 253.
26. Ibid., p. 254f.
27. Marx, Grundrisse, p. 524.
28. Ibid., p. 430., my emphasis.
29. Ibid., p. 432., my emphasis.
30. Ibid., p. 428f.
31. Ibid., p. 431., my emphasis.
32. Ibid., p. 424f.
33. Garrett Hardin, "The Tragedy of the Commons' Science," 162 (1968), pp. 1243-48.
34. Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: 1990).
35. Charles Wyplosz, "Global justice. Beyond International Equity," in Kaul et al., (eds.), Global Public Goods.
36. José de Luna Martinez, Globalisierung und Finanzkrisen: Lehren aus Mexiko und Sükorea (Berlin: 2002).
37. Kaul et al., (eds.), Global Public Goods, p. 159.
38. Elmar Altvater and Birgit Mahnkopf, Grenzen der Globalisierung. Politik, Ökonomie und Ökologie in der Weltgesellschaft (Münster: 1999).
39. UNDP, Human Development Report, Kaul et al., (eds.), Global Public Goods.
40. Bodo Zeuner, "Das Politische wird immer privater. Zu neo-liberaler Privatisierung und linker Hilflosigkeit," in Michael Heinrich and Dirk Messner, (eds.), Globalisierung und Perspektiven linker Politik (Münster, 1998), pp. 284-300.
41. Birgit Mahnkopf, "Formel 1 der neuen Sozialdemokratie: Gerechtigkeit dutch Ungleichheit," PROKLA: Zeitschrift für kritische Sozialwissenschaft 30/4 (2000), pp. 489-526.
42. Egon Matzner, "A Preliminary Note on Privatization Mechanisms." Paper presented to the European thematic network "Improvement of economic policy co-ordination for full employment and social cohesion in Europe," (2003).
43. Here we cannot deal with the privatization of common land such as the Ejido in Mexico after the constitutional reform carried out when NAFTA was formed. Also lacking here are passages on privatization by means of corruption, which in many countries (in central and eastern Europe, in East Germany after unification, in Argentina and elsewhere) have led to public expropriation on a massive scale for the benefit of private actors.
44. WBGU, Wissenschaftlicher Beirat der Bundesregierung Globale Umweltveränderungen: Welt im Wandel. Neue Strukturen globaler Umweltpolitik (Berlin: 2001).
45. At the Documenta 11 art exhibition in Kassel in 2002, the "Lament of the lmages" collage by Alfredo Jaar clearly demonstrates the consequences of the privatization of the "information" public good by means of pictures. One example he draws upon is that Bill Gates purchased 17 million pictures and is storing them in a limestone quarry in Pennsylvania in order to prevent public access to them until they are scanned and digitized by Gates and made accessible only for a fee. In this manner the visual memory of a society is privatized and in any case manipulated and weighted in favour of those with private money to spend. A second example he adopts is the Pentagon's purchase of the exclusive rights to all satellite pictures of Afghanistan and its neighbouring countries to prevent pictures of the air strikes and their effects during and after the war of 2001 from getting into the public domain uncensored. The privatization of a public good always involves a loss of public accessibility and hence a restriction of democratic participation.
46. Mahnkopf, "Formel 1 der neuen Sozialdemokratie."
47. Zeuner, "Das Politische wird immer privater. Zu neo-liberaler Privatisierung und linker Hilflosigkeit."
48. But in the meantime first signs of a "solidarity economy" have also begun to emerge from this deficiency (as perhaps in Argentina and Brazil).
49. Weltbank, Weltentwicklungsbericht (Washington: 1994).
50. John Sulston, "Das Menschliche Genom: Eine Entdeckung, keine Erfindung," Le Monde Diplomatique 6928 (13 December 2002).
51. Hardin, "The Tragedy of the Commons."
52. Elmar Altvater, Die Zukunft des Marktes: Ein Essay über die Regulation von Geld und Natur nach dem Scheitern des "real existierenden Sozialismus " (Münster: 1991).
53. After 30 years, the local government can exercise an option to buy the facility back, i.e., cancel the contract. If it does not exercise this option, the ownership of the facility reverts for the rest of the time stipulated in the contract (69 years) to the investor, who then can have the facility run by private investors.
54. Conversely, the "damage" incurred by the investor would be an additional source of tax revenue for the government of the USA, which would have to be paid by the German municipality. In this deal only the "investor" cannot lose.
55. The contracts are drawn up in accordance with US law (the jurisdiction is always New York). Usually only an abridged version is shown to the responsible people in the municipality. There is every reason to fear that in the case of legal disputes the municipalities will have a hard time asserting their position against the trust, law firms, and investors in the jurisdiction of New York. That is why critics emphasize that CBL is high-risk venture.
56. Enquete-Kommission: Deutscher Bundestag (Hrsg.). Schlussbericht der Enquete-Kommission Globalisierung der Weltwirtschaft (Opladen: 2002).