This NACLA Report focuses on privatization—the conversion of public entities into privately-owned, profit-oriented businesses. As Bea Edwards details in her introductory article, international lenders have required would-be borrowers to sell off not just government-owned mines and industries but also public utilities, railroads, even highways. Not even public schools and hospitals have been spared.
When we began planning for this issue last year, it seemed that privatization was an unstoppable force in Latin America. Needy governments were in no position to resist the lenders’ demands. Over the last months, however, in country after country, anti-privatization movements have begun to take shape. These differ in their emphasis and scope: In Bolivia, where Cochabamba residents successfully fought the sale of the local water company, privatization is becoming a key issue in national politics. In El Salvador, old political foes of the civil war days are now facing off over hospital privatization. In Mexico, privatization of the electrical system may become a political flashpoint. In Peru, privatization of the telephone company and utilities have sparked local protests. It remains to be seen how effective any of these movements will be in the long run and whether they will develop a more comprehensive critique of the neoliberal agenda of which privatization is merely a part. But the protestors have at least encouraged some governments to question whether privatization is, as its promoters claim, an economic panacea.
The neoliberals who proselytize for privatization are the true ideological heirs of classical liberals: Confusingly for many in the United States, where the liberal label is now applied to those who argue that governments should provide social services for their citizens, 19th century liberals actually believed that free markets and free trade were all that was needed to ensure everyone’s welfare. But even after postcolonial Latin American economies were “opened” to the international economy and to free market forces, the vast majority of Latin Americans were still horribly poor—and many Latin Americans felt that they were being exploited by foreign nations and companies that exported profits and resources without doing anything to develop the region. Elizabeth Dore describes the historic response in her article: Through the first two-thirds of the 20th century, many Latin American governments took key industries and utilities out of foreign hands by nationalizing them.
Undoubtedly, these nationalizations did not usher in an economic golden age for Latin America either: By the end of the 20th century, many government entities were ridden with corruption, overstaffed and burdened with woefully outdated equipment. But rather than demanding reform and modernization of the public sector—and providing the resources for both—international financial institutions have instead demanded the sale of public entities. The privatizers promise that profit-seeking new owners will make these entities more efficient, less corrupt, more responsive to “customer” needs. New private industries are also supposed to create new jobs. But in country after country, our contributors report, almost none of this has happened.
Despite this, the privatizers press ahead with an agenda that is even more radical than that of their 19th century forebears: The neoliberals want to altogether abolish what has been dubbed “the commons”—that realm where members of a society agree to act together to meet social needs. Over the course of the last century, as a result of ongoing struggle by poor and working people around the world, the provision of at least minimal levels of such essentials as food, housing, education and health care had increasingly come to be seen as a social responsibility. In the past, governments provided these services, or subsidized their provision, because it had come to seem clear that society as a whole suffers when citizens who are too poor to provide them for themselves at “market” prices go hungry, sick, uneducated or unhoused. If governments abandon this role, there is no reason to think that profit-driven companies are any more likely than they ever were to fill the gap. And the privatizers’ promises notwithstanding, the poor are still with us—indeed, they have grown more numerous as privatization advances.
