Talk:Privatization

Moved from article page

Should only the original names of the companies appear here?

This page needs a lot more info.

I completely concur, especially information on post-Communist economies, where privatization has had a far greater impact on society.

Within a day or so I’m going to totally revamp this article.

172

There has been some nice work here since I last looked at it. I think that the discussion of natural monopolies when privatized could be expanded to discuss their regulation and the distinction between regulatory regimes that cap prices and those that cap return on capital. Does anyone agree? -- Alan Peakall 17:29 10 Jun 2003 (UTC)

I have removed the following:

"This was the case in the privatization of California's electricity market: electricity producers were able to manipulate the electricity market by turning their power generators off. The result was higher costs for consumers along with routine black-outs. Pro-privatization advocates insist the cause of the problem was that the California government still held too much control over the market, and true market processes were stymied".

The electricity market in California was largely in private hands. The main players were Pacific Gas & Electric, Southern California Edison and San Diego Gas and Electric. The problems arose from an inefficient deregulation of the market. Ownership of certain power stations was transferred in order to increase competition in the wholesale market. In return for divesting some of their power stations the major utilities negotiated a deal to protect them from their assets being stranded. Part of this deal involved price caps for retail customers and a prohibition on the utilities from entering into hedging arrangements. The consequence was the PG&E and SocCalEd were forced to buy from a spot market at very high prices but were unable to raise retail rates. They lost billions and were reneging on power purchase deals and limiting supply. San Diego had worked through the stranded asset provision and was in a postion to increase prices to reflect the spot market. Small businesses were badly affected. Overall chaos!

The consequence has been state intervention and high retail prices. Nothing to do with privatization.

(Identifying the snippet I removed Tiles 00:01, 29 Sep 2003 (UTC))

-- I put that snippet at California electricity crisis with some editing dml

The list of privatizations is nice, but begs listings from *other* countries besides the UK, meaning it could get VERY long. -- Viajero 16:43 4 Jul 2003 (UTC)

If it did get really long may, and you are right it certainly should do, we could farm it out it List of privatizations and put a smaller table in here which contained collated data - e.g. amount raised per country per year? Pete 00:25 5 Jul 2003 (UTC)

- Well, sounds like an ok idea, but such a list would be a big chore to compile and probably a long while in coming. For the time being it is ok. I will add some companies from Argentina and Bolivia which were privatized.

Privatization is frequently associated with industrial or service-oriented enterprises, such as mining, manufacturing or power generation, but it can also apply to any asset, such as land, roads, or even rights to water. In recent years, government services such as health, sanitation, and education have been particularly targetted for privatization in many countries.

This kind of wording is called rhetoric, which means non-NPOV. You can simply state the fact neutrally like (notice very rough writing)

it has become common that heavy industrial enterprieses are privated but recently to improve efficiency, traditional government services such as education are sometimes privtized.

The fact is completely equal but the impression is different. -- Taku 03:38, 28 Sep 2003 (UTC)

Sorry, Taku, but I find your version worse. First, entities such as land, roads, and water rights are being nationalized. Second, to simply state that that privatizations are taking place to improve efficiency retreats into vague technocratic language hiding the main actors involved by For me, to improve efficiency is a highly idealogically laden phrase; it isn't some kind of neutral virtue. But what means is efficiency measured? Who benefits? -- Viajero 06:36, 28 Sep 2003 (UTC)

I have a problem with the language used in this article. It constatly refers to "companies", "buisness" and "customers" and so on. It doesn't sound very neutral. Take for example a hospital, the sick people there cannot in a netural sense be referred to as "customers" and the hospital itself is neither a "company" or a "buisness". Using words like that imply an agreement with the neoliberal theories. BL 17:18, 28 Sep 2003 (UTC)

From article:

These bits still need to be reincorporated:

--==-- On the other hand, income from successful state-owned enterprises can be used for other other, socially-oriented government programs. When governments sell such enterprises, they can lose a major source of revenue. Argentina is a case in point.

Although this strategy allows often corrupt elements to capture control of state enterprises, this strategy would have fostered a viable capital market, which is the mechanism for bringing private savings into investment in enterprises.

that few privatizations of the past few decades can be deemed unqualified successes.

Contents

1 neoliberal vs free market

2 On a totally unrelated question....

3 not to privtized university education

4 A point and a question

5 to balance some issues

6 July 30 Reversion

7 Some distinctions to be worked towards

8 Arguments against privatization

9 Deutsche Post

neoliberal vs free market

I don't think its appropriate to discuss nationalization in the first paragraph here. I do not think it is NPOV to refer to Reagan's policies as "strongly neo-liberal". LirQ

The page on neoliberalism would appear to agree with you. I changed it to "free market". Martin 01:42, 28 Sep 2003 (UTC)

And I changed it to free market again. Free market is a term used by lots of folks, and is uncontroversial. Our article on neoliberalism says that that term is largely used by critics, and descriptions of it considered straw men, and it is therefore POV. Martin 15:10, 28 Sep 2003 (UTC)

(In response to BL's description of Thatcher and Reagan's policies as "liberal") Nor was Thatcher "liberal", either in the UK sense or the US sense. Martin 17:25, 28 Sep 2003 (UTC)

We're not only dealing with the UK and US. The policies of the "Washington Consensus" probably have had a greater impact on Salinia's Mexico, Collor's Brazil, Yeltsin's Russia, and Menem's Argentina, just to name a few cases, where IMF-back structural adjustment programs, stabilization, and privatization have been enacted. And when you go beyond Reagan and Thatcher, it's really hard to use these old "right" and "left" labels. Cardoso in Brazil kept with a neoliberal program, but he considers himself a "viable leftist." So have the "third way" social democrats on both sides of the Atlantic, such as Blair, who have stuck with many neoliberal programs; Cardoso's presidency in Brazil has even been called the "third way in the Third World." Aside from Cardoso, another social scientist/former state governor Ciro Gomes in Brazil is known for promoting a neoliberal program wed to a progressive social agenda, cutting expenditures on the civil service, while investing more directly in certain sectors (e.g., health, roads, bridges, etc.) to promote long-term growth, promote progressive distribution of wealth, and improve living standards. His party is known as the "Progressive Socialist Party," despite advocating a neoliberal program. Thus, the term "rightwing" doesn't always apply, and can be considered non-NPOV; in fact, only the far-left would try to apply the term so broadly. In addition, the term "free market" is more a slogan than anything else. For instance, the Town and Village Enterprises in China (TVEs) account for a very large sector of the Chinese GDP. They're "free market" in that the distribution of what they produce is determined by market forces of supply and demand; they also chose the destination of their outputs, and chose the destination of inputs. But they're publically owned at the local level. You can apply both the term "free market" and the term "socialist" to the TVEs! Where "right wing" would come in would be anyone's guess; and the term "neoliberal" cannot be applied by any means, as they are a form of public ownership. In short, this is the case because China is the best example of a market reform program that rejected neoliberalism.

In short, the least bad term that you can use for the wave of economic restructuring and reform associated with the Reagan and Thatcher era over the past two decades is "neoliberal." Please don't change it again. 172 22:28, 28 Sep 2003 (UTC)

I maintain that describing Thatcher and Reagan's policies as "right wing" and "pro-free market" is more accurate, more neutral and more widely understood than "neoliberal". I agree with you that when describing the worldwide spread of privatisation that came after, both terms are inappropriate. However, we're looking here for an adjective to describe Thatcher and Reagan's policies, not an adjective to describe worldwide pro-privatisation policies. Martin 22:54, 28 Sep 2003 (UTC)

I concur with Martin. LirQ

"Supporters of concepts found in neoliberalism, such as free trade and capitalism..." -- I believe that "free trade" is the "neoliberal" concept behind privatization. Also, is privatization necessarily "neoliberal" -- Bush is a "neoconservative" and he is pretty big on privatization. LirQ

Martin:

First, let me address your point about the term "liberal." We are not referring to the "liberalism" of the New Deal or social democracy. The "liberalism" of the term "neoliberal" refers to the "laissez faire" or "classical liberalism" of the classical economists (e.g., Adam Smith and David Ricardo), the neoclassical economists (who predominated the study of what was then "political economy" before Keynes), and most recently the monetarists. In popular discourse today, the heirs to "classical liberalism" are known as "libertarians."

Of course. My point on liberal was in response to BL's use of the term. I clarified above. Martin 11:30, 29 Sep 2003 (UTC)

I know that it can get confusing to non-experts. But the programs we think of as "conservative" in popular discourse (Thatcher and Reagan) are derived in their theoretical assumptions from the economics of "classical liberalism." As the political and historic context shifted over many years, "liberalism" in the United States began to refer to the tradition of the New Deal, while the term "liberalism" in economics remained fixed. Yes, today's "neoconservatives" back a "neoliberal" economic program. But some "neoliberals" reject aspects of the "neoconservative" agenda. The Cato Institute (a neoliberal think-thank in the US), for instance, rejects a unilateralist, aggressive foreign policy because it's too costly and bad for the economy; moreover, they favor free trade whenever possible, thus backing normalization of relations with regimes the neoconservatives consider "evil."

Second, this is an article on "privatization" in general, and is not to be arbitrarily confined to the US and UK. The acceptance of neoliberal monetarist economics in the developed countries during the Reagan/Thatcher years has had a great impact on the rest of the world, as they helped to shape the IMF, World Bank, and US Treasury Department policies vis-à-vis developing countries with balance of payment and inflation crises. The neoliberal "Washington Consensus" medicine of "shock therapy" (i.e. de-controlling of prices and exchange rates), macro-economic stabilization (i.e. cutting government expenditures, raising taxes, deregulation, slashing wages, enacting tight-money policies, high interest rates, and immediately opening up markets to foreign competition), and privatization (in the form of competitive bidding, in order to strengthen capital markets, not redistribution) was prescribed across the world as conditions for loans and debt restructuring.

In that sense, the revolution of economic policy in Britain and the United States probably had a greater impact on the countries of medium-level economic development where the neoliberal programs were implemented, such as Salinas' Mexico, Collor's Brazil, Yeltsin's Russia, Fujimori's Peru, and Menem's Argentina, than it did on the UK and US.

I don't know what kind of agenda you might have, but if this were not a user-edited encyclopedia, you'd be alone among political scientists and political sociologists in believing that you can broadly apply the term "right wing" to a diverse, and not always overlapping, sets of policies in Eastern Europe, Latin America, and even parts of Southeast Asia and Africa, over the past couple of decades. Furthermore, "free market" is such a broad term that it's really a slogan in most discourse.

I refer the honourable member to the answer I gave some moments ago: "I agree with [172] that when describing the worldwide spread of privatisation that came after, both [free market and right wing] are inappropriate". Martin 11:55, 29 Sep 2003 (UTC)

I'm frankly fed up with this attitude in general on Wikipedia. This attitude can be summed up in these words: "Let the proper placement and definition of scholarly literature be dammed. I have an opinion, and a personal agenda that I won't utter, and that's more important than correct usage of terms with precise meanings and all academic literature." 172 00:05, 29 Sep 2003 (UTC)

Personally I would settle for language that is comprehensible to the reader. Also I must say that you don't really seem to have read what Martin said above at all. The whole of your (perhaps boilerplate) diatribe does not address the point at all, but tries to spread it out into a huge splodge. When we are evaluating what to call Reagan and Thatchers policies, we are discussing just that, not some nebulous other thing. When the article addresses wider issues, a more general view should reign, but when we are talking about Reagan and Thatcher, insisting that a view encompassing only the US and UK is not apposite, is madness. -- Cimon Avaro on a pogo-stick 00:18, 29 Sep 2003 (UTC)

No, proper and precise use of terms trumps all else. This is not at the expense of articles being "comprehensible" either. We have the hyper-links. If a reader doesn't recognize a term, he/she can click on the hyper-link; in this case a reader can click on "neoliberalism" if the term is unfamiliar or confusing. We are also not simply looking at Reagan and Thatcher's domestic policies, but a wave of privatization throughout the world. 172 00:50, 29 Sep 2003 (UTC)

Come again? When we are choosing a description for Reagan and Thatcher's policies, we are not simply looking at their policies, but a wave of privatization throughout the world. No, really, run that by me again, I missed something... -- Cimon Avaro on a pogo-stick 01:17, 29 Sep 2003 (UTC)

This really has a lot to do with POV, the article originally said "strongly neoliberal views of Reagan and Thatcher" -- obviously the neoliberalism, of a person, is a variable; thus, it is sort of POV to associate privatization so "strongly" with neoliberalism. LirQ

At free market it is said, "The economic and political application of the concept of the ideal free market is known, primarily by detractors, as neoliberalism." LirQ

Precisely: my concern is that neoliberal is a loaded term that would not be accepted by Thatcherites and their ilk. The current intro, courtesy of Lir, addresses that concern well. Martin 11:55, 29 Sep 2003 (UTC)

Cimon Alvaro:

No, we are not. We don't need a description for political context within which Reagan and Thatcher enacted some neoliberal programs (including privatization) in their respective countries. We are not describing the politics of Reagan and Thatcher. That's for another article.

Reagan and Thatcher were brought up for another reason: to frame the time period of the wave of privatization throughout the developed, post-Communist, and developing worlds. Thus, in the intro, we want to bring up the phenomenon of the wave of privatization, which has been a pillar of a more general global wave of neoliberal market reforms, not "right wing" politics.

The policy revolution in economic policy of those years was heralded by Reagan and Thatcher; that's why they're mentioned in the intro, even though we need to focus on the entire world beyond the UK and US. The "Washington Consensus" of structural adjustment, stabilization, and privatization was later carried out throughout the developing and post-Communist worlds due to both domestic realities within these countries, and international pressure (coming from the developed countries) to enact certain neoliberal macro-economic and micro-economic (and privatization is a pilliar of the micro program, along with trade liberalization and deregulation) reforms in order to reach the terms set by the IMF, US Treasury Department, and World Bank for debt restructuring and loans. That's why Reagan and Thatcher were brought up in the context of a wave of neoliberal reforms (including privatization) globally. 172 01:51, 29 Sep 2003 (UTC)

By "neoliberal market reforms" -- are you referring to the so-called "free market"? LirQ

Cimon Alvaro and Martin:

Let me just sum up what I've been saying since it appears to have gone over some heads. Political terms need to stay out of this article, as it is one on economics and not politics. In addition, there are huge problems with saying that the increasing popularity of privatization is a part of a wave of "right wing" politics and "free market" reforms. If we are dealing this global trend in economic policy (of which privatization is a pillar of the micro side) over the past two decades, the term that fits best, in that it encompasses the most and excludes the least, is "neoliberal." 172 02:08, 29 Sep 2003 (UTC)

BTW, Cimon Alvaro's current revision is better than some others earlier. However, "epitomized" (see Cimon Alvaro's use of this term in the current revision) is not really a good term. It ignores the relationship between the the rise of Reagan and Thatcher in the US and UK and the implementation of neoliberal programs abroad in later years, especially in developing and post-Communist countries. Please see my earlier comments on this page, which sketch the relationship. Another term should be used that suggests a relationship. 172 02:14, 29 Sep 2003 (UTC)

172, I think your point about "sloganizing" is a good one. But how can economics and politics really be separate? I don't think you can talk about things like privatization and free-market reforms without bringing in politics. It isn't poor people who are clamoring "open markets" and such; it is a wealthy elite in powerful institutions cultivating armies of "organic intellectuals" to articulate and justify their aims. -- Viajero 09:26, 29 Sep 2003 (UTC)

Since this is an article on a microeconomic policy, the political side can be neglected to a point, as it is in other articles on economics. This article has to be limited in scope to defining privatization, sketching the theory behind it, bringing up problems with implementing it, and providing some cases as examples. Once the theory is articulated, then there is room to examine how politics and economics are intertwined. Political structure and institutions are considered in the section on its implementation and criticism of privatization theory. Your points are well-taken (however, popular support for privatization was high in many post-Communist countries - although some are ruing their support now), but they are best addressed in articles on the cases. For instance, I detailed those points when discussing privatization in post-Communist Russia. If you're interested, please take a look at History of post-communist Russia. 172 10:18, 29 Sep 2003 (UTC)

On a totally unrelated question....

I know this is a very ancillary matter. But who inserted the date about 1948 being the date for the coining of the term? Is there a source for this? My sources say the earliest use was in 1968. -- Cimon Avaro on a pogo-stick 02:32, 29 Sep 2003 (UTC)

Just off m-w.com. Martin 11:31, 29 Sep 2003 (UTC)

Good luck with this question. However, my involvement with this article will be limited to keeping the intro on an economic focus, and keeping out slogans. It seems that I killed the interest in deeming the trend "right wing free market;" so I'm happy. 172 02:50, 29 Sep 2003 (UTC)

Lir:

Good job on your latest revision. You expressed a difficult point to articulate very well and you killed the b.s. (i.e. "the paragon of what a modern state...); you pinned down a complex relationship over time, involving an interplay of domestic and international forces across many cases, and you summed it up in a way that fits them all in a very concise way. Keep up the good work. Sorry for my misplaced suspicions. 172 02:57, 29 Sep 2003 (UTC)

Now that the edit war seems to have died down. I just want to add a little about privatization and free market. Even while the neoliberals ofcourse want to put an equal sign between free market and privatization, very few privatizations are ever made that actually increases the competition in the market. Because if the buisness that is sold to private owners has a monopoly before it is sold, it ofcourse will to after it has been privatized. And if the company is sold while it is already subjected to competition it will to after it has been privatized. Indeed, privatization has nothing to do with "free markets", but is only a transferment of public property to private hands. Ofcourse that argument will not keep the neoliberals from claiming the Second Return of Messiah as long as we privatize and the Doomsday if we dont. But atleast we do not have to use their rhethorics. BL 04:15, 29 Sep 2003 (UTC)

Jesus was a capitalist, ya know... heh LirQ

If there is any residual energy, the article on deregulation requires some expert input. Tiles 04:26, 29 Sep 2003 (UTC)

Because a large part of the corporate profits end up in private pockets, the general effectivness of the company is reduced.

I removed Daniel Quinlan's NPOV dispute heading since he has failed to explain himself on the talk page. In addition, he chose to delete a sentence on the PRC, which is an empirically verifiable claim. Hopefully, these revisions aren't a precursor to a pro- versus anti-privatization edit war.

Let me stress the need to keep this article non-ideological. This is an article on a micro-economic program and the theory behind it. The theory's generally valid; the disputes center on when to implement it, or how to do so. We already have theory in favor of privatization sketched (most of which I added myself a while back) and lists of different problems that can arise in its implementation, thus providing the proper NPOV balance. The cases should also be brief and matter-of-fact, leaving few cracks for the expression of ideological agendas.

As an aside, I'd just like to remind to those on one extreme (who oppose all privatizations) and those on the other (who favor privatizing anything) that the same economic policy can have starkly different ramifications depending on when and where it's applied. When designing polices it's best to consider institutional and macro-economic realities, along with the distribution of factor rewards. 172 17:04, 29 Sep 2003 (UTC)

I think I would qualify privatization as a dogma rather than a theory, but that is probably a minor semantic quibble. However, as to its "validity", that is highly debatable. How many successful privatizations have there been? European long-distance telecoms, maybe the UK energy market... But how many others? In Latin America, one of the parts of the world where it has been widespread and you rightly point out should be examined, privatizations have been one long series of disasters, driven not by empirics but by ideology (and greed). Hence, I am not sure whether it is entirely possible (or even desirable) to ban politics entirely from the article. It is not a hard science; theory and practice in this context are just so closely intertwined as to be practically unseparable. -- Viajero 19:51, 29 Sep 2003 (UTC)

172, if you're going to continue to revert any change made against the non-neutral point of view of the article, then the NPOV banner will need to stay forever rather than temporarily. As it stands, the article is so flawed and biased against privatization that it reads like a Marxist schoolteacher talking down to his class. Much more attention has been devoted to "failures" of privatization and examples where privatization is supposedly to blame for poor economic conditions. The pro-arguments are poorly written, etc. The article as it stands lists no successes of privatizations and offers no explanations of the failures other than to say that privatization is bad bad bad. The entire article needs to be reworked. Until the article is reworked, I feel the need to continue adding the NPOV banner to caution Wikipedia readers. I'm not adding the banner without an accompanying offer to work on the article, but it is dismaying that even some initial small changes to remove bias have been reverted. Daniel Quinlan 20:35, Sep 29, 2003 (UTC)

Im not sure if the NPOV banner is appropriate if the complaint is simply, "My viewpoint is not discussed there sufficienty, and my beliefs (when represented) are poorly written." I don't know what specifically you find problematic since you haven't bothered to point it out here, which, I think you should do before adding an NPOV banner. Obviously this is a work in progress. LirQ

Daniel Quinlan:

I'm removing the dispute heading. Next time, demonstrate your points. Right now, we have a section with arguments for privatization and a section raising questions. Both sides are given equal weight. If you find that the cases are tilted against privatization, please offer some of your own. The current structure of the article (theory of privatization – "pro-privatization", problems with its implementation – "anti-privatization," and cases) is inherently prone to being unbalanced if the sections are proportionally developed.

In addition, I am aware that the "pro-privatization" section is mostly derived from market theory while the "anti-privatization" is more concrete. This is not meant to suggest the old adage "it works well on paper, but fails in practice." This is merely case because most of the "anti-privatization" academic literature today doesn't reject the assumptions of privatization theory, but raises questions concerning the difficulties of designing a privatization program (i.e. who decides how to set value, which level of government decides what to privatized, and who gets what and how) or fairness (the state agency overseeing privatization can be corrupt, clientelistic and exhibit favoritism toward certain interests).

Actually, this article is somewhat slanted in favor of privatization. The "anti-privatization" section actually accepts the premises of the pro-privatization argument. In a sense, most of the arguments against privatization in this article, and in today's economic literature in general, center on the problems of state institutions – not the market. Few doubt that if the process if the design of the program is ideal, and all actors act appropriately, that privatization (especially by competitive cash bidding) can boost capital markets and channel investment into moribund industries, thus yielding superior goods and services for consumers (often at a lower price), and boost income levels in the economy as a whole. Since privatization is s process overseen by state agencies, even the most diehard privatization proponent should view the process with caution - especially in developing countries - bringing in the same skepticism vis-à-vis state institutions and bureaucracies that is a pivotal assumption of privatization theory. In addition, the short-run dislocations resulting from privatization are addressed. Since these are the bulk of the arguments in the "anti-privatization" section, this hardly constitutes criticism of the assumptions and principles behind privatization.

Furthermore, despite your claims that the article has a "Marxist slant," Marxist arguments are not even presented! Maybe a little has changed since I last read the article, but there isn't anything criticizing private property on Marxist grounds (e.g., the theory of labor value, alienation, and exploitation) or on non-Marxist ethical grounds. Next time, if you're going to put up a dispute heading with the claim "this article sounds like it was written by a Marxist school teacher," make sure that Marxian arguments were even present. If anything, the article's strongly slanted in favor of market allocation of resources and private property. This is the case despite the plausible arguments that can be made in favor of nationalization (e.g., state ownership often accelerates extensive growth or the mobilization of resources, profits can be directed toward certain national goals, and many creative forms of public ownership – especially now in the PRC - have incorporated mechanisms for efficiency, which are usually associated with a competitive capitalistic market). A Marxist would actually have more grounds to put up the dispute heading than you'd have.

Now, let me address the problem you brought up concerning the prose of the "pro-privatization" section. Last May (I believe) I wrote much of that section in the form of several paragraphs. Since then, someone converted it into a bullet format. I feel that my original contributions were better articulated. Thus, you might want to go through some of the old versions and see if you want to restore my original text if you're still concerned with the writing quality. 172 01:16, 30 Sep 2003 (UTC)

This is my first time reading the article, so perhaps some fresh viewpoints. To me, it still seems too slanted towards "against privatization" not simply because of the word count (340 vs 1100, pro vs against) but because the "against" argument sets up some pretty unfair/inaccurate statements. Some examples:

Privatization has rarely worked out ideally because... When has anything every worked out "ideally?"
Some privatizations have already been deemed failures. This doesn't sound like a very strong argument, as "some" SOEs have also been deemed failures.
Chinese economic reform has illustrated that economic reform can take place in the absence of mass privatization. But this is not true. Privatization and foreign investment in private enterprise has indeed been a major reason why China's economy is so powerful.

That said, this is not to disparage 172 or other peoples' good evidence, but certainly putting the "Neutrality is disputed" would be accurate until the article is balanced out more. Fuzheado 01:32, 30 Sep 2003 (UTC)

I believe that it is unreasonable to state that the article as a whole has a disputed POV. It appears that only parts of the article have a disuputed POV -- is the first paragraph disputed at all?

Every article on the wiki has some POV component which needs correction; but that does not call for a POV disclaimer; such a disclaimer should be reserved for an article which is seen as wholly and fully being slanted in favour of some POV. LirQ

Fuzheado and Daniel Quinlan:

The problems with this article stem from the fact that it is incomplete - not slanted toward either argument. Before I address Fuzheado's points individually, let me remind you that a number of key points on both the "pro-" and "anti-" privatization sides have been omitted. On the "anti-privatization" side many key concerns with privatization that can be found in any intro-level course on microeconomics aren't even stated (e.g., pure public goods, natural monopolies, etc.). In fact, in my earlier posting I mentioned that all the arguments from both sides are written from the standpoint of market theory. A Marxist would have legitimate reasons to argue that the article's unbalanced, and add a critique of private property to the article. Thus, gaps are the problem, not a slant in either direction. Wikipedia's an ongoing, collaborative effort, so we expect that every article hasn't reached it's optimal state. A dutiful, helpful contributor will thus fill in the gaps, rather than flag the article with banners and raise questions concerning the creditability of the entire project as a viable online sourcebook.

Now, let me address Fuzheado's point concerning what he feels is the lack of proportionality between the "pro-" and "anti-" privatization sections. First, I suggested that Daniel Quinlan restore my original "pro-privatization" contributions, which might better present those arguments. Maybe you ought to do the same. Second, the word count alone is hardly a good indicator of balance. An empirical case usually requires more content to be developed than a theoretical one. Most of the time, the "pro-privatization" argument is presented theoretically, while the "anti-privatization" arguments are presented empirically, with a hodgepodge of possible concerns raised over dislocations and the ability of state institutions design a non-politicized plan and carry out the process fairly and judiciously.

Perhaps an analogy will help illustrate this point. Consider various disciplines (let's say history, economics, and political science) offering courses of the same level (either beginning, intermediate, or advanced), same level of difficulty, and same subject (let's say the Soviet Union). The history course would require the heaviest reading load (in terms of numbers of pages); the political science course require the second; and the economics course would require the shortest reading-load. I know that this is a crude example, but it probably gets the point across. The history would offer little theory and long narratives. The economics course will over a great deal of theory (which would be hard to digest and take longer to read and comprehend) and farily short narratives.

Now, let me address the points Fuzheado made in the bullets. First, about the privatization 'rarely working out ideally' sentence: perhaps this can be modified to account for particular national experiences, such as Russia's. In general, this claim is the most applicable to developing and post-Communist countries. In reference to Russia, this claim certainly cannot be contested. However, I agree that it can be qualified and contextualized (i.e. specify conditions).

Second, about the 'some privatizations have been deemed failures' point. This sentence is found in the section on arguments against privatization. Since the article's effectivley divided between "pro-" and "con-" sections, this point has to be addressed in the "con-" section. As for your comments concerning SOEs, I remind you that those problems are clearly dealt with in the first section. Frankly, this point is more of a rhetorical flourish on your part than anything else.

Finally, let me address the China matter. Direct foreign investment (DFI) is not to be conflated with privatization. The vast majority of private enterprises in China are upstarts, not restructured state owned enterprises (SOEs). The PRC has placed more emphasis on fostering a private economy, not restructuring the old. In fact, there has been little restructuring of SOEs; and what restructuring that has taken place has usually taken the form of corporatization, joint stock ventures, and cooperatives. Efforts have also centered on reducing the scale of ministerial planning, de-centralizing decision-making, and downsizing value-losing enterprises. Thus, the content on China is fine. I think that you might be conflating, in general, private ownership of production factors and the process of privatization.

Let be make some other points before closing that might ease your concerns. Perhaps the two contributors who are a bit uneasy about the article are looking at this from a Western frame of reference. However, it's important to consider that privatization has been a far more sweeping structural change in the economies of many developing and post-Communist countries. First, the impact on the advanced market democracies of the West has been far less dramatic. Privatization in the UK and US has accounted for such a far smaller share of GDP than in countries such as Russia. Second, countries remaking political and economic institutions at once (i.e. the post-Communist countries) are the ones that have encountered more difficulties in privatization than, for instance, the US, UK, Australia, and New Zealand. Keep in mind that most of the arguments raising questions vis-à-vis privatization are based on problems more pertinent to countries such as Brazil and Russia rather than the US and UK. Keep in mind that Russia, along with many other post-Communist states, embarked on three radical stages of a privatization program before effective institutions that govern a market economy (enforcing contracts, settling disputes over property, protecting property, regulating competition, etc.), provide micro-economic stabilizers, and regulate the banking and financial sectors were effective or even in place. There was also the large underground "black market" economy from the Soviet period, contributing to flourishing corruption and thriving clentelistic networks (which were in the position to unfairly swipe many of the gains from the process). In addition, lack of transparency, corruption, and clientelism are even major problems in market economies in the developing world. Perhaps they might want to contextualize some of the arguments against privatization, pointing out that the institutional and design problems listed are less pressing concerns in advanced market economies. Perhaps, if you considered that many of the problems with privatization detailed in the article don't really apply to the advanced market economies to a great extent, you'd both be less irate.

All and all, there are no grounds for a dispute over neutrality; there are just reasons for contributors to focus on adding content, spelling out certain contexts within which privatization is employed, and keeping this all non-ideological. The attempts to flag this article for neutrality is just a step toward this article suffering from ideological disputes between those who either hate all forms of private ownership or hate all forms of state ownership. Rather, the best writers will be willing to spell out and contextualize certain conditions and arrangements that are conducive to well-designed plans for privatization and success (that is, success in improving efficiency and channeling investment into companies - not merely transferring assets to the friends and cronies of high officials bent on plundering companies swept up at give-away prices). If this is accomplished, this article will no longer be haunted by the specter of those bickering over whether it is pro-privatization or anti-privatization enough to them. This might be much to ask, but both sides (and I mean Daniel in particular - who dismissed the "anti-privatization" arguments as nonsense typical of a 'condescending Marxist schoolteacher') should consider that they don't have a monopoly on reality; many privatization plans worked out quite nicely while many have not.

In short, keep the silly neutrality headings out. 172 04:52, 30 Sep 2003 (UTC)

172, excellently argued, and I would suggest putting the second-to-last paragraph nearly verbatim into the article itself. I'm in absolute agreement that privatization in UK, US, Australia and New Zealand is certainly a different beast than with economies like Russia and Brazil. Perhaps the biggest problem is that one label is slapped onto a very complex set of ideas that needs to be customized for the different countries and situations at hand. "Shock therapy" and the like as solutions are just too simplistic to employ as a blanket policy, and you've described the nuances very well. And putting that into the article provides a much greater understanding of the issues, without the simplistic PRO and CON arrangements of most articles like this. Fuzheado 05:05, 30 Sep 2003 (UTC)

Thanks for the very encouraging reply! If this is possible, we could have a top rate article (rather than this simplistic, incomplete list of pros and cons that does injustice to both sides – and thus qualifies as neutral by default) very soon. 172 05:09, 30 Sep 2003 (UTC)

Every single word the article says about Central and Eastern Europe is a lie. Soviet Union wasn't poverty-free and with small social inequalities - it was exactly the oposite. 156.17.4.253 11:07, 30 Sep 2003 (UTC)

Way off on every count. First, let me address the charges being specifically stated. Before Perestroika, the Soviet economy operated on full employment and was relatively free of poverty in the terms in which poverty is now qualified right now in Russia. However, this means nothing more than access to the basic, subsistence-level amenities for survival, such as food, water, clothing, shelter, and health-care. In addition, there was a gap in income distribution during the Soviet era; but still, income distribution (in terms of the Gini coefficient was among the most equitable in the world. Now, Russia's distribution of wealth is one of the least equitable in the world, short of the notorious cases such as Brazil. Second, the charges by the anon also attack the integrity and abilities of a number of users, especially myself (since I believe that I wrote the content in question). I contributed thousands of words of text on the structural problems of the Soviet economy, its macro-economic imbalances, and its distributional problems at the micro-level in many articles (just a disclaimer - I'm a historian, not an economist, despite my presence on this page). I even went in great detail on the relationship between Russia's current difficulties and the problems of the old administrative command system (ACS). If this anon is accusing me of distorting reality and promoting "outright lies," then I'd be glad to eviscerate his/her absurd claims if he/she wants to press them any more. While living standards then were remarkably higher than they are now, the structural problems were such that reform was inevitable sooner or later, and the nature of the post-Brezhnev ACS only enabled Russia to wind up in the perilous state of affairs it's in right now (although I'd argue that different policies would have yielded a much better outcome, but hardship and declining living standards in the short-run nonetheless - but I'll keep the counter-factual history off Wiki). If I'm being accused of suggesting that all was fine in Russia until shock therapy, stabilization, and privatization, then I have a great deal of contributions that would prove that this anon is way off. 172 12:25, 30 Sep 2003 (UTC)

As 156.17.4.253 pointed out, but 172 was quick to go pretend it was some sort of ad hominum attack, the post-Communist Russia text is highly biased, and this is only one paragraph of the entire POV article:

For example, in post-Communist Russia — by far the largest country to experience a rapid privatization of nearly the entire economy — economic decline over the past decade since the collapse of the USSR has actually been far more severe and more protracted than the Great Depression following 1929, and half as severe as the catastrophic depression caused by the effects of World War I, the collapse of the Tsarist regime, the Civil War, and the implementation of "War Communism" — in stark contrast to the stated aims of the huge privatization process. GDP in post-communist Russia has roughly halved and over half the population is impoverished in a country where poverty had largely been eliminated.

This is very biased and attempts to throw the blame for current economic conditions in the erstwhile USSR on privatization:

it lumps together a multitude of factors into "privatization": converting from the collapsed Soviet Communist regime to a democracy, a less constrained market, a civil war (Chechnya), crime, and the loss of the Soviet empire (both eastern europe and provinces that were part of the USSR itself). Atttributing the poor economic conditions to "privatization" is disingenious.
it relies on hyperbole comparing current economic conditions with far worse (and completely unrelated) historical situations
it seems to rely on GDP numbers from the USSR
it uses the USSR definition of poverty, Soviet Russia claimed to eliminate poverty by defining the term rather differently than other European countries, and they didn't exactly brag about murdering 10 or 20 million people to get there

Daniel Quinlan 20:41, Sep 30, 2003 (UTC)

I removed portions of the above paragraph, which seems to be an abridgement of some content I had contributed to an article on post-Communist Russia. Whereas the original content listed privatization along with the two earlier pillars of Russia's sequence of economic reforms (i.e. structural adjustment and stabilization), this one solely mentions privatization. Perhaps this was a hasty attempt to keep the paragraph on focus (by selectively keeping the word "privatization" while removing other reforms). The paragraph would be fine if the other two programs were mentioned; but it would be off topic so I opted to remove the paragraph.

Privatization did result in a wave of asset stripping, but this is strongly related to the macroeconomic realities after the stabilization regime, which counteracted the hyperinflation opened up by shock therapy. All and all, no market economist is going to agree that meteoric interest rates, a lack of liquidity, and low saving rates simply encourages investment. So if we’re going to detail the macro-level effects of micro-level privatizations in Russia, this has to be along with the broader sequence of economic and political reform.

I haven't been following the article closely between May and late September; between that time I noticed that the paragraphs providing the theoretical, microeconomic argument for privatization were abridged and converted into bullet form. Perhaps even I was sloppy when cutting and pasting (yesterday I removed a paragraph by mistake when attempting to update an analysis of Hu Jintao that's been questioned by recent developments).

In light of calling this paragraph to my attention, I can see that the article's not only incomplete, but horribly edited. BTW, (to Daniel) please don't stir up hostility. Fuzheado and I agreed to set a tone that would allow a number of users to make this into a top rate article (please see the earlier postings). 172 23:49, 30 Sep 2003 (UTC)

BTW, I'm on the busy side, so I don't have time to get to it now. However, I'll soon respond to the questions your rasing over the GDP figures. 172 23:49, 30 Sep 2003 (UTC)

"In theory, privatization promotes the free market, as well as competition."

Extremely contested. BL 21:59, 4 Oct 2003 (UTC)

Removed:

"*Infastructure such as the power system or the water system, does not lend itself to normal market competition, since it is prohibitevely expensive to build competing power lines. Thus a more abstract competition, which critics ultamitely dismiss as wastefull, can exist only by "service providers"."

as it is not relevant to the topic. Tiles 04:07, 21 Oct 2003 (UTC)

not to privtized university education

A point and a question

The definition given of privatisation is what could be called a "British" definition. In the United States privatization mainly refers to the contracting out by the government of local public services to private provides, rather than the outright sale of firms. My question is to do the the reference in the article to the fact that "The term "privatization" was coined in 1948". Does anyone have a reference for this?

to balance some issues

Hey, there are examples of the failed privatisations presented here, and where are the examples of those that SUCCEEDED? There were some, as privatisation and deregulation of Deustche Post and Deutsche Telekom, AT&T (which was privately-owned, state-privileged monopoly in the USA), energy industry in Florida, to name few of them. I know that there's a list of privatisations here, but as for me, it's not enough to balance the pretty detailed information on failures (as the UK railways). At least one of positive examples should be presented here, or this article will remain POV (by presenting only one side). I would write something but sadly, I have no free timeCritto

July 30 Reversion

172, why did you delete all the contributions by anon #83.25.224.238? - Nat Kraus e 05:42, 30 Jul 2004 (UTC)

Because of the content of those contributions. 172 05:49, 30 Jul 2004 (UTC)

That's hardly a sufficient explanation. I'm restoring the deleted material. - Nat Kraus e 06:22, 30 Jul 2004 (UTC)

Are you going to bother to copyedit it and NPOV it? I doubt it. 172 06:33, 30 Jul 2004 (UTC)

Lots of pages on Wikipedia need copyediting and minor NPOVing and this is far from the most egregious case. Is the solution to delete them all? - Nat Kraus e 06:59, 30 Jul 2004 (UTC)

Exactly. Thanks, Nat Krause. Before my edititions, the page was as terribly POV, with the anti-privatization bias, as possible. For example, while there were some examples of misprivatization described, there was NONE supporting the successful privatization, and it looked like the succeessful one exists 'in theory' only, what is NOT true. Currently, I am collecting the list of successful privatizations, with more details, but as for now, at least let the examples of Kwidzyn and Deutsche Post-TNT stay as I put them, since they are real, and giving them here makes the page's way of treating the different attitudes more objective.

" It happened in the case of many Polish companies(...)"

Also, I can't understand what 172 sees wrong in the following statement:

" this argument, of course, relies on the view on state one holds: what it should or should not be 'obligated' to. What is seen as desirable by a socialist may not be by a supporter of capitalism, and vice versa." -- since the paragraph was about the issue that IS a point of view (duties of the state towards the society), it's more objective to present the clashing points of view that really exists (in this case, capitalist v. socialist) than to make 'argument' for only one of them.

Also, this one is very important:

"Speaking about the transformations in the post-communist countries(...") -- well, it's impossible to just OMIT those issues! It's impossible to talk about those countries applying the same rules you would if you would be talking about the democratic ("free") countries. I am living in Poland, which is a post-communist country, and I know those things well: the economy was ruined by the regime, and the factories were not working anymore. The state had no money to support them any longer. Observe, that in this paragraph, I haven't spoken out for or against those privatisations, only merely mentioned the reasons they were conducted for.

Further, deletion of this fragment by 172 is SCANDALOUS:

"Another argument for privatization is, that to privatize a company which was non-profitable (or even generated severe losses) when state-owned means to take the burden of financing it off the shoulders and pockets of taxpayers, as well as free some national budget resources which may be subsequently used for something else. Especially, proponents of the laissez-faire capitalism will argue, that it's both immoral and inneficient for the state to force taxpayers to fund the business that can't work for itself. Also, they hold that even if the privatized company happens to be worse off, it is due to the normal market process of eliminating the businesses that can't cope with the market reality or simply aren't preferred by the customers." -- listen, 172, this argument is being often used by the supporters of privatization, and it treated as the very important one. Since I placed it in a section of arguments FOR privatization (without stating whether it is true or not, which would be POV), it's alright: point of view is presented as point of view, and not as something objective.

That's not an excuse. When content gets added under my user name in the page histories, I do my best to ensure that it is encyclopedic. (I can't control all the content that gets added to the site either, of course, but I can control what I add. 172 07:35, 30 Jul 2004 (UTC)

If I understand you correctly, you're saying that restoring deleted material should be held to a higher standard than deleting it in the first place, which I don't agree with. Furthermore, in my opinion, the edits in question don't require substantial changes, just a little tweaking for encyclopedia style, etc. - Nat Kraus e 11:26, 30 Jul 2004 (UTC)

I am saying that content that appears in articles should be held to a higher standard than content that doesn't appear in articles. 172 11:30, 30 Jul 2004 (UTC)

Some distinctions to be worked towards

Obviously this will be a controversial page, as the Talk history shows. I think it would help to structure the page more around the principle that the basic pro-privatization argument is that any social costs are outweighed by increased efficiency, and the basic anti argument that often any increase in efficiency is either outweighed by social costs, or an illusion (costs are externalised not reduced, and/or services reduced).

Also there are some distinctions or categorisations that might be worked towards, and if done properly it would make the pro/anti arguments clearer. We might try to avoid an overly-technical language ('merit goods' etc) as the basis for classification, though maybe the terms should be used/explained somewhere on the page. First, post-communist privatization is clearly a category of its own - that's why we have the term 'transition economies' (a term not currently in Wikipedia AFAIK). Second, privatization of companies operating in (more or less) standard competitive markets. Third, natural monopolies. Fourth, public services. Each of these categories raises different aspects of the basic issues, and explaining the pro/anti arguments specifically in each will be much more helpful. The general pro/anti argument sections could then hopefully be reduced to summaries, and mention some of the broader issues (eg cultural impact such as concerns about the marketization of society).

There might also be a specific section on economic/social/regulatory context - in particular the effects of privatizing where there are weak institutions, and what kind of institutions can be considered 'strong'. There could be some mention of links with liberalisation/deregulation here, especially in terms of how the order of economic reforms can affect their success. Finally, I think the list of privatizations should have its own page - here it's mostly a distraction from the arguments, and is very partial anyway. A summary would suffice and be less misleading by omission.

I don't have time at the mo for making any actual changes - maybe in a couple of weeks - so plenty of time for people to pick this up and/or respond here.

Rd232 12:19, 30 Oct 2004 (UTC)

I've cleaned up the page a bit, but the central pro/anti structure remains to be tackled. It's not necessarily easy, but I think the page would be much better structured around the issues, such as incentives; competition/liberalization; externalities; and so on. Rd232 20:22, 20 Dec 2004 (UTC)

Arguments against privatization

Removed:

These bits still need to be reincorporated:

--==--

that few privatizations of the past few decades can be deemed unqualified successes.

Deutsche Post

"An example cited by proponents is Deutsche Post, once part of the German postal service, which began generating profits after it became a part of the international corporation TNT Worldwide Express." I can't find any deals between Deutsche Post and TPG ([1] (http://www.tpg.com/)) ([2] (http://biz.yahoo.com/ic/57/57511.html)) Template:Nyse. - Jerryseinfeld 20:25, 20 Dec 2004 (UTC)

I looked in Lexis-Nexis, and the example seems to be a mangling of several things. The privatised Dutch post office acquired TNT Express for several billion dollars in 1996 (later becoming TPG); Deutsche Post (not-yet privatised) bought some German operations of TNT in 1997. There are plenty of examples of privatised companies becoming profitable, but the above was inaccurate. Rd232 16:24, 21 Dec 2004 (UTC)

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