Privatization: What? Whose?
by Sunny Akuopha
Since the mid 80s, the word “privatization” has entered the daily vocabulary of Africans, although few have any clear sense of what they mean when they say it. People speak of “democracy” in a similar way — because everyone else is talking about “democracy”. It is a pity that Henry George is not around to steer us away from the misery brought about by misunderstanding the concept of privatization — and I feel that georgists have a duty to cast some light on what privatization should be, so that proper recommendations can be made to the World Bank, the IMF, the UN and various national governments.
Which companies are being privatized today? State owned and operated companies, and state shares in companies. These assets were purchased with
- the taxpayers’ money directly, or
- revenues from the natural resources that belong to all citizens of the country, or
- external borrowing, repaid by the above two sources of revenue.
Who benefits from this privatization? Multinational corporations, and a small core of well-placed domestic investors. The true owners — those who created the assets and whose wealth was used to “nationalize” them in the first place — are thus victims of their own industrious toil.
It is important to consider how stock markets operate in Africa and other developing countries. Most voters have not the slightest idea about the stock market’s role in the economy. The possessions that most poor and working people own are owned "informally" — they are not “assets” in the eyes of modern financial institutions. Such people have utterly no access to modern “financial” wealth. So, these people have no means of participating in the “capitalizing” of the nation’s assets — wealth that they have created. Under such conditions, the stock market can serve only to further concentrate wealth in the hands of the well-connected few.
If the citizens that vote in a country’s general elections do not participate in any privatization exercise, then it is clear that such an exercise is a sham, designed to rob the nation’s people. Nevertheless, we welcome the foreign investor, for his technical acumen and exchange, in the name of “world solidarity”.
We heard much stirring rhetoric about “Health for All, Shelter for All, Food for All, Education for All by the year 2000” but poverty and unemployment go on like a repeating decimal in the lives of Africans. Africa has entered into another millenium, lame and hopeless. African leaders talk about ten-year plans, but they don’t mean it. They have absolutely no plans to change; the “privatization” process has placed them in charge in the first place.
The people must see that there is a moral basis of ownership, as George described — that natural law dictates what truly belongs to the community and what must belong to individuals. Today’s brand of “privatization” flies in the face of natural laws and it is doomed to fail.
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