NCPA - National Center for Policy Analysis


July 31, 2006

The 20th Anniversary Edition of the Reason Foundation's annual global privatization report by Robert Poole and other scholars chronicles the sweeping economic changes in Great Britain and the United States in the late 1970s and early 1980s, and more recently in China and the former communist nations of Eastern Europe, says the Wall Street Journal.

Although the United States never went as far down the socialist path as China or Eastern Europe, privatization has yielded gains here:

  • Corporate subsidies and regulations in banking, energy and financial services were rolled back in the 1980s.
  • Under Bill Clinton, government-owned oil fields, large sections of the electromagnetic spectrum for broadcasting and the U.S. uranium-enrichment facility were sold.

But the biggest U.S. revolution, says Reason, has been at the state and local level.  Cities have learned to cut costs by shifting operations to the private sector:

  • GOP Governors Jeb Bush of Florida and Mitch Daniels of Indiana have shifted hundreds of millions of dollars of government operations into the private sector.
  • Democratic Mayor Richard Daley of Chicago recently sold the Chicago Skyway for $1.8 billion, and Mayor Jerry Brown of Oakland outsourced 40 city services.

However, both in the United States and abroad, there is still much more privatization that could be done, particularly in vital areas like education.  The steady erosion of productivity and lack of advancement of charter schools, vouchers and private scholarship programs has been much too slow for the well-being of our poorest children.

Looking forward, says Reason, entrenched interests, such as unions and public employees that intimidate politicians into opposing competition will continue to be privatization's biggest obstacle.  Building a political strategy to overcome this opposition is one of the main challenges of our time.

Source: Editorial, "Socialism in Reverse," The Wall Street Journal, July 29 2006

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