“The privatization of schools, water, and other public goods increases inequality, which leaves people more susceptible to far-right leaders,” writes Jeremy Mohler of the anti-privatization organization In The Public Interest (ITPI):
It’s one sentence in a 1,244-word article, but it made me pause and think deeply.
The article was a guest essay in the New York Times about the rise of Sweden’s far-right political party, which was created out of a neo-Nazi group and resembles the increasingly Trumpian Republican Party with its hatred of immigrants, journalists, and others.
The sentence: “Once one of the most economically equal countries in the world, Sweden has seen the privatization of hospitals, schools and care homes, leading to a notable rise in inequality and a sense of profound loss.”
That makes me wonder: How much has privatization contributed to soaring far-right populism, white nationalism, and fascism in the U.S.?
In Sweden, argues journalist and author Elisabeth Asbrink, high levels of political and economic inequality leaves people looking for answers to why they’re suffering and who is to blame—and far right leaders are happy to provide them.
“It was better in the good old days, [those leaders] say, and people believe them,” Asbrink writes. “Back to red cottages and apple trees, to law and order, to women being women and men being men.”
Sound familiar?
Indeed it does sound famliar.
I always argue about privatization the same way:
Let’s say you have a city’s publicly-owned water utility, the major expenses of which can be grouped into four main areas:
- Water (getting and treating water)
- Distribution (moving the water from the utility to customers)
- Labor (wages, benefits)
- Operations (all the equipment and systems needed to do the first three)
Let’s say, for the sake of argument, that each of those is 1/4 of the budget.
Now let’s say that the city council sells the utility to a private company in exchange for a large lump sum payment up-front.
Now you have:
- Water
- Distribution
- Labor
- Operations
- Profit Motive (including huge sums for executive salaries and money to stockholders)
You’ve only added another major expense — the profit motive — which actually now is the most important expense to its new owners, Wall Street. The previous four are now secondary considerations.
You have to take money somewhere from 1 through 4 to help pay for 5.
Who gets the shaft? Ratepayers, who end up paying much higher rates even though the Wall Street company has slashed employee benefits and pay, and started cutting corners on Distribution and Operations.
Nowhere, ever, in the history of major public utility privatization, has the public come out ahead. It hasn’t happened. You cannot point to a reliable source that says it has.
So the public, which doesn’t pay attention to the finer points of utility privatization politics, only knows its water bills are skyrocketing while the water tastes funny and the public can’t get anyone to answer the customer service lines at the water company because they’ve slashed payroll.
To the public, the water company is still the government, thereby feeding into the notion that government doesn’t work and we should throw all the bums out in favor of right-wing candidates who scream about “the swamp.”