Privatization is the prerequisite to anti-biopolitical movement – it destroys public spending, decreases the state, reduces the body politics, helps individualization and minorities.

The traditional socialist program of nationalizing industry aim to subject the economy to public control. But nationalization sorely disappoint expectations; public ownership did not make nearly as much difference as soc had anticipated. In an ironic twist, conservative advocates of privatization among the few in the West who are still convinced of the decisive importance changing the locus of ownership. But it is not only nationalized industry that want transferred to the private sector. In the United States, that would scarce amount to a significant program. The original contribution of American proponents of privatization is that they would like to privatize the full gamut of public assets and services, including many forms of public provision, such as public schools, national parks, public-transport infrastructure, and prisons, whose origins and rationale fall comfortably within the ambit of the classical liberal state privatization. They believe they have found a sovereign remedy against all ailments to the body politic, good for stimulating economic growth, improving the efficiency of services, slimming down the state, and expanding individual freedom, including the opportunities of disadvantaged minorities, too.

In a dismal world where trade-offs and compromises prevail, we rarely up with so happy a possibility of simultaneously making the economy larger, government smaller, and virtually all of us better off. Then why has privatization made so little headway in the United States? Opposition, the conservative comes from the same groups whom they identify as responsible for public programs: self-interested politicians, public employees, and beneficiaries with stakes in public expenditure. The picture of our political life that the conservatives propose is a bloated, parasitic public sector blocking the bustle and growth of a more freely flowing private economy.

The task of this brief essay is to challenge both the specific claims mad privatization and the general picture of our political and economic world offer by its advocates. However, my aim here is not to present a mirror image of right wing simplifications by suggesting that public provision is always better than private or that every activity in the public sector ought to remain there forever. A pragmatic public policy must recognize where private alternatives might work better and, by the same token, where new forms of public provision may ameliorate endemic shortcomings of the market. Most of all, it must recognize that markets are not natural creations; they are always legally and politically structured. Hence the choice is not public or private but which of many possible mixed public-private structures works best. And "best" cannot mean only most efficient, for a reason- able appraisal of alternatives needs to weigh concerns of justice, security, and citizenship.

For the sake of clarity, it may be helpful to define some terms. In this essay, privatization refers to a shift from publicly to privately produced goods and ser-vices.' Policies that encourage such a shift include (1) the cessation of public pro-grams and disengagement of government from specific kinds of responsibilities; (2) sales of public assets, including public lands, public infrastructure, and public enterprises; (3) financing private provision of services - for example, through con-tracting out or vouchers- instead of directly producing them; and (4) deregulating entry into activities, such as first-class mail, that were previously treated as a public monopoly.

These forms of privatization vary greatly in their consequences. They differ, first of all, in the extent to which they reduce public spending and accountability. Contracting out, vouchers, and other systems for paying private providers gener-ally do not obviate the need to collect taxes. And they do not eliminate, though they may reduce, the accountability of public officials for the results of the expen-ditures. By shifting only the locus of service production, they privatize the means of policy implementation but not the functional sphere of government action. These partial forms of privatization need to be sharply distinguished from the sale of assets and cessation of programs (sometimes called "load-shedding," a term which itself is politically loaded, since it defines public programs as a burden). Yet even the more thorough forms of privatization may involve indirect forms of public subsidy and control. For example, many proposals for asset sales and program termination contemplate the use of tax incentives to stimulate private substitutes for public services. Such incentives influence market outcomes and represent a source of lost revenue (that is, a tax expenditure). Hence there is no certainty that these policies lead toward budgetary balance.

The various forms of privatization also differ in their effects on competition. Two related processes, privatization and liberalization, need to be more carefully distinguished than they are in much discussion. In this context, liberalization refers to the opening up of any industry to competitive pressures. The opening up of public monopolies to private firms is a form of privatization that is also liber- alizing. However, it is entirely possible to privatize without liberalizing, as Mar-garet Thatcher's government has demonstrated by selling shares of two monopo-lies (British Telecom and British Gas) without significantly subjecting either industry to competitive forces. Britain has substituted private monopolies for public ones and introduced new regulatory agencies to perform some of the functions previ-ously undertaken through public ownership.2 Conversely, it is also possible to liber-alize without privatizing- that is, to introduce competition into the public sector without transferring ownership. For example, governments may require public enterprises or operating agencies to compete for capital or contracts from higher-level authorities. Indeed, it is even possible to nationalize and liberalize at the same time. In the early 1980s the French socialists both nationalized banks and liberal-ized financial markets. In other words, things are not as simple as they may first seem.

These distinctions suggest that privatization is not a single logically or practically entail one another. Only ideologically are they linked. There is an obvious, radical difference between privatization and a subtle but equally important difference between privatization and liberalization. By treating these heterogeneous measures as members of same family, the advocates of privatization use the more moderate ideas, such as vouchers and contracting out, to gain plausibility for the more radical goal of government disengagement. Milton and Rose Friedman have said explicitly that they would prefer ending all public financing of primary and secondary education, except in hardship cases, but propose vouchers as a more acceptable first step.3 In the most ingenious and refreshingly frank case for privatization, Stuart Butler has argued that the real objective should be to break up “public spending coalitions" to bring about a permanent reduction in the base of political support for government growth.4 So, while privatization can be presented as a measure to improve the performance of particular services, the large intention of some exponents is to reduce support for public provision altogether. Whether partial privatization would actually lead to disengagement (or even to lower budgetary costs) will be scrutinized below, but it is worth noting here that the more moderate forms of privatization are for its advocates stepping stones towards more radical objectives shared by only a small minority of Americans.