(c) Copyright 1998: Graham L. Strachan
The other arm of economic rationalism is ‘PRIVATISATION’, which really has little to do with genuine free market theory at all. Economic rationalism requires governments to ‘privatise’ all taxpayer-owned enterprises and public utilities, which means sell them to private interests, which invariably turn out to be foreign multinationals and financial institutions. None of this is required by genuine free market theory.
Nobel Prize-winning economist and jurist, Frederick Hayek, is regarded as one of the world’s foremost advocates of free market economics (2). He makes it very clear that government-run enterprises are quite consistent with a free market provided the government competes in the marketplace on the same terms as everybody else (3). They are inconsistent with a free market only if political power is used to give them an unfair competitive advantage, such as using taxpayers' money to make up losses, or refusing licences to potential competitors. In the latter case it is the monopoly which is anti-competitive, not the government ownership of it.
Even the Australian bible of economic rationalism, The Hilmer Report, concedes this: ‘The ownership of a business is not of itself a matter of direct concern from a competition policy perspective’ (4). In other words privatising a government-owned corporation or public utility will not in itself increase competition. Not only that, but it is likely to be detrimental to the public interest. Privatisation converts a goal of ‘service to the public’ into a goal of ‘profit and bugger the public’, which will almost guarantee there will be price rises, as there always are in practice (5). So privatisation is of no benefit to the public. [There is the nauseating media myth of ‘the mums and dads shareholders’, but purchase by a few of what used to belong to all is not ‘public benefit’].
Privatisation cannot be justified on economic grounds either. The Hilmer Report concedes that rail, electricity, gas and water utilities account for less than 5% of GDP (6). Even if (and there’s no guarantee) a 25% improvement in economic efficiency could be achieved through privatisation (7), the overall return to the taxpayer would be insignificant. ‘Filling black holes in the budget’, while a clever invention by Treasurer Costello, is not the real reason either. The grin is a dead giveaway. The policy of privatisation was well under way before the Howard government even came to power. It was recommended by the Hilmer Report in 1993.
Professor Hilmer, having failed to give any sort of credible reason for the sale of Australia’s public assets and utilities ended up saying the following: ‘In recent years there has been a WORLD-WIDE TREND in favour of transferring ownership of hitherto public businesses to the private sector’ [and even though there is no apparent benefit to the public] ‘Nevertheless there is evidence that privatisation MAY increase the efficiency of MANY businesses, WHICH IS CONSISTENT WITH THE OVERALL GOALS OF COMPETITION POLICY’ (8).
In other words, the assets have to be sold because the policy says they have to be sold. And why does the policy insist they be sold?
BECAUSE SOMEBODY ELSE WANTS THEM!!
The real goal of ‘privatisation’ is to achieve precisely what the policy is achieving: not one economic asset of any significance located in Australia, including public assets and utilities, is to remain in the ownership or control of Australian nationals. ALL OF THEM are to be owned by international big business and finance. There is to be no Australian-owned national economy, and the fraudulent policy of ‘privatisation’ is one of the ways the Australian government can assist the engineers of ‘globalisation’ to achieve that goal.
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