Privatization: Rip-Offs and Resistance

Derailed The UK’s Disastrous Experience With Railway Privatization

by Brendan Martin

London — Even Margaret Thatcher thought British Rail was off limits. Virtually no public service was safe from privatization under Thatcher, British Prime Minister from 1979 until overthrown by her own Conservative Party Members of Parliament in 1991, but her instincts for political danger were more highly developed than her ideology. So, while she starved rail of investment, she refused to privatize it.She has been proved right, and how ironic it will be if the state of Britain’s railways leads to the downfall of today’s British Prime Minister, Tony Blair.

That is no longer a far-fetched idea, and there would be some justice in it too, even though Blair’s Labor government, which replaced the Conservatives in 1997, only inherited the mess from Thatcher’s successor, John Major. Having done so, and despite Blair’s on-the-record commitment in opposition to restoring a publicly accountable, publicly owned railway, his government has tried to make the privatized system work. This has involved pumping an ever greater public subsidy into the pockets of shareholders whose commitment to safety or reliability no longer commands any public confidence in a service that, in Britain, has core economic and social significance. MORE>>

Business Goes to School: The For-Profit Corporate Drive to Run Public Schools

by Barbara Miner

In September 1990, ABC’s “Good Morning America” was broadcast from South Pointe Elementary School in Dade County, Florida.South Pointe was run by the for-profit Education Alternatives, Inc. (EAI), the first for-profit private firm under contract to run a public school and, at the time, a darling of the movement to privatize schools. John Golle, head of EAI, boasted that his company could run public schools for the same amount of money, improve achievement and still make a profit. “There’s so much fat in the schools that even a blind man without his cane would find the way,” he told Forbes magazine in 1992.

EAI’s rhetoric never matched the educational and financial reality, however. EAI soon found it couldn’t run public schools for less than the districts it contracted with, and its promises of academic improvement proved elusive. By the spring of 2000, EAI was in the midst of a corporate and educational meltdown. The company, which changed its name to Tesseract Group Inc., was millions in debt, got kicked off the Nasdaq when its stock price tumbled to pennies a share, and couldn’t even afford the postage to mail report cards home to parents at one of its remaining charter schools in Arizona. Today, the company is in bankruptcy. MORE>>

Power to the People in South Africa: Operation Khanyisa! and the Fight Against Electricity Privatization

by Patrick Bond

Johannesburg — “It’s a criminal gang,” announced Jeff Radebe, the African National Congress (ANC) Minister of Public Enterprises, at a December news conference.

He was blasting activists of the Soweto Electricity Crisis Committee (SECC) for their Operation Khanyisa! — Reconnect the Power! — campaign. Over six months, more than 3,000 families had their electricity supplies illegally switched back on, after being left in darkness when they could not afford to pay their enormous monthly bills. SECC volunteers risk electrocution to do the work, and charge their neighbors nothing for the service. MORE>>

Undermining Security: A Warning Against Social Security Privatization

An Interview with Dean Baker

Dean Baker is co-director of the Washington, D.C.-based Center for Economic and Policy Research. With Mark Weisbrot, he is co-author of Social Security: The Phony Crisis. Other work includes Getting Prices Right: The Battle Over the Consumer Price Index (M.E. Sharpe Press, 1997), which was selected for the 1998 Choice Outstanding Academic Book List, and Globalization and Progressive Economic Policy (Cambridge University Press, 1998), edited with Jerry Epstein and Bob Pollin, and The Scorecard on Globalization: Twenty Years of Diminished Progress, which examines performance of countries on indicators of health and education outcomes during the era of globalization, co-authored with Mark Weisbrot. Baker received his Ph.D. in economics from the University of Michigan. MORE>>