Privatization

Privatization is the conversion of something from the Public sector to the Private sector.

Etymology

The term privatization itself was coined by the Economist magazine to describe the Economic policy of Nazism.

History

20th century and later

The Kingdom of Italy was the first nation to institute a privatization programme. The next nation to do a mass privatization programme was Nazi Germany:

It is a fact that the government of the National Socialist Party sold off public ownership in several state-owned firms in the middle of the 1930s. The firms belonged to a wide range of sectors: steel, mining, banking, local public utilities, shipyard, ship-lines, railways, etc. In addition to this, delivery of some public services produced by public administrations prior to the 1930s, especially social services and services related to work, was transferred to the private sector, mainly to several organizations within the Nazi Party.

— Germà Bel,

The time when privatization became very popular internationally was in the 1980s with Margaret Thatcher and Ronald Reagan, both conservatives. The UK and America traditionally supported privatization. Too, in the 1990s there was mass privatization after the Counterrevolution of 1991 in Central and Eastern Europe.

Results

Nazi German privatization

The average German family had only met about 64.6% of their required amount of calories in order to maintain their weight and most likely their health as well added with the fact that Hitler was destroying the German reserves and accumulating massive debt to fund the army. If the Germans did not conquer most of Europe by the 1940s the German economy would not only be in shambles but the German population would be starving too. Life was worse for the average person in even Pre-war Nazi Germany than it was in the Weimar Republic.

Eastern and Central European privatization in the 1990s

In the 1990s there was mass privatization after the Counterrevolution of 1991 in Central and Eastern Europe. It was disastrous for the working class. The privatization, though claimed by the reformists to be for the "Restoration of Democracy", were not introduced through democratic means, and the associates of Boris Yeltsin claimed that "most representative bodies have become a hindrance to our [market] reforms.". The reformists, too, repressed opponents of the free market reforms. Yeltsin was hailed as a defender of democracy by American. leaders and media. What they most liked about Yeltsin was that he "never wavered in his support for privatization". Yeltsin got multi-million dollar donations from U.S. sources and a $10 billion aid package from the International Monetary Fund and World Bank.

Once a Rightist took power in Albania, a new law was passed denying Albanian communists and other opponents of the privatization reforms the right to vote or otherwise participate in political activities.

In Czechia between 1989 and 1995, about 80 percent of all enterprises were privatized — and industrial production shrank by two thirds. Polish privatization had production shrink one third between 1989 and 1992, Vast electronic and high tech complexes in the GDR which employed tens of thousands of workers, were taken over by private West German firms and then closed. Much of the former USSR's scientific and technical infrastructure is disintegrating, along with the physical plants.

A large plant named ZiL saw its production of trucks go from 150000 to 13000 a year, with about 40 percent of the workforce laid off. In April 1996, the remaining workers petitioned the Russian government to lake back control of ZiL. In the past, ZiL workers and their relatives "had unshakably safe jobs" at the factory. In Macedonia a labor representative noted that "Privatization seems to mean the destruction of our companies.". Farm output of grains, corns, livestock, and other foods plummeted in the former communist states, as thousands of co-op farms were forcibly broken up. The new private farmers have small plots, often cannot get loans, seeds, fertilizer, or machinery. Hungary's agricultural co-ops had been a sector of the socialist economy that performed quite well. But with privatization, farm output fell 40 percent in 1993 alone.

West German capitalists had grabbed almost all the public property in the GDR, including factories, mills, farms,apartments and other real estate, and the medical care system, which were assets worth about $2 trillion, which has amounted to the largest taking of public wealth by private capital in European history. The result of all the privatization in the GDR is that rents, once merely 5 percent of one's income, have climbed to as much as two-thirds of it, and many the costs of transportation, child care, health care, and higher education. In Russia, the living standard of the average family has fallen almost by half since privatization happened.