In 2003 an initiative of researchers from the Rosa-Luxemburg-Foundation lead to the establishment of the Network on Privatization and Public Goods (ppg-network). The ppg-Network was a lose network of individuals, research institutes, organisations, etc. who were all working on issues of privatization/ public goods and corporations, public spaces and public services / wealth / property. Some members focused more on the political sphere, others emphasized social movements or theoretical academic work. Topics were the conflicts about property and public goods. We organized seminars, workshops and lectures (also internationally), published policy papers or books and edited a regular newsletter for over 400 subscribers from 17 countries. Additionally, our main feature became this huge website full of information.
Today this website is our main activity. It collects information on the topics of privatization, valorisation, public goods, deprivatisation, property, and distribution of wealth and then files them into currently 30 categories: Short news items with internet links, text references, and announcements, as well as recommendations on selected search tools for finding further information on the internet. Of course we work together with various other organisations that criticise privatisation, for instance the German Left and the European Left party (DIE LINKE and the European GUE/NGL). In short: we seek co-operation, support, and networking.
Privatization is currently occurring everywhere all the time – privatization profits amounted to 497 thousand million euros in the 15 EU states from1977 to 2004 – and added to this are further profits to the amount of 54 thousand million euros made in the new member states. France, Germany, England and Italy are among the top privatizers. Privatization is promoted as the master solution against state debt in the global financial crisis. But we know and show: Privatization is just one of the strategies to distribute wealth from public to private, to exclude the people from goods they created with the work of their hands and minds.
In a more specific sense, privatization is the transfer of certain activities that were previously carried out by the state to the private sector. The market (considered as allegedly more efficient) is then responsible for the allocation of resources. In the broader sense, privatization means the social tendency to open all productive conditions of the accumulation process to market forces: the general (state infrastructure, public services), the personal (social reproduction) and the external (natural environment). These conditions are successively subjected to the utilization interests of private capital. The narrower concept of privatization can be subdivided into three dimensions: state capital privatization (including material or real privatization) such as selling state-owned economically productive businesses (for example, a state run automobile industry, banks, steelworks etc.). The state withdraws completely from productive processes and transfers these to the private sphere. Privatization of services (also known as formal privatization) is meant to signify reforms in infrastructure. Previously public tasks with monopolies (e.g. mail, telecommunications, railways, water supply) are taken over by profit-oriented companies and supplied in competition with the state. Finally, organizational privatization describes economising strategies that affect public services in the narrower sense as well as the classic core areas of state activity. Micro-economic management norms and working conditions of the private economy are introduced without an alteration in the owner relationship.
Public goods are those goods, services and conditions for which the society is responsible that they are produced, distributed and secured. They are goods which are not sold as commodities on the market and are available for common use. Access to public goods should in principle be open to all members of society, independent of their income. Public goods can include commodities of basic need such as energy and water, as well social, cultural and educational goods – but also personal security, peace, a clean environment, justice and social cohesion.
Public goods are not determined by material properties, but by political decisions based on their social value, interest and power relationships. The prevailing social common sense and the degree of inner social solidarity determines the quality and the differentiation of public goods and the willingness to finance these by the state as an opposite pole to these being an expression of individual economic competition. The “public nature” of public goods requires that the political decision-making processes on public goods should be transparent and democratic.
Services of Public Interest
Basic public services of general interest are those services traditionally provided by the state. From a political-economic perspective, these services are “the general production conditions” of capital and serve the purpose of securing the reproduction of capital. Historically, the bourgeois state was prepared to provide these services when there was no individual private capital with the necessary instalment or there were no expectations of an adequate profit. At the same time, these public services were always the result of social struggle.
In the eyes of certain interested parties or functionaries of bourgeois society, basic welfare is “a service that is indispensably necessary to ensure a dignified existence for the citizen” (BverfGE 66, 248 (258) for the example of energy supply). This objective is linked to the paragraph of general equality of article 3 of the GG (Basic Constitutional Law of the FRG) through the social state principle of article 20 paragraph 1 of the GG and the human dignity stated in article 1 paragraph 1 of the GG, without, however, providing a subjective right to recover a claim or receive such a service. Changes in the provision of basic public services always mean changes in power relations or follow the changes in power relations. The definition of basic public services or the definition of who can benefit from these services is both the result of social and political struggle and the society’s current set of values.
The concept of basic services of public interest thus always has a political content, it is never neutral. The various viewpoints on determining what basic public services should be will always favour certain social interests in society, existing common interests of different social groups may be reinforced and the scope of certain social groups will be expanded or restricted.
Our political aims
What is our approach?
Quite simply, we question the relationship between property, power and inequality.
A left perspective on questions of property (and thus, privatisation) links these rigorously to the question of their effects on
- the distribution of resources in society (equality/inequality) and
- the distribution of political “goods” (effects of power, democracy and participation, access). If they include these dimensions, then they almost inevitably involve
- the dimension of political-social conflicts.
The great myths of neo-liberal privatisation and deregulation policies are increasingly crumbling, also because they are confronted with these questions.
The structure of property relationships and their variations are clarified by their concrete effects. We are dealing with an “assessment of the impacts of privatisation” and this leads to 6 questions:
- What are the consequences for the structure of the market. What position do privatised businesses occupy in the economic structure [the economic inequality aspect]?
- What are the socio-economic security effects – what are the developments in job security, working conditions, social welfare, etc., [the social inequality aspect]?
- Does privatisation have an effect on the provision of goods and services (access to and distribution of goods and services, “human security”, equality in access and of opportunity, quality of goods and services, fees, spacial distribution with regard to gender, ecology and health [developments in utilisation value aspect]?
- What are the consequences for the state: what income is generated for the state from sales or taxes? What income losses are incurred or what costs are to be met by the state? What is the status of the loss of the state’s ability to political intervention [economic and political inequality aspect]?
- How does privatisation effect politics – transparency, access, participation, influence and democratic control [political inequality aspect]?
- What conflicts result from these effects?
This Post is also available in: German