We're selling off the world - but who wins?
By all rights, the 2008 global financial crisis should have marked the end of the era of privatisation and the return to the more equitable mixed economy model which dominated in the post-war era.
Instead, it only ushered in a new, more extreme phase in the neoliberal project.
The question is — who benefits from all of this privatisation? While states can raise money from sales, more often than not assets are sold at below their market value, as occurred with the sale of the Royal Mail in Britain.
And often privatisation proves to be a false economy as privatised companies receive higher public subsidies than their state-owned predecessors got.
A classic example of this of course is the handouts to Britain’s rail operators which have received up to five times more in taxpayer subsidies than British Rail received in its last year of existence.
On so many levels privatisation makes no economic sense — until you start to look a little deeper into who benefits from this policy.
A new, must-read report The Privatising Industry in Europe, by Sol Trumbo Vila and Matthijs Peters for the Transnational Institute “puts a spotlight on the legal and financial corporate giants making millions out of the new wave of privatisations.”
The TNI finds that “a small coterie of legal, financial and accountancy firms, many based in the UK, are reaping huge profits from the new wave of crisis-prompted privatisations.”
Among these firms are “financial advisory firms NM Rothschild, the UK law firms Freshfields Bruckhaus Deringer, Clifford Chance, Allen & Overy and Norton Rose Fulbright, and the accountancy firms based in London PricewaterhouseCoopers and Ernst & Young.”
The report notes that these firms “actively promote privatisation at the European level.”
Read the full article here.