Privatization

Privatization has indeed become a core mantra of neoliberalism or market fundamentalism and received its strongest political support from British prime minister Margaret Thatcher (who served from 1979–1990), U.S. president Ronald Reagan (1980–1988), and Chilean president Augusto Pinochet (president from 1974–1990), who were all strong proponents of market fundamentalism. The collapse of the Soviet bloc strengthened the trend toward privatization as the state apparatus of the former socialist regime was systematically dismantled and privatized. Since 1990, privatization has been implemented to one degree or another in the developed economies of the West, the transitional economies of the former Soviet bloc, and in the developing countries of Africa, Asia, and Latin America. The enthusiasm by which privatization was embraced is illustrated by the following statement by M. Peter McPherson: The development approaches of the past, based on large-scale government bureaucracies and centralized, government-controlled economies, have been discredited by their failure. Privatization is forging economic success and stability. Privatization works because it focuses on the entrepreneur, encourages individual initiative, and promotes market-oriented policies. More and more developing countries are discovering that privatization produces wealth for their economies and greater opportunities for a broader spectrum of their people. (Hanke, p. 20)

Toward the end of the twentieth century, it was apparent that the policy of privatization had mixed results and that in some countries it had generated significant opposition, apart from the fact that its theoretical premises were also being credibly challenged as well.