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Sunday, August 11, 2013


Privatization is the turning over of services and entities to private government. It is a form of rent seeking in which persons seek to govern an entity for the sake of wealth and riches (profit). The rent seekers usually sell their services either on the premise that they can do a better job of running entities or they simply acquire and exercise power and control over entities and systems through acquisition and exercise of power. When they create the system they run that is not strictly speaking privatization as they are running that service from the start. But the results are similar.

Privately run entities are usually run for the private separate advantage of the owners and investors. They are usually monopolies and so such entities usually control their markets, have unequal power and information, can set monopolistic rents on their goods and services, and usually are monopolies or part of an oligarchic power structure. And so their rule of services and entities is usually oppressive and redistributes wealth from customers and employees to investors and owners.

History verifies is worse than bureaucratization (and usually combined). In the 19th century the Pennsylvania Railroad was bigger, had more power, and a bigger bureaucracy, than the State Government of Pennsylvania. Eventually they had to be "regulated" because they couldn't logically be broken up (on the contrary they needed to be integrated). Once regulated our Railroads decayed because private management was monopolistic acquisitive and diverted it's trust accounts to speculative purposes. Using it's monopoly over rails and steady income to finance other activities. A Government entity must be run on a mission; which may not have an end point but does have virtues and objective measures. For example a railroad provides transportation services and integrates towns and country; but private government does not have that mission, it's only mission is to make money. And as demonstrated with turnpikes, canals, railroads, and countless other examples going back to before the USA was a company, that is fatal to the efficient running (government) of any service or system.

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