— RUPE
[Read complete article (as revised March 6, 2019) in PDF format]
According to the currently dominant ideology, privatisation is identified with greater ‘efficiency’ (the meaning of which term is kept vague). Privatisation may take different forms: the handing over of existing public sector assets to private investors; permitting private investors to enter sectors hitherto reserved for the public sector; opening up the exploration and mining of mineral wealth to private investors; promoting insurance schemes in place of universal provision of basic services; contracting out to private firms jobs hitherto done by the public sector; and so on.
But whatever the form, the dominant ideology claims that privatisation delivers the goods more effectively, and more cheaply. Private firms are said to be driven by the profit motive to lower costs and compete with other firms. Even if the activity to be privatised is a monopoly, it can be awarded to a private firm through competitive bidding, in which the State can specify the fulfilment of various criteria/targets as part of the contract. A firm which does not fulfil its contract can be penalised or replaced with another firm. In this way, we are told, the building of a public sector institution, with an experienced workforce developed over years of stable employment, is no longer necessary. The magic of the ‘market’ will do the job.