[Marxism] More than a trillion dollars worth of global privatisation

["Jurriaan Bendien" <andromeda246@xxxxxxxxx>]

The link below provides a statistical look by IMF researchers at the global
picture of privatisation since 1985.

"[some 1.1 trillion US dollars - note: this estimate refers to constant 1985
US dollars -JB] worth of state-owned firms have been privatized since 1980.
(...) For every dollar a developing country owed the IMF in the early l980s,
it subsequently privatized state-owned assets worth roughly 50c."

See: http://www.imf.org/External/Pubs/FT/staffp/2004/02/pdf/brune.pdf

That kind of neatly sums up an aspect of "primitive accumulation" in the
modern world. Assets previously held in common are transformed into
private property, under the pressure of indebtedness and insufficient
current income.

Socialists would obviously not agree with the IMF's unqualified favourable
assessment of the socio-economic benefits of privatisation, but nevertheless
the data is of interest, insofar as it gives an indication of the world
scale of the privatisation process.

The 1.1 trillion US dollars of state assets for 1985-1999, measured in 1985
constant dollar terms, would be about 1.9 trillion in current (i.e. 2004) US
dollar terms (allowing for US currency inflation). Of course, the privatised
assets might well be worth much more after privatisation, i.e. they were
often bought at a very "economic" price, and resold for much more later.

The interesting question is whether these sell-offs of public property,
mainly acquired with taxpayers' money, have in fact helped to solve the
"fiscal crises" of governments. There is, however, very little evidence that
this is the case. Most governments are in the hock to lending institutions
just as much as before, or more so. Nor is there any clear correlation
between privatisation and additional growth in real GDP. If anything, the
burden of an increasing total indebtedness has shifted more from the public
to the private sector (households and private enterprises). Obviously, the
capacity to borrow depends greatly on the size of capital assets held - the
more capital assets you have, the more you can borrow.

It all makes you wonder where that "more than a trillion dollars" of state
revenue from assets actually went!

In case you are wondering what 1,100,000,000,000 US dollars represents, it's
equal to about 1/10 of annual US GDP, or equal to the annual take-home pay
of about 30 million American workers, or roughly equal to Canada's annual
GDP. 1.9 trillion dollars is a bit more that the annual GDP of France (of
course, those sorts of comparisons are misleading in one sense, because
they are not adjusted for purchasing power parity; my aim here is only
to give an approximate indication of size).

The OECD mentions that privatisation has slowed down in the last years after
its peak in 1998. It attributes this both to the stock crash, slowdown in
real
GDP growth, and the fact that there is less left qua assets which can be
privatised.
http://www.oecd.org/dataoecd/29/11/1939087.pdf
http://www.oecd.org/dataoecd/57/31/1897956.pdf

Jurriaan


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