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un.privileged
10-08-2010, 06:56 PM
Since the thread "Why are liberals so delusional when it comes to public service privatization?" has completely gone out of topic, I'll just re-post my inquiry regarding Privatization.





Speaking about "Privatization", is there any existing practice of a true libertarian method of "Privatization"? In fact does the State has the right to even sell a "public service"? Rothbard said, the State has no legitimate claim of ownership of any "public" property anyways, so how does it has the right to sell it to anybody?

Selling to the highest bidder is the most dominant form of "privatization". The fact is most of privatization that exist is government managed.


So would we really blame the liberals for being so delusional and ignorant? Or the hypocritical conservatives who propose privatization but in fact most of them apply the government managed form of privatization?


Rothbard mentions that the legitimate claimant of ownership would be the current homesteaders. Rothbard even quoted Marx, "All land to the peasants. All factories to the worker".
Like seriously, where are the existing examples of this true "Privatization" proposed by Rothbard?

Confiscation and the Homestead Principle by Murray Rothbard

Karl Hess's brilliant and challenging article in this issue raises a problem of specifics that ranges further than the libertarian movement. For example, there must be hundreds of thousands of "professional" anti-Communists in this country. Yet not one of these gentry, in the course of their fulminations, has come up with a specific plan for de-Communization. Suppose, for example, that Messers. Brezhnev and Co. become converted to the principles of a free society; they than [sic] ask our anti-Communists, all right, how do we go about de-socializing? What could our anti-Communists offer them?

This question has been essentially answered by the exciting developments of Tito's Yugoslavia. Beginning in 1952, Yugoslavia has been de-socializing at a remarkable rate. The principle the Yugoslavs have used is the libertarian "homesteading" one: the state-owned factories to the workers that work in them! The nationalized plants in the "public" sector have all been transferred in virtual ownership to the specific workers who work in the particular plants, thus making them producers' coops, and moving rapidly in the direction of individual shares of virtual ownership to the individual worker. What other practicable route toward destatization could there be? The principle in the Communist countries should be: land to the peasants and the factories to the workers, thereby getting the property out of the hands of the State and into private, homesteading hands.

The homesteading principle means that the way that unowned property gets into private ownership is by the principle that this property justly belongs to the person who finds, occupies, and transforms it by his labor. This is clear in the case of the pioneer and virgin land. But what of the case of stolen property?

Suppose, for example, that A steals B's horse. Then C comes along and takes the horse from A. Can C be called a thief? Certainly not, for we cannot call a man a criminal for stealing goods from a thief. On the contrary, C is performing a virtuous act of confiscation, for he is depriving thief A of the fruits of his crime of aggression, and he is at least returning the horse to the innocent "private" sector and out of the "criminal" sector. C has done a noble act and should be applauded. Of course, it would be still better if he returned the horse to B, the original victim. But even if he does not, the horse is far more justly in C's hands than it is in the hands of A, the thief and criminal.

Let us now apply our libertarian theory of property to the case of property in the hands of, or derived from, the State apparatus. The libertarian sees the State as a giant gang of organized criminals, who live off the theft called "taxation" and use the proceeds to kill, enslave, and generally push people around. Therefore, any property in the hands of the State is in the hands of thieves, and should be liberated as quickly as possible. Any person or group who liberates such property, who confiscates or appropriates it from the State, is performing a virtuous act and a signal service to the cause of liberty. In the case of the State, furthermore, the victim is not readily identifiable as B, the horse-owner. All taxpayers, all draftees, all victims of the State have been mulcted. How to go about returning all this property to the taxpayers? What proportions should be used in this terrific tangle of robbery and injustice that we have all suffered at the hands of the State? Often, the most practical method of de-statizing is simply to grant the moral right of ownership on the person or group who seizes the property from the State. Of this group, the most morally deserving are the ones who are already using the property but who have no moral complicity in the State's act of aggression. These people then become the "homesteaders" of the stolen property and hence the rightful owners.

Take, for example, the State universities. This is property built on funds stolen from the taxpayers. Since the State has not found or put into effect a way of returning ownership of this property to the taxpaying public, the proper owners of this university are the "homesteaders", those who have already been using and therefore "mixing their labor" with the facilities. The prime consideration is to deprive the thief, in this case the State, as quickly as possible of the ownership and control of its ill-gotten gains, to return the property to the innocent, private sector. This means student and/or faculty ownership of the universities.

As between the two groups, the students have a prior claim, for the students have been paying at least some amount to support the university whereas the faculty suffer from the moral taint of living off State funds and thereby becoming to some extent a part of the State apparatus.

The same principle applies to nominally "private" property which really comes from the State as a result of zealous lobbying on behalf of the recipient. Columbia University, for example, which receives nearly two-thirds of its income from government, is only a "private" college in the most ironic sense. It deserves a similar fate of virtuous homesteading confiscation.

But if Columbia University, what of General Dynamics? What of the myriad of corporations which are integral parts of the military-industrial complex, which not only get over half or sometimes virtually all their revenue from the government but also participate in mass murder? What are their credentials to "private" property? Surely less than zero. As eager lobbyists for these contracts and subsidies, as co-founders of the garrison state, they deserve confiscation and reversion of their property to the genuine private sector as rapidly as possible. To say that their "private" property must be respected is to say that the property stolen by the horsethief and the murdered [sic] must be "respected".

But how then do we go about destatizing the entire mass of government property, as well as the "private property" of General Dynamics? All this needs detailed thought and inquiry on the part of libertarians. One method would be to turn over ownership to the homesteading workers in the particular plants; another to turn over pro-rata ownership to the individual taxpayers. But we must face the fact that it might prove the most practical route to first nationalize the property as a prelude to redistribution. Thus, how could the ownership of General Dynamics be transferred to the deserving taxpayers without first being nationalized enroute? And, further more, even if the government should decide to nationalize General Dynamics—without compensation, of course—per se and not as a prelude to redistribution to the taxpayers, this is not immoral or something to be combatted. For it would only mean that one gang of thieves—the government—would be confiscating property from another previously cooperating gang, the corporation that has lived off the government. I do not often agree with John Kenneth Galbraith, but his recent suggestion to nationalize businesses which get more than 75% of their revenue from government, or from the military, has considerable merit. Certainly it does not mean aggression against private property, and, furthermore, we could expect a considerable diminution of zeal from the military-industrial complex if much of the profits were taken out of war and plunder. And besides, it would make the American military machine less efficient, being governmental, and that is surely all to the good. But why stop at 75%? Fifty per cent seems to be a reasonable cutoff point on whether an organization is largely public or largely private.

And there is another consideration. Dow Chemical, for example, has been heavily criticized for making napalm for the U.S. military machine. The percentage of its sales coming from napalm is undoubtedly small, so that on a percentage basis the company may not seem very guilty; but napalm is and can only be an instrument of mass murder, and therefore Dow Chemical is heavily up to its neck in being an accessory and hence a co-partner in the mass murder in Vietnam. No percentage of sales, however small, can absolve its guilt.

This brings us to Karl's point about slaves. One of the tragic aspects of the emancipation of the serfs in Russia in 1861 was that while the serfs gained their personal freedom, the land—their means of production and of life, their land was retained under the ownership of their feudal masters. The land should have gone to the serfs themselves, for under the homestead principle they had tilled the land and deserved its title. Furthermore, the serfs were entitled to a host of reparations from their masters for the centuries of oppression and exploitation. The fact that the land remained in the hands of the lords paved the way inexorably for the Bolshevik Revolution, since the revolution that had freed the serfs remained unfinished.

The same is true of the abolition of slavery in the United States. The slaves gained their freedom, it is true, but the land, the plantations that they had tilled and therefore deserved to own under the homestead principle, remained in the hands of their former masters. Furthermore, no reparations were granted the slaves for their oppression out of the hides of their masters. Hence the abolition of slavery remained unfinished, and the seeds of a new revolt have remained to intensify to the present day. Hence, the great importance of the shift in Negro demands from greater welfare handouts to "reparations", reparations for the years of slavery and exploitation and for the failure to grant the Negroes their land, the failure to heed the Radical abolitionist's call for "40 acres and a mule" to the former slaves. In many cases, moreover, the old plantations and the heirs and descendants of the former slaves can be identified, and the reparations can become highly specific indeed.

Alan Milchman, in the days when he was a brilliant young libertarian activist, first pointed out that libertarians had misled themselves by making their main dichotomy "government" vs. "private" with the former bad and the latter good. Government, he pointed out, is after all not a mystical entity but a group of individuals, "private" individuals if you will, acting in the manner of an organized criminal gang. But this means that there may also be "private" criminals as well as people directly affiliated with the government. What we libertarians object to, then, is not government per se but crime, what we object to is unjust or criminal property titles; what we are for is not "private" property per se but just, innocent, non-criminal private property. It is justice vs. injustice, innocence vs. criminality that must be our major libertarian focus.

RedStripe
10-08-2010, 07:08 PM
Man, sometimes Rothbard would get in the zone and really home runs like this.

I think that last bold section of the excerpt is especially important. It really does identify a problematic false paradigm that has been used to excuse corporate welfare in the name of "privatization" (see: Latin America, IMF/World Bank activities for some of the worst examples).

un.privileged
10-08-2010, 07:35 PM
"Pinochet gave us a free market!"

RedStripe
10-08-2010, 07:36 PM
"Pinochet gave us a free market!"

Hahaha

Have you read The Shock Doctrine by Naomi Klein?

Sentient Void
10-08-2010, 09:13 PM
Wow - that was really great. That's the first that I've read of it, and it's exposed me to new ways of looking at the situation that I hadn't thought of before.

Logically, ultimately, I must say I am in complete agreement.

I always wondered about the 'private corporations' that benefitted heavily from government funds (read: taxed aka stolen money), and if they should really be considered 'private' at all (just never devoted enough time to thinking about it or researching it). And what to do in a situation where if/when we did begin breaking down the government, and what to do with all the corporations that have grown to such a large point / major market share, not due to the free market but instead due to what is essentially government subsidies via regulation/taxes/etc.

Glad I now have my answer.

Live_Free_Or_Die
10-08-2010, 09:21 PM
Furthermore, no reparations were granted the slaves for their oppression out of the hides of their masters. Hence the abolition of slavery remained unfinished, and the seeds of a new revolt have remained to intensify to the present day. Hence, the great importance of the shift in Negro demands from greater welfare handouts to "reparations", reparations for the years of slavery and exploitation and for the failure to grant the Negroes their land, the failure to heed the Radical abolitionist's call for "40 acres and a mule" to the former slaves. In many cases, moreover, the old plantations and the heirs and descendants of the former slaves can be identified, and the reparations can become highly specific indeed.

No disagreement but I have also advocated for reparations (against stiff opposition in a couple threads around here).

un.privileged
10-08-2010, 09:47 PM
Murray Rothbard, Justice and Property Rights : The Failure of Utilitarianism
http://mises.org/daily/4047


It should be clear that, since the utilitarians only base their theory of justice in property on whatever the government defines as legal, they can have no groundwork whatever for any call for restoring the property in question to its original owners. They can only, willy-nilly, and, despite any emotional reluctance on their part, simply endorse the new allocation of property titles as defined and endorsed by government. Not only must utilitarians endorse the status quo of property titles but also they must endorse whatever status quo exists and however rapidly the government decides to shift and redistribute such titles. Furthermore, considering the historical record, we may indeed say that relying upon government to be the guardian of property rights is like placing the proverbial fox on guard over the chicken coop.
"It is a curious fact that utilitarian economists, generally so skeptical of the virtues of government intervention, are so content to leave the fundamental underpinning of the market process wholly in the hands of government."

We see, therefore, that the supposed defense of the free market and of property rights by utilitarians and free-market economists is a very weak reed indeed. Lacking a theory of justice that goes beyond the existing imprimatur of government, utilitarians can only go along with every change and shift of government allocation after they occur, no matter how arbitrary, rapid, or politically motivated such shifts might be. And, since they provide no firm roadblock to governmental reallocations of property, the utilitarians, in the final analysis, can offer no real defense of property rights themselves. Since governmental redefinitions can and will be rapid and arbitrary, they cannot provide long-run certainty for property rights; and, therefore, they cannot even ensure the very social and economic efficiency which they themselves seek.[4] All this is implied in the pronouncements of utilitarians that any future free society must confine itself to whatever definitions of property titles the government may happen to be endorsing at that moment.

Let us consider a hypothetical example of the failure of the utilitarian defense of private property. Suppose that somehow government becomes persuaded of the necessity to yield to a clamor for a free-market, laissez-faire society. Before dissolving itself, however, it redistributes property titles, granting the ownership of the entire territory of New York to the Rockefeller family, of Massachusetts to the Kennedy family, etc. It then dissolves, ending taxation and all other forms of government intervention in the economy. However, while taxation has been abolished, the Rockefeller, Kennedy, etc., families proceed to dictate to all the residents in what is now "their" territory, exacting what are now called "rents" over all the inhabitants.[5]

It seems clear that our utilitarians could have no intellectual armor with which to challenge this new dispensation; indeed, they would have to endorse the Rockefeller, Kennedy, etc., holdings as "private property" equally deserving of support as the ordinary property titles which they had endorsed only a few months previously. All this because the utilitarians have no theory of justice in property beyond endorsement of whatever status quo happens to exist.

Consider, furthermore, the grotesque box in which the utilitarian proponent of freedom places himself in relation to the institution of human slavery. Contemplating the institution of slavery, and the "free" market that once existed in buying, selling, and renting slaves, the utilitarian who must rely on the legal definition of property can only endorse slavery on the ground that the slave masters had purchased their slave titles legally and in good faith. Surely, any endorsement of a "free" market in slaves indicates the inadequacy of utilitarian concepts of property and the need for a theory of justice to provide a groundwork for property rights and a critique of existing official titles to property.

I guess this is an important point of privatization, without a theory of justice, rent would be no different than taxes, and even worst, as privatization could become a de facto more unaccountable government under the disguise of private ownership. Seriously, this is what is refereed to as "privatization" today, it is the dominant method of privatization that exists. I am quite surprise that this is not very much discussed today by libertarians.

un.privileged
10-11-2010, 05:59 AM
From Centre for Stateless Society (http://c4ss.org)

The Problem With Privatization
Posted by Thomas L. Knapp on May 15, 2009


Over the course of the last 25 years or so, “privatization” has gone from innovative idea to over-used buzzword to standard government operating procedure (often described as “public-private partnerships”).

Last week, the National Aeronautics and Space Administration announced its own privatization initiative: NASA intends to pay private firms to provide interim rockets and crew capsules while it develops a government replacement for the shuttle program. Other recent privatization trial balloons cover everything from Internet governance at the international level to foster care at the state level.

The idea behind privatization is that the private sector — the market sector — operates more “efficiently” than government, providing cost savings to the taxpayer. Company X, we’re told (probably truthfully) can produce the widget for a buck, where a state-owned and operated factory would require two bucks to produce the same widget.

That, of course, raises the question of what we need government for. Why not just buy the things we want on the free market in the first place, rather than passing our money to market providers through the hands of inefficient government bureaucracy, driving the total cost back upward toward that “inefficient government” price?

Convinced anarchists need no more justification than that question to reject privatization outright. The unconvinced, however, may require more evidence for the unacceptability of privatization. That evidence is abundant.

Privatization, as it is currently practiced, strengthens the state and weakens the private sector. While it was originally sold as bringing “market values” to “public sector” operations, in practice exactly the opposite has happened.

First of all, “privatization” is a misnomer. When a government project is “privatized,” the state generally retains substantial authority over that project — and takes a substantial financial rakeoff for “administration” and “oversight.” The retained authority keeps the whole project soaking wet in the smelly liquid of politics, and the rakeoff, as previously mentioned, pushes the real price back upward from “market prices” toward “political prices.”

Secondly, the enterprises attracted to, and most likely to garner contracts for, privatization schemes aren’t necessarily the most efficient market enterprises. Rather, they’re the enterprises which hire the best lobbyists and wield the most political influence. In this respect, “privatization,” rather than being a cure for government failures, is a vector for infecting the private sector with the same diseases.

Finally, there’s a flip side to the “public-private partnership.” While the state retains substantial authority over the projects, the contractors get tagged with substantial responsibility for the outcomes.

When a privatized project goes south — when it comes to light that inmates have been abused in “private” prisons, or prospectively when one of NASA’s “private” crew capsules loses atmosphere in orbit — our bureaucrats will point their fingers straight at the “private” contractors and hope we forget the piles of government standards those contractors were required to operate under.

The market entities, if there are any involved, take it in the shorts; more likely, these “market entities” are actually politically connected enterprises who’ll be back for another dip from the well after things blow over and fade into memory, but they at least get a public spanking to keep up appearances.

The government entities, on the other hand, move forward with their reputations unstained and their budgets untouched.

Privatization, as currently practiced, is a “heads the state wins, tails the state’s subjects lose” proposition. If a privatized project founders on scandal or capsizes on cost, it’s all the market’s fault and the state should get more directly involved. If a privatized project “succeeds,” the state takes the credit and throws more “privatization” bait into the water, bringing more of the “private sector” into its happy, spendthrift “public sector” family.

The alternative to privatization as currently practiced — let’s call it “sham privatization” — is real privatization: Taking the provision of traditionally “public” services away from government altogether. The nugget of truth at the core of sham privatization schemes is that yet, the market really is more cost-efficient than government. At everything.

Travlyr
10-11-2010, 06:46 AM
Speaking about "Privatization", is there any existing practice of a true libertarian method of "Privatization"?
While not true "privatization" because it has not yet been owned by the state, doesn't the Internet exemplify a true libertarian example of laissez-faire free markets?

un.privileged
11-15-2010, 07:39 PM
While not true "privatization" because it has not yet been owned by the state, doesn't the Internet exemplify a true libertarian example of laissez-faire free markets?

I'm talking about real, tangible property here, not virtual property. Libertarians have been talking about privatization, yet there is no examples of actual true/legitimate libertarian practice of privatization. All existing forms of privatization in the modern age has been a transformation of the form of government, from a more accountable one to a radically less accountable form of government. It has become only nominally "private", but it is de facto government run by investors holding monopolistic power.

awake
11-15-2010, 08:20 PM
I'm talking about real, tangible property here, not virtual property. Libertarians have been talking about privatization, yet there is no examples of actual true/legitimate libertarian practice of privatization. All existing forms of privatization in the modern age has been a transformation of the form of government, from a more accountable one to a radically less accountable form of government. It has become only nominally "private", but it is de facto government run by investors holding monopolistic power.


You have to remember, for the government to assume control of an industry (private to public control) it must hobble and destroy the market in that sphere. After this is accomplished the men who previously made the market function dissolve, many into the new government controlled apparatus, and upon tasting bureaucratic security, become spoiled to the ways of the free market. After some time, even if the attempt were made to release the industry into private hands there is no organized element to pick it up, to rebuild the working private sphere. And, there is always the option for the government to recapture the industry upon first signs of trouble, which would prevent the rebuilding and redevelopment of the released sphere.

In my opinion, you will not see proof as long as the government is an existent element in the privatization equation. Absence of government regulation and control is the true private sphere. Government does not truly give up complete control in any area it dominates, it simply picks shop keeps and makes them play market.

If transfer of control can happen from private to public, then the reverse is in fact true as well.


Note: you should look into Hans Hoppe for his reversal and transference from government to proper private ownership; as best as can be achieved with the destruction caused.

un.privileged
11-17-2010, 06:03 AM
Well it is a fact, that most politicians or advocates of privatization, in actual practice does privatization through the government, or in other words transforming the current non-profit public government into a private for-profit government. All privatization that have existed are statists, or effectively have become another more centralized government running for profit (investors becomes the government). So I wouldn't blame many who are suspicious to any privatization proposals, especially liberals. We must be clear what we mean by "privatization", simply shouting out for "privatization" would not attract the public.