Privatization Risks

The drumbeat to corporatize (a.k.a.: privatize) essential facilities continues to beat from the business-funded think tanks in Washington, D.C.

Recently, the government’s uranium enrichment installations — which deal with national security matters — were corporatized, and are now run by a company listed on the stock exchange.

Corporatization is supposed to be more efficient, more innovative and reliable. Well, events this month in Japan and England contradict that. A corporate uranium processing plant in Tokaimura, Japan, owned by Sumitomo Metal Mining, produced Japan’s worst nuclear accident. Official investigators attribute the serious release of deadly radiation to a secret company policy that was illegal but reduced company costs. The workers who mixed this uranium cocktail were so ill-trained that one of them admitted he didn’t understand the meaning of a “critical reaction.”

The sloppiness was everywhere. The arrival of critical equipment, including a neutron measurer, both at the plant and in the surrounding neighborhood was delayed for hours. The order to evacuate was also delayed, as was an order for more than 300,000 people to remain indoors.

According to the Washington Post, company officials admitted to investigators that “workers have been using the same illegal shortcut that caused the accident for the past seven or eight years.” In addition the Post reported that open quote (Unless, of course, the close quote at the end of this graph is a mistake)] Company officials also said they had not made any preparations for this type of accident in which an excess of uranium poured into a mixing container triggered a nuclear chain reaction.”

So far, three workers are in critical condition, many others have been seriously exposed to radiation, and each day brings more bad news. The accident has been raised to a Level 5 rating, which indicates higher levels of contamination outside the plant and in the surrounding community. The Wall Street Journal reported that, beyond bad management, the “enormous pressure to cut costs and compete with overseas rivals” was a major factor.

On the other side of the world, two crowded commuter trains collided in London resulting in more than 100 deaths. Each train was run by a different company. The locomotives and passenger cars were rented from three other companies, while the track and signal equipment were the property of another corporation. Maintenance and repair work were contracted out to other companies.

Five years ago, British Rail, the nation’s railroad system, was government owned. It has since been “privatized” by the conservative government. Now more than 100 corporations own pieces of the national railroad network.

The national railroad regulator, Tom Winsor, sums up the result: “Punctuality and reliability are down, fares are up, complaints are way up, and government subsidies have doubled since privatization. Even the simple things don’t get done: Why can’t they clean the toilets?” And these companies get taxpayer subsidies to boot!

Whenever there are breakdowns or mishaps, the companies blame each other. What is noteworthy to remember is that Margaret Thatcher’s other numerous privatizations have not worked out very well for consumers lessons lost on the ideologues in the United States.

About 60 years ago, the noted author and journalist, Walter Lippmann, chided the market fundamentalists of his day by reminding them that there is a need for both private enterprise and public enterprise in our country. Wisdom is finding the right balance between what is best suited to one or the other.

Unfortunately that “balance” presently is out of balance in the rush to privatize prisons, water companies, fire departments, mental health facilities, background checks for public employees, municipal garbage collection, and spy satellites.