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“Privatizing”

By Matthew Yglesias  

"“Privatizing”"

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Read Steve Benen on the madness of privatizing the VA health care system and the tea-fueled candidates who want to do it. Then come back over here for some neoliberal claptrap.

Right. So there’s a lack of precision in the discourse around “privatization” of this or that that always bugs me. The classic case of privatization has to do with state-owned firms, which we largely never had in the United States. But many European countries had things like a state-owned airline or a state-owned phone company. In this case, “privatization” means you sell the firm. And then the state of play post-privatization is just that you have a private firm selling airplane tickets or telephone lines or whatever.

Oftentimes, though, we’re talking about something pretty different. You sometimes hear that Denmark has privatized its fire fighting services. But that doesn’t mean that Denmark just sold all the fire stations and has left it up to the free market whether or not fires are extinguished. On the contrary, Danish municipalities provide firefighting services to their residents. But instead of taking revenue and using it to hire firemen and buy fire trucks, they use the revenue to contract with a firm—Falck A/S is the largest—to provide firefighting services. Then the firm hires firemen and trucks and so forth.

If you’re standing in England and proposing that the health care system be turned into something like Medicare, I think people would say that you’re proposing “privatization” of health care. Instead of doctors and nurses working for the National Health Service they’ll work for private firms and the government will contract with them to provide health care. But if you’re standing in the United States and proposing that people under the age of 65 receive Medicare, then people would say that you’re proposing “socialized medicine.” What’s happening, of course, is that Medicare represents socialized financing of health care and private provision—just like Danish firefighting.

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