November 12, 1989, New York Times PERESTROIKA GOES SOUTH

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Privatizing Will Make Life Worse
by Michael Hudson

This article was published in the NYT more than 20 years ago, forecasting precisely what has happened.

I attended the annual meetings of the International Monetary Fund and World Bank in Washington
last month. When the meetings ended, I was left with the impression that no further writedowns
would be forthcoming for Latin America’s debtor countries unless they followed the lead of Mexico.

To do this, countries like Brazil and Argentina would have to sell off their public utilities, some
potentially profitable industrial corporations and some service industries like airlines.
In the past, one met mostly bankers at these big international meetings. Now there are a lot of
lawyers.

For Latin America the foreclosure process has begun, but for the time being it is called privatization
or debt-for-equity swaps. Countries hoping to borrow more money from creditor-nation
governments, the I.M.F. and the World Bank, are being told to help themselves by relinquishing
ownership of their basic economic infrastructure.

In advocating this brave new world of privatizing hitherto public monopolies, these local investors
and their partners, the international banking and investment community, cite a number of truisms.
Private-sector managers will run enterprises more efficiently, the proponents of privatization say.
This argument has merit, as far as it goes. But it should be remembered that the troubled savings
and loan institutions in Texas were all privately run businesses.

in full: http://michael-hudson.com/2011/07/privatizing-will-make-life-worse/

[arcane1]

1. The "Shock Doctrine" is coming home n/t