Rhian's claim that privatisation somehow enjoys popular support because "there's no public clamour to buy back once-public assets" is a breathtaking leap of logic.

Of course no polls have ever been taken to ask the public what the public think of privatisations after the event and it is not hard to imagine why the pro-privatisation corporate newsmedia does not bother to commission such polls.

However, in the absence of such polls, I would suggest that public opposition to planned privatisations would be a very good indicator of their attitude towards previous privatisations. If previous privatisations had been so beneficial, then could Rhian explain why was the NSW public so resolutely opposed to privatisation throughout 2008?

I would have thought that there are other more obvious reasons to explain the lack of an overt "public clamour". The obvious one is that, with the rare exception of articles such as this one by Tristan Ewins, the issue is rarely covered in our heavily pro-privatisation biased newsmedia.

The other reason is the fundamental weakness of our democracy, that is, when a minority stand to gain immensely at the expense of the majority, they will act with far more determination to subvert the will of the majority. As those representing the interests of the majority are rarely paid for their time and have to fight these issues in their own (increasingly limited) time and at their own expense, it is much harder to keep political movements in the public interest on track long enough for them top succeed.

Nevertheless, I believe this needs to be done if we to undo the damage caused by those who inflicted the privatisation of Telstra upon us and to prevent them from doing further harm.

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Whilst Ross Gittins can write intelligently on occasions, his article on privatisation at http://business.smh.com.au/business/iemmas-reasons-for-privatising-electricity-20080316-1zsa.html?page=-1 is garbage.

It's interesting that, like Rhian, he accepts that politicians are entitled to lie to a public that they presume to be too stupid to know what's in its own best interests:

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"For a start, experience teaches that the arguments politicians advance publicly aren't necessarily those that persuaded them to try to push through an unpopular measure. They choose the arguments the punters are likely to find most persuasive and least offensive, not necessarily those that make sense to economists."

However, Gittins inexplicably failed to notice that "the punters" did not find the "(false) arguments" any more "persuasive" and any less "offensive" than what Gittins insists are the true arguments in favour of privatisation that the politicians decided to keep from the public.

It's interesting that having accused opponents of privatisation of attacking straw men, Gittins, himself, then proceeds to erect and then demolish a number of his own straw men:

"Retain the electricity businesses and borrow hugely to finance their future needs? Sure, why not? Borrow heavily to finance all other infrastructure needs? Sure, why not?"

"In reality there /are/ limits. ..."

Well, why not cross that bridge when we come to it?

However, Gittins anticipates this by claiming that it is not possible to know until after the event whne limits have been exceeded, which I consider nonsense.

Of course, having a Treasurer seemingly incapable of giving timely advice to the NSW public of the true of the true state of NSW's finances as Costa failed to do would not help, but any competent Treasurer should have managed to do that.

Gittin's nonsense is further demolished at http://johnquiggin.com/index.php/archives/2007/12/12/nsw-electricity-privatisation-a-quick-look/

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The justification that money invested in supposedly "non-core" areas such as telecommunications would be better invested elsewhere is rubbish and often used hypocritically as most proponents of privatisation are opposed to the government are opposed to providing any services whatsoever.

If this was the case, then why is NSW in such a poor financial state after having undergone so many previous privatisations? This was noted in a Financial Review article "Bits and pieces won't fetch $1 billion" by Tracey Ong on 24 September and I commented upon this in "How decades of privatisation has impoverished NSW" at http://candobetter.org/node/823

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In any case, what better way for the government to serve the public than to provides as cheaply as possible broadband to all sectors of Australian public?

The Liberal Opposition rightly criticised the Rudd Government for failing to take account of broadband connections to schools when it announced its plans to provide a laptop to every high school student. However, they forgot to mention that if they had not privatised Telstra, then schools would not have to incur the costs of providing shareholder profits and paying the bloated salaries of Trujillo and his Three Amigos, no-bid contracts, overseas junkets etc, etc.

Telecom had planned in the 1970's to give every Australian access to fibre optic broadband network connections before the turn of the century. Unfortunately the 'free market' ideologues have since got their grubby hands onto Telstra/Telecom and we are now paying the price.

Hi daggett

I don’t believe, and haven’t argued, that privatisation is popular. What I have argued is that the reality of privatisation seems less unpopular that the anticipation – people oppose it in advance, but get used to it very quickly, because it’s seldom as bad as its opponents expect.

I think you’re mixing two separate arguments – the argument that a thing should not be privatised because it’s unpopular, and the argument that it should not be privatised because it doesn’t deliver net social and economic benefits. The first is essentially a political issue, the second is an issue of economic and social policy.

My post concerned the merits or otherwise of privatisation based on its economic and social consequences. I believe that depends mainly on the nature of the market and its capacity to support competition. There are certain goods and services which only governments can provide, or which only governments can ensure are distributed fairly to the whole community. And, there are natural monopolies that need to be either government run or regulated. I believe that, by and large, governments should stick to these activities and not get involved in supplying goods and services the private sector can deliver perfectly well.

You falsely accuse me of believing it’s ok for politicians to lie. I do not. But I do think Gittens is right that politicians will tend to put the most positive spin on the policies they try to promote. To name something is not to endorse it.

I have acknowledged the political issue of governments doing things that the community doesn’t approve of. But we live in a representative democracy, not a majoritarian one. Sometimes governments implement policies that do not have majority support, for a great many reasons. Whether and when they should do that is an interesting question, but it is not the one I was addressing.

You say “most proponents of privatisation are opposed to the government are opposed to providing any services whatsoever”. Do you really believe this? What is your evidence? It seem preposterous to me.

Rhian, firstly, I withdraw my accusation that you think it is OK for politicians to lie and apologise for having said so.

However, as I have demonstrated that a good many of those who imposed privatisation upon us clearly misled the Australian public I trust you will be forthright in acknowledging that.

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Rhian wrote, "... people oppose (privatisation) in advance, but get used to it very quickly, because it's seldom as bad as its opponents expect."

In what way did you mean to suggest that the results are not "as bad as its opponents expect(ed)"?

The Financial Review Story "Telstra Raises stakes with job cut plans" of 15-Jan-09 reports that Telstra intends to increase its already savage job reduction plan to cut 12,000 jobs by 2010, even though it's ahead of schedule. This is partly to pay the cost of Trujillo's failed gamble to bully the Australian government over the National Broadband Network (NBN).

In 2005, the Howard Government willingly handed over control of our vital telecommunications infrastructure to this man, who seemed to be devoid on any useful talent other than cunning and ruthlessness.

Trujillo had largely ruined the US telco <a href="http://en.wikipedia.org/wiki/US_West">US West</a> which he left in 2000 and secretly negotiated a severence package totalling US$72million with the company <a href="http://en.wikipedia.org/wiki/Qwest">QWest</a> which bought out US West, apparently in return for shifting the takeover date forward in order to avoid US West's responsibility to pay out hundreds of millions of dollars in dividends to its shareholders. (see http://news.sbs.com.au/dateline/sol_trujillo_on_the_line_130713 of 20 Sep 2006 and http://www.citizensagainstsellingtelstra.com/resources/2/dissent-trujillo-aug05.html).

In spite of swindling US West shareholders, even QWest suffered as a result of the deal so bad a state had Trujillo left the company in.

The man should have been put behind bars and not placed in charge of Telstra.

The Howard Government evidently gambled that by the ruthless shifting of costs onto Telstra's workforce and the broader Australian community and by gouging its customers, Trujillo would be able to lift Telstra's profitability.

... and he couldn't even do that. (See "Sol Trujillo's use-by date at Telstra is near" at http://www.theaustralian.news.com.au/business/story/0,28124,24945099-30538,00.html).

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No-one's mixing arguments. If the Australian people truly wished to hand control of Telstra across to Trujillo and the Three Amigos, then those opposed would have had to respect those wishes.

However, as I have shown, it is the proponents of privatisation, who refused to accept the public verdict against privatisation.

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Rhian wrote, "But we live in a representative democracy, not a majoritarian one. Sometimes governments implement policies that do not have majority support, for a great many reasons."

Rhian, the pattern of supposed 'democracy' in Australia for at least the last three and a half decades has been that elected representatives have repeatedly acted in defiance of the public will on critical questions. If it happened only very occasionally, then it just might be acceptable, but not when it happens almost all the time.

How can you possibly defend the deceit of the Australian public over Telstra during the 2004 elections? How can you possibly defend the behaviour of Iemma and Costa throughout 2008?

Rhian asked if I truly belived that "most proponents of privatisation are opposed to the government are opposed to providing any services whatsoever"?

Yes, I do.

Why don't you check out Michael Moore's movie "Sicko" (http://www.michaelmoore.com/sicko/)? It should be in your DVD store.

When the private health insurance companies thwarted Hillary Clinton's attempts to introduce universal health care in the US back in the 1990's, they deliberately brought about a situation which would cause the deaths of many Americans unable to afford health insurance and even many of those who could.

The health insurance companies employ people, whose job it is to find any excuse to refuse funding for life-saving treatment. There is more than abundant evidence of the unconscionability of proponents of the 'free market' system in Moore's film and in Naomi Klein's "The Shock Doctrine" and many other places.

BTW, I have republished this article with Tristan's kind permission at http://candobetter.org/node/992

Possibly some may choose to also post comments there if they find OLO's limits too restrictive.