The term, 'privatization,' as it is used by those in power today bears as much resemblance to the original as Anna Nicole Smith does to Mother Theresa.
The term, 'privatization,' was first used by Dr. Robert Poole, founder of Reason Foundation in his book, “Cutting Back City Hall,” in the mid 70s. The idea of converting services provided by government into services provided through private, for profit business, became a byword for efficiency over the next three decades. But efficiency had not been the point. The issue was giving people back control of their own lives.
The road to Hell is paved with good intentions. The idealism of the 70s was harvested for the benefit of the greedy.
The issue of privatizing began with trash collection, proposed by Bob Poole and then Social Security. was first posed for a position paper written for the campaign of Ed Clark, Libertarian presidential candidate, in 1979. The 'white paper' later appeared in much the same form under the sponsorship of Cato Institute, founded in 1977 by Edward H. Crane, III, Charles Koch, and Murray Rothbard. During this time things changed. Ideas are useful tools for achieving your goals; this idea proved to be fertile ground.
In 1981 Rothbard, a stalwart Austrian School Economist, was ousted from the Cato Board. In his newsletter, Libertarian Review, Rothbard said Cato, "revealed its true nature and its cloven hoof. Crane, aided and abetted by Koch, ordered me to leave Cato's regular quarterly board meeting, even though I am a shareholder and a founding board member of the Cato Institute." Austrian economists do not approve of Congress fiddling with the economy.
Cato began providing regular briefings for Congress on how to minimize their costs and optimize their profits in the 90s when the Contract on America swept into office.
Privatization and outsourcing had found applications that lead to consequences none of the Libertarians who had originally supported the ideas expected.
Lt Eric Shine had seen continuous and troubling violations of the Merchant Marine Act of 1936 through the first six years of his career. Shine had witnessed blatant dumping of toxic waste, violation of safety regulations, and other wrong doing. Because he was doing his due diligence, ironically Shine gained a reputation as a trouble maker. He persisted in reporting these through avenues that had been truncated, leaving active Federal Maritime Officers with no recourse. It was as if the rules he had learned had been canceled.
Congress had mandated that at majority of American shipping must sail under America 's flag. They had done this to ensure that ships would be available in time of conflict and peace so that standards for safety and the wellbeing of the seas and our nation would be maintained. These ships, Congress said, would be manned by Officers of the US Merchant Marine. When Lt. Shine began his career the 10,000 ships under the US flag at the close of WWII had shrunk to less than 200, reducing the protections to America intended by Congress and the jobs available to Federal Maritime Officers.
In 1998 Shine began work in Hawaii for the Navy. What Shine saw at Pearl Harbor was the application of American ingenuity to the dissolution of the Navy Installation that had been a hub of strength for decades. Under the mandate of privatization services were being transferred to private companies. Graft, corruption, and thievery were systemic. Serving as a project engineer Shine could find no one who would listen to his objections. There was too much money to be made by remaining silent. Privatization and cost reduction were the rhetorical devices that filled the air.
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