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New Left Review 55, January-February 2009


Within the global wave of privatizations, those enacted in Latin America stand out for their breathtaking speed and scale. Medeiros contends that the principal motivation was not economic but political, driven by new capitalist coalitions emerging from the 1980s debt crisis.

CARLOS AGUIAR DE MEDEIROS

ASSET-STRIPPING THE STATE

Political Economy of Privatization in Latin America

The crash of 2008 has been claimed, by right and left alike, to signal the end of the ‘neoliberal’ era. This may, then, be an appropriate moment to take a retrospective look, through the lens of comparative political economy, at one of the principal planks of its programme over the past three decades: the process of privatization. As with the liberalization of finance, the initiative came from the United States: the American airline industry was deregulated under the Carter Administration in 1978. In the uk, Thatcher launched a massive wave of state divestiture, in an economy where public enterprises had been a basic feature of the postwar period; a similar process followed in New Zealand. During the 1980s, however, despite the free-market orientation of many governments across the world, privatization remained a localized policy, restricted principally to Anglo-American economies. Yet by the early 1990s it had begun to be implemented on a global scale—to the extent that in 1993, the Economist could crow: ‘a policy that in 1980 seemed adventurous to some and unworkable to everybody else is now economic orthodoxy worldwide.’ [1] Economist, 21 August 1993. Throughout this essay, privatization is understood as the transfer of both ownership and control of a state asset to the private sector, rather than simply a sale of state assets.

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Carlos Medeiros, ‘Asset-Stripping the State’, NLR 55: £3
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