Privatization: When Business Makes All The Rules

2014-01-23 13:33

  1. Pic: Google.com/www.reuters.com

    ‘Let me issue and control a nation’s money and I care not who writes the laws.’

     The aim of any business is supposedly to generate profit. The aim of privatizing the work force is supposedly to foster freedom of creativity and entice performance through competition.

    But in that privatizing of commodities we perhaps demonstrate utter negligence on the part of the State as a custodian of every human within the republic. A private institution, by virtue of being private, has very much the right to dismiss the workforce as it deems beneficial to its own survival – or that of its wealthy shareholders ultimately.

    Should profits suffer - as we witness in the South African mining sector so often – the company may retrench the workers at will, offering them meagre retirement incentives in the process. But a State institution doesn't employ for the sake of earnings and remunerations. Its sole purpose is to create and sustain work for all its citizens. The private sector in this regard is not influential and is normally given a nominal or no role at all in the running of the economy.

    As far as the argument that private control inspires productivity goes, I think it has been totally crushed and left obsolete. It might only be a question of attitude over reality. As the World Bank’s Marcelo Giugale once reasoned: “The big lesson of the 90’s is that ownership is less important than accountability… What you need to be sure of is that at the end of the day the company, public or private, is held accountable.”

    Nationalization or Communism doesn't mean people stop being productive and live under oppressive and undemocratic tyrannical laws. It simply means the CEO doesn't answer to the (private) Board of Directors but to the Municipal Council, as appointed by the people. The CEO knows well enough to maintain productivity and to win the approval of the [professional] council. This means people may only get dismissed on the premise of incompetence as opposed to profits deficit, as it frequently happens with private institutions.

    State companies have a moral obligation over the welfare of the citizens, while a private company may serve the exclusive interests of the owner. In today’s Free Market rates, a staggering percentage of generated money goes into the private vaults of the shareholders, rather than to the local municipality, which could immediately invest that money into more job creation.

    We can take an example of a top flight auditing company, which employs about ten accountants, who earn around R400 000 P/A, and their CEO, who for example takes home R1,2 Million annually. This very workforce, which is the company as a whole, may bring in R100 Million for the company’s owner/s annually. Out of all this money, the owner spends about R7 Million tops on all his workers, including PA’s, receptionists, etc.

    After taxes and other business expenses, the owner is left with about R70 Million of easy money he didn't really sweat for. Imagine how many more accountants could have gotten employed had that R70 Million been reinvested into job creation initiatives. This regrettably is the curse we face in a world where private capital rules. There cannot be progress I see, so long as acquisitive globalist tycoons control even our reserve banks.

    As the pioneer of modern banking Mayer Amschel Rothschild once conceitedly mused, ‘Let me issue and control a nation’s money and I care not who writes the laws’. Unfortunate as it is, this statement rings more true today than when it was made centuries ago. Clearly it was spoken from the confines of malice and pomp, but even the great Nelson Mandela eventually bowed to this devilish decree.

    Today’s governments, as I noted, have become like mere tax collectors to the larger than life private conglomerations of the ‘New World’. The South African Economy is so privatized that even our government can’t move without any corporate sponsorship. As far as ethics are concerned in the matter, an adult or pornographic company recently made an offer to sponsor our National Soccer team, and this was no prank at all.

    If we were to not nationalize but rather impose higher state control or regulation in private companies, the purpose would be wholly defeated. That would make owners mere subordinate managers and the State the real owner, which is not the case presently. As it stands now, the private sector calls the shots and in a strange sense it is able to mould and manipulate social culture as it prefers, through advertising and sponsorship (or what is called Social Responsibility). ©

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