Evening Bachelors program at University of San Francisco
cps.usfca.edu, September 11, 2006
"Conservative" economist Peter Drucker popularized privatization, a key Nazi economic policy
The term seems to have been first introduced into academic social science by Maxine Yaple Sweezy, wife of the distinguished Marxist economist, Paul Sweezy.
Bel, Germa`. 2006. "The Coining of 'Privatization' and Germany’s National Socialist Party." Journal of Economic Perspectives, 20: 3 (Summer): pp. 187-94.
187-8: “The standard story on the coining of “privatization” reports that in 1969 Peter Drucker used the term “reprivatization” in the sense that economists understand it today. In The Age of Discontinuity (1969, p. 229), Drucker makes a negative appraisal on the managerial capabilities of the public sector: “Government is a poor manager …. It has no choice but to be `bureaucratic.’” Drucker’s (p. 233) analysis of how government works leads him to what he takes as “the main lesson of the last fifty years: the government is not a doer.” Thus, Drucker (p. 234) proposed adopting a “systematic policy of using the other, the nongovernmental institutions of the society of organizations, for the actual `doing,’ i.e., for performance, operations, execution. Such a policy might be called `reprivatization.’” Drucker referred to “reprivatization” because he proposed giving back to the private sector executive responsibilities that had been private before the public sector took them over through nationalization and municipalization starting in the last decades of the nineteenth century.”
192-3: “The primary modern argument against privatization is that it only enriches and entrenches business and political elites, without benefiting consumers or taxpayers. The discussion here suggests a rich historical irony: these modern arguments against privatization are strikingly similar to the arguments made in favor of privatization in Germany in the 1930s. As Sweezy (1941) and Merlin (1943) explicitly point out, German privatization of the 1930s was intended to benefit the wealthiest sectors and enhance the economic position and political support of the elite. Of course, this historical connection does not prove that privatization is always a sound or an unsound policy, only that the effects of privatization may depend considerably on the political, social and economic contexts. German privatization in the 1930s differed from the privatization of Volkswagen in the 1950s, and both of these situations differ from, say, the British privatizations of the 1980s, the Russian privatizations of the 1990s, or the privatizations across Latin America over the last two decades.”