Politics in Minutes (2016)

Privatization

Acentral concept of liberalism in all its forms has been the limitation of government’s powers to what is necessary and good for society as a whole. Classical liberals argued that government should be confined to defence, administration of justice and public works. As social liberalism replaced classical liberalism, the understanding of what constitutes ‘public works’ expanded - in addition to defence and justice, liberal governments considered social issues to be the responsibility of the public sector, and even utilities such as water, gas and electricity, and public transport. In the 1980s, however, neoliberal economists argued that public ownership led to inefficiency, and many Western governments began the process of returning these businesses to the private sector. Since then, many European countries have not only reversed the public ownership of utilities, but also privatized traditionally national industries and services, such as post offices, and outsourced the work of government departments, such as prison services, tax collection and policing, to private firms.

In Europe, many railways started out as private enterprises, were later nationalized, and have more recently been privatized once again.