PRIVITIZATION EVERYWHERE 

Many North Americans think that "high tech" is just something that only affects their life when they come in contact with its hardware.

That just isn't so. A case in point: the growing trend towards "privatization" in governments throughout the Western World.

Many of the services provided in the past by federal, state, provincial or municipal governments are now being considered "fair game" for the private sector. And the high-tech 'hook' is cost.

Almost all the infrastructure connected with such services provided in the past by governments were built around the technology of the time. A sound move during those days. However, with the fast technological improvement in many fields the past two years, such governments are operating with dray horses when more efficient machines are available.

The problem is that, in many cases, initial capital investment for new equipment is much higher than setting up the original structure.

And most governments are finding that they just don't have the money. To raise such funds would mean increasing taxes to pay for it and that isn't a move politicians like to make. It puts them out of work. They do not get re-elected.

So why this accelerating trend towards "privatization" or "contracting out"? Major reason, putting aside the strong argument by supporters of the private sector that they are more efficient, is that they are able to take over a service utilizing technologies designed for today's world. What's happening is astounding.

"Fiscal Watchdog" a bulletin of the Local Government Center in California, points out that "European-developed mass-burning techniques are much more sophisticated than old municipal incinerators... have now began to establish a reasonable track record in the U.S." They state "the fact that government itself is not by nature an institution designed for risk-taking" and do not have the highly-trained technical personnel required to operate new and highly-sophisticated equipment.

Political considerations in government decision-making often tend to override economic factors with the consequent inevitable increase in taxes somewhere down the road.

Britain appears to be leading the way. There they are now considering the sale of British Gas Corporation, the National Bus Company, the British Airports Authority and even privatizing some sewage-treatment plants and roads.

What doesn't appear at first glance, to be privatization but really is, is what is happening in Sweden. There the government found out, years after everybody else knew, that a tremendous amount of national energy was being expended to circumnavigate the complicated income tax rules set up to bankroll the welfare state. The rules were necessary because the state had established such generous welfare allotments. They now realize that all that was counterproductive. Paying income tax rates as high as 68 percent just made everyone look for loopholes instead of being entrepreneurial, innovative and productive. The state therefore was forced to reduce taxes to 30 percent for most workers. Ten years ago in Sweden this would have been unthinkable. Today there it is fact. Globalization will force it to occur in North America in the very near future. Moral: Lofty morals only occur in times of lavish national wealth. When times and conditions change to a more conservative era, when free-spending eventually forces governments to reduce their indebtedness or collapse, most safety nets are removed from the non-productive.

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