Film Review: The Big Sellout
Readers:I am in Washington this week (more on that later) and marveling about how deep a crisis it takes for some people to learn a basic fact of economics -- raw faith in a marketplace with limited public rules is a recipe for disaster. There is a sad justice in this. It was this city that pushed developing countries, like Bolivia, so hard to toe the line on "unfettered markets will set you free." And now those chickens have come home to roost and even the mighty giant Citicorp has come here hat in hand begging for public cash. So it looks like corporate America only wants unfettered markets when things go as they hoped, but wants government intervention to be massive when they screw up. I wish I could get that deal, and so do many other Americans.
It turns out that the sad history of market fundamentalism in Latin America was a preview of events to come in the U.S., tales of am economic theology run amok.
In this post our intrepid Lily Whitesell offers up a brief review of a recent film from California Newsreel, The Big Sellout, which documents the Cochabamba Water Revolt as well as three other cases where privatization hasn't worked. Here is her review.
Jim Shultz
The Big Sellout
The Big Sellout begins by introducing its viewers to stories of how privatization has affected real people’s lives across the globe. A middle aged mother in the Philippines frantically tries to find money for a twice-a-week kidney dialysis that her quiet teenage son needs to live. After 20,000 families in South Africa lose their electricity in a single month, the community decides to take matters into their own hands. Railway train drivers in Great Britain who used to boast the most efficient system in Europe now fear that the poorly maintained tracks could cost them their lives.
The documentary follows hospitals in the Philippines, electricity in South Africa, trains in Great Britain, and water in Cochabamba, which were all privatized in the 1980s and 1990s. In interviews with Joseph Stiglitz, former Chief Economist of the World Bank, it explains how privatization came to be the prevailing doctrine in many of the industrialized countries of the world, and how it was exported to developing countries through the World Bank and IMF, promising more efficient systems, greater investment, and better management.
The Big Sellout is a solid introduction to both how private companies have failed to meet those promises, and a deeper look at what is lost when basic services are privatized without being regulated. In Great Britain, the train system has lost its long-range vision, planning, and basic maintenance. The results have been severe job cuts, massive train delays, and a higher incidence of train crashes and deaths on the rails. In the Philippines and South Africa, the privatized health system and electricity company lost the goal of providing services for people in favor of profits and a better bottom line. Those unable to pay have had no option but to live without electricity and to let loved ones die without proper treatment.
Interviews with a spokesperson from the World Bank and a short promotional video from the IMF, juxtaposed with the four stories of privatization failures, reveal just how removed those backing privatization can be from the communities their policies affect. After a series deadly train crashes in Great Britain, the maintenance of the railway tracks was put back under public control. However, nations like the Philippines, South Africa, and Bolivia have had strict conditions written into their loans from the World Bank and the IMF, taking away the ability of regular citizens to have a say in what is in public hands and what is privatized.
At the same time, The Big Sellout brings to light stories of people fighting back from the ground up. In South Africa, a community group turns the lights back on for hundreds of houses that will never have the money to pay electricity costs. In Great Britain, unions are organizing to prevent further cuts. In the end, the film looks to Cochabamba's struggle against Bechtel for inspiration and hope in fighting other failed privatizations.
The film provides solid stories from around the world of when privatization has not worked for people – and how groups around the world have used both creative and traditional ways to combat policies imposed from above or abroad. California Newsreel’s efforts to bring these stories into the public eye are extremely useful to both informing a broader audience as well as inspiring people to take action in the face of injustice.
Written by Lily Whitesell
Labels: water-privatization
posted by The Democracy Center at 4:12 PM
The Democracy Center, based in Cochabamba Bolivia and San Francisco California, works globally to advance human rights through a combination of investigation and reporting, training citizens in the art of public advocacy, and organizing international citizen campaigns. If you like the Blog, consider becoming a subscriber to The Democracy Center's free e-newsletter by sending us an email at 
28 Comments:
What I marvel about is how Jim still knows so little about basic economics. He thinks that the "neoliberal" years in Latin America have been of rampant capitalism, and his proof are his cherry picked privatization examples. But what Jim doesn't seem to comprehend is that only governments allow privatizations -- who can participate in the buying process, the price of the public property being sold, the rules and regulations that the new owners must abide by, the amount of taxes paid, etc, etc. Many public institutions private monopolies, thanks to less than transparent processes and government kickbacks. In many instances no competition was allowed. So, what's the difference that a monopoly will be private or public if no competition is allowed? Therefore, although most of Latin America has taken some small steps towards more economic freedom, it hasn't been merely enough. In Jim's mind, government bureaucrats somehow have a magic solution to all our problems, despite countless examples of failure.
He doesn't understand is that the most economic free countries in the world are the most prosperous ones, and that's a fact.
There ain't no free lunch, Jim. That's a real "basic economic" concept. The more you get that, the better informed you'll become.
;-)
The Croats are Morales' Jews
Beni is Morales' Katrina
Thank you Jim for showing us that regarding the economy, you are even more lost than a lollypop in an ass. The fall down of the economy in the US, apart from being a cyclic situation, has almost nothing to do with the privatization of electricity, water and health in that country and a lot to do regarding the lack of government control over social policies, like the ones allowing people without resources to get houses they cannot afford without down payments because everybody has the right to have a house.
Or, like is happening in their automotive manufacture, allowing the unions so much power that their workers make double the amount the Japanese automotive manufacture in the same country, having some of this people will minimal skills making more that the doctors in their same city; or having the company paying the fired employees for up to 5 years just to seat while looking for other job.
By the way, water service in Cochabamba is much worse that ever!!!!!
i pity you ignorant asses, i truly do. humans are animals my friends, as the two commentors above so eloquently demonstrate. look at what jim wrote instead of spewing your backward ideologies onto this space. your theories are bankrupt, much like your tag lines. jim did not say markets are stupid and the government can run everything better, he said, markets that do not have proper oversight are doomed to failures such as the one we are experiencing today.
You are the antithesis to human progress and development.
Best of luck in all that you do. I know I will sleep soundly tonight knowing that people like yourselves exist, but your ideas and you yourselves have no practical applications in the real world. your ideas and taglines are nothing more than letters made into words, and though you are given a platform here to voice them, they will never, ever, persuade or influence me. a person who actually does and does not destroy.
peace.
The only thing you're capable of destroying is the English grammar, b-dogg.
Woof!
;-)
The Croats are Morales' Jews
Beni is Morales' Katrina
LOL. good one.
ano 9:20 please define "prosperous." Where do european countries fit in your model? What about the highly regulated Chinese market? Your simplistic analysis betrays your own ignorance, as does your petty, juvenile insults.
2:01, I decided to let pass your contemptuous "ano" just because you asked "please." But in the end you just couldn't help yourself, couldn't you? Your first and last words towards me were insults. Let me talk to you as if you were a 3 year old:
Insulting others is a big no-no if you want to exchange pleasantries.
Now, as if you were an 18 year old:
You just sounded like b-dogg's bitch.
Woof!
;-)
The Croats are Morales' Jews
Beni is Morales' Katrina
"2:01, I decided to let pass your contemptuous "ano" just because you asked "please." But in the end you just couldn't help yourself, couldn't (sic) you? Your first and last words towards me were insults".
Crooked eye: "ano" is short for Anonymous, certainly not contemptuous or insulting, in my book. And "juvenile insults" are no such thing if they reflect the truth. Now, if he had said "anal" that would be another thing. And perhaps close to the truth!
2:01 is not exchanging pleasantries. He is asking you to show some logic in your reasoning. I realize that isn't your speciality. But then we who follow this great and informative blog all know that (with the exception of Bolivia Libre).
Banality = Crooked eye
Buffy :)
Showing the failures of privatizations will always be more glamourous and attract crusaders like Jim than failures from Nationalizations or government interventions.
Case in point the water wars: Nobody will ever bother to make a "poignant" (with creepy music in the background and all) showing that people in cochabamba have even worse access or the fabulous trips trips and whore-orgies of Abel Mamami.
Figthing Globalization = Good
Promoting Private Investment and Job Creating in Bolivia = Evil
I guess I was a little over the top in that last post. I had just taken drugs, as I often do before I post here.
;-)
The Croats are Morales' Jews
Beni is Morales' Katrina
So, you ain't so bad after all!
I usually mix a little rum with that.
For reasons we shall not discuss.
Buffy :)
PS: Legal,of course?
Ok, for all those on this blog that question the empirical fact that Economic Freedom leads to Prosperity, or are confused as to what Prosperity means, please look at any of the Economic Freedom of the World report's published in the last few years. Here is a link to the latest one by the Fraser Institute in Canada - http://www.cato.org/pubs/efw/
To this, I add that you should also examine the close correlation between Economic Freedom and Political Freedom, and while causality is debatable, what is not is the fact that those countries that exhibit economic freedom also, for the most part, exhibit political freedom. Before you start chiming in with - What about China? and What about Sweden? Please look at the report.
As for Mr. Schultz's comment that "raw faith in a marketplace with limited public rules is a recipe for disaster." as a basic economic fact, is simply mistaken. In fact, the basic economic facts show quite the opposite, and the fact that the US recent housing crisis is a result of government intervention refutes this claim. Freddie Mac, Fannie Mae, CRA, etc. are "public rules" and programs that were intended to fix the market so that some member's of society can afford housing. A noble goal, but riddled with unintended consequences that we are now experiencing. If you really want to understand the US economic crisis (housing bubble included) as a whole, you must look at monetary policy - and you will find that US monetary policy is filled with government intervention that dates back to 1913.
It seems to me what Jim (as well as most of the readers of this blog) is against - is corporatism, not capitalism. Corporatism is the collusion between business and government, which is only created through "public rules" which favor certain industries and companies over others. The idea that more government laws are the solution for problems created by government laws is a fallacy. Free market advocates are also against corporatism, because it creates barriers of entry that do not allow the market mechanisms to work. In fact, corporatism has roots in Keynesian economics which is the idea of a mixed economy in which governments are responsible for correcting market failures. This branch of economics has been critiqued heavily, and has shown to have many holes.
Finally, as for the case of Bolivia, if you look closely at the water privatization efforts you will see that collusion not capitalism was at work. And even more broadly, most reform efforts in Bolivia are plagued with wealth transfer from public institutions to private ones. Jeffrey Sachs is not the model for Laizze Faire Capitalism.
Joseph, thanks for a post worth reading.
For years years Jim has been promoting over and over again the great role his "democracy" center played in "defeating" the demoniac Bechtel and, therefore, "saving" the people of CBBA from this terrible monster. Lots of water (and $$$) has gone under the bridge and it is getting quite boring. Your readers should receive an update to the story letting them know how the lives of the people there have actually improved (or not) after the expulsion of Bechtel and what your center has done to provide a viable alternative. Come up with real stats about how the current administration you so vehemently pushed for has made the availability and quality of the water service for Pedro, Juan, etc. Don't worry, I'll do it for you. Less people have access to clean water now. More people are now at the mercy of the "aguateros" who sell them unhealthy and t expensive water from their trucks at a much higher price per m3 than what they would have been paying now with Bechtel. Yep, that is the ugly reality. But that doesn't matter much now, does it? You obtained the epical story you needed.
One more thing, before you continue promoting the "benefits" of socialism for our countries, take a look at what is happening in Chile, Peru, Brasil and Colombia. Countries which are growing rapidly, REDUCING poverty significantly, creating the conditions to attract national and foreign investment which create productive jobs all while respecting the democratic rules and laws. Lastly, let me tell you something you apparently don't know about us. You can fool us for a while with rhetoric and demagogue actions but eventually we will wake up and kick all these corrupt governments out. Just look at what has happened in Venezuela last Sunday. Despite having spent 800 billion $ in 10 years (the equivalent of the bail out package to rescue the US economy which is 100 times larger than Venezuela's!!), the absolute control over every institution, press, army, etc, the democratic opposition obtained huge victories in Key States. The end is coming for this tropical Mussolini and his acolytes. Oh, yes, the end of the party for all the “caviar left” ngos is near too! :)
I take my hat off for Joseph that took his valuable time an explained the issue to the maSSist goons in this blow like they are in elementary school. His,”as a basic economic fact, is simply mistaken. In fact, the basic economic facts show quite the opposite, and the fact that the US recent housing crisis is a result of government intervention refutes this claim. Freddie Mac, Fannie Mae, CRA, etc. are "public rules" and programs that were intended to fix the market so that some member's of society can afford housing. Was much explanatory than my The fall down of the economy in the US, apart from being a cyclic situation, has almost nothing to do with the privatization of electricity, water and health in that country and a lot to do regarding the lack of government control over social policies, like the ones allowing people without resources to get houses they cannot afford without down payments because everybody has the right to have a house.
To complement Anon 11:42 AM, it will be interesting for the democracy center to explain the close ties between the “aguateros” (water cistern owners) and the water revolt movement, since the aguateros patsies were the main bulk, in goons terms, of the opposing forces before the cocaleros participation. The last ones had a bigger prize in mind as we all know at the present time.
(deep breath)
Ahhh...it's so refreshing to read in this lefty blog so much common sense from those who understand the true meaning of capitalism and how it benefits everybody. I recommend reading Henry Hazlitt's "Economics in One Lesson." Easy to read, I bet that there have been more conversions to the free-market philosophy from this one economics book than, perhaps, from all others put together. It's that good.
Every widespread economic fallacy embraced by pundits, politicians, editorialists, clergy, academics, and Cuchi Cuchi worshipper is given the back of the hand they so richly deserve by this author: that public works promote economic welfare, that unions and union-inspired minimum-wage laws actually raise wages, that free trade creates unemployment, that rent control helps house the poor, that saving hurts the economy, that profits exploit the poverty stricken; etc.
Here's the link of the book:
http://jim.com/econ/
Dare ye to discover the light, Jim (Schultz)?
;
The Croats are Morales' Jews
Beni is Morales' Katrina
Hazlitt is a great recommendation! Very easy to read, and he presents economics in a very intuitive manner. I read this blog from time to time, not to really stay informed, but to get a perspective about Bolivia from people who are there. If you think about it, this is a pretty balanced blog because even though Mr. Schultz often makes a leftist analysis, there is always comments that counter his analysis and give the objective reader a balanced perspective. I've learned a lot about Bolivia here, by simply reading the comments along with the initial blog.
So that's basically why I decided to post. When you make the comment that the recent economic crisis is caused by free markets, you really misinform the reader. Usually schumpterian innovation and smithian gains from trade outsmart government silliness, and I'm not convinced that it won't this time, but with all these bailouts the dollar is in serious trouble. The US economy is hurting, and now is not the time for people to go anti-free market. I implore all the readers of this blog to a) take a serious look at US monetary policy; b) understand the difference between Corporatism and Capitalism; and c) then decide which has affected Bolivia more throughout the years.
My name is Rafael
Here is my comment.
It is fairly obvious to anyone who has read jim's blog for some time that he is biased. But that does not mean he does not have a point or his crusades are pointless.
With the ''water wars'' he points, in admittedly not too nuanced a language that, Bechtel acted shamefully. NO ONE CAN DENY THAT.
Then we can argue eternally on whether more, less or no state intervention is required. I think any informed observer will notice that different systems have qualities and flaws and none is perfect.
American style capitalism, Northern European ''third way'' or even may I say the-axis-of-good-socialism are points in case.
Look at the state of the American healthcare system and you will realize that taxes are an ESSENTIAL ''necessary evil'' and state intervention is required. Furthermore, all note that a REPUBLICAN neo-liberal government has had no choice other than to intervene in the market in order to save what is left of wall str etc... No one can deny that!!!!!!!! Fuck sake.
Chavez has one of the best track records in distributing wealth, Cuba one of the best health systems in the world and Morales has been outstanding in empowering the disposessed. Nevertheless what were the consequences: the prostitution and servitude of the Cuban people, a nearly collapsed Bolivian state and a Venezuelan petro-economy which is blatantly unsustainable.
If any SERIOUS commentator wants to comment please feel free to do so.
Rafeal,
Your points are well taken. I in no means want to discredit some of the valid points made in Jim's blog, after all their is a valid reason that Evo Morales won the 2005 election by a landslide. But what I ask is that you reconsider the economic merits of what he says.
I agree that no system is perfect, but what in life is? While one can debate about anything they wish, there are certain realities we all must come to term with. I mean if compelled, I'm sure some bright Ivy League grad could argue against the law of gravity...but guess what....I'm still not going to walk off a cliff to test that hypothesis. Like physics, (good) economics has shown us that certain realities (truths) exist in this world. Demand curves slope downwards, and while the Krugman's, Sachs, Stiglitz..etc. of the world would love to refute this....if a society wishes to refute this, they do so at their own peril. Socialism, in all its forms, does MOT meet its intended goals...NO ONE CAN DENY THAT!
As for the case of Cuba, your right they do have top notch health care...but what is the opportunity cost for this great healthcare? I'll tell you...its having great industry, finance, transportation, and many of the other things that a society needs along with healthcare. I'm sure if the US woke up one day and decided to have the best healthcare in the world and was willing to devote 80% of its resources to get it....we would have a healthcare system like you wouldn't believe! But what would we give up? We live in a world of scarcity and tradeoffs, and the only efficient way to determine what a society wants/needs is through a market system.
Now I know you pointed to some of the consequences within Cuban society (i.e. prostitution, servitude) but I made this point to be clear about why capitalism even exists in the first place. As for Morales, as noble as his goals are, they are unattainable! Yes, he did empower the dispossessed...but what good is this if the country will just become poorer. The only thing worse than not having a choice, is being poor and not having a choice. "Movimiento al Socialismo" should give you a hint as to where Bolivia is headed.....
Joseph and company remind me of mmy Republican friends in the 1980s. This is the same old story we have heard for decades and the result in the US has been more rich, more poor, and shrinking middle class. The present crisis is result of de-regulation and less government. It is not the result of government "siliness." Though the last time I heard from someone from the Cato institute speak they described government siliness as including consumer protections on fatal infant products. Joseph please define where government siliness begins and ends. Parks are government suiliness? Public transportation? Public water systems? The military? Social Security? Minimum wage laws? Medi-care? The endangered species act? The War in Iraq? The War on Drugs? The War on Poverty? As an aside I think Enron, World Com, Haliburton, Lehman Brothers, etc. have debinked the myth of the inherent superiority of the private sector.
Miguel de los Shanqueros
Miquel,
You make a valid point with public goods. I was in the military, so I can acknowledge that certain goods may be best served through the government. Yet, there is an argument to be made for "radical" capitalism (of the anarcho kind) in countries like Bolivia, where the government doesn't seem to even protect its citizens, much less build efficient roads, schools, etc.
But government silliness begins when it slaps the invisible hand of the market out of the way and places its grabbing hand in various sectors of the economy. Price controls, tariffs, subsidies, etc. are all examples of govt. silliness, because despite the plethora of empirical evidence showing why these interventions don't work, the govt still enacts them.
I'm not republican, and this has little to do with political ideology, but rather accepting economic realities which are value free. If you want to call it dogmatic, so be it, but I believe in the laws of supply and demand as much as I believe in the law of gravity. Until someone proves either to be false, we must organize our society according to these laws
Now, you mention that our "present crisis is result of deregulation and less government" and cite "Enron, World Com, Haliburton, Lehman Brothers, etc." as examples of the free market con amuck. Never mind that the government has significantly grown over the past 8 years, and the financial market is heavily regulated. Lets just focus on the source of this crisis, for as a famous economist once said - before you know why things are going wrong, you must first know how it can ever go right.
Basic economic logic tells us that money, like anything else that is traded, is a good. As a good, it has a supply and demand which is called a loanable funds market. Those that supply the loanable funds (i.e. banks) get the money from our savings, and those that demand the loanable funds (i.e. entrepreneurs) borrow according to how much money (i.e. our savings) is available, their personal time preference, and the calculated risk associated with their loan. This all manifests itself in a naturally occurring interest rate, which tells us how much individuals in a society rather invest than consume.
This is how things should work, however, we know that this is not the case for we have a nasty thing called the Federal Reserve, which pumps credit into the system and creates an oversupply of money. This oversupply of money distorts the interest rate and sends a false signal to entrepreneurs about how much they should be investing. This creates a temporary boom followed buy a bust, which is what we call a recession. S&P, dot.com, and now the housing bubble are all examples of this distortion of interest rates and malinvestment. The companies you name are hardly the cause of the problem, nor examples of principled entrepreneurship in a free market system. They are merely examples of companies who decided to play the political game in a mixed economy.
Sorry for the long winded response, but I felt this needed to be said.
Thank you for the thoughtful response... My point is that government is stereo-typed as "silly" and corporations as "savvy." Yet, government is the core around which society is constructed and it is, or should be, as good and efficient as we can make it. Most positive societal changes are prompted, directed or implemented through government action. Corporations are good at making things and making money, but their concerns are limited to profits generally. So when you blame the government for everything, I think the analysis is misapplied. Enron gto out of control because of deregulation. They were create ficticious profits and manipulate energy markets, particularly in California, because of de-regulation. 1980s and 1990s promises by big business and Republicans that de-regulation would increase competition and lower prices for consumers were false. The opposite occured, prices rose and there was collusion and consolidation not increased competition. I do not know all the details of how heavily regulated financial markets are certainly there are some antiquated and silly regs out there. But to say that the boom and bust cycles are the result of government regulation seems false. Boom and busts seem part of the capitalist system and in large part psychological in that they are fear based. The government should mitigate the negative effects of business, including boom and bust cycles, and hopefully encorage positive effects. In that sense, I agree with Keynes that in the long run we are all dead.
Miguel de los Shanqueros
"Corporations are good at making things and making money, but their concerns are limited to profits generally."
Cars, cell phones, airplanes, TVs, medicine, diapers, books, pens, pencils, chairs, pillows, i-pods, underwear, shoes, condoms, music, tacos, salteñas, homes, tables, rugs, electricity, the very computer you're using, volleyballs, the Rubik cube, etc., etc. And these greedy exploiters dare ask for compensation for their many years of blood, sweat, and tears? Off with their heads!
;-)
The Croats are Morales' Jews
Beni is Morales' Katrina.
What is your point Anus 2:39?
its point is it's an "anus"
Logic dictates an "anus" can only produce s__t not arguments. Much less, ca. It make a point. What we have here is an ongoing case of Internet diarrea
Lol
Railway train drivers in Great Britain who used to boast the most efficient system in Europe now fear that the poorly maintained tracks could cost them their lives.
Hasn't been the "the most efficient system in Europe" in decades, long before privitization. Another "fact" that got pulled out of someplace dirty and stinky.
Bolivian Railway, Big Sellout Part II Should be our preocupation right now, not only to regain the topic, from the filmographic point of view, but also historically, and in direct correlation with the War on Water that foreign enterprise has been waging against bolivians way before gonimientismo. The formerly British company, literally disguised as an iron horse, showed it's trojan scheme, plotting to divert our water to the wealthier chilean market, and profiteering of it for decades, under those same sacro-sanctimonious premises that still lure the intelectuals of the hour, while the scoundrels they fail today to recognize as their masters, stand stripped of their nobel prizes in economy, all three of them: The micro, the market, and the macro-economy proponents, the whole MM&M triad is a sorry epilogue to the decapitation of das kapital, prey, not unlike apiaries, to the latest mal du siecle: Colony Capitulation Disorder. L&M.
Post a Comment
Links to this post:
Create a Link
<< Home