Global Auction of Public Assets: Public Sector Alternatives to the Infrastructure Market and Public Private Partnerships
Radice, Hugo, Capital & Class
Dexter Whitfield Global Auction of Public Assets: Public Sector Alternatives to the Infrastructure Market and Public Private Partnerships, Nottingham: Spokesman, 2010; 378 pp.: 9780851247731 £18 (pbk); 9780851247847 £11.99 (e-book)
Ten years ago, Dexter Whitfield's Public Services or Corporate Welfare? gave us the first detailed critique of the growing use of private resources to 'finance' public infrastructure projects. With Global Auction, he provides a comprehensive account of just how far and wide these forms of privatisation have now spread. A movement that seemingly began as a technical innovation in project financing now threatens to transfer the design and implementation of infrastructure projects entirely from public to private hands, with taxpayers and service users footing the bill. If this continues, the consequence will be to dramatically restrict the scope of democratic decision-making in this vital part of the economy, while simultaneously redistributing income from the poor to the rich. And as with so many innovations in the history of capitalism, successive uk governments have been the most enthusiastic pioneers and promoters of this process.
Chapter 1 outlines the context of changing global infrastructure requirements, and the transformations of finance, private and public, up to and including the 2007-8 crisis. Chapter 2 provides a taxonomy of the different infrastructure sectors and the many forms of 'public private partnerships' (hereafter ppps), and then charts the economic and social impacts of infrastructure in general and its relation with public service provision. Chapter 3 places the ppp model in the wider context of neoliberalism, and more specifically privatisation. Here, Whitfield shows how the efficiency claimed for ppps is belied by the highly monopolistic nature of the markets from which infrastructure is commissioned. He also exposes the determined efforts by the World Bank and imf to portray ppps as development-friendly.
The following five chapters provide rich detail on the mechanics of ppps. Chapter 4 examines why public infrastructure has become a favourite 'asset class' for global investors, and how modern financial engineering techniques have been adapted to maximise returns. Chapter 5 shows how the major global investment banks have constructed financial assets to attract cash-rich investors such as sovereign wealth, pension, private equity and hedge funds, levying colossal fees for their work. The role of transnational corporations is also crucial, since ppps allow them to minimise the long-term commitment of their own capital. Chapter 6 surveys the field around the world, showing how the model has been adapted to the economic, political and legal environments of different countries, not only in Europe, North America and Australia, but also in Russia, China, India and Brazil. …