Privatization, Russian Billionaires, And Carlos Slim

Some in the low-tax, small-government crowd believe that the less regulation, the better for private enterprise, entrepreneurship, and overall economic performance. Yet nothing could be further from the truth. What is required for a good soccer match or a good basketball game is not an absence of referee, but a good referee with a solid knowledge of the rules, along with a willingness and ability to enforce the rules fairly and decisively. There is a presumption among some right-wingers that privatization will automatically lead to improved efficiency, lower prices, and other economic gains. But in the absence of a sound regulatory framework, neither consumers nor economy at large benefits from the transfer of ownership from the government to the private sector. For example, when India privatized its airports, the result was a sharp increase in landing fees, which had a detrimental impact on air traffic. In this case, the result of privatization is simply the replacement of a bad public monopoly with an even worse private monopoly…