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The Privatization of Everything: Forty Years of Undoing [1]
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Date: 2025-09-19
In his review for The American Prospect, Mark Levinson unpacks Donald Cohen and Allen Mikaelian’s book The Privatization of Everything. Few works have so thoroughly catalogued the sad—and often catastrophic—results of America’s forty-year love affair with privatization.
It began, of course, with Ronald Reagan. When he entered the White House, economist Milton Friedman was crowned intellectual guru. Friedman’s core argument was simple: “society” does not exist, only individuals do, and only individuals can have moral obligations. In this view, government has no moral function—no duty to its people.
Reagan’s economic adviser Murray Weidenbaum translated Friedman’s philosophy into marching orders: “Don’t just stand there, undo something.” And undo they did—gutting public programs, auctioning off assets, and outsourcing public functions under the banner of “efficiency.” The real goal was not efficiency at all but lowering expectations—convincing Americans that government was incapable of solving problems.
Apple Valley: Privatization’s Cruel Parable
Cohen and Mikaelian highlight a revealing case in Apple Valley, California. There, the town’s water utility—owned by a Carlyle Group subsidiary—charged residents 50 to 100 percent more than neighboring towns with public water systems.
During the 2015 drought, Apple Valley residents conserved water—but their bills went up. The CEO explained: “with declining unit sales you almost have to raise rates.” Translation: they gouge you whether times are good or bad.
The lesson? When profit replaces public service, the public always pays more and gets less.
Clinton’s Betrayal: Privatization Becomes Bipartisan
Levinson doesn’t let Democrats off the hook. Bill Clinton, the champion of “Third Way” politics, became one of privatization’s greatest enablers.
By 2015, there were 2.6 contract or grant employees for every one federal employee, meaning the private shadow state now dwarfed the public workforce.¹ In total, hundreds of billions of dollars in federal spending were being funneled into private contracts. Privatization hasn’t shrunk government—it has created a sprawling private government, accountable only to shareholders.
Privatization as Political Strategy
Cohen and Mikaelian argue convincingly that privatization was never about saving money. It was a deliberate political strategy:
to weaken unions,
to cut wages for public workers,
to shift power from communities and governments into corporate boardrooms.
Privatization was not a cure for inefficiency—it was an attack on democracy itself.
A Biden Interlude: A Partial Reversal
Levinson sees hope in the Biden administration’s investments in clean energy, care work, and infrastructure, alongside stronger regulation and fairer taxation. But progress was limited by razor-thin majorities and implacable Republican opposition.
The tide may have begun to turn—but it’s far from clear whether it can hold.
How Prescient Were Cohen & Mikaelian?
By 2025, the authors’ thesis looks prophetic. The COVID crisis exposed the hollowing-out of public health systems. Privatized utilities failed catastrophically in wildfires, freezes, and hurricanes. Private equity ownership of nursing homes was linked to higher mortality and worse care.² For-profit prisons and charter schools replicated the same dynamic: the public pays, corporations profit, and accountability disappears.
Cohen and Mikaelian were right: privatization does not shrink government—it redirects it, away from citizens and toward capital.
What We Gained … and What We Lost
What We Gained
A thin veneer of “efficiency.” Politicians got to brag about quick fixes and budget savings. A few contracts introduced technologies faster than slow-moving procurement offices might have managed.
What We Lost
Transparency. Accountability. Resilience. Solidarity. When public goods are sold off, those who can pay get service; those who cannot are left behind. Each scandal—whether in prisons, utilities, or water systems—eroded public trust in government itself.
Most importantly, we lost democracy. Privatization was not just economic policy; it was a quiet betrayal of the social contract.
Trump’s 2025 Privatization Blitz
If Reagan was the prophet of privatization and Clinton its enabler, Donald Trump has become its berserker. Since returning to office in January 2025, Trump has unleashed a privatization blitz that would make Milton Friedman blush.
DOGE: Department of Government Efficiency
Trump created the Department of Government Efficiency (DOGE), advised by Elon Musk, to slash federal spending and outsource public functions. DOGE announced plans to privatize USPS, sell and lease back federal buildings, and even allow private developers access to federal lands.³ Thousands of federal workers are being pushed out, with contracts flowing instead to politically connected firms.
Selling the Federal Estate
In March, DOGE published a list of 443 federal properties—from courthouses to CIA buildings—earmarked for sale before hurriedly retracting it.⁴ The message was clear: the government is for sale, building by building.
USPS, Amtrak, Social Security on the Block
The Postmaster General signed an agreement with DOGE to cut 10,000 USPS jobs while preparing the agency for privatization.⁵ Musk has openly floated privatizing both USPS and Amtrak.⁶ Insider leaks suggest Social Security’s customer service could be outsourced to private call centers—raising the specter of less access, higher prices, and zero accountability.
Healthcare and Housing Finance
The administration is fast-tracking Medicare recipients into private Advantage plans, boosting corporate profits while weakening traditional Medicare.⁷ Trump has also met with Citigroup and Bank of America executives to discuss privatizing Fannie Mae and Freddie Mac—moves that analysts warn could spike mortgage rates and cripple affordable housing.⁸
Regulation Tilted Toward Private Power
In a high-profile case, Trump fired a Democratic member of the Surface Transportation Board just before a massive rail merger decision—ensuring consolidation tilted in favor of private operators.⁹
A Sovereign Wealth Fund for Cronies
Finally, Trump has proposed a U.S. sovereign wealth fund that would pour public money into companies of “strategic interest.” Critics call it a taxpayer-financed slush fund for corporate allies
As of September 19, 2025
The privatization project is no longer creeping or bipartisan—it is roaring, consolidated, and explicitly partisan. The fight is not about efficiency; it is about whether democracy itself remains in public hands or is auctioned off piece by piece.
Call to Action: Reclaiming the Public
The lesson of the last forty years is unmistakable: privatization has not made government leaner, smarter, or more efficient. It has made democracy weaker, costlier, and less accountable.
If we want to reclaim the promise of democracy, three steps are essential:
Expose the Costs
Every community should demand transparent accounting: how much more do we pay when water, prisons, nursing homes, or mail delivery are outsourced to private companies? Sunlight is the first weapon against the false claims of “efficiency.” Rebuild Public Capacity
We must reinvest in public institutions—not just with money, but with trust. That means restoring staffing to critical agencies, training a new generation of public servants, and ensuring public goods are run for the public interest, not private gain. Organize to Resist
Privatization is not an economic inevitability; it is a political choice. Communities, unions, consumer advocates, and everyday citizens must push back—at school boards, city councils, statehouses, and in Congress. Every contract signed is a piece of democracy sold. Every contract reversed is a piece reclaimed.
The challenge is urgent. Reagan gave us the ideology, Clinton made it bipartisan, and Trump has turned it into a scorched-earth crusade. The choice before us now is simple: either we allow democracy to be hollowed out until it is little more than a corporate brand, or we rise up to insist that public goods belong to the public.
Democracy cannot be privatized. But it can be lost—unless we act, and act now.
Endnotes
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