Taming Modern Monopolies

Analysts at the OECD, the Paris-based research agency, have just shared a grim prediction: If current trends “prevail,” all developed nations will show by 2060 “the same level of inequality as currently experienced by the United States.”

If we let those current trends continue, that conclusion sounds about right. But why on earth should we let those trends continue? The trends that have made our world so unequal reflect simple political decisions, not some inevitable unfolding of globalization. We can make different decisions.

Take privatization. Over the past four decades, governments around the world have chosen to sell a broad array of public services. These privatizations have increased the concentration of wealth. Carlos Slim, one of the world’s three richest men, obtained much of his $75 billion fortune by snapping up Telmex, Mexico’s formerly government-owned phone company.

But privatizers today are increasingly facing as much resistance as opportunity. In many countries, John and Jane Q. Public are beginning to reject the privatization mantra. The privatizers, turns out, have a problem with their pitch.

Privatizers promise greater efficiency and cheaper prices. Most people have experienced the opposite, notes University of Glasgow economist Andrew Cumbers, and this perverse reality is spurring a growing global push “to take back utility sectors into public ownership.”

But not just any public ownership. Instead of the old over-centralized state entities “far removed” from ordinary citizens, privatization’s critics are looking at “new forms of public ownership.” Cumbers says. These models “encourage broader engagement and participation in economic life by the wider public.”

Denmark, for instance, is nurturing innovative “public-public” partnerships. In 2001, one of these partnerships built what then rated as the world’s largest wind farm.

The partners: Copenhagen Energy, the municipally- owned local utility of Denmark’s largest city, and a cooperative run by the over 10,000 local residents who had purchased shares in it.