Human
Rights or Global Capitalism: The Limits of Privatization, by Manfred
Nowak: Book Review (Philadelphia: University of Pennsylvania Press, 2017).
\Note: I am posting this review with the
permission of Bert Lockwood, editor of Human
Rights Quarterly, in which this review will be published.)
Shortly before I read Manfred Nowak’s
important new book on privatization, I came across an article in the business
section of Toronto’s Globe and Mail discussing
a promising new investment opportunity. The author alerted his readers to the
anticipated increase in the number of for-profit prisons in the US as a result
of President Trump’s announced policies to get tough on crime and immigration,
and suggested that readers could invest in the companies running those prisons.
Manfred Nowak has collected much evidence that privatization of essential
social services undermines all human rights, civil and political as well as
economic and social.
Nowak’s principal argument is that international
human rights law cannot be neutral regarding whether services essential to the
fulfillment of human rights may be privatized. Such a position, he argues,
abnegates responsibility to assess the actual consequences of privatization. International
law requires progressive implementation of economic, social and cultural rights
to the maximum of a country’s available resources. Thus, Nowak argues, it also prohibits introduction of “deliberate retrogressive
measures.” (p. 42). He also argues that the requirement of progressive
implementation applies to civil and political rights as well as to economic,
social and cultural, although it is unclear whether this is the consensus among
international human rights lawyers. Thus, Nowak argues, a thorough human rights
impact assessment is required before any privatization program is undertaken, and
private providers must be held accountable to the same high human rights
standards as States.
In assessing the consequences of
privatization, Nowak suggests as a baseline measure the status quo at the time
each State ratified the various relevant legal instruments, particularly the
International Covenant on Civil and Political Rights and the International
Covenant on Economic, Social and Cultural Rights. This appears to be a good
principle, but it does assume that what States reported to be the provision of
services and protection of human rights at the time of ratification actually
was the case.
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| Manfred Nowak |
In chapters 3-6, Nowak provides much
evidence that privatization of education, health, social services and water has
resulted in poorer services overall. But he does not compare the results of
these policies with the reality on the ground before they were implemented. He
assumes that all privatization –especially that connected with the Structural
Adjustment Programs (SAPs) instituted by the International Monetary Fund and
the World Bank —leaves people worse off. This is not necessarily the case. It
may appear, for example, that resort to private schools in sub-Saharan Africa is
a regressive measure, compared to earlier guarantees of free government-provided
primary schooling. But the reality in many government-supported public schools,
both before and after SAPs, was that classrooms were overcrowded, supplies
non-existent, and many teachers unqualified or underpaid, if indeed not paid at
all. In one study of public schools (described in the Economist, January 28, 2017) in seven African countries, children
received less than two and a half hours of teaching per day, although there was
no evidence that private schools were any better.
Like the educational systems, so also government-provided
health services may have been more fictitious than real. Hospitals were often
undersupplied; patients and their families had to buy their own bandages, drugs,
and food; and they routinely had to bribe doctors in order to obtain treatment.
It is, indeed, appalling that SAPs required governments to reduce spending on
already inadequate health and education services, but we should not be misled
into assuming that these services were either universally available or
accessible to all on an equal basis. Nor were they ever free: they were
supposed to be tax-supported, but countries with very low tax bases, either
because of administrative inefficiencies, tax-payer resistance, corruption, or
a combination of all three, routinely do not provide these services.
On the other hand, according to Morton Jerven in his Africa: Why Economists get it Wrong (Zed Press, 2015) statistical data
suggesting improvements in economic performance in sub-Saharan Africa in the
1980s and 90s after SAPs were introduced may also be an artifact of
mis-reporting rather than a reflection of the reality on the ground.
SAP-induced cutbacks applied to statistical offices as well as to other state
institutions, reducing their capacities for accurate reporting compared to late
colonial and early- post-colonial times. Thus, the economic growth that various
international institutions claim occurred after SAPs were imposed may be more
an artifice of guesswork and estimates than of actual data. If
this is so, then supposedly positive effects of privatization on economic
growth may be more mythical than real, as may be privatization’s supposedly
positive effects on States’ capacities to fulfill economic human rights.
While Nowak’s comments on the
detrimental effects of SAPs may be sound, he exaggerates the detrimental
consequences of globalization. He maintains in his introduction that “globalization
driven by neoliberal market forces” has resulted in “growing inequality,
poverty, and global economic, food, financial, social, and ecological crises.”
(p. 1) The type of inequality—whether within states or between states, among
individuals only within one state or among individuals world-wide, depends
heavily on public policies. Moreover,
there is absolutely no evidence that poverty as a whole has increased: rather,
there is substantial evidence that the current era of globalization coincides
with decreased poverty. A 2017
World Bank study estimated that from 1993 to 2013, the number of the world’s
poor fell by about 1 billion, from one-third to one-tenth of the world’s
population. According to Branko Milanovic in his book, Global Inequality, (Harvard, 2016), the “big winners” in this reduction of poverty were the new Asian
middle class, while the big losers were the Western working class. The biggest
winners of all were the global plutocrats, or multi-billionaires.
This extreme inequality does indeed point to
the danger to human rights of unregulated profit-seeking global capitalism. But
it does not mean that globalization has caused increased poverty, as Nowak
himself later concedes, saying “I am fully aware that neoliberal economic
policies in times of globalization have led to rapid economic growth, which…has
enabled millions of human beings to lift themselves out of poverty…” (p. 3). This
shows the misleading nature of the book’s title, Human Rights or Global Capitalism. There is no known economic
system other than market economies that coincides with the institution of
rights-protective societies. Capitalism appears to be a necessary, although
hardly sufficient, condition for human rights. In this respect, Nowak’s
reference to property rights as “bourgeois” is also misleading. Although he is
correct that the history of the right to own property is rooted in the struggle
of the bourgeoisie against the monarchs and nobles of early modern Europe, that
right is now essential to peasants, indigenous peoples, urban slum dwellers,
and women worldwide, precisely to protect themselves against global capitalism
and expropriation of the resources that they own and use.[6]
The book’s sub-title, The Limits of Privatization, clarifies this. The question is not
whether capitalist market economies spread worldwide; it is if and how governments
regulate them, and whether governments are willing to turn over the fulfilment
of economic human rights to private, profit-making enterprises. When Nowak
addresses actual privatization policies, he is on much solider ground that when
he condemns globalization outright. Addressing education, for example, he shows
that the introduction of vouchers that parents can use to send children to any
school they wish, either public or private, has actually resulted in increased
inequality of educational opportunity, an impermissible regressive measure. This
makes for sad reading, considering the recent appointment of Betsy DeVos, an
advocate of school vouchers, as Secretary of Education in the US. Regarding the
right to health, Nowak again provides evidence from selected cases that
privatization is often regressive. On the other hand, he does not consider the
problems of entirely tax-funded health systems that experience shortages of
doctors, hospitals beds, and operating time in part because of government
decisions to reduce access to save money, as in Canada. This is becoming a
severe problem as the population ages.
In his chapter on the right to water,
Nowak describes the well-known protests in the city of Cochabamba, Bolivia,
against water privatization. But he does not assess whether as a result of the
government’s decision to abrogate its treaty with the US water multinational, Bechtel,
Bolivians now enjoy better access to clean water. Water is not a free good,
nor, as Nowak contends, are “simple tools” (p. 99) such as wells always enough
to access it. In some parts of the world, water-borne disease is rampant. I
agree that governments are responsible to provide water and sanitation, and
should supervise any private enterprises involved in that provision. But there
may be times when municipal bureaucrats are incompetent or corrupt, and private
providers are more efficient. As Nowak acknowledges, between 1990 and 2012 2.3
billion more people worldwide obtained access to clean water, in large part
because of the “construction of water pipelines by private companies.” (p.
116). The trick is to provide efficient, knowledgeable, and incorruptible
oversight by public officials of private companies, not to object to
privatization per se.
Concentrating so much on international
law, Nowak does not consider the realities of budget and other types of
constraints in even the most rights-protective Western countries in the 21st
century. He notes favorably that current social policies encourage transfer of
incomes from the young to the old, without considering demographic changes that
have severely increased the burden on the young of providing pensions for an
expanding older generation. Nowak avoids these questions by noting that his
book is only about “the permissibility of privatization under international
human rights law,” and is “not primarily concerned about the consequences of
privatization.”(p. 2) But if we are
concerned with the fulfilment of human rights, then we should be concerned with
privatization’s consequences and how they compare to the reality—not merely the
legal myth—of state-supplied services in both poor and rich countries.
One of Nowak’s strongest chapters
discusses privatization of personal security by the “global prison industrial
complex” (p. 121), although this complex is mostly confined to the US and UK. It
is outrageous that any government, anywhere, would entrust the administration
of prisons to profit-making entitles. As Nowak states, “the very idea of
delegating the custody of prisoners to for-profit companies and thereby
treating prisoners as a commodity violates their human rights to personal
liberty and dignity.” (p.173) Deprivation of personal liberty should only occur
under the most drastic of circumstances, after a fair trial and other
guarantees of the rule of law. Moreover, under international law prisons are
supposed to engage in rehabilitative measures; instead, for-profit prisons cut
costs as much as they can. At the same time, they encourage policies that
incarcerate more and more people, since higher rates of incarceration mean
higher profits.
In another very strong chapter, Nowak
discusses privatized services that often undermine the most basic human right
to personal security. He argues that some states, especially the US and UK,
deliberately use privatized security forces to commit such acts as torture that
violate international humanitarian and human rights law. Just as running
prisons is a core function of the state, Nowak argues, so also “internal and
external security belong to the core functions of the modern constitutional
state,” (p. 159) and ought not in any circumstances to be contracted out to
private for-profit firms.
One
final critical point. Nowak introduces his argument by contrasting the
“Western” with the “socialist” perspectives on human rights. It is illogical to
contrast a geographical region with a philosophical position. He should either
contrast the “Western” with the “non-Western” or “Southern” position on human
rights, or he should contrast liberalism with socialism. In fact, Nowak begins
his section on the socialist position by referring to the works of Karl Marx
and Friedrich Engels, two people from Germany who spent much of their
professional lives in England, surely a quintessential Western country. More
than that, one of Nowak’s central arguments is that socialism is indeed a Western
philosophical position. He provides very interesting information on how welfare
states emerged in Western Europe, and he shows how two Westerners, the Canadian
John Humphrey and the Frenchman René Cassin, were instrumental in including
economic human rights in the Universal Declaration. His chapter on social security
begins with a discussion of how Western countries introduced these “socialist”
policies.
This criticism is not merely a matter of
semantics. As long as the myth that civil and political human rights are
“Western” and that Westerners are not concerned with “socialist” economic and
social human rights persists, then civil and political human rights are an easy
target for ideologues and repressive political leaders, as in China. At the
same time, the myth does a disservice to non-Westerners who not only accept,
but often risk their lives to protect, civil and political rights. Scholars of
human rights should combat this myth, not support it by use of inaccurate
terminology. Nowak’s discussions of welfare states clarifies that the libertarian position opposed to
collective social and state responsibility for economic and social human rights
currently dominating the US is not the common “Western” one. To the contrary,
the “Western” position on human rights has included economic and social rights
for over 150 years. Western states have provided the relevant social services
in large part because citizens have exercised their civil and political rights
to force them to do so. Without civil and political rights, constitutions such
as that of the Soviet Union, which Nowak cites as an example of protection of
economic and social rights, are worse than a farce. They are a cynical attempt
to cover up massive denials of the right to work or the right to equal access
to health care and education, as opposed to superior education and health care
for the privileged Party elite and their families.
Despite these critical comments, I
recommend this book highly. Nowak has pulled together much information about
the dangers that privatization poses to human rights, and made persuasive legal
arguments for prohibition of retrogression and the imperative of human rights
impact assessments before any privatization policy is instituted. One can disagree with some of his summary
comments and terminology, yet still learn much from this volume.
