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.
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.
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.