WFR:  The film is largely based around the dissection of a few key terms. 

MC: Sure.  Let's start withprivatization, which is "the transfer of assets or service delivery from the government to the private sector."  Government can't be expected to do everything or provide everything that a nation or society needs; as I mentioned in the film, it'd be rather silly and unnecessarily costly to have a Department of Hamburgers, for instance.  So, by transferring certain industries or interests to the private sector, government can spend more time, effort, and money on 'important' things, such as healthcare, policing and justice, etc.  It is also argued that the private sector can run certain things more efficiently without the red tape of the public sector. 

Stiglitz argues that privatization is currently being pushed by the neoliberal agenda of top financial entities such as the IMF and US Treasury.  Closed and developing economies are being encouraged to privatize, with the hope that private industries, driven by profit, will warm to open markets and become more inclined to enter the global economy -- one where the western countries currently hold considerable power and influence.

WFR:  It sounds to me like you are suggesting that there are problems with privatization as it is currently practiced.  Would you like a beer?

MC:  A Guinness would be great, thanks.  Stiglitz brings up a number of concerns with privatization.  He points out that usually, when the private sector doesn't fill a public need, the government jumps in.  However, when the government dispossesses itself of a service or industry, the private sector might not necessarily jump in with the same fervor or skills or organization.  Many government-run initiatives are massive, and a private infrastructure may not be set up to handle such a large undertaking. Imagine a 'company' needing to serve the broad public interests of a population such as India's or China's, or over a land mass such as Canada's or Russia's.

Also, a theme reissued time and time again by Stiglitz in his book is mentioned here:  social costs.  Private industries are driven by profit.  Governments have to balance the books, but also maintain a high level of welfare for their people to justify their ruling power.

WFR:  What about issues of unemployment?

MC:  Proponents of privatization argue that when you have efficient, driven companies running the show, the best workers rise to the top and the lazy and weak are weeded out.  So, you have more efficient work being done, decreased payrolls, and companies make more money... Good, right?

Well, this isn't so bad in developed countries where there are welfare and assistance systems to help the unemployed, but this isn't the case in developing countries.  Massive unemployment can lead to widespread social unrest, family problems, resentment, crime, underground economies that do nothing to help fill the tax coffers of governments that might be able to use that money for continued improvements to their country.

While Stiglitz is very critical of the IMF in not recognizing social disruptions resulting from economic reform policy decisions, rhetoric from the Fund is beginning to suggest otherwise.

WFR:  You also mention corruption.

MC:  One notion to improve a country is to transfer the holdings of corrupt governments over to the private sector.  However, corrupt government officials still have to handle the transfers, so what stops them from selling industries or assets to their own cronies or taking a cut of the transfer for themselves?  Essentially, criminal elements are not dissolved but can be ingrained in the privatization process.  Just look at the issue of the Russian Mafia.

To summarize, Stiglitz argues that privatization can work, but has to be done carefully, not rapidly, and with much planning.  We must be aware that private companies and industries serve only to reap profits and satisfy shareholders;  there are no checks and balances to assure they morally serve the needs of the public.

Another thing to consider is how privatization is being used to economically 'conquer' a country.  For instance, America invaded and 'liberated' Iraq.  They can't let Iraq remain an American military state; the Iraqi people wouldn't stand for it.  However, if the American government forces the Iraqi government to sell off their holdings to American-owned companies in exchange for badly needed reparation capital, America can pull out its soldiers but leave behind an army of CEOs and executives -- taking away jobs from Iraqis, I might add.