Privatization in Italy

Privatization has recently become a very important phenomenon in Italy.

“The transfer of ownership, property or business from the government to the private sector is termed privatization. The government ceases to be the owner of the entity or business”.

A recent example of this phenomenon is the decision of the Italian government to partly privatize the railway group Ferrovie dello Stato.

It is a matter of debate if this decision is going to benefit society as a whole or not. To answer this question we should consider that the goal of private firms is most of the time profit maximization, to be achieved without considering the negative externalities that could arise from the production or consumption of the good or service, in this case transport.

Whereas, the government also considers the external costs to society and to private individuals when producing a good or service. Therefore, the government might decide to be less efficient spending more in order to produce the good without polluting the environment or maybe giving the possibility to those who cannot afford it to consume the good or service produced.

Privatization is a main feature of a new developing system in Italy and in other parts of the world, such as France or Spain: Neo-liberalism. Neo-liberalists are not happy with the disempowerment of the individual in favor of the state. Therefore, the markets should be deregulated and privatized. The power of the state is drastically reduced and its role should only be to preserve the institutional framework for free market, free trade and private property.

Thus, it is possible to state that neo-liberalism is the opposite of communism, where instead all the power is in the hands of the state rather than in the hands of private individuals.

The main issue when analyzing and evaluating different political and social systems is to decide how power should be distributed and whether the most powerful should be the state, the market or the individual. Moreover, another aspect which should be evaluated is how democratic a system is, if democratic principles are considered valuable and desirable, which I believe to be the case.

I personally believe that privatization could help Italian economy to recover since private businesses might have more resources than the state and therefore provide a better and more efficient good or service. However, I think that goods and services fundamental for the survival of the individual, so needs not wants, should be provided by the state in order to make it possible for everyone to be able to afford and consume them.

If you want to know more about it: https://next.ft.com/co…/0dd11b26-91f8-11e5-94e6-c5413829caa5

#Italy #Europe #EuropeanUnion #Privitization #Government