Human Rights or Global Capitalism: The Limits of Privatization

By Manfred Nowak

The fall of communism in the late 1980s and the end of the Cold War seemed to signal a new international social order built on pluralist democracy, the rule of law, and universal human rights. But the window of opportunity for creating this more just, more equal, and more secure world slammed shut just as quickly as it opened. Rather than celebrate the triumph of democracy over autocracy, or political freedom over totalitarian rule, the West exulted in the victory of capitalism over communism. Neoliberal policies of deregulation and privatization that minimized the role of the state were imposed on the transitional societies of Central and Eastern Europe, as well as economically weak and politically fragile nations in Africa, Asia, and Latin America. Twenty-five years later, the world reaps the fruits of that market-driven state foundation: inequality; poverty; global economic, food, financial, social, and ecological crises; transnational organized crime and terrorism; proliferating weapons; fragile states.

Human Rights or Global Capitalism is not simply concerned with the success or failure of neoliberal policies per se or judging whether they are good or bad. Rather, it examines the application of those policies from a human rights perspective and asks whether states, by outsourcing to the private sector many services with a direct impact on human rights—education, health, social security, water, personal liberty, personal security, equality—abdicate their responsibilities to uphold human rights and thereby violate international human rights law. Manfred Nowak explores these examples and outlines the ways in which neoliberal policies contravene the obligations of states to protect the human rights of their people.

• Language: English
• Publisher: University of Pennsylvania Press
• Release date: Oct 26, 2016
• ISBN: 9780812293494

Book preview

Human Rights or Global Capitalism

PENNSYLVANIA STUDIES IN HUMAN RIGHTS

Burt B. Lockwood, Jr., Series Editor

A complete list of books in the series is available from the publisher

Human Rights or Global Capitalism

The Limits of Privatization

Manfred Nowak

Copyright © 2017 University of Pennsylvania Press

All rights reserved. Except for brief quotations used for purposes of review or scholarly citation, none of this book may be reproduced in any form by any means without written permission from the publisher.

Published by

University of Pennsylvania Press

Philadelphia, Pennsylvania 19104-4112

www.upenn.edu/pennpress

Printed in the United States of America on acid-free paper

10 9 8 7 6 5 4 3 2 1

Library of Congress Cataloging-in-Publication Data

ISBN 978-0-8122-4875-3

Contents

Introduction

Part I. Historical Observations

Chapter 1. History of Human Rights—A Dialectic View

Chapter 2. Did the West Comply with the Vienna Compromise?

Part II. Privatization and Selected Human Rights

Chapter 3. Right to Education

Chapter 4. Right to Health

Chapter 5. Right to Social Security

Chapter 6. Right to Water

Chapter 7. Right to Personal Liberty and Rights of Detainees

Chapter 8. Right to Personal Security

Conclusion: A Human Rights Based Approach to Privatization

List of Abbreviations

Notes

Bibliography

Index

Acknowledgments

Introduction

When the Communist regimes in Eastern Europe collapsed in 1989 leading to the end of the Cold War, the time seemed ripe for a new international social order built upon pluralist democracy, the rule of law, and universal human rights. The Vienna World Conference on Human Rights in 1993 solemnly proclaimed the universality, indivisibility, and interdependence of all human rights. But this window of opportunity for creating a more equal and more secure world order remained open only for a short while. Rather than celebrating the victory of democracy over autocracy and political freedom over totalitarian rule, the West seemed only concerned about celebrating the victory of capitalism over communism. The neoliberal ideology of deregulation, privatization, and minimizing the role of the state, which had dominated politics in the United Kingdom and the United States under the conservative governments of Margaret Thatcher and Ronald Reagan during the 1980s, reinforced by the Washington Consensus of 1989 as a global policy to be promoted by the World Bank and the International Monetary Fund, was vigorously forced upon the newly emerging transitional societies in Central and Eastern Europe as well as on economically weak and politically fragile states in Africa, Asia, and Latin America. Twenty-five years later, we see the results of globalization driven by neoliberal market forces: growing inequality, poverty, and global economic, food, financial, social, and ecological crises. In addition, we witness increasing threats to our global human security resulting from transnational organized crime and terrorism, a proliferation of weapons and armed conflicts, fragile states and global climate change.

Much has been written about the pros and cons of the neoliberal economic theory and its application in times of globalization, including through privatization. But there are only a few studies that look at these phenomena from a human rights perspective. Of these, most deal with the relationship between business and human rights, corporate social responsibility of transnational corporations, obligations of the home and host states to protect human beings against abuses by non-state actors, including the corporate sector, as well as ways and means of holding transnational corporations directly accountable under international and domestic human rights law.

The present study on the relationship between privatization and human rights is not primarily concerned about the consequences of privatization and outsourcing of traditional public functions to the corporate sector, including accountability for human rights abuses committed by non-state actors. It rather looks at the permissibility of privatization under international human rights law and the limits imposed on future privatization measures by human rights standards, both in the field of economic, social, and cultural rights and in the field of civil and political rights. The analysis of a selected number of human rights addresses the question of the limits to future privatization policies deriving from the context of these specific rights.

The present study challenges a widely held belief among human rights scholars that human rights are neutral toward privatization. While it is true that human rights may be fulfilled in different economic systems, effective implementation of international human rights obligations requires states and the international community to develop, maintain, and progressively improve a certain level of public infrastructure in order to enable all human beings to effectively enjoy and exercise all human rights. Political rights and freedoms require states to establish the necessary democratic infrastructure in order to enable citizens to participate in political decisionmaking processes by means of free and fair elections, organizing political parties, and expressing their political opinions in independent media and public gatherings. Similarly, economic, social, and cultural rights demand that states create the conditions to empower people to lift themselves out of poverty through equal access to free educational facilities, affordable health care, housing, food, water, social insurance, and other services which ensure social security and an adequate standard of living. Finally, civil rights, the rule of law, and the right to an effective remedy require states to establish and maintain a system of administration of justice which provides everyone with equal access to justice and protection against violence and other threats to their personal security by professional law enforcement structures. Not all these infrastructures and services have necessarily to be provided by public state bodies. On the other hand, far-reaching privatization of these structures and services will make it very difficult, if not impossible, for states to live up to their domestic and international human rights obligations. The aim of the present study is to define, on the basis of a thorough analysis of international human rights law in light of its historical genesis, those core governmental functions which cannot be outsourced to the corporate sector because such privatization would entail a violation of the respective human rights obligations of states.

The research question underlying this book is a purely legal one, namely whether international human rights law provides limits to privatization in certain fields, such as education, health care, and social or personal security. The economic and social facts described and analyzed in Chapter 3 relating to the extent of privatization in these areas in selected countries, such as the phenomenon of privatized prisons in the United States, UK, Australia, New Zealand, Canada, Germany, and Austria; the privatization of water in Chile, UK, Bolivia, Argentina, and South Africa; or the role of U.S.- and UK-based private military and security companies in armed conflicts in Iraq, Angola, or Sierra Leone, are purely illustrative to show to the reader that my research question is not merely hypothetical. Far-reaching measures of privatization, often under the pressure of the international financial institutions, bilateral and multilateral development agencies, or the European Union, constitute an essential element of neoliberal economic policies, underlined by the Washington Consensus and structural adjustment policies. As a lawyer, I am not entering into an economic debate about the pros and cons of Keynesian economic policies versus those developed by the Chicago school of economics. I am fully aware that neoliberal economic policies in times of globalization have led to rapid economic growth, which, for instance in China, has enabled millions of human beings to lift themselves out of poverty, and which has provided millions of people in Africa, Asia, and Latin America with access to clean drinking water. I am also not arguing out of principle against privatization. In many fields (industry; banks; means of transport, including railways, airlines, airports, and roads; means of communication, including postal and telecommunication services), privatization has led to more efficiency and has had no direct positive or negative impact on the enjoyment of human rights. The book only analyzes some fields of privatization that have a direct impact on human rights, namely the rights to education, health, social security, water, personal liberty, security, dignity, and integrity. In discussing these rights, I selected a few country-specific situations and practices on the basis of relevant domestic jurisprudence, literature, and practice of international human rights monitoring bodies in order to show possible consequences of privatization on the enjoyment of these civil, political, economic, social, and cultural rights. These empirical case studies as well as the jurisprudence and literature on which they are based are highly selective and by no means claim to provide an exhaustive picture and debate on those issues. They simply serve the purpose of illustrating possible scenarios and problems in relation to the respective human rights. At the end of each chapter, I attempt to assess whether and at which stage practices of privatization may amount to a violation of the rights chosen for my analysis.

Similarly, the short survey of the history of human rights in Chapter 2 is certainly not exhaustive and puts a certain emphasis on the development of economic, social, and cultural rights and on the synthesis between the Western and Socialist concepts of human rights in the United Nations during the first decades following World War II. These three decades, called the Trente Glorieuses in France, represent a period of economic growth that was strongly influenced by the economic policies of John Maynard Keynes and led to the rise of the advanced social welfare state. In other words, the synthesis between the Western and Socialist concepts of human rights was achieved during a historical period based on the Keynesian consensus. This leads me to the conclusion that international human rights law, as codified in the International Bill of Human Rights and many other universal and regional human rights treaties, is based on the model of the advanced social welfare state and requires all states parties to these treaties to take measures aimed at the progressive realization of the goals of the advanced social welfare state. In reality, the economic policies of neoliberalism, which have gradually replaced the Keynesian consensus since the late 1970s, led in the opposite direction, namely the progressive dismantling of the social welfare state. This explains the somewhat provocative and generalizing title of the book, Human Rights or Global Capitalism: The Limits of Privatization. The research question addressed in the book is, however, much narrower and deals with only one aspect of neoliberal economic policies in times of globalization, namely the trend toward privatization and its limits from a human rights perspective.

PART I

Historical Observations

Chapter 1

History of Human Rights—A Dialectic View

Every attempt to describe the history of human rights is a fascinating journey through some of the most inspiring ideas of philosophers and their impact on political reality, usually in the course of revolutionary changes. Human rights declarations and bills of rights were drafted and promulgated by states and international organizations in reaction to experiences of injustice, discrimination, repression, violence, and barbarity, often explained in the preambles that put them into a particular historical context. Although the values underlying human rights can be found in most religions, cultures, and philosophies, the very idea of human rights as legal claims of human beings against those who have the power, on the one hand, to violate such rights, and on the other hand, to respect, protect, and fulfill such rights, only developed during the age of Enlightenment. Like any other legal rights, human rights empower rights-holders, put legal obligations on duty-bearers, and provide for certain remedies to hold the duty-bearers accountable in case of noncompliance. Human rights can be considered as the most fundamental of all legal rights in the sense that they respond to the most basic needs and aspirations of human beings, which are often described as being inherent and inalienable. The answer to the question which needs and aspirations of human beings are so fundamental that they ought to be codified as human rights, of course differs among cultures, religions, and political systems around the globe. But the history of human rights originating during the age of Enlightenment in Europe and gradually having developed toward a globally recognized value system enshrined in a growing number of UN human rights treaties with universal recognition by governments and a global civil society reveals a surprisingly broad consensus on these fundamental values. Most important, the recognition of economic, social, and cultural rights by the United Nations as being equal to civil and political rights was not simply the result of political pressure by the former Communist states during the time of the Cold War. It rather reflects the deep conviction of the international community after two world wars and the Great Depression that states have a historic obligation both to respect individual freedoms and to ensure social justice by pursuing the economic model of the social welfare state. This entails certain core functions of states and thus also limits to the privatization of human rights.

Origins of the Western Concept of Civil and Political Rights

During the age of Enlightenment, struggling to liberate the individual from the divine order of the Middle Ages in Europe and the power of absolute dynasties, feudalism, and the Catholic Church, life, liberty, equality, security, property, and participation in democratic government seem to have been the most important values that inspired revolutionary changes. They were based in the rationalistic doctrine of natural law and in theories of the social contract developed by philosophers such as John Locke, Thomas Paine, Jean-Jacques Rousseau, and Samuel Pufendorf. In his Second Treatise of Government, published in 1690 and inspired by the revolutionary movement in Great Britain that had led to the English Bill of Rights of 1689, John Locke had asserted: The great and chief end, therefore, of men uniting into commonwealths, and putting themselves under government, is the preservation of their property—that is, their lives, liberties and estates.¹ This statement was based on his belief that in the state of nature, all men were free, equal, and independent, but the enjoyment of these natural rights was constantly exposed to the invasion of others, . . . very unsafe, very unsecure.² These ideas were directly reflected in the American Declaration of Independence of 1776:

We hold these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are Life, Liberty and the pursuit of Happiness.—That, to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,—That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute a new Government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

The former British colonies, which later formed the United States of America, were eager to defend their newly won independence by defining and protecting the civil and political rights of their inhabitants in the first comprehensive written Bills of Rights, most notably the Virginia Bill of Rights of 1776. A similar, though far less comprehensive Bill of Rights is contained in the first ten amendments (1791) to the U.S. Constitution.

The same ideas had inspired the French Revolution, this time not against colonial rule, but against the oppressive rule of the old regime of the Bourbons. The first six articles of the famous French Declaration of the Rights of Man and of the Citizen of 1789, which was incorporated into most French constitutions until the present, read as follows:

1. Men are born and remain free and equal in rights; social distinctions may be based only upon general usefulness.

2. The aim of every political association is the preservation of the natural and inalienable rights of man; these rights are liberty, property, security and resistance to oppression.

3. The source of all sovereignty resides essentially in the nation; no group, no individual may exercise authority not emanating expressly therefrom.

4. Liberty consists of the power to do whatever is not injurious to others; thus the enjoyment of the natural rights of every man has for its limits only those that assure other members of society the enjoyment of those same rights; such limits may be determined only by law.

5. The law has the right to forbid only actions that are injurious to society. Whatever is not forbidden by law may not be prevented, and no one may be constrained to do what it does not prescribe.

6. Law is the expression of the general will; all citizens have the right to concur personally, or through their representatives, in its formation; it must be the same for all, whether it protects or punishes.

Apart from reflecting, almost literally, the ideas of Jean-Jacques Rousseau, including his concept of the volonté générale, published in 1762 in his Du contrat social,³ these six articles encompass in a very compact way all essential elements of what later used to be called the Western concept of human rights: rooted in the doctrine of natural law and the social contract; liberalism and democracy as the two philosophical ideas behind the concept of civil (liberal) rights of men and political (democratic) rights of citizens;⁴ liberal freedom as the right of all human beings to do whatever is not injurious to others (Article 4) and political freedom as the right of citizens to participate in the democratic decision making of the people or the nation (Articles 2 and 6); the interdependence of human rights, democracy, and the rule of law (Article 5), as later expressed, for instance, in the Statute of the Council of Europe 1949; and the protection of human rights as the essential function of democratic governments and sovereign states. The latter idea, namely that internal sovereignty of states means more than simply exercising effective power and control over people and territory, as often asserted by states and scholars of general international law, and that sovereignty also implies governmental obligations to protect human rights of their populations, was taken up by the General Assembly of the United Nations when defining the concept of the Responsibility to Protect (R2P) in 2005.⁵ States are only sovereign and, therefore, protected by the principle of nonintervention, as long as they are able and willing to protect their own people against the worst forms of gross and systematic violations of human rights, including genocide, ethnic cleansing, crimes against humanity, and war crimes. If governments are themselves responsible for such crimes or are either unwilling or unable to protect their people against such crimes by third parties, they gradually lose their internal and external sovereignty toward the international community. The United Nations, represented by the Security Council, takes over the responsibility to protect populations against such crimes, first by assisting governments in their efforts to protect human rights, and, as a measure of last resort, by taking coercive measures under Chapter VII of the UN Charter, including authorization of military intervention, as in the case of Libya in 2011.⁶

Origins of the Socialist Concept of Economic, Social, and Cultural Rights

The Western concept of civil and political rights, as proclaimed in the revolutionary bills of rights of the late eighteenth century and further developed in the constitutions of many other states during the nineteenth century, such as the Belgian Constitution of 1831 and the German Paulskirchenverfassung of 1848, did not mean, of course, that these lofty principles were immediately put into effect. In particular, the proclamation of the right to equality stood in stark contrast to the reality of those times. The word man was understood in its literal meaning in bourgeois societies of the eighteenth and nineteenth centuries, excluding not only women and children, but also all men who were not considered free in the bourgeois sense, above all slaves, workers, and peasants. It is thus no surprise that the bourgeois concept of civil and political rights, most notably the right to property, came under heavy attack by socialist philosophers and by communist revolutions in the early twentieth century. In his essay On the Jewish Question, written in 1843, Karl Marx developed a fundamental criticism of the very concept of civil and political rights, as contained in the French Declaration:⁷

The droits de l’homme, the rights of man, are as such distinct from the droits du citoyen, the rights of the citizen. Who is homme as distinct from citoyen? None other than the member of civil society. Why is the member of civil society called man, simply man; why are his rights called the rights of man? How is this fact to be explained? From the relationship between the political state and civil society, from the nature of political emancipation. Above all, we note the fact that the so-called rights of man, the droits de l’homme as distinct from the droits du citoyen, are nothing but the rights of a member of civil society, i.e., the rights of egoistic man, of man separated from other men and from the community.

Marx continues by analyzing the concepts underlying the French Declaration, namely liberty, property, equality, and security. Most important, he notes:

The practical application of man’s right to liberty is man’s right to private property. What constitutes man’s right to property? Article 16 (Constitution of 1793): "The right to property is that which every citizen has of enjoying and of disposing at his discretion of his goods and income, of the fruits of his labour and industry." The right of man to private property is, therefore, the right to enjoy one’s property and to dispose of it at one’s discretion (à son gré), without regard to other men, independently of society, the right of self-interest. It makes every man see in other men not the realization of his own freedom, but the barrier to it. But, above all, it proclaims the right of man.⁸

With respect to the principle of equality, Marx’s criticism is similar:⁹ "Égalité, used here in its nonpolitical sense, is nothing but the equality of the liberté described above, namely: each man is to the same extent regarded as such a self-sufficient monad."

On the basis of these writings, the socialist concept of human rights developed as an antithesis to the Western concept, both in philosophy and reality. On the one hand, some of the key features of the bourgeois concept of human rights, namely the individualistic and egoistic concept of civil rights, above all the right to property, were criticized as being incompatible with a socialist perception of human rights. It is interesting to note that the right to property, despite being one of the pillars of the Western concept of human rights, was excluded from the International Covenant on Civil and Political Rights (CCPR) because of the strong opposition by Communist states during the time of the Cold War.¹⁰ Even today, almost thirty years after the fall of the Iron Curtain and in a time dominated by neoliberal thinking, the right to property has not yet been included in the core UN human rights treaties.

Second, the principle of equality was further developed from a purely liberal concept of equality of free men before the law to a concept that should benefit all human beings, irrespective of class, race, gender, and other distinguishing criteria, and which should be applied to all areas of life, including political, social, and economic equality, that is, real equality of opportunities. In his well-known essay Anti-Dühring, Friedrich Engels envisaged in 1878 that the working class would pick up the promises of the bourgeoisie and implement the principle of equality in real life, in society and the economic sphere.¹¹ In order to implement equality in real life, it was necessary to first address the most obvious forms of inequality, discrimination, and domination of human beings over other human beings, above all slavery and the exploitation of the working class during the age of industrialization. The desire to create equal rights and opportunities for all people is the driving force behind the gradual development of economic, social, and cultural rights, the very essence of the socialist concept of human rights and the modern welfare state.

The origins of real equality and economic, social, and cultural rights go back to the French Revolution. The first Declaration of the Rights of Women was drafted by Olympe de Gouges in 1791 in reaction to the French Declaration of 1789, which only applied to men. She was, however, convicted and executed for her counter-revolutionary activities under the terror regime of Robespierre in 1793. It is rather paradoxical that the Jacobins had in the same year adopted their own Declaration of the Rights of Man and of the Citizen of 1793, which clearly had put equality of human beings above the liberal concept of 1789. The Jacobin Declaration was spearheaded by the French agitator Gracchus Babeuf and his Society of Equals. Babeuf also perished on the scaffold, after conspiring in 1795 to lead a nascent urban proletariat against the establishment of a bourgeois regime.¹² The declaration of 1793 never became effective, but it is interesting as it contains a number of elements that clearly distinguish it from the bourgeois concept of the 1789 declaration. According to Article 1, the aim of society is the common welfare. Government is instituted in order to guarantee to man the enjoyment of his natural and imprescriptible rights. According to Article 2, these rights are equality, liberty, security and property. Article 18 proclaimed that Every man can contract his services and his time, but he cannot sell himself nor be sold: his person is not an alienable property. The law knows of no such thing as the status of servant; there can exist only a contract for services and compensation between the man who works and the one who employs him. Similarly, Article 19 imposes certain restrictions on the right to property: No one can be deprived of the least portion of his property without his consent, unless a legally established public necessity requires it, and upon condition of a just and prior compensation. In the same vein, Article 20 established that No tax can be imposed except for the general advantage. All citizens have the right to participate in the establishment of taxes, to watch over the employment of them, and to cause an account of them to be rendered. This principle known as no taxation without representation also played an important role in the course of the American Revolution. Finally, Articles 21 to 23 contain the first core of rights, which later came to be called economic, social, and cultural rights:

21. Public relief is a sacred debt. Society owes maintenance to unfortunate citizens, either procuring work for them or in providing the means of existence for those who are unable to labor.

22. Education is needed by all. Society ought to favor with all its power the advancement of the public reason and to put education at the door of every citizen.

23. The social guarantee consists in the action of all to secure to each the enjoyment and the maintenance of his rights: this guarantee rests upon the national sovereignty.

Babeuf and other early socialist thinkers, including Michel Buonarroti, had already at that time concluded that as long as the working class was excluded from political participation, they would have to fight an uphill battle to gain equal economic and social rights.¹³ Such early socialist visions of political rights and social welfare were fostered by the rapid industrialization of England and France during the first half of the nineteenth century. The Chartist Movement in England adopted in 1837 a People’s Charter calling for a Law for Equally Representing the People of Great Britain and Ireland that would guarantee universal suffrage and abolish all property qualifications for the right to vote.¹⁴ Although it still took quite a while until universal suffrage was achieved in England and other countries, a number of Reform Bills and antipoverty laws, enacted in England in the 1830s, widened male suffrage, prohibited some of the worst forms of child labor, and introduced the first social benefits for the poor.

Similar developments in France, spearheaded by socialist thinkers, such as Pierre-Joseph Proudhon¹⁵ and Louis Blanc, led to the inclusion of certain economic and social rights in the French Constitution of 1848, including the prohibition of slavery and the death penalty, limitations of the right to property in the general interest and expropriation only with adequate compensation, as well as the right to free primary education aimed at the full development of the physical, moral, and intellectual faculties of human beings, the right to work as the right of every member of society to live by labor, and the right of orphans, vulnerable groups, and the elderly to be supported by the state. At the same time, the 1848 German Paulskirchenverfassung contained a