For forty years, the Anglo-American world has been governed by a single, seemingly unshakeable belief: that government is the problem and the private sector is the solution. This is not an empirical claim. It is a theological one. And, like all bad theology, it has produced a trail of wreckage: financialised water systems, impoverished majorities, state-created oligarchs and a generation of politicians who have abandoned the craft of governing because this myth has made laziness respectable.
The evidence against this belief is overwhelming. The International Monetary Fund has acknowledged that the theory of private-sector superiority is "ambiguous and the empirical evidence is mixed". The World Bank concedes that "privatisation per se does not guarantee improved performance". Large-scale meta-studies have found "no significant difference in efficiency between public and privately owned companies in public services". The assumption is not merely unproven; it is demonstrably flawed. Yet it remains the organising principle of our political economy because it serves a purpose far more important to its proponents than the pursuit of truth: it justifies the upward redistribution of wealth and public assets.
Consider England's water sector. The 1989 privatisation was presented as a pathway to greater efficiency and investment. Instead, water prices have doubled in real terms, shareholders have extracted more than £95 billion, including £89.6 billion in dividends, and debt has been accumulated not to build infrastructure but to finance those dividends. Sewage spills more than doubled, reaching 3.6 million hours in 2023. Water companies have effectively been transformed into financial extraction machines, while the public bears the cost and lives with the consequences of environmental pollution. This is not efficiency. It is legalised looting, dressed up in the language of market economics.
What is particularly revealing is that the consequences of this economic philosophy are no longer confined to developing countries. Across Europe, the very societies that once championed the neoliberal model are experiencing growing public discontent over inequality, declining living standards, unaffordable housing, rising energy costs and deteriorating public services, with thousands taking to the streets over the increasing difficulty of making ends meet. Young people, workers, teachers, trade unions and housing activists have increasingly found common ground in their frustration with an economic system that appears to deliver prosperity for a privileged few while leaving the majority struggling to afford the essentials of everyday life. These demonstrations expose the wider consequences of an economic model that prioritises market solutions and private interests while public services and household purchasing power come under pressure.
The same pattern has been repeated across the Global South, where this myth has been imposed most aggressively. Nigeria is a textbook case. The privatisation of state-owned cement assets in the early 2000s created the conditions for a handful of well-connected individuals to emerge as some of Africa's wealthiest billionaires. Today, cement, the basic building block of shelter, is priced beyond the reach of the majority. The result is a housing crisis in which only government officials and oligarchs can afford to build or purchase homes, while those homes increasingly function as safety deposit boxes for the rich.
The scale of the problem is staggering. The Economic and Financial Crimes Commission seized approximately 800 houses from a single former Central Bank governor. Eight hundred houses. From one man. Meanwhile, millions of Nigerians cannot afford a bag of cement, let alone a roof over their heads. For every Nigerian who makes the Forbes list, roughly 22 million citizens sink deeper into poverty. More than 112 million Nigerians live in poverty, while a handful of oligarchs, created through the state's own transfer of public assets, continue to accumulate extraordinary wealth. This is not the market rewarding merit. It is the state selecting winners and presenting the outcome as privatisation.
And now the monster has evolved. The old model of privatisation involved selling off assets that already existed. The new model indebts nations, creating a mechanism through which future public revenues are transferred into private hands. In Nigeria, former Vice-President Atiku Abubakar has warned that President Bola Tinubu's request to borrow $20.52 billion and €1.045 billion could become a "slush fund", with borrowed money channelled through the Lagos–Calabar Coastal Highway to "political campaigners and favoured contractors".
This leads to a deeper question: can this system of privatisation even function in a democratic setting where, every eight years, a new group of political officeholders comes to power and proceeds to distribute public wealth among its cronies? The logic of the system suggests otherwise. Each administration inherits the transfers made by its predecessor and then proceeds to arrange its own. The result is not a functioning market. It is a rotating spoils system in which the public balance sheet becomes the prize, and citizens are reduced to spectators. Under these conditions, privatisation does not shrink government; it repurposes the state as a conveyor belt for transferring public wealth into private pockets, with the machinery retooled after every election cycle to accommodate a new set of beneficiaries.
Why, then, does this myth survive? Because it is convenient. It allows a generation of political and business leaders to evade the difficult work of governing effectively. If government is inherently inefficient, why bother fixing procurement systems? If the private sector is always better, why invest in public-sector capacity? If corruption is simply an inevitable consequence of government involvement, why reform institutions when you can outsource their functions? The myth becomes a self-fulfilling prophecy: the government is starved of resources, expertise and talent, then blamed for its resulting weakness.
The generation that helped break the state now refuses to confront the consequences. Meanwhile, millennials and Generation Z inherit the debt, the housing crisis, polluted water systems and precarious employment, only to be told that the solution is more of the same.
There is no shortage of evidence that the neoliberal model has failed. What is in short supply is the political courage to acknowledge it. The problem is not a lack of data; it is a generational refusal to abandon a superstition that has served its proponents extraordinarily well. From the streets of Europe to the struggling households of Africa, the consequences of this economic philosophy are becoming increasingly difficult to ignore. Until that refusal is overcome, the water will continue to rise, the billionaires will continue to multiply, and the majority will continue to pay for the convenience of the few. What is unsustainable cannot be sustained.