On March 5, 2025, Elon Musk beamed into the Morgan Stanley Technology, Media and Telecom conference to discuss his plans for downsizing the federal government. “I think we should privatize anything that can be privatized,” Musk stated. He went further, explaining that “something’s got to have some chance of going bankrupt or there’s not a good feedback loop for improvement.” On this particular day, Musk had Amtrak and the U.S. Postal Service in his crosshairs, but as the current head of the Department of Government Efficiency (DOGE), Musk and his lieutenants have already initiated a scorched-earth policy for the federal government.
After winning the 2024 election, President Donald Trump appointed Musk, currently the world’s richest man, as a Senior Advisor to the President and the de facto head of DOGE. Moving with purpose and shoving aside career civil servants, Musk and his department have pursued an aggressive and illegal strategy of mass layoffs and withholding funds from federal agencies and contractors. Their actions crippled the U.S. Agency for International Development (USAID), and even Social Security—once viewed as an institutional bedrock—is on wobbly ground. Musk essentially reached into the federal power box and started pulling wires.
In many respects, Musk’s rise to DOGE is the big surprise of the second Trump administration, yet his zeal for deregulation and privatization is far from shocking. “Milton Friedman was the best,” Musk posted on Twitter/X, alongside a video interview of Friedman discussing which federal departments he would abolish. For Musk, privatization allows him to live out his savior complex while filling his bank account with public dollars. Musk’s SpaceX stands to gain billions in federal funding from the Trump administration, and he has long carped about federal regulations as a hindrance for his own companies; he is thus careful to wrap deregulation in the rhetoric of “efficiency” to avoid acknowledging his company’s, and his own personal, enrichment.
When viewed as a coherent whole, the right-wing, neoliberal push for privatization evinces an incredibly illiberal project.
The unchecked corruption is plain for all to see. Musk and DOGE are a supercharged manifestation of the assault on public goods, but this simply raises the question: why has the longstanding assault on public goods reached this level of criticality now, and why has Elon Musk been entrusted to overhaul the federal government? The answer to these questions has to do with the role played by the concept of privatization in the history of American conservatism. Since the middle of the twentieth century, privatization has played a major role in the right’s established ideologies and its fringe movements; it became central to the liberal mainstream and has had a special role to play in the discourse surrounding segregation and higher education. When viewed as a coherent whole, the right-wing, neoliberal push for privatization evinces an incredibly illiberal project, one where public welfare and democratic governance are subordinated to the whims of markets and billionaires, and public money is channeled to the already wealthy.
Privatization in the Right-Wing Imaginary
While the conservative movement is far from monolithic, a belief in privatization permeates every right-wing ideological strand.
The central tenet connecting privatization to the various strands of American conservatism is a particular style of anti-statism, one which is contingent upon the belief that the government cannot and should never attempt to solve societal ills. As Barry Goldwater, the “cowboy conservative” and Senator from Arizona, wrote in 1960, welfare creates a “dependence on government,” transforming beneficiaries into victims. He further argued that federal spending on public welfare was a Trojan horse for the “collectivists” who “sought to rule as absolutely as any oriental despot.” This mindset inverted political reality. Public programs like Medicare and Social Security were created through popular demand and democratic governance. And Goldwater, like Musk, personally benefited from federal spending. Goldwater’s home state of Arizona ranked near the top of New Deal expenditures, and, at first, the Goldwater family store proudly flew the Blue Eagle of the National Recovery Act. He quickly soured on the New Deal, however, blanching at the administration’s empowerment of labor and decrying the New Deal’s willingness to, in his view, “impose its will on private business.” To combat this perceived liberal overreach, Goldwater offered a simple solution: “I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size.”
In the latter half of the twentieth century, privatization emerged as a key strategy for reducing the government’s footprint. One of the key intellectual architects of modern privatization was University of Chicago professor and economist Milton Friedman. According to historian Jennifer Burns, Friedman’s economic world view placed “freedom [as] the first principle, and the second and third principles concerned the state: government must be both limited and dispersed.” All of his economic and political philosophies flowed from this ideological edifice. Friedman aligned with Goldwater, arguing that government assistance and welfare programs were paternalistic, shackling the populace and economy in tandem. Instead, Friedman promoted “the widespread use of the market” to create greater freedom and efficiency. Using the market, in this context, amounted to an austerity program of slashing taxes, reducing regulations, and retrenching federal programs, all of which he believed would remove the yoke stymying innovation and market-based solutions. Enacting such a program meant that, ideally, everything would be privatized: Friedman called for privatizing national parks, public schools, highways, the postal service, public housing, and even Social Security. These ideas were immediately seized upon by right-wing politicians and activists, laying a foundation for a half-century of gradual privatization of public institutions and power.
In the latter half of the twentieth century, privatization emerged as a key strategy for reducing the government’s footprint.
Across the Atlantic Ocean, the University of Vienna minted two economists who would also go on to have great influence within the intellectual discourse on privatization: Ludwig von Mises and Friedrich Hayek. Born in 1881, Mises produced numerous works, such as Socialism, that formed a foundational right-wing riposte to Marxist economic theories. Hayek, a decade younger than Mises, wrote the best-selling The Road to Serfdom, which contended that state intervention and central planning inevitably enabled totalitarian ends. The two men’s ideas helped form the school of Austrian economics, which diverged from Friedman’s mathematical analysis in favor of applied logic about human behavior. Despite this methodological difference, they shared numerous touchstones with Friedman and the Chicago School. Similar to Friedman, historian Kim Phillips-Fein notes, Hayek and Mises created “a defense of the free market using the language of freedom and revolutionary change.” Austrian economists (Mises, in particular) also provided the intellectual blueprint for the anarcho-capitalist strain of libertarianism, a radical offshoot promoting a puritanical laissez-faire economics while condemning government economic intervention.
The Austrian school and its associated think tanks, namely the Mises and Cato Institutes, also helped forge a new generation of radical libertarian thinkers. Murray Rothbard, once a student of Mises, joined forces with the paleoconservative movement, blending Austrian economics with a politics of racial resentment and right-wing populism. Congressman Ron Paul (R-TX), who waged an insurgent presidential campaign in both 2008 and 2012, cited both Hayek and Mises as intellectual touchstones. “We are all Austrians now,” Paul gloated after his third-place finish in the 2012 Iowa caucuses, a proclamation paradoxically revealing both Paul’s delusions of grandeur and the long influence of libertarian economics within the conservative movement.
On the fringes of mainstream politics, though firmly at the core of the conservative movement, the far-right also played a critical role in disseminating ideas for shrinking the federal government, including the notion that liberalism was merely a pathway to communism. As America First founder John T. Flynn once wrote, “Our federal government… is transforming this great Republic into a socialist society.” The only way to rid the country of the communistic cancer, in their view, was to carve it out root and stem.
Willis Stone, the leader of the far-right Liberty Amendment Committee, went further than the more gradualist approaches favored by economists like Friedman. Stone proposed a constitutional amendment, dubbed the “Liberty Amendment,” which sought to end the federal income tax by repealing the Sixteenth Amendment and cease all federal government economic activity. Stone was pitching a battle plan for radical libertarian action, and he was far from a lone crusader. By 1981, nine states had passed Stone’s proposed Liberty Amendment, and similar measures had been proposed in nearly two dozen other states. Though the amendment never made it to a vote, in 2010, Congressman Paul submitted the Liberty Amendment exactly as Stone had crafted it in 1956.
The Privatization Consensus
Anti-government privatization schemes were hardly just the purview of the libertarian right. Indeed, the allure of market solutions gradually permeated both major political parties.
Anti-government privatization schemes were hardly just the purview of the libertarian right. Indeed, the allure of market solutions gradually permeated both major political parties. President Carter, for example, started the process of shifting the Democratic Party toward neoliberalism by embracing deregulation and fiscal austerity. However, the free-market mindset found the most fertile ground in the Republican Party, and under Ronald Reagan, the push for privatization accelerated. The president appointed a “privatization czar” and created the President’s Commission on Privatization which wrote up a list of public services that could be privatized. As Emanuel S. Savas, an assistant secretary in the Department of Housing and Urban Development, crowed, privatization provided an avenue for “dismantling the state step by step.”
Rather than resist this neoliberal assault on public goods, the Democratic Party, under the leadership of President Bill Clinton, viewed Reagan’s success as proof of an emergent conservative consensus. Clinton and a new generation of “Atari Democrats” came to view liberal defenses of public goods as a political liability. Privatization flourished, and in his 1996 State of the Union address, Clinton proclaimed, “The era of big government is over.” But instead of wealth trickling down, privatization created an upward vacuum as private interests swallowed up public funds.
In 1996, Clinton signed a bill replacing Aid to Families with Dependent Children (AFDC), a New Deal-inspired welfare program, with Temporary Aid to Needy Families (TANF). Designed to shove poor Americans off welfare, TANF established work requirements and lifetime limits on welfare payments. The new bill also transformed federal welfare funds into a series of block grants, shifted the distribution of those grants to individual states, and removed the prohibitions on private companies determining welfare eligibility. According to a report published by the U.S. Department of Health and Human Services, the shift to block grants “encouraged states to investigate new options for increasing efficiency, including privatization.” By 2003, the U.S. General Accounting Office estimated that about $1.5 billion, roughly thirteen percent, of TANF funds ended up in the hands of private companies, which were incentivized to keep caseloads low to boost their own profits. Ultimately, privatization helped reduce access to public welfare. In 1996, the last year of AFDC, 68 out of 100 families in poverty received government assistance. That number had plummeted to 21 out of 100 by 2020—a difference of more than 2.3 million families. The onslaught of privatization not only ripped the social safety net away from the most vulnerable Americans and underscored the apparent consensus surrounding the idea of free markets and privatization, it also set the stage for more dramatic incursions into the public pocketbook.
The onslaught of privatization not only ripped the social safety net away from the most vulnerable Americans, it also set the stage for more dramatic incursions into the public pocketbook.
Perhaps the most egregious example of transforming public dollars into private wealth occurred during the 2008 financial crisis. One year earlier, the American housing market had imploded. The investment banking sector, which had made billions selling risky and unscrupulous mortgage bonds, descended into a death spiral. Numerous venerable Wall Street institutions, such as Bear Stearns and Lehman Brothers, found themselves on the ropes. The Bush administration, led by Treasury Secretary Henry Paulson, deployed the Federal Reserve and utilized new legislation, namely the Troubled Asset Relief Program, to stabilize the industry by purchasing failing bank assets using public dollars. Paulson argued these measures were necessary to prevent the collapse of the entire banking sector, but the reality is that taxpayer dollars were being used to rescue private investment firms from their own self-made apocalypse. As journalist Michael Lewis wrote, “By 2009…more than a trillion dollars’ worth of bad investments were transferred from big Wall Street firms to the American taxpayer.” Adding insult to injury, as foreclosures shoved millions of Americans out of their homes, investment firms gave their departing executives generous, multi-million-dollar “golden parachutes.” It amounted to, Lewis quipped, “free money for capitalists, free markets for everyone else.”
From Freedom to Domination
While economists like Friedman believed privatization would usher in greater freedom and efficiency, conservatives today have also started wielding privatization as a weapon for punishing ideological opponents and cementing right-wing dominance. Supporters of privatization laud the absence of “state tyranny,” but the market itself is a coercive mechanism that forces compliance and obedience through the logic of capitalism. Even Hayek admitted that coercion can occur when “the alternatives are so manipulated that one is compelled to choose what the coercer wants as the least painful choice.”
While some believed privatization would usher in greater freedom and efficiency, conservatives today have also started wielding privatization as a weapon for punishing ideological opponents and cementing right-wing dominance.
This notion certainly describes the modern trend of corporate consolidation, wherein a handful of companies, empowered by years of deregulation, control a vast array of consumer products. Market monopolization is thus masked behind the illusion of choice and competition. Furthermore, conservatives have no problem with federal largesse so long as they get to dictate where and how that money is spent. The upshot is that federal dollars are directed away from public goods and perceived political enemies, instead flowing toward conservative priorities and the pockets of allies.
Rather than viewing higher education as a public good that raises the tide for all, conservatives have come to see modern universities as a spawning pool for the ideological opposition.
Trump’s strategy of using privatization to punish enemies comes into focus when examining his war on higher education. Universities have long been a bogeyman for the American Right, going back at least to William F. Buckley’s bestselling God and Man and Yale (1951). Rather than viewing higher education as a public good that raises the tide for all, conservatives have come to see modern universities as a spawning pool for the ideological opposition. They claim that academia is dominated by left-wing groupthink (somehow, business schools and economics departments are never included in this calculus) and lambast universities for simultaneously coddling students and enabling dangerous radical protesters. President Richard Nixon put it bluntly: “Professors are the enemy,” a phrase repeated verbatim by Vice President J. D. Vance at the 2025 National Conservatism Conference.
Trump and the MAGA coalition have clearly painted a target on higher education. After decades of funding cuts, universities are incredibly reliant upon student loans. Christopher Rufo, a right-wing provocateur and Senior Fellow with the Manhattan Institute, pinpointed this weakness and argued that privatization could bring universities to heel. “By spinning off, privatizing and then reforming the student loan programs,” Rufo noted earlier this year in a conversation with Ross Douthat of The New York Times, “I think that you could put the university sector as a whole into a significant recession. And I think that would be a very salutary thing.” The Heritage Foundation’s Project 2025 framework also called for the privatization of federal education loans. J. D. Vance urged an even more confrontational tactic: Republicans should “seize the endowments” of any university deemed an ideological foe.
This caustic approach has already borne fruit.
The Gaza Protests rocked Columbia University, leading to charges of antisemitism and revealing an administration struggling to balance the right to protest alongside its duty to protect the campus, students, and faculty’s intellectual freedom, not to mention the university’s occasionally paradoxical obligations to donors and trustees. Conservatives smelled blood in the water. Trump pressured Columbia, threatening to withhold $400 million in federal research funds. The university, which is a private institution, quickly capitulated. Columbia agreed to hire an additional police force with broad powers and a new provost with the ability to review programs “to ensure the educational offerings are comprehensive and balanced.”
Here we have an example of the new administration using the pretext of a public good (student safety) to exert dominance over a private institution and undermine the actual public good of higher education. It is a vision that would destroy the modern university system by placing it at the mercy of either the donor class or an antagonistic federal government. But there are structural issues at play here, too. Most universities are run by boards of trustees that operate as private clubs, accountable to no one, with a membership that rarely comes from the ranks of faculty. Thus, as Arjun Appadurai and Sheldon Pollock observed, trustees can “become conduits for politicians and finance-driven values that affect the core life of academic institutions rather than buffers against these forces.” In fact, recent reporting shows that Columbia’s administration was already planning a similar crackdown and used Trump’s threats as a pretext to enact such stringent policies. It is not a stretch to believe that any university receiving federal funding could be targeted by Trump’s administration, and universities’ administrative structures indicate that the Rufo-Trump pressure campaigns might find soft targets. Indeed, the Trump administration’s coercive threats against wealthy private universities like Columbia expose the still greater vulnerability of America’s public universities and colleges.
Trump and his fellow conservatives want to use the might of the federal government, alongside the cold logic of the market, to discipline and reorder institutions. The bottom line is clear: privatization is less about freedom or efficiency and more a partisan strategy to bring perceived enemies under the heel of conservative orthodoxy.
Trump and his fellow conservatives want to use the might of the federal government, alongside the cold logic of the market, to discipline and reorder institutions. By altering federal loan programs and granting federal funding based on ideological litmus tests, the Trump administration could force universities to significantly alter their funding strategies. The reduction of public funding means students would have to rely increasingly on private loan companies, and universities would find themselves at the mercy of a donor class with their own political ambitions. The bottom line is clear: privatization is less about freedom or efficiency and more a partisan strategy to bring perceived enemies under the heel of conservative orthodoxy.
Toward the Antisocial State
When viewed as a coherent whole, the privatization efforts under the Trump administration reveal an incredibly illiberal project, one that undermines real public goods and services while justifying and intensifying inequality. Trump and his acolytes cloak themselves in the aesthetics of populism and deploy the neoliberal language of freedom and markets, but they are acting to replace public democracy with a corrupt patronage system. Melinda Cooper has referred to this phenomenon as the “apotheosis of the antisocial state: a state form that has withdrawn from the task of social insurance and placed its entire administrative apparatus in the hands of a small group of uber-wealthy business partners.” It is as if Trump and his billionaire allies want to create something like a post-Soviet situation, where public goods are privatized and sold off to ideological allies, without a thought for the public good, or for what then comes next.
Americans need to stand up to the hatchet work of Musk and Trump, lest public dollars disappear into vast private wealth and cement an already powerful right-wing oligarchy. This requires a forceful rejection of neoliberal privatization, a reclamation of the public commons, and a renewed acknowledgement of societal interdependence. The government should, as noted in the preamble to the Constitution, seek to promote the general welfare. Over 150 years after America’s founding, President Franklin Roosevelt added an addendum to this lofty notion: “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” That is a vision worth fighting for, one that seeks to use state capacity to provide and protect rather than divide and plunder.
John S. Huntington is a professor of history at Houston Community College. His book, Far-Right Vanguard: The Radical Roots of Modern Conservatism, analyzes how far-right activists propelled and radicalized the modern conservative movement. His writings on American politics can be found in popular outlets like Politico, The Atlantic, and the Washington Post. When not teaching or writing, Dr. Huntington can be found traveling with his wife, trying to raise a toddler, and doting on his dog.
Image made by Aaron Irion using “U.S. Capitol east front in 2020,” by Senate Democrats licensed under CC Attribution 2.0 Generic. All other images are in the public domain or otherwise free to use and adapt.
