Privatization has been accelerating at break-neck speed (and in ludicrous ways) the last thirty years or so, in part because of the decline in government revenues and the general growth of the neoliberal consensus that assumes the profit motive brings with it ideal efficiency. It is also an efficient means of weakening the labor movement, because employees of a government contractor are covered by a different, considerably weaker, set of labor laws than employees of a state actor.
But privatization isn’t new; in fact, privatization of public services was quite common back in the day, and by back in the day I mean ancient Rome.
The late Roman Republic grew quickly as a result of conquests and voluntary ceding. There was no time to inculcate Roman civic values and grow the necessary institutions to ensure administration along Roman lines. Instead, what the Roman Senate, Consuls, and other governing bodies did to guarantee the provisioning of necessary public services and the gathering of taxes was to contract powerful local men, called Publicans, to provide these services and gather these taxes.
The Publicans in turn grew immensely wealthy with these government contracts, and thus were able to flex significant political muscle in Rome itself, through the buying of tribal leaders in elections and the funding of foreign adventures for ambitious soldiers and politicians. It was a textbook rent-seeking loop.
The privatization craze may be leading to similar results in the U.S. (hopefully without the foreign adventures, although, you know; military-industrial complex). Stories have been popping up with increasing frequency indicating that privatizing the provisioning of public goods is creating wealth, but not, you know, provisioning public goods any more efficiently.