The Storied Teller: Union Made

World Politics contributors Isabel Perera and Trevor Brown explore three countries’ attempts to privatize public rail services

In the January 2025 (Volume 77, Number 1) issue of World Politics, Cornell University Department of Government scholars, Isabel M. Perera, an assistant professor, and Trevor Brown, a Ph.D. candidate, unpack three cases of attempts to privatize public railways — in the United States, New Zealand, and the United Kingdom — in the 1970s and 80s.

All three efforts saw vigorous push back, yet each met with a different fate: The U.S. efforts staved off privatization, the British railway was sold off, and New Zealand’s railway went private in 1993, but was returned to the public in 2008. 

Perera and Brown posit that existing explanations are insufficient predictors of whether a privatization push will succeed: “What we propose is that the political role of the employees in those services — particularly the coalitions made or not made between rank-and-file public-sector workers and managers — plays an important part.”

In our Storied Teller series — designed to extend World Politics’ content to a non-academic audience — the journal’s executive editor Emily Babson speaks with Perera and Brown about worker-manager coalitions and how they matter for an industry’s survival more than might be expected.

Let’s start by discussing the manager-worker coalitions. How, and why, do they often constitute the most powerful antidote to privatization?

Isabel Perera: In the last half century or so, there has been an enormous wave to privatize public services in most countries, especially the advanced democracies. Most of the academic research on it has focused on the type and degree of privatization: How much of the state-owned enterprise will a government sell? Which parts are sold to which actors (nonprofit or for-profit)? What is the structure of marketization? But there is another side to this story, which is that some governments have not privatized their public services at all. 

Our question was: “If the wave of privatization is so strong, why would a government maintain a service as public?” We point to the political role of the employees of those services as an important part of the explanation. These are folks who depend on public services for their jobs. These are the postal workers, school teachers, or, in our cases, railroad employees. Public-sector jobs are typically decently paid, long-term jobs with good benefits. These workers therefore care about maintaining the quality jobs that they have. We find that when those employees, across ranks, form a coalition, they can be very powerful advocates for maintaining a service public. 

Usually, we don't think of managers and workers as being close political allies. In most cases, managers and workers appear on opposite sides of the bargaining table. But in the public sector, that's not necessarily the case. Supervisors aren't profiting off of their workers. They're often on the exact same pay scales. They benefit from the same retirement plans. As such, public-sector managers can be very interested in defending the public service alongside their employees — or at least in aligning with their employees on a number of key employment-related conditions. When that coalition exists (and it doesn't always), it can be one factor that helps to maintain a service as public, despite a huge amount of pressure to privatize.

Why are managers in particular so important in forming and maintaining a coalition and being at the bargaining table on behalf of their rank-and-file workers?

Perera: Public-sector managers face a different set of incentives than do private-sector managers. Like private-sector managers, public-sector mangers can make decisions about hiring and firing, workplace protections, and production capacities — but unlike, private-sector managers, public-sector managers don't necessarily want to extract a lot of revenues out of workers. That means that sometimes they behave like private-sector managers; other times they develop these coalitions with their employees. 

When that coalition forms, public-sector managers have some unique opportunities to advocate for public employees. They can organize directly and bargain collectively with the labor unions representing these employees. For example, a lot of the supervisors have their own union representation. We've found that their bargaining processes can be quite intertwined with those of their employees. In other words, what the supervisors’ union negotiates is closely connected to what the workers’ union negotiates. Those are strong incentives to advocate for similar conditions. 

Supervisors also can serve as direct brokers between public-sector workers and policymakers. They serve as links between what's happening with the rank-and-file and what's happening at the policy-making table. Supervisors might be responsible for lobbying directly to policymakers or they might be perceived to have special expertise or influence on the shop floor. They can liaise between the rank-and-file and elites.

Why did you choose the rail sector for this study?

Perera: Rail is one of the most famous cases of privatization. When people think about the privatization of major state-owned enterprises, they often think about British Rail and its fragmentation into lots of different private companies. That case got a lot of international attention. 

We wanted to focus on passenger rail, in particular, because of the nature of its client base. In my previous work on another public service, mental health care, I found that workers and managers were influential partly because clients in that area couldn't mobilize very strongly. In this way, passenger rail is similar to mental health care. Certainly, there are plenty of passengers who take rail; but people don't necessarily vote or mobilize politically based on their identity as rail passengers. In fact, often those who most need passenger rail are low-income people who live far from cities. They need rail to get around, but they might not have the kind of influence and power to advocate for rail expansion. That's more reason for workers and managers to mobilize and defend the sector.

You interviewed twenty-two industry specialists and rail employees. Why was it important to supplement your research with interviews? 

Trevor Brown: We conducted strategically selected interviews with industry officials, employees, and activists from each of the three cases that we studied: the United States, New Zealand, and the United Kingdom. These ranged from high-level government officials all the way up to the board level, to public-sector managers who were pivotal in privatizing the rail, to activists who fought against privatization.

These interviews served a few purposes. First, they helped us to test what social scientists refer to as “observable implications” of our theory; these interviews were key here because we struggled to get this type of information from primary or secondary sources. 

Second, these interviews helped us to better understand the coalitional dynamics that we discuss. Many political actors are quite organized and strategic: they have meetings, they have rallies. Some of those might get covered by newspapers, but oftentimes they don't. And political actors don’t always keep great notes on what they are doing or who they are working with, even at highly important moments. So you have to talk to them. There was a lot of not-so-glamorous research that went into tracking these folks down, in part, because we're going on forty years after some of these privatization attempts happened. Nevertheless, the interviews were extremely important for the project.

You write that governments have sought to privatize a lot of services, and that scholars attribute this to the “transformation of economic governance from mid-century Keynesian approaches to more recent neoliberal ones.”  As a political scientist, what does this mean?

Brown: Keynesian economics is an approach to managing the economy that sees the national government, broadly construed, as an instrument to promote economic growth, and that can include things like monetary policy, fiscal policy, taxing and spending, or it can include regulatory policy, like how we decide to regulate a particular industry. It's this way of thinking that sees the state as having an important role in facilitating economic well-being. And that well-being can be achieved by providing public services, like passenger rail or mental-health services, or promoting full employment. 

Neoliberalism has many definitions. In general, this economic vision sees markets, without much regulation from the state, as being the core way to distribute goods and services. What we see in the 1970s and 1980s is the ascendance of neoliberal thinking among both economic and political elites in all three of the countries that we study. In the United States, we get Reaganomics. In the United Kingdom, we get Thatcherism, named after Margaret Thatcher. And in New Zealand, we get “Rogernomics,” named after Roger Douglas, who was the Minister of Finance. And again, the idea with this way of thinking about economic policy is you really want to liberate the market from state intervention. Neoliberalism often sees state-owned public goods, like rail, as a far less efficient way to run an enterprise. Instead, neoliberals often think that the more efficient, effective way to do so is to privatize them, in large part because the private sector is governed by a different set of incentives. 

Briefly describe each of the three cases and why it was important to look at these countries.

Brown: There are a lot of factors that go into case selection. We wanted cases in which countries were both successful and unsuccessful at privatizing rail. Social scientists like variation on their outcome (or dependent) variable because it often allows them to plausibly infer that an independent variable of interest was causally important. So, we needed at least one case where a state did not privatize, and preferably a couple of cases where a state did. 

In selecting these countries, we needed each country to have characteristics that helped us to rule out what social scientists call “alternative hypotheses” or “competing arguments” that might explain the outcome of interests (again, privatization). In other words, we wanted to match cases on alternative arguments to show that they couldn't fully explain our outcome variable. For example, one might wonder if the United Kingdom privatized rail because it had a more conservative government in power, but all of our cases were ruled by right-leaning parties, so that can’t explain the variation in outcomes. 

Importantly, all three of our cases attempted to privatize their railways around the same time — again, at the height of neoliberalism. What we found is that in addition to having high levels of rank-and-file union density, workers in the United States also made allies with management to stave off privatization, whereas in the other countries, workers struggled and failed to build those coalitions. 

Michael Ross' book review article appears in the same issue of World Politics as your article. His article is about the new political economy of climate change. In your article, you write that rail is a “greener and more equitable alternative to carbon intensive transportation modes.” In his piece, Ross* talks about unions, but in the fossil-fuel industry. How can the coalitions in that industry, and others like it, be tapped into to combat climate change? 

Perera: This is a great question. The key point is that not all workers want the same thing. Workers in the fossil-fuel industry want to maintain the industry to maintain their jobs. Workers in the rail industry want the same. 

To arrive at an answer, it is important to consider the relative power of these different sectors in the economy. In a lot of countries, fossil fuels are much more economically valuable and productive than passenger rail (which requires a lot of public investment given the diffuse nature of its client base). The economic importance of the fossil-fuel industry really helps workers in that sector to build their case for maintaining the industry. They can go to government and say, “You can't afford to give us up, because this sector is so productive” — at least in the short term and in monetary terms, even if not in the long term and in climate terms. We know that one of the reasons why climate change is so difficult is because “brown industries” are intractably connected to our economies, and fossil-fuel employees are connected to that entrenchment. 

So, what can activists and policymakers do? It is a lot harder to leverage the political influence of employees in a particular sector, in this case a “green industry,” when that sector isn't yet economically valuable or doesn't even exist. My armchair response is “Build it and they will come.” Build the green sectors, like clean transport and clean energy. Make employment there attractive, so that employees become attached to those sectors. Support the unions in those sectors. To whatever extent possible, incentivize the employees of the brown industries to move into the green industries. That creates a whole new set of employees who are vested in these new sectors. That of course is difficult to do politically, but it is one way forward for activists and policymakers who want to influence workers to support a green transition. 

Brown: There’s arguably a message here for the labor movement: We often think of labor-management relations as antagonistic in the United States, but our article shows that they don't always have to be. And so, the extent to which the labor movement can, in these newer sectors, leverage and build coalitions with management, and even capital, to advance their interests, it can potentially pay dividends — even if it doesn't seem like the most progressive thing at the time.

To read Perera and Brown's article, “Why States Do and Do Not Privatize,” visit Project Muse. 

*Editor’s note: Ross’ article was also featured by The Storied Teller. Read it here.