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In a lecture entitled The State-Corporate Complex: A Threat to Freedom and Survival given by Noam Chomsky in 2011, at the University of Toronto, a 'standard technique of privatization' is described:

Social Security is actually in pretty good shape despite what everybody screams about. But if you can defund it, it won’t be in good shape. And there is a standard technique of privatization, namely defund what you want to privatize. Like when Thatcher wanted to defund [privatize] the railroads, first thing to do is defund them, then they don’t work and people get angry and they want a change. You say okay, privatize them and then they get worse. In that case the government had to step in and rescue it.

That's the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital. That’s the Social Security scam.

Is there a specific term for this practice of cutting funds allocated to a public asset, such as the given example of railroads, in order to facilitate its privatization?

Note: The factual accuracy of this quote has previously been discussed here, but I don't see a term which characterizes this practice.

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    I think, that it is so along-sided with privatization, than the same term can be used. That's exactly the way western-educated economists destryed nearly all factories on the ex-USSR lands. Defund=>privatize=>close and destroy. Because of that "privatization" is still an invective word in Russia – user2501323 Jul 9 '20 at 12:20
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    Related but not quite an answer to the question: en.wikipedia.org/wiki/Starve_the_beast – BurnsBA Jul 9 '20 at 13:34
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    The reason there is probably not a specific term is that, as discussed in the link, it is not something that actually happens - at least not to any great extent. The idea that it does is conspiracy theory by ideologues of Chomsky's stripe. – jamesqf Jul 11 '20 at 6:16
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    @jamesqf The current administration in 2018 calling for the privatization of the USPS is a conspiracy theory that never happened? wsj.com/articles/… – BurnsBA Jul 12 '20 at 20:48
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    @jamesqf The USPS nowadays is pretty much relegated to delivering packages and junk mail. Maybe you have missed that thanks to online shopping "delivering packages" is nowadays a bigger business than ever. – SJuan76 Jul 15 '20 at 9:59
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Is there a specific term for this practice of cutting funds allocated to a public asset, such as the given example of railroads, in order to facilitate its privatization?

Interestingly, the term "load-shedding" (Action to reduce the load on something, especially the interruption of an electricity supply to avoid excessive load on the generating plant.) was used in relation to concern that Eskom may be "privatized." The term may be used to describe any reduction of service levels, whether intended for privatization or, possibly, in response to a pandemic to reduce exposure for service providers. That it may apply generally, it is not a specific term.

Eskom is a South African electricity public utility, established in 1923 as the Electricity Supply Commission (ESCOM) and also known by its Afrikaans name Elektrisiteitsvoorsieningskommissie (EVKOM), by the South African Government and people of the Republic of South Africa in terms of the Electricity Act (1922).

Loadsheding, part of standard technique of privatization, January 10, 2020.

On the issue of loadsheding, who is lying? Cyril Ramaphosa? DD Mabuza? Pravin Gordhan? Eskom?

Or are all of them involved in a grand conspiracy against the people to ensure the privatization of Eskom – to ensure that the SOE goes under the hammer for next to nothing!

Noam Chomsky correctly expounds in how the process works.

“That’s the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital”, he says.

Loadsheding is part of the standard procedure …

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(Expanding on a comment, this isn't a full answer)

A related concept to the question if "Starve the Beast." It describes the first part of the question (defunding) but not the second (to privatize).

The phrase "starving the beast," first whispered by neo-conservative intellectuals behind the closed doors of Washington think tanks, has gained just enough currency to be found within mainstream media and at venues such as Independent Sector’s recent conference. The notion embodies both a means and an end for those who prefer a reduced size and role of our government.

In short, the strategy is to cut taxes, then use the resulting deficits as an excuse for cuts in social spending.

(via a source on the wiki article)

wiki article:

"Starving the beast" is a political strategy employed by American conservatives to limit government spending[1][2][3] by cutting taxes, in order to deprive the federal government of revenue in a deliberate effort to force it to reduce spending.

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    The problem here is twofold. First, the primary motivation for Reagan-era tax cuts was that it would actually increase revenue: en.wikipedia.org/wiki/Laffer_curve Second, social spending does not seem to have been cut (in the long term, at least). – jamesqf Jul 11 '20 at 15:13

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