What Is the Difference Between Privatization and Commercialization?

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In the strictest sense, privatization is the industrial assumption of functions or institutions that were formerly part of or administered by the government, whereas commercialization is the introduction of a commodity into the free market for mass consumption. An example of privatization is the growing trend of for-profit colleges. In contrast, the introduction of a new food item at a fast food restaurant is an example of commercialization.

Building from the given examples, the government has traditionally been responsible for education. But it is also expensive to hire trained instructors and other professionals as well as maintain campuses. By charging tuition that is higher than the expenses of operating a college in order, corporations are able to profit. Education headed by the government is also bound by the United States Constitution, which means that government-funded universities must be free from religious affiliation. Privatized institutions, however, are not bound by such obligations because private money and not public taxes are used to fund them. In the case of commercialization, a product is not, at any point, funded by public tax dollars. The sole purpose for its introduction to the consumer market is to make money for the corporation that manufactures it.