"Privatization" gives privatization a bad name
In political circles "privatization" sometimes means that a service previously provided by a government agency is replaced by the services of a private contractor. Let's call this the Bush-Halliburton method of privatization.
There are benefits to contracting out government services. For starters, contractors can go out of business if they do a bad job whereas the half-life of government bureaus rivals that of nuclear waste. Government agencies have the reputation of horribly inefficient places where no worker is ever fired or even given a stern talking to.
But contracting services out to private firms is not always an improvement. The bid process is a golden opportunity for corruption, as this reddit link vividly illustrates.
The worst contractors prosper primarily through the exercise of political influence. In return for campaign contributions and other kickbacks, political leaders are only too happy to shower them with taxpayer money for subpar levels of service.
Skeptics of the free market witness the ignoble cycle created by so-called privatization and are further soured on capitalist ideology. They reason that government agencies can't be more corrupt or inefficient than a contracting process that awards billion dollar no-bid contracts to the Vice President's former employer. At the very least public agencies are bound by the Freedom of Information Act to operate with a degree of transparency. In many cases skeptics' concerns are valid.
For this reason I have never been completely sold on the charter school idea. On the most surface level it does represent the "privatization" of schooling, which I support. But if charters ultimately answer to school district management then they just add another layer of indirection to the existing power structure, providing extra opportunities for rent seeking and graft. Such privatization does not unleash the power of provider competition and consumer choice that free markets claim as their chief virtues. School voucher programs, like the Swedish model, do a much better job of fostering a true educational market.
The private market contains firms that produce great products like General Electric and Google but it also contains firms like Halliburton that grow fat on political favors. Separating the two classes of Capitalists in the public mind is essential to convincing young liberals of the virtues of free markets.