I missed this before. Comments:
In the 1980s and 1990s, the trend in American business was toward increased privatization of government industries...
This means that the general pattern was one that could be described as more private ownership. Here, "increased" modifies "privatization", and means "more".
This is not an especially frequent construction, but it is completely correct and the best way to say that particular meaning ("privatization was more and more common").
In the 1980s and 1990s, the trend in American business was increased toward privatization of government industries...
This is grammatically acceptable I suppose, but has a very unclear meaning. Who increased the trend? I don't understand this sentence. This is a passive verb-- the
trend was increased... but what does that mean? Someone increased the trend? I think this ends up as a sort of redundant expression-- "trend" isn't needed, so you could just say "privatization was increased".
Now, with "increasing":
In the 1980s and 1990s, the trend in American business was toward increasing privatization of government industries...
This is acceptable, slightly weird. It means that the pattern was that privatization was increasing. Here, the -ed and -ing forms are almost identical in meaning, but -ed is more common.
They're both adjectives, and because increase is a verb that can be repeated multiple times (it's a continuous function), there is no practical difference between the two, whether it's in progress or completed. But more often we would use "increased" in that particular construction.
In the 1980s and 1990s, the trend in American business was increasing toward privatization of government industries...
As I wrote above, a "trend" can't "increase". So "passivization was increasing" would make more sense. The distinction between "was increased" and "was increasing" is subtle, because the first is a passive transitive verb (completed action), and the second is a progressive (ongoing) detransitive (middle) verb.
