Privatization

[kalm]

Interesting think piece about the philosophy of privatizing government services and how it is failing in many instances. It's a broad spectrum issue with implications on everything from the ethics of relying upon cheap foreign labor, to consolidation of power, to the ethics of choosing profit over someone's health.

That's my problem with the privatize everything notion, government is supposed to be about liberty and ethics, the market is not. But at least the trains can run on time.

What advocates miss is that the logic of markets creates private-sector coalitions capable of extracting just as much from taxpayers as the state. Corporations, lobbyists and other market actors can have just as much political agency as the government, and privatization can mobilize businesses to rewrite market practices.

This political process plays out in the quality of the services provided and the structure of the companies providing them. Privatization has sometimes meant that the most lucrative and easiest parts of these government obligations go into private hands, creating private profit, while the most difficult and dangerous parts remain with the public. This can range from the “privatizing the gains, socializing the losses” of various parts of the financial sector to the “cream-skimming” that goes on in many other industries...

What’s actually public about these responsibilities disappears from the conversation. Privatization assumes that cost quantifying solutions are more fundamental to government than any discussion of ethics or values. The move away from democratic accountability is particularly worrisome because in many of these fields, the ultimate motivator of private markets, the profit motive, is in direct conflict with the public administration. The basic values, concepts and institutions of liberal democracy — political participation, elections, equal distribution of individual liberties, checks on concentrated power — do not work towards economic competitiveness.

The ideology that the government is just one among many providers of goods and services is a seductive one in this age of markets. But the government isn’t simply just another agent in the market, and firms that are empowered to carry out the role of the state can be as abusive as the worst bureaucracy.

http://www.salon.com/2012/02/05/the_privatization_trap/" onclick="window.open(this.href);return false;

[Ivytalk]

Interesting article. I agree that privatization works better in some sectors (for example, toll roads) than others (prisons). The grand-daddy of 'em all would be entitlements. But I think the author overstates the role of "democracy" when the government administers a standard public function. He conflates political transparency with bureaucratic efficiency. Thought-provoking, though.