This Layperson’s Opinion On Privatization

If the creation of value (i.e. GDP) is the measure of a healthy economy, how is it that transferring that value to the few benefits the many? Does placing more value into fewer hands broaden and raise the general welfare (via the economy) as effectively as distributing that value broadly? I would submit that it does not and, for my example, I will point to this latest currency of ideas to privatize the functions of government. Or, to put it more bluntly, to basically sell off our country to private owners.
Ever since the 1970’s when TV broke that story of the military paying gazillions for a toilet seat and a hammer it’s become somewhat fashionable to consider that privatizing governmental functions would create more value to the taxpayer through expediency and thrift. And, now more recently, that if privatization does not occur the government has become so bloated with waste that it will soon collapse under its own weight and we as a nation are doomed anyway. Yes, it would seem that our government debt (that could be argued was created in large part by big business interests in the first place) has now generated enough panic by corporate media to close some kind of a privatization deal between the American public and big business. And I certainly disagree with such a sell-out idea. I would argue instead that no value whatsoever is gained by merely trading the cost of governmental inefficiencies for the cost of feathering the nests of private businesses. And I would argue, moreover, that the general notion that government functions poorly when compared to private business is just plain rubbish. The fact that our government is broken politically should not be confused with convenient criticisms used by those who would profit by pushing them.
To argue my point let us start with the basic premise of privatization. I think most could agree that the prevailing criticism that a government operation cannot provide the same level of value as a business operation rests wholly on the supposition that business has an incentive to be as lean as possible to provide itself the best profit; and, therefore, that waste would be better eliminated and savings the result. But then, if this were true, would it not follow that since government is not meant to be “for-profit” those savings from its inefficiencies would be negated by a private company’s own profit motive? And that by continually exploiting the notion that the business is saving the taxpayer money, a private company would have incentive to continue to siphon its profit from the taxpayer in lieu of the supposed cost it’s saving them? Then that same circumlocuted rhetoric they’ve cultivated, raised and harvested to substitute for a perrenial profit would then be ressurected to justify whatever reasoning needed for continued profits. And, even more troubling, that in supporting a for-profit operation replacing a non-profit operation, excuses would crop up to erode the wage/benefit base that supports a decent standard of living–in a race to the skeletal bottom.
Hey, if government is so wasteful and out of control why not just contract some outside efficiency experts like ENRON did to monitor things? Has our CBO lost so much credibility with the corporate media that we now need a private accounting firm to satiate them? Are we lulled to think we would rather lose a little money on profits gleaned by private industry sneaking in through our back door than to get off our duffs and try to put a lock on it?
Look, whether it works well all the time or not, the simple fact is that government is meant to be non-profit; that means it costs to run it. Business, on the other hand, exists to make a profit–and would even enslave if not restrained. I fear that we would pay dearly for trading attitudes of reward of service to our country for attitudes on how to use the government to make money…eventually to the point of losing the services and decent standard of living that good honest government jobs symbolize and stabilizes. Remember this from your high school 1930’s economics lesson? The lower prices get on things the less money there is in circulation and, thus, the less flexibility an economy has. (Look at how the big-box stores have destroyed those margins small stores need to exist…) Sure, in government there are going to be screw-ups and outlandish cost overruns from time to time, but please let’s not throw the baby out with the bathwater. Let us instead be vigilant, frugal, and–most of all–rational about things. Let us not ask too late, “Why did we ever let Fed-Ex partner with the U.S. Postal Service and then allow companies like Bain Capital to sell off our country?”

~Carl Lewis Madison
11/25/12