Privatization by Richard Jones

“Privatization” of government functions is getting a lot of press lately and sounds like an idea whose time has come.  At first blush I agree: FedEx really kicked butt when it took on the Post Office, showing up all those government workers making good, secure wages and pensions in the ponderous and inefficient government bureaucracy.  If they could do it with the PO, what about the rest of government?  We should bear in mind that, good as FedEx is, its business plan cherry-picked the most profitable part of the mail delivery business and left the rest of this critical public service to the government entity.

            As a response to “bloat and waste,” private sector contracting is an idea whose time has come, but it is not appropriate to every situation.  The begged question: what is the role of government?  You might say, to “establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty” - to quote the constitution.  Remember the Constitution?  Now that the US military is using contractors to provide for the common defense, we should be aware of the tough questions that arise from privatizing the basic services our government was charged to perform.

            One downside to privatization is, well, it is private.  For example, the company that contracts to the state for electronic voting technology happens to own the software that controls the count - and the entire function of the technology is proprietary information, not available for the kind of scrutiny that would be possible and necessary to verify the fairness of the vote count.  As we may have learned in Florida, democracy cannot survive privatization of vote counting if it cannot insure the fairness of the count.

            Another issue with privatization is how to establish justice within the confines of the profit motive.  The most sensitive charge of the federal government is also its most onerous, to hear certain politicians rant.  To “promote the general welfare” does not fit with some folk’s vision of rugged individualism, and yet it is essential to modern society.  As a community member, I recognize that while we may be created equal, our economic systems have nothing to do with equality.  For whatever reason(s), some people get the breaks while others are broke.  Talent, intelligence, even plain old goodness may make a ripple of effect, but the tidal wave of opportunity washes out these personal attribute differences when it comes to sharing equally in the opportunities.  Also, our economy depends to an extent on the instability of the workforce - if all jobs were guaranteed and all pay equal, human nature would show some working harder, some coasting.  But with variations in reward, some train harder, work smarter, produce more, and the overall economy thrives because of the competition.  But when the stock market is set to panic at low levels of unemployment (the system evidently cannot perform at full employment), the system must also be responsible to provide for those it systematically excludes.

            The graduated income tax has been one tool used for the redistribution of wealth.  While taxes are not popular, the distribution of funds into community infrastructure needs like libraries, roads, and yes, social services, creates the level playing field required for a just society.  Experiments with privatization of essential community services like water systems in the developing world have been disastrous, as service falls short and prices climb in response to profit motive.  Responsible government must ensure privatization only in competitive enterprises, and the community should be prepared to support taxes to cover the necessary infrastructure that does not generate profit.