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The Push to Privatize

The Push to Privatize
By Josh Sager

One of the major precepts of the right wing platform is that basic services and government functions can be more efficiently performed through the free market than by the government. While I am a progressive liberal, I agree that the free market can supply services that the government often does, and sometimes at a decreased price. I mean, look at Somalia, the rich use the free market to get medicine, food, and security while not needing to pay any of those pesky taxes to support those who cannot survive in the market. By privatizing everything in society from goods, to personal security/defense, Somalia has very little waste from the free rider problem. This situation allows for the rich and powerful to have everything and the poor to die of starvation.

When conservatives worship the free market they fail to take into account several very important factors in their decision:

1) The free market is amoral and entirely based upon the profit motive. If you cannot pay for a service/good in the free market, you do not receive any help. If a profit can be made, the corporation is beholden to act even if the consumer is harmed (Chinese mouthwash using cheap antifreeze as a flavoring despite health risk). I am of the opinion that there are places for profit motives, but others where the profit motive is not proper.

2) The free market requires several specific conditions to function correctly. When the free market breaks down, cabals or monopolies can form and the supply/demand/cost relationships will become skewed. Without government intervention in the market through antitrust laws or regulations, the corporations will maximize profit and take advantage of those unable to defend themselves.

3) The people who cannot live in a pure market driven economy are the poor, sick, disabled, old, and simply unlucky. The most overlooked factor in the conservative market model is that they assume that those who cannot afford a service which is necessary for health/survival will simply find a way to afford it (take a new job). When legitimate employment is not available or profitable, people will often resort to illegal options simply out of survival. For students of history, the food riots of the great depression are an example of crime for survival. Conservative ideals don't account for those who cannot take care of themselves, as well as the effects of denying these people services. An example of this disconnect is when Nixon saved money by kicking a large amount of people out of state mental institutions. Insane people were released onto the streets and became homeless where they increased crime and disrupted the public. Even with the saved money from the closings, the increase in the need for police and personal damage to those effected by the unanticipated effects, actually caused a net loss to society.

4) We are part of the same society and thus there is the moral imperative to help one another survive. Whether you use a religious or secular justification to the social contract, most people can agree that in a society as rich as ours, there is an obligation to others. While I am not religious, I believe that there is some obligation to other less fortunate members of society. As for the religious, most religions have common moral tenants of charity, as well as basic component of a moral contract (Don't murder, steal, etc.). A pure market mentality only sees profit and loss, thus the less fortunate fail to get taken care of.

In my opinion, there are several services which the free market will inevitably fail in and thus the government can more equitably administer at a net gain to society.

Defense -- Privatizing defense is almost always a terrible idea. From antiquity to modern times, defense has been the responsibility of the state and whenever it has become privatized, disaster has struck. Machiavelli made the point that a mercenary will always go to the highest bidder, and if you rely on them for defense, you will be taken by someone with more resources. Armies should be loyal to the state that they protect, or they will easily be bought off of the battlefield. Mercenaries (such as Blackwater in modern times) are not bound by a common code of ethics because they are corporate, not governmental, thus are more likely to violate the rules of war and commit war crimes. One must only look at the history of PMCs in Iraq to see that relying on them for national defense would be a terrible idea. The main goal of defense and war should always be defending your home, not profit.

Law and Order -- The police, courts, and prison systems should all be purely government run. There should be no profit motive in locking citizens up so there are no perverse incentives to lock up more people. In my opinion police should be paid by the public through taxes even if they could be more efficiently be run privately because they should exist to impartially enforce the law. Say somebody doesn't pay their taxes, does this mean that they should be excluded from protection by the law? That exclusion would be the end result if the police were privatized. The prison systems should be government run for two reasons. Where private prisons have taken over, surprisingly more people are arrested and jailed. Either prison lobbies are paying politicians to make the more draconian or the people in these places are merely worse; guess what I think the explanation is. By putting a profit motive on imprisoning people, corporations will maximize profit by maximizing the number of imprisoned through bribing politicians. To see the most extreme example of the effect I am describing go to this link: http://www.youtube.com/watch?v=5qjwEKtlZIU. If you think private prisons are good ideas after watching this nothing I can say will change your mind.

One component of retaining order in society that we should take particular care to keep public is that of firefighting. The goal of fighting fires should not be making a profit but rather protecting society from fire regardless of economic status. Even if you don’t think that fire protection is a right, you must take into account the fact that fire spreads. We cannot allow the profit motive to endanger society, nor should we allow those without money to be endangered where we can help them; the end result of privatizing firefighting is found entirely in the recent news story where firefighters let a house burns down over a missed $75 payment

Education -- Put simply, the goal of education should be EDUCATION not profit. A good education is extremely important for life in modern society and while private schools can be better than public, often they are simply more expensive and perceived as better because they are private. Private schools can reject people, skimming the top portion of the students, thus making themselves look good, but what happens to the less academically gifted? A strong public education system, supplemented by private schools for those who want them is my ideal. As with the above examples, there are certain times where the profit motive will simply not have the best results.

Infrastructure and roads – Public works projects such as road, bridge and highway construction should primarily remain funded by the government. Unless the road or bridge is exclusively for private use, these projects have been and should be funded entirely by the government as there is no other way to effectively pay for such projects in the private sector. With the massive free-rider problem inherent to thoroughfares, the only way that the private sector could be motivated to fund roads through profit would be to make all roads into toll roads; this is not only inefficient but also highly regressive (charging the poor a higher percentage of their resources than the rich). I ask: would you rather pay a few cents in taxes per month to pay for your roads, or stop at toll points on every road that you drive on during your commutes.

Financial regulation and oversight – As with any law enforcement functions, the government should fund and control the organizations that enforce our laws. Where justice of any sort is profit motived rather than justice motivated, there are massive openings for abuse. As shown by the massive failure of bond rating companies to catch the huge mortgage frauds perpetrated by the companies that were rating paying for their bonds to be rated, the private sector should not be involved in regulation; the bond rating companies were being paid by the banks to rate bonds, thus there was a disincentive for them to accurately assess the mortgage’ values as worthless. Where the government is impartial, it can enforce the laws with much more effectively than the public sector can (just as long as corruption is kept under control, but that is a separate issue).

While the public services listed above are good examples of services that should be controlled by the public sector rather than the private, they are by no means the only ones that fit this argument; these are simply glaring and simple examples that exemplify a much larger category.

Unless mainstream independents and liberals are able to identify and respond to the Republican push towards a privatized society, the USA may one day look like the stage of a dystopian novel. The free market is the driving force behind the United States economy but it must not extend to all portions of our life lest we end up with a world where the rich have every service, protection and good while the rest of us are paupers.