Someone tweeted me a few days ago and asked “what’s wrong with privatization?”
I didn’t have time or space to respond in 140 characters, but fortunately someone else has done it for me.
Let me be clear. I believe in the value and strength of the private sector. Long ago, I traveled in the Soviet Union and in China, and I developed a deep respect for the efficiency of the private sector in supplying goods to markets for consumers.
But I believe that a healthy and decent society has a strong private sector to provide goods and services (contractors, plumbers, electricians, repairs, etc.), and a healthy public sector to provide essential public services, like public education, roads, postal service, parks, beaches, transportation, government, police, military, fire fighting, libraries, and healthcare for those who can’t afford to buy it in the private sector. I may be forgetting other essential public services, but you get the point, I hope.
Privatization of public services is not in the public interest. The services are inevitably more expensive to the consumer and the taxpayer, who must now pay profits as well as the cost of the services. And the services are not more efficient; they are even less efficient because there is less money available to pay for the same service. And as the enclosed article shows, there is actually an incentive for failure. Privatized schools want public schools to fail so they can get more customers. Privatized prisons want more criminals for them to house.
We need a healthy private sector and a healthy public sector.
Unfortunately, there is a movement to privatize public education. Big money is going to fund political candidates in both parties who are committed to privatization.
The privatized schools–whether voucher or charter–do not outperform our public schools.
We must resist the current well-funded effort to privatize our public schools.
Diane Ravitch's blog 
Why do we trust a test score number as evidence of learning? Would we want to go to a doctor who is considered successful if he/she writes a high number of prescriptions, orders a high number of procedures or surgeries and then gets paid accordingly?
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Good stuff. A few thoughts:
1. I think you might make a clearer distinction between the financing of essential services and the management of essential services. It seems that you are against the private management of essential services.
2. You might provide a clearer definition of an “essential public service”. What makes a service more appropriate for public management rather than private management? Why, as an example, do we allow our food production and delivery systems to be privately managed by for-profit companies? Why do we contract with private for-profit companies to build roads and bridges?
3. I think that the vast majority of economists would disagree with you that the public sector generally provides services more efficiently than the private sector. Even liberal economists like Krugman believe that the public sector should manage services only when there are extenuating circumstances (for example, as he believes, in healthcare). (There are certainly many economists to the left of Krugman that question private management in many, most, or all cases. However, they are a small minority and not considered to be in the mainstream. That doesn’t make them wrong, of course!)
4. You might consider our food industry combined with food stamps. Do you think it would be better for the government to run food companies rather than provide food vouchers (food stamps are just food vouchers)?
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The only “economists” that would disagree with her are those from the crackpot Chicago School. Private is NOT more efficient than public when it comes to essential services; that is a fact.
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Which services are essential?
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I am so tired of trying to talk to people who don’t know the difference between a society and a supermarket. I am just going to hang it up today and go have a … damn, I forgot my BP medication doesn’t mix well with beer … okay, a chai tea latte then … on ice …
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If I hear one more yahoo libertarian or GOP politician talk about limited government and personal responsibility, I will become quite ill. Limited government and personal responsibility are really code words for let’s kill off Social Security, Medicare, Medicaid, CHIPS, unemployment insurance or any social program that helps ordinary working Americans, the poor, the disabled and the elderly. In other words, more personal responsibilty for all those moocher poor kids and granny with Alzheimers in the nursing home. After all, Bill Gates, Donald Trump and Paris Hilton pulled themselves up by their own bootstraps so why should their tax dollars go to the poor moochers.
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Privatization of government services is neither private sector nor public, neither free market capitalism or the dreaded socialism–it is the worst of both worlds, crony capitalism, using political power to divert public resources into the pockets of your friends and patrons, that we recognize instantly in the “Third World” but seem to have a blind spot for in our “developed” country.
What our political leaders should notice is that this kind of corrupt, looting of the public sphere by the wealthy is exactly what led to Arab Spring and the current crop of leftist governments in South America.
That could spread here if those at the top keep stealing from the rest of us.
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I think some of the issues here stem from the original post. Public roads are not built and often not maintained by the government, but by private for profit firms. Healthcare programs typically provide a subsidy for people to use to purchase privately produced healthcare services. The way these essential services can be produced is very different from national defense. It is a mistake to lump all these together.
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You can have private companies providing services such as education as long as it is monitored and money is spent on schools and services, not going to large profits for the ones running it. Too many stories have come out about excessive profits and people running away with the money. The public needs to be assured that their tax money for education is going for just that, not to line someone’s pockets
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The problem is that the for-profit corporations make political contributions and don’t get monitored at all And they make more $$$
Diane
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Yes, Diane, that’s the problem. For-profit corp. are not monitored and aren’t regulated. That has to change, but I doubt it will.
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There is also another issue between the items on the list. People can choose different amounts of education. Individuals can not choose to have different levels of national defense. National defense is inherently a social decision while the education levels for different individuals is not.
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One more time ..
It is essential to the survival of any nation that its rulers be well-educated and well-informed.
In a democracy, the people are the rulers.
Ergo, in a democracy, it is essential that the people be well-educated and well-informed.
That’s logic.
So there.
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I don’t think there is a post here disputing that.
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When people put their practices where they pretend their principles are, then we’ll be getting somewhere.
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Do you really think the wealthy reformers are interested in a well-educated public? Just look at the inner cities over the last 50 years.
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An interesting exercise for Diane might be to speak with one or more NYU economics professors to see what they think about this post, particularly when she writes:
“The services are inevitably more expensive to the consumer and the taxpayer, who must now pay profits as well as the cost of the services. And the services are not more efficient; they are even less efficient because there is less money available to pay for the same service.”
I think it would be useful for her to realize that these statements are, in the very least, outside the mainstream. If true, they’d questions the role of any for-profit enterprises in our economy.
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Have you read about the roof is and the abysmal results of for-profit online corporations? Have you read any of the evaluations? These are almost all bad schools, making millions from tax receipts intended for schools.
Diane
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I think Khirsh is reading “pubic services” as more than just education. It might include trash pickup, for example.
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Just because some (or even most) for-profit online schools have performed poorly doesn’t justify more extreme blanket statements about the relative efficiency of for-profit private management versus public management. I think a much narrower assertion would be better.
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Efficiency is relative to purpose.
The economic war machine of the 0.01% is very efficient in the campaign it wages to suck up every bit of wealth from the land it can while salting the earth it leaves behind — but when it comes to adding humane values to the lives of humankind, that is something the economic war mechanics simply and utterly fail to understand.
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I think a big difference is is it in the public interest. Companies do things for profit while public services are for people. For example transport by me is all private. Is it better not necessarily for the simple reason, not all the companies work together for public benefit and they take buses off non profitable routes. This blinds them in that we live up a hill and access up it is important for people shopping etc especially for the elderly etc. But companies took off routes even though the buses were packed. They claim the route was too long ignoring other issues. So private can blind people into bad decisions. Not saying all private is bad. Sometimes issues can be ignored which are important.Neither is all public bad like libraries closed which provide good public services yet you never see private people stepping in as their interests aren’t benefitted. Transport too has led to disjointed services if they were all public run they would have streamlined services but its hard to get companies to do the same as they can have conflicting interests.
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