Chris Savage of Eclectablog writes about the disasters of privatization in Michigan.
There are at least three public services, he says, that should never be privatized:
Healthcare, education, and prisons.
Why? Because the bottom line is profit, not service or quality.
Yet Governor Snyder just can’t get over his certainty that privatization must work, if only he can find the right vendor. He can’t. The incentives to game the system for profit are too great, and they are baked in.
Diane Ravitch's blog 
Absolutely. And add utilities, public infrastructure and the military. Seems like we’re fighting losing battles on all fronts.
LikeLike
We should also try to “deprivatize” Congress and the Executive Branch.
LikeLike
Good point. Our government is bought and sold.
LikeLike
The salaries and bonuses of the CEOs our healthcare companies are obscene. If we take profit out of the equation, people will pay less. This is why Bernie campaigned on Medicare for all. Healthcare has been guilty of price gouging. This is very clear in the pharmaceutical industry. The Big Pharma lobby prohibits Medicare from negotiating with drug companies. We pay more for drugs than any other nation. The drug companies all claim they need the money for R&D. The government actually subsidizes some of the R&D, and then taxpayers get to pay drug companies twice!
Utilities is another area where privatization is resulting in consumers paying more for worse service. I have seen this at work in Texas where my daughter lives. Since introducing the “value” of competition, electric rates in the Houston area have skyrocketed in the past decade. However, in rural Texas where cooperatives provide electricity, the rates have been stable with modest hikes. The free market results in a system where the people at the top are overpaid, and everyone else suffers. This is contributing to dramatic income inequality. http://medcitynews.com/2015/06/what-were-the-top-healthcare-ceo-salaries-last-year/
LikeLike
An excerpt from my forthcoming book:
The current direction toward privatization in education is equivalent to outsourcing in the criminal justice system. The Corrections Corporation of America (CCA) is the criminal justice equivalent of the education privatization movement that is currently underway. CCA is a $1.8 billion company that builds and operates prisons and detention facilities on behalf of the Federal Bureau of Prisons, Immigration and Customs Enforcement, the United States Marshals Service and state and local agencies. All of their incentives are perverse. Maximizing revenue depends on “customers” and “repeat” customers. In the decade ending in 2012 CCA spent nearly $18 million lobbying various government agencies to keep the market robust. In their own SEC filing they wrote:
“The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.” [87]
Read that excerpt carefully. CCA sees draconian drug laws and punitive immigration practices as good for business. Their interests are diametrically opposed to social justice. It takes only modest revision of the language of the SEC filing from CCA to imagine it coming from a charter organization:
“The demand for our facilities and services could be adversely affected by proper funding of district public schools and decriminalization of certain activities that currently land young black fathers in jail, particularly with respect to drugs and controlled substances. Any changes that resulted in substantial job creation, fair wages and rebuilding of neglected urban communities might potentially reduce demand for alternative, impersonal “no excuses” facilities to house poor children.”
Here too, the interests are diametrically opposed to social justice.
To be fair, children in urban charter schools are not prisoners, despite “no-excuses” disciplinary practices that might seem prison-like. Even increasingly profitable charter management organizations are not going to benefit from recidivism. Education reformers do want children to succeed, at least on their own limited terms. But there is common ground with prison privatization along several dimensions. As education becomes privatized, the same perverse incentives arise. Ratcheting up class size and increased use of technology reduce labor costs. Reduced labor costs increase profit. The highly mechanized systems being developed by corporate reform are cost effective, replicable and scalable.
In short, many schools driven by education reform are a really aggressive manifestation of the industrial style of traditional education that has dominated education policy for more than a century. The difference – and it is a critical difference – is that this time it’s also profitable.
Sorry for the length and self-reference, but it is germane.
LikeLiked by 1 person
Privatization always puts profit before people as they seek to lower the bottom line. While they reduce the quality of the product or service, they seek the same or increased compensation. We have seen an explosion of services related to the military industrial complex. There is lots of waste and fraud here that no one ever discusses. My husband does taxes for military contractors, and citizens have good reason to be concerned as there is also very little accountability or oversight.
LikeLike
I hope your book is widely read. To see how deep the dive is into profiting from social programs, including education, look at this and some of the sidebars. Non-profits are deep into subsidizing the private sector, which means that these tax havens are proliferating at considerable cost to taxpayers in addition to undermining democratic governance.
of institutions and services that serve the common good.
http://www.newprofit.org/new-profit-makes-three-new-education-investments-in-partnership-with-the-bill-melinda-gates-foundation/
LikeLike
YES. The interests of the CCA are “diametrically opposed to social justice.” THIS is the system our “public” schools are now imitating.
LikeLike
Reblogged this on Politicians Are Poody Heads and commented:
Yes, these are three things (not the only three things) that should not be privatized, but that are being increasingly privatized.
After all, if some corporation can make a profit, who cares if the people are scrwed, the prisoners are scrwed, the patients are scrwed, the children are scrwed?
Profits above all. 😦
LikeLiked by 1 person
If the profit motive makes things worse in education, healthcare, and criminal justice, that raises the question of whether it is good at all, for anything.
Doing it for the money, huh, I wonder if that has the potential to undermine quality everywhere. Food production? Technology? Transportation? Science research?
Maybe capitalism is more geared to quantity than quality.
Just maybe.
LikeLike
“Maybe capitalism is more geared to quantity than quality.”
True. The problems with capitalism were already adequately addressed 150 years ago by Marx.
I think the main issue is the size of the companies. That needs to be controlled to ensure truly fair competition. In France, you can walk into almost any restaurant, and you’ll be treated well, you’ll eat well. Restaurant owners don’t want to develop a chain that spreads all over France or even the World. The same can be said about the bed and breakfasts in Austria. They don’t want to dominate.
In the US, on the other hand, anything small has a hard time surviving.
I think if the size of the companies is controlled then the quality becomes automatically better. Things shouldn’t increase, expand all the time.
Ultimately, I think the American Dream needs to be modified. As long as people believe, BIG is the key to happiness, we’ll have problems. As long as we dream about BIG houses, BIG SUVs, BIG TVs, BIG backyards, BIG yachts, we’ll also crave for BIG profit which needs BIG companies and requires BIG control over others.
LikeLike
The American dream is a BIG problem!
LikeLike
For now I have titled my eventual report on Donald Trump:
Donald Trump: Dark side of the “American Dream.”
The American Dream, or at least part of it, says that an individual can “achieve success” by “working hard” and “overcoming all obstacles.” Donald Trump represents one logical conclusion of that dream, just like Hillary Clinton represents a logical conclusion of a corrupted political system (triangulation, dishonesty, secrecy, elitism, calculated rhetoric, and personal enrichment through these means).
LikeLike
I would love to read any book where the practical solution is for each research that shows the problem.
For instance:
1) Online learning: learners should learn for knowledge and practical application, NOT for badges.
2) In the subject economy: PROS and CONS in compare and contrast of buying or leasing of a car; buying or renting house/condo; borrowing to invest or to go on vacation; Invest in short term, long term, GIC, Preferred shares, mutual funds, stock market….
3) In the subject of career: short term, long term, pros and cons of natural talent versus building-up talent; passion versus survival; academe versus vocational trades.
4) In the subject of politics: the real meaning and practical application in each ideology that is shown daily in leadership and followers’ words and actions.
In short, society will not easily turn into chaos if people have been educated and cultivated to be humanitarian from the young age.
All greedy, selfish, and egoistic people will be outcast in society where being humanitarian is respected and beloved by all. Back2basic
LikeLike
Chris Savage missed the most important one, and the ONLY one, that will wake people up to the dangers of privatization. That’s the privatization of Child Protective Services.
If he had paid attention in Michigan, he would have known more about what really happened with the Burns family and a host of others. We have a list. And it’s not just his state, but in every state. It should be obvious, because most of it spun off the privatization of prisons, and Juve.
We are the only country, ever, that takes children of political dissidents.
The only reason I follow this blog, (not that I haven’t learned a ton about the privatization of education and the need to ‘keep us stupid’), is because of the data mining and the privacy concerns. I keep hoping that you’ll cover more of the IDEA program, and the incentives for reporting families to CPS. Or the incentives for reporting children for not being vaccinated which immediately gets families investigated for ‘medical neglect’.
As Hamilton said, “the masses are asses”.
LikeLike