Privatizing government services can be more efficient. But there are also risks, including Government, Inc. (More)

Owning Our Seed Corn, Part II – Government, Inc.

The BPI faculty and guests debated privatization in Evening Focus on Tuesday and Wednesday, and this week Morning Feature continues that focus. Yesterday we examined some reasons behind the push to privatize government services. Today we discuss risks of privatizing core services such as military logistics, law enforcement, and public education. Saturday we’ll explore how we can talk about this seemingly arcane topic with Fred, our archetypal median voter.

Road Work Ahead

There’s an old joke: “The shortest distance between two points is under construction.” For months, that seemed to apply to the main road near my home. It was the road to Springoff the Fifth’s school, the grocery, the post office, the doctor, and the inconvenience store. (Nothing on that road could be called convenient.) Finally I called the county and asked why work on that road, a major artery in a crowded area, had been stalled for months.

The answer had nothing to do with lazy, overpaid public employees. The county contracted out road construction. The answer also didn’t involve private contractors milking the job for all it was worth. The answer, a very patient county employee explained, had to do with the weather and the county budget. If the weather was too hot, too cold, or too rainy, the road bed and surface would not bond properly. Because the work was seasonal, the county hired contractors. The contractors worked all over the state, perhaps all over the southeast. That meant moving some workers around and hiring some workers in each area, so the contractors had to get paid as the work was done. When the county had money available in the budget, they brought in contractors for the work that could be done in that weather. Then the project stalled until the weather and the budget aligned for the next phase.

Knowing that didn’t change the snarled traffic, but I was less frustrated. I understood why they contracted the work out, and why the contractors couldn’t “just do it.” We think of roads as a core government service, but it made sense to hire private firms to build and maintain them. County crews couldn’t have done the work any faster. Any road crew would be at the mercy of the weather. Privatizing government services is not always bad. But there are risks.

Who’s Watching Whom?

Most of us would agree that public safety is a core government service. On Tuesday and Wednesday in Morning Feature, winterbanyan explored the risks and hidden costs of uranium mining. I know the mathematics of risk well enough to write a basic equation comparing the availability and risks of nuclear power to coal, oil, and sustainable energy sources like wind, solar, geothermal, biofuels … and the risks of not having enough electricity to run hospitals, sanitation, and other life-saving public infrastructure.

My risk analysis equation would have lots of variables. To solve it I’d need to fill in each variable with a specific number. I could write an equation, but I couldn’t solve it. I don’t know those numbers. The people who do know those numbers are experts. They may disagree on details, but they could probably agree on a reasonable estimate, provided their jobs didn’t hang on shading the numbers in one direction or another. But what if all of the experts on uranium mining work for mining companies?

I don’t know if that’s true for uranium mining, but privatization has made it true for some other technical fields. Without independent experts to plug numbers into risk equations, government agencies can’t tell us whether this is safer than that, or know whether businesses are doing business as safely as they should. We’re left with corporations saying “Just trust us” … then too often leaving us with the bill if something goes wrong.

Who Decides, and Why?

In the comments after Tuesday night’s debate, we discussed the risks of privatizing military logistics: organizing, allocating, and moving men and materiel. The details are mind-numbingly arcane, but logistics are the essence of strategic and operational planning. Whatever politicians and armchair strategists might wish, actual commanders must answer a basic question: “Can the logistical system move and sustain enough combat power to fulfill these mission objectives?”

Since the early 1990s, our military have privatized most logistical services. Warehouses that once were run by support troops are now run by private contractors. Other contractors crew most of the ships, aircraft, trains, and trucks that move supplies to and from those warehouses. That adds a clause to that commanders’ question: “Can the logistical system move and sustain enough combat power to fulfill these mission objectives … and return a profit for the contractors?

As a former Marine, and as a citizen, that italicized clause makes me nervous. That clause also makes me nervous when I read about privatized law enforcement – police and prisons – and other core government services. Much of our nation’s intelligence work, both gathering and analysis, is now done by private contractors. All claim to be dedicated professionals, and the majority may well be. But that italicized clause – “and return a profit for the contractors?” – is still a risk.

Government, Inc.

But the biggest risk, as I see it, is framing Government As Business. Google [run government like business] and you get 286 million hits. It’s been a conservative buzz-phrase for decades. And as Frederick Allen wrote in Forbes magazine, that frame is fundamentally wrong:

Chief executives and presidents have jobs that are in many ways opposite. For instance, when a CEO may do the best thing by laying people off or offshoring jobs, a president has to put people back to work.

As Matt Yglesias wrote at ThinkProgress:

The optimal economic growth policy isn’t to slash Social Security or Medicare benefits, it’s to euthanize 70 year-olds and harvest their organs for auction. With that in place, you could cut taxes and massively ramp-up investments in physical infrastructure, early childhood education, and be on easy street. The problem with this isn’t that it wouldn’t work, it’s that it would be wrong, morally speaking.

The Government As Business frame has another, more insidious risk. “One man, one vote” is a basic principle of democratic government. But in corporate democracy the rule is “one share, one vote.” Tea Party Nation leader Judson Phillips suggested we return to allowing only property owners to vote, as only they have a “vested interest” in government. And “Only Taxpayers Should Vote” has become a common bumper sticker. Neal Boortz argued that people receiving public assistance should not be allowed to vote. And the National Review‘s John Derbyshire said public employees should not be allowed to vote.

All use the same argument: government, like any corporation, should be run by the shareholders. That’s great if you’re part of the tiny but incredibly wealthy minority. It’s not so good for the rest of us.

Neither is Government, Inc.


Happy Friday!