Privatizing public infrastructure and gov't agencies

[lostnfound]

Democrats are Democrats for a variety of reasons. I wondered whether the great majority here are against privatization across the board, or whether some believed in applying the 'efficiencies of the marketplace' to some government services.

To be upfront, personally, I am NOW very disturbed by privatization and I see it as a way to take public investment & infrastructure and turn it into paybacks for political allies. But there was a time that I felt differently, more akin to a libertarian, even though I was a Democrat. So I wondered where on the spectrum y'all fell.

Here in Texas, the state is looking to consolidate and privatize social service agencies with the likes of Accenture (Arthur Anderson reborn) and Deloitte. The agencies bidding are demanding that the bid proposals remain secret (names or resumes of staff, existence of other government contracts, organization structures) from the public.

[La_Serpiente]

1. My MAIN and ULTIMATE concern

is when natural resources are privatized. I am talking about water and when private companies start buying up huge tracts of land from the municipalities. I guess the same could be said about electricity.

[Ilsa]

3. I'm worried about that also.

Especially in Texas where water is a precious commodity. In TX, you can argue the economic and environmental feasibility of using disposable diapers and building a new landfill (lots of ugly land around here) versus using water to clean cloth diapers.

[Fall_No_Further]

7. Electricity?

Doesn't electricity--in amounts necessary for human benefit--have to be generated, through human action, unlike, oh, water? Wouldn't you say there's a conceptual difference there?

[ShimokitaJer]

12. Not really

Just as electricity has to be generated and transported via an infrastructure of wires, water has to be cleaned and treated, transported via an infrastructure of pipes, and also transported away when it has become dirty. It's not just water you're paying for, but clean, potable water.

[Fall_No_Further]

13. Collective-action lack of a problem.

I've always understood, ever since I started looking into this stuff WAY back in the day, that one of the primary justifications for a government TO BEGIN WITH was that it (government) solved the good old collective-action, free-rider problem. With a basic substance like water or electricity, which are both necessary goods in any industrialized society, you don't have the free-rider problem in any major form, that I've seen. Everybody needs it, everybody can be charged for it, access is easily controlable, there are ways to privatize distribution and production, that do work and are effective. Where's the necessity for government intervention?

----------
Don't mind me; I'm addicted to being the quintessential devil's advocate. I argue with myself all the time.

Sadly, I still manage to lose.

[ShimokitaJer]

15. There are ethical problems with allowing necessities to be profit-driven

If you can't afford a BMW, you can buy a Civic, and if you can't afford that you can take the bus. But no one can simply decide not to use water or electricity because it is too expensive.

If you want an argument against privatization, just look at the deregulated California energy market. If the only concern is maximizing profits, and the quickest way to increase profits is to falsify levels of supply and demand, then that's what the dictates of the free market will have you do.

Welcome to DU, by the way.

[Nederland]

23. California "Deregulation"

California energy deregulation did NOT put in place a free market system. It put in place a system specifically designed to be rigged by companies like Enron. If it had been a truly free market system, California would never have suffered like it did.

[Ilsa]

2. On the one hand,

I could see where social service employees might have it better, including a little more personal freedom, if they were working for a private company versus the state of Texas. Everyone I've known in a social service job for the state seemed to have ridiculously strict conduct rules (NO personal phone calls, etc) or risk being fired.

But ultimately, I think the whole situation would end up being abused by the corporations taking over. They would eventually demand more productivity, including longer hours, heavier case loads, for the same pay and no OT or time off. I think they would try to manipulate results of interventions and outcomes in their favor for evaluation purposes to maintain their hold on their bids.

Bringing us to the next question: would Halliburton get into the social service business with some no-bid contracts? I'm being facetious, but not by much.

[Don Claybrook]

4. When has privatization helped anything, at all?

The mantra that's always been used to sell privatization has been that businesses are much more efficient than government, that the dollar would go farther, etc. One would think that the Enrons and World Coms and Tycos of the past few years would've negated these ridiculous arguments. Apparently not.

Moreover, where's the quantum leap in logic that explains why government SHOULD be run like a business? I don't see it, and I never have. I could and have, however, been able to make a strong case that government should not be run like a business. There's a real dearth of critical thinking...but I'm preaching to the choir.

[Fall_No_Further]

9. Choirs are boring.

Let's pretend that I seriously disagree with you. Kick this argument around for a minute, have fun.

Business can only survive in a free market by being competitive. Competitive businesses are the most efficient, productive ones, that deliver the most value for the least price. The incentive to be competitive is that only the competitive busiensses will stay in money, and allow their owners to make a profit. The only way a business can get around the need to be competitive is with government assistance, favors, and welfare. So if government functions that can be addressed without a significant free-rider problem are privatized, privatized areas--being run now by private businesses--will only generate a profit for the owners if they are run competitively, which means efficiently and productively. If entry into the field is free from government restrictions and corporate welfare, the laws of the free market will control the now-privatized sectors, ensuring that privatized businesses will be run so as to be as competitive as possible. The government, lacking competitition, will never have the same incentive--nay, not even incentive, verily it is a need, a mandate of nature!--to be efficient and productive. Thus, any public sector that can be privatized, should be privatized.

For deity's sake, I'm just presenting the typical free-market argument. We all know that there's flaws there; it's just so much more useful to make sure we can all point them out, right? So please, kick the argument around, beat it down, but please don't imply I actually _agree_ with it.

[Don Claybrook]

16. OK, I kicked it around some

And I come back to my central question, which is still unanswered by the free market line: why should government be run like a business?

Put another way, and this will be sacrilege to some, are there traits of a government that are, or should be, more important than efficiency? I think there are.

[Fall_No_Further]

18. Such as?

What are those traits? Does privitization necessarily preclude their practice? Does not utilizing public money in an inefficient and wasteful manner constitute a disservice to the public, to any and everyone the government claims to serve? Is it not the government's purpose to provide certain goods and services, at the smallest feasible cost?

[Nederland]

24. Answer

You ask why should government be run like a business. Answer: because government is inefficient and opposed to innovation.

[pmbryant]

19. Key word being "competitive"

Privatization does not mean competition.

The only way a business can get around the need to be competitive is with government assistance, favors, and welfare.

When you hit this sentence, I thought for a moment you were arguing against privatization, like almost everybody else, including myself. After all, what is privatization of public services, but goverment assistance, favors, and corporate welfare. Effective competition is, in practice, virtually non-existent in many many areas.

Privatization is the government doling out money to businesses to provide public services (based to a large extent upon campaign contributions) and is not my idea of a "free market". :crazy:

--Peter

[Fall_No_Further]

20. Privitization Doesn't Mean No Competition.

The question is not, apparently, whether or not the argument I presented is correct; you have tacitly ceded that, should the system be competitive, it would work as the argument I presented shows. Your contention is that if a function, currently public, is privatized, there will be no competition. This does not necessarily follow. If the government remains involved in the system, the market will not be free; that would be corporate welfare. IF the government privatized completely, and fully removed itself from the market, allowing it to be a free market, would not the argument hold water for you?

You seem to be saying that it is not the concept of privitization that bothers you, but the manner in which it is implemented. Are you saying that a privitization movement which completely removed government intervention in a market is in fact preferrable to nationalization?

[pmbryant]

22. Reading way too much into what I said

The question is not, apparently, whether or not the argument I presented is correct; you have tacitly ceded that, should the system be competitive, it would work as the argument I presented shows.

I haven't tacitly ceded that at all.

I was arguing that the "competition" argument was worthless, because there is little or none. And the "free market" argument is also worthless, because the government is the one doling out the dollars.

If the government remains involved in the system, the market will not be free; that would be corporate welfare. IF the government privatized completely, and fully removed itself from the market, allowing it to be a free market, would not the argument hold water for you?

How exactly does the government "fully remove itself from the market"? This is either impossible or extremely undesirable for public services. ("Free markets" only work for the public good when they are properly regulated... by the government.) So again, I find this argument extremely leaky.

--Peter

[Fall_No_Further]

27. Quite possibly.

You had seemed to be taking issue only with the way the government handled privitization, not the concept itself, which is why I interpreted your comments as I did. You have clarified yourself a great deal; thank you.

To address the concerns you present:
When I present the argument, one of its premises is that the government does not " out the dollars." The argument which I have presented assumes that government does not redistribute tax dollars to certain businesses, privately owned, which it has hand-selected to administer the previously-public function. Rather, it removes itself to the point it at most functions as a regulator. Just ast the government is not in the candy production business, that is a private concern, so this model assumes the government would adopt a similarly distanced role from the privatized good. It wouldnt' dole out money, it wouldn't collect money for the program, it would stay away, going no farther than it does in most other sectors of the economy.

With THAT understanding, which is how it's been presented to me, which seems to avoid the "corporate welfare" response, how do we dismantle the argument?

[pmbryant]

28. We're getting a bit too hypothetical for my taste

I see how so-called privatization works in practice these days and what you describe isn't it. I'm sure there are some hypothetical cases where privatization is appropriate, but hypotheticals don't concern me at the moment.

A possible example of modern-day privatization: Bush is thinking about privatizing National Park Service jobs, or at least so I've heard numerous times over the last couple years. If this were to happen, the Feds would still be the ones supplying the money (via the taxpayers). They'd just be giving it to private businesses instead of to NPS employees directly. In that scenario, all my concerns apply: a few individuals will make out like bandits, and the typical employee, as well as the public interest, will be screwed.

--Peter

[Fall_No_Further]

32. And in that case

the whole notion is about as messed up as it can possibly get. Gee, let's just take money from this private entity, and give it to that one just because we like 'em more...after all, the one we're giving money to helped out getting us elected. Sounds just great, don't it?

Note the sarcasm.

You'd think people would just learn, one of these days...

[Beaker]

5. If something is built with taxpayer funding-

It should not be able to be privatized. That goes for anything from sports stadiums to hydroelectric dams and nuclear reactors.

[lostnfound]

6. Yes, it's infuriating that they take advantage of the public's ignorance

of economics..The economics of most politicians will hand over infrastructure, natural resources, and market share at little or no cost to private interests...and claim that they are 'saving money' or balancing the budget by reducing expenses of operation.

[mmonk]

8. No

and a way to revitalize jobs would be to grant contracts to build the infrastructure to private firms. But defunding government agencies (which is really what privatization is) should be a no go.

[WhoCountsTheVotes]

10. Privatization is a scam

Please explain why a third party (investors) should be able to siphon profits off of the top? What's the difference between a private organization and a public one?

In the public, you have workers and managers. In a public, you have workers and managers - and a bunch of leeches skimming off the top. What the hell is the point?

[Nederland]

26. The Difference

The difference between public and private organizations is that private organizations exist in a competative environment that insures that they do not become wasteful. Public organizations have no such check, and therefore can become wasteful and beaucratic.

This of course, assumes that private organizations exist in a free, competative market that Capitalist theorists advocate, not the psuedo free market where private companies receive non-competative bids from their buddies in the White House.

[Ksec]

30. I think having a dissenting voice is a good

way to learn how to debate wingnuts. Maybe we could have a poster with this job ? I think it would be a smart move.

[pmbryant]

11. Privatization is simply a massive kickback scheme

A way for the government to hand out huge sums of money to their "favorite" people (e.g., big $$$ contributors). The contributors then kickback some of that money to keep the same politicos in power, and the cycle continues.

I've seen privatization in action, and the result is so bad in so many ways: workers paid less than they would be in government; top management paid much more; less worker protections; etc etc.

It is disgraceful, really.

--Peter

[haele]

14. I'm currently a government contractor...

And I'll always say that way too much is being privatized.

What most of these privatization/free-market lunkheads don't understand is that without government to regulate and stabilze commerce and infrastructure, et-all - there won't be a middle class left. Nor would there be many land owners/homesteads around - the majority of the population would be at the mercy of a few elite land owners and businessmen. Some areas would be
Historically, one should study 18th century britian and it's colonial policies to understand what truly privatized, "free market" life in modern day America would be like after the initial rush to make the most of the profit-taking kicks in.

Most people, even "Liberatarians" and especially Republicans in general, are up to their eyeballs in debt. Get rid of regulations, and watch the forclosures really shoot up.

Oh yeah, the formerly middle class/working class will be given the options to rent, but certainly after those nice houses and condos that were forclosed on have been let fall to neglect and abandonment, to be snapped up by slumlords who will charge as much as they can and still keep the housing rented out.

Privatization of roads lead to tolls and increases prices in items that require those roads to deliver food and goods.
Privatization of regulatory offices lead to hazardous environments, poor health, mis-representation of products, cheap, poor quality goods and services being the only items that the average american can afford, "fly by night" businesses that only care about making a profit.
Privatization of public services lead to cut rate basic education, a stationary class structure, an increase in isolationism between communities and social strata, a decrease of the amount of small, profitable businesses due to rising costs.

Privatization is currently the code word for "privatizing the profits while socializing the costs".

Let's all protect the conglomerants, the corporatists, the otherwise priviledged inheriters of wealth who think they've hit a home run because they were born on third base.

Heaven knows that the Government and the Constitution is not written for the Average Joe, it's obviously for the person who understands the Golden Rule - (s)he who has the Gold, gets to make the Rules. Everyone else has the right to pick the Nuevo-Squire or Baronet they're going to try and collect crumbs from to survive as a tenant worker or bonded servant and to be glad for it.

Rant off. Gee, I'm supposed to be at work...:)

Haele

Let's go back to the Enclousure Acts, let's go back to "Corn Laws"
All costs for infrastucture would be born by the "free market".

[Monte Carlo]

17. Competitive markets cannot efficiently provide pure public goods!!

At least, that's what I took away when I was studying for my economics and business actuarial exam recently. Things like utilities and medicine and other things of similar nature cannot be provided in the amounts needed in a society through markets. These things that the GOP wants to privatize are by their nature un-privatize-able; it's a step in the wrong direction.

[Nederland]

25. Public Goods

Utilities and medicines are not public goods. Public goods by definition are things that are non-excludable, like national defense.

[lostnfound]

21. Thank you all for your replies; glad to see so many are in agreement.n/t

[Ksec]

29. Privitising

is just a way to cut in profit in a non profit "business"

[Ksec]

31. my theory on dissenting voices

I think having a dissenting voice is a good


way to learn how to debate wingnuts. Maybe we could have a poster with this job ? I think it would be a smart move.