Privatization is anti-social. While this may seem like a statement of the obvious, what it actually means in practice doesn't seem to have been much discussed.
We actually have a long history of privatization to judge its benefits, or decide if there are any. In just the last thirty years or so we've seen the privatization of the medical services industry, the air transport industry, public energy and water utilities and now we're supposed to embrace the privatization of the national pension system.
How have the other privatizations worked for us? Before you object that medical services were never social to begin with; that doctors were traditionally in private practice, let me make a couple of obervations. Many doctors, it's true had their own offices and some even had small clinics where they did x-rays and performed tests in a simple lab. But, much primary care was actually delivered by municipal, county and state health departments (immunizing all school children, for example) and most hospitals were run on a not-for-profit basis by political entities, such as counties, or a variety of religious institutions and charities. The acquisition of these facilities by the private sector was orchestrated during the late seventies and early eighties, usually through the mechanism of restricting public subsidies and the requisite tax revenues, so the operations appeared to be unsupportable by the tax base.
While the air transport industry was slightly different in that airlines owned their planes and relied on government for the assignment of routes and landing rights to guarantee sufficient revenue--sufficient to insure that they were able to comply with service and safety upgrades as required--privatization was accomplished by abolishing those service criteria and relying on the market to determine what level of service is most efficient and profitable.
The rationale for relying on the market to make these determinations was primarily related to the perception that government involvement is wasteful because governmental behavior is directed by one over-riding principle--avoiding failure. In other words, there was a belief, one that is widely shared and fundamental to an understanding of modern economics, that enterprise must confront the possibility of failure to force it to achieve excellence. Being able to avoid failure, it is argued, results in mediocre performance.
Now, that may well be true in theory, if the market were simply a mechanism for trading and exchanging goods and services most efficiently. But that's not what the market has become. What we have now is a market system in which the actors are actually predatory players whose interest lies in business failure. That's right, the function of the market is not to reward success. Rather, it's to artificially inflate business assets (by promoting consolidation, for example) in order to orchestrate a crash and enable the waiting scavangers to snap up the resulting pieces cheaply.
There's actually a philosophic basis for this behavior. In the late seventies and early eighties it was called "creative destruction." Probably as a result of the accurate observation that creation involves the destruction or transformation of one thing into something else (as water loses its fluidity, mobility and other characteristics when it is transformed into a solid block of ice), the proponents of creative destruction determined that destruction is a necessary prelude or component of creation. And that destruction is good.
Where they went wrong I think, as was evidenced by the process of urban renewal most starkly, was in concluding from their observations that all that was necessary to initiate creation was to destroy something, usually whatever didn't seem to have much value in somebody's else's eyes. For some people, probably well intentioned, the proof lay in the experience in Western Europe which was rebuilt from the ashes of World War II, renewed and much better than before. That the destruction of Europe was not perpetrated in the interest of creating a good, but simply to get rid of an evil, somehow didn't register. As a result, when many of the old industrial cities were gradually destroyed by systematically withdrawing municipal services, routine maintenance and other social supports, the creative destructionists kept expecting that like the phoenix, they too would rise from the ashes left behind by arsonists.
It took a long time for people to recognize that the creative idea has to come first.
In any event, a lot of people were hurt in the interim. And, while the cities on the coasts are gradually coming alive, the same mistaken assumptions seem to be destroying the middle of the country, the heartland, where agricultural consolidation into companies that rely on the international markets for their success, are falling into the grasp of the same predatory forces that have worked to destroy the garment industry, the steel industry, the medical services industry and the energy production industries, and are now anticipating the next crash, so they can pick up the pieces cheap.
If we don't recognize the pattern in the heartland, it's probably because the population is more dispersed and being thinned out as we speak. But the symptoms are the same as the industrial cities suffered, if we just take the time to recognize them. Most of the statistics relating to the health of a society are moving in the wrong direction in the heartland. Divorce, suicide, drug use (legal and illegal), elective terminations of pregnancy, incest and child abuse are all increasing and higher than they used to be.
People may still be living longer, especially if we take vehicle-related deaths and suicide out of the mix, but that they are not living better is beyond dispute. Even the high-tech health-care system is not up to providing a good life, though it may stay the early demise that decades of ingesting agricultural and industrial toxins tends to result in.
I am not suggesting that corporate agriculture is to blame. Rather the fault lies with our acceptance of the notion that business failure is not just inevitable, but desirable.
There's a new book coming out about Disney which demonstrates rather starkly a whole range of behaviors (not least of which is the hiring of competitors for outrageous sums to keep them from succeeding in their own enterprise) which aim to define success in terms of the last left standing by destroying the competition. The increasing rate of bankruptcy is not accidental. Businesses are intended to fail.
However, that public policy additionally rewards this behavior by relieving a failing enterprise of its social obligations--i.e paying taxes--is an unintended consequence, promoted by the mistaken belief that failure is an undesired and/or unfortunate condition. That businesses are intended to fail; that that's the mechanism by which they are brought to account, is rather startling. But, there it is.
Now, the question is: If private enterprise is destined to fail why would we want to entrust our health and the welfare of our elders to it? Doesn't it make sense to entrust these crucial functions to a system that is failure-proof? Failure-proof because we as a society determine that we just won't let it happen.