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This is a topic that often intrudes into my consciousness.   Reading Meteor Blades' front page story on privatizing prisons thrust it forward to the point I decided to offer some mental ruminations.

Let's start with prisons.  A prison is a place to which we send someone as punishment for having broken the social contract.  Prisoners do not have the full rights of the rest of us - even the !3th Amendment banning slavery and involuntary servitude says of the ban

except as a punishment for crime whereof the party shall have been duly convicted
thus in theory there would be no Constitutional bar for the government committing people to private prisons as is already the case around too much of the nation.  But while prisoners and ex-felons lose some rights, they are not subject to absolute authority of those controlling their confinement:  a sentence even of life imprisonment without parole does not authorize the jailers to torture, maim or kill.  

The kind of contract guaranteeing a flow of prisoners for the purpose of private profit has always seemed a dangerous path for this nation to follow.  We had a history in the South of allowing private corporations to rent prisoners for very lost cost labor to line private pockets:  anyone who saw the movie Brubaker got a glimpse of what that system was like.  

Some things might be legal and/or constitutional, but I wonder what it says about our nation that they can be so classified.   Private prisons are but one example.

There are other things I question being in private hands, especially when those hands are either offered a guaranteed profit or subject to the pressures of maximizing profits for shareholders and thus potentially burdening the population of this nation in a way that may be destructive.

Let me explain. . . .

In the past we had an approach to natural monopolies - you did not have two sets of power lines to your house, nor did you have two sets of water or sewer pipes.  If your water was not provided by a local or regional government but by a private company,  it would be subject to regulation:  guaranteed an operating profit but not allowed to use its monopoly power to maximize its profits to excessive levels.  

My electricity, like that of the vast majority of Virginians, is provided by Dominion Virginia Power.  That is, the wires that connect me to the grid are theirs, although nominally I might be purchasing my electricity from some other provider.  Dominion is regulated by the Commonwealth.  Yet in Virginia we have allowed direct corporate contributions in our political races, and Dominion is by far the biggest single contributor to our politics.   Given Virginia's strong reliance upon the Dillon Rule, Dominion is able to prevent local regulation of what they do by its influence on the General Assembly.  Thus for an essential service they have far more influence than do those reliant upon them for that service.

I once had a discussion with a good friend who taught at a seminary and was a major mentor to many clergy in his domination, in which I was at that time a member.  Given my long orientation towards service, I had a discussion with him about possibly attending that seminary.   As part of that discussion we wandered through compensation.  He described the sense that many had in helping/serving professions of wondering about how much we might profit from the needs of others.  Clearly there is nothing wrong with earning a good living, with being paid for the services one provides.  But there seemed something wrong about allowing one who serves to be able to dictate to others at their time of need, be that need physical, mental, or spiritual.  

In that denomination, many of the clergy were very poorly paid, and depended upon "stole fees" -  if you wanted the clergyman to perform a baptism, a wedding, a funeral, you were expected to pay him directly for that service, despite some clear language to the contrary in the New Testament.  

I never pursued becoming a clergyman.  I did serve twice as president of a local parish.  In that position we enacted a policy on stole fees, starting by raising the salary of our clergyman and increasing his benefits, including his housing allowance (we did not own a rectory).  It did not matter if you were a member of the parish or not, there were no stole fees.   You could feel free to make a contribution to the church, you might well give the clergyman a thank you gift, but it was not required.  We might point out that if you wanted a choir to sing for your wedding, our choir members were not paid and if you were not inviting them to the reception (in our small parish if one of the couple was a member the choir was usually invited) it might be nice to offer some wine and cheese for them for giving up their time).  It was rare that someone did not offer a gift to the church that was more than might have been charged in stole fees, but on those occasions we smiled and performed the spiritual service.

Let me return to this mental meandering.  

People are entitled to a living.

People who provide goods or services of any kind should not be required to do so at a loss, even if it serves a good purpose -  thus fixing the Medicare reimbursement rates is necessary if many seniors are going to be able to continue to receive medical care.  I note that the medical practice where I receive my medical care will not take new patients who are already on Medicare because the reimbursement rates are so poor.

To what should people have access without being excluded because of their financial situation?   Certainly those things necessary for life, unless we are totally inhumane.  Basic shelter, clothing, food, power and certainly water, without which none of us can live.  Should not this also include medical and dental care?

How do we ensure that all have access to the basic necessities of life, especially at a time when many have been without work despite being willing to work for extended periods of time, when even the extended unemployment benefits have run out?

How much does bureaucracy add to the cost of necessary services?

How much does profit add when those services are privatized?

One can provide services through a non-government but also non-profit organization.  

Is profit the highest value in our society, in our economy?   If it is, should it be?

I teach in a public school.   I am paid a decent but not an exorbitant salary.  I am able to focus on the service I provide to my students and their families (and thereby to the larger society) without having to worry about paying for the building in which I provide those services, or having to purchase their textbooks, etc.  But our district is financially strapped, and much of what I use to enrich their educational environment comes out of my own pocket.  I recover some of that because these are deductible expense.  The money I spend on providing these things is money not available to me to take my wife out to dinner, or to buy myself a new pair of shoes (and those i wear to school are getting worn down).  I could teach in a private non-profit school, probably get paid less, but have less work to do outside of my school day because i would not have the insane load (more than 175 students, in 6 classes ranging in size from 23 to 33).  Some think my compensation should be variable, depending upon how much my students test scores improve.  Perhaps I could make much more money, but then would not my motivation be to look for those from whom I had the best chance of getting improved scores?  Would not I be rightly motivated to avoid teaching those that were hardest to educate, and thus least rewarding?   Is that what we want of our educational system?

I do not claim to be an economic specialist.  Nor do I claim that I have a complete or coherent point of view on this subject.

I know that I would like more money, that because of my choice to be a teacher there have been economic consequences.  Some were poor choices on our part, and we accept responsibility for those.   Others were inevitable consequences of the decision not to seek a greater financial return for my work in order to do something I cared about deeply, which was serving others, making their lives better.

Yet I remain troubled by what i see.  I see schools being turned into profit centers -  this is true from pre-school through graduate school.  The Washington Post Company gets its operating profits from Kaplan, a for-profit educational endeavor that includes a university.  

I worry about privatizing our toll roads, as Mitch Daniels has done in Indiana:  it did not work well when a private organization built a toll road from Dulles Airport West to Leesburg, and the commonwealth had to take it over.

We have already begun to privatize our security, both at a national level and locally.  Think of all the private security forces in gated communities.  Think not only of the services used by the military that are privatized, even in combat zones like Iraq and Afghanistan, but also intelligence functions that are outsourced -  remember that some of the abuses attributed to our nation were done by privatized security and intelligence organizations.

Politically it was bad enough that our campaigns have been taken over by people who make too much money driving the process -  too many Democrats still hire consultants who get a piece of the television advertising and therefore commit to large amounts of advertising for their profit even it if is a waste of money and counter-productive.  But at least there we could hold the candidates and the parties accountable.  Now we have corporations and their foundations dictating policy, driving elections with their uncontrolled expenditures, delivering messaging for which neither candidate nor party can be held accountable.  

Policies that should benefit people are being shaped by the profits that can be made.  I remember looking at a professional educational journal shortly after No Child Left Behind had been passed into law, enacting a policy that was going to require many more tests to be created, and seeing an advertisement for Harcourt Educational Measurement in Texas seeking to hire a batch of psychometricians -  opportunity to profit from policy, from a firm politically connected to the administration?  Or perhaps you have seen news that Gates and Pearson have linked up to create computerized versions of and support for the new assessments to be tied to the Common Core Standards?  Are we doing the policies because they are the best way to educate our children, or because some organizations, including those that are ostensibly non-profit, are seeing and seizing the opportunity to make money?  At what cost to our society?

I think it is a negative moral judgment on this nation that we have privatized prisons.

I think our worship of the almighty buck is destroying not only our political democracy, but the hopes and dreams of millions upon millions of Americans.

We are destroying the communities in which we live.

We are destroying the institutions necessary for meaningful public life and replacing them with entities whose primary if not sole purpose is to maximize profits for their owners and to hell with the rest of us.

Which leads me again to the question with which I started, and to which I find myself as yet unable to offer a cogent or coherent motive:

When is the profit motive wrong?

I feel as if I am Potter Steward talking about pornography, I may not be able to define it but I know it when I see it.

I am seeing it.

... in privatized prisons

... in privatization of policing, intelligence, military support

... in privatizing of public toll roads

... in privatizing of what used to be public education

And what I see saddens me.

It scares me.

And I do not have an answer.

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Comment Preferences

  •  Tip Jar (23+ / 0-)

    "what the best and wisest parent wants for his child is what we should want for all the children of the community" - John Dewey

    by teacherken on Thu Feb 16, 2012 at 03:13:54 AM PST

  •  There's obvious reasons we don't privatize some (7+ / 0-)

    things, like our court, police, or fire services.  It would be senseless injecting a "middle-man" who's inherent motive to get paid must be to maximize profit by cutting costs which will can only lead to reduced services.  Bit of an irony, huh? IMHO, our jail/prison system falls into same self-defeating dangerous territory.

    "There's nothing in the dark that's not there when the lights are on" ~ Rod Serling

    by jwinIL14 on Thu Feb 16, 2012 at 03:50:29 AM PST

  •  sorry I only skimmed your... (1+ / 0-)
    Recommended by:
    historys mysteries

    ...diary.  for me it is when profiet is more important than people.  Like when I can imagine a manager responding to a subordinate with the phrase 'fuck them' or if you don't like it you can leave' to a concern that whatever they are doing can cause harm

    We Glory in war, in the shedding of human blood. What fools we are.

    by delver rootnose on Thu Feb 16, 2012 at 03:51:45 AM PST

  •  MY question is: is privatizing cost effective? (1+ / 0-)
    Recommended by:
    Eric Twocents

    And we STILL don't know that. In this case I'm speaking of war and all the privatizing thats been done in that field.
    Correct me if I'm wrong but Ive never seen a study of whether  privatizing war is cost effective. I just don't see how it can be.
    Has there been any studies of the cost effectiveness of prvatizing in ANY field?

    And forgetting cost effectiveness, has there ever been ANY study of the effects of privatization in the areas you cite at the bottom of the diary?

    Happy just to be alive

    by exlrrp on Thu Feb 16, 2012 at 04:13:32 AM PST

    •  I don't know about long term (4+ / 0-)

      the one example I can cite about privatizing a road, the Dulles Greenway was built by a private for-profit company that went belly-up, the Commonwealth had to step in, it cost the Commonwealth millions and the tolls shot up

      I think if we look at hospitals, where there are ever fewer community or non-profit hospital and increasing numbers runs by for-profit entities, with some of the functions (labs, for example) run by separate for profit-entities (sometimes unfortunately owned by doctors or medical practices who make referrals for tests), it has NOT succeeded in holding down costs.  

      "what the best and wisest parent wants for his child is what we should want for all the children of the community" - John Dewey

      by teacherken on Thu Feb 16, 2012 at 04:30:25 AM PST

      [ Parent ]

      •  The real problem for us is lack of information (5+ / 0-)

        I always thought that government health services should be government owned and run, i.e. taxpayer run.
        Like the VA,  where I get my healthcare. (or great Britain) I originally thought that would be the model but I was severely disapppointed. The best we could do was hand it all back to the insurance comanies
        Why should there be any profit motive at all in that, its a public service? There can also be private hospitals. but to turn over heath services to insurance companies is just bound to create substantial problems, like them taking only the healthy ones.

        I ALWAYS wanted to see some kind of study or commission investigating to see just how cost effective having all those contractors was in Iraq. That war was started 8+ years ago and its over now so we should have plenty of information about whether privatizing so much  was cost effective or even just militarily effective.
        And I'm just nastyspicious enough to think that the fact that we don't have this information and no real study has ever been done shows us real well that its not cost effective, its just another way for Congresscritters to funnel public money back  to their donors.
        just how the system is spozed to work. (sneer)

        Happy just to be alive

        by exlrrp on Thu Feb 16, 2012 at 04:47:21 AM PST

        [ Parent ]

    •  It isn't (0+ / 0-)

      Competition is what pushes toward efficiency.  Privatization is at best efficiency-neutral.

      Those who support banning cocaine are no better than those who support banning cheeseburgers

      by EthrDemon on Thu Feb 16, 2012 at 11:21:23 AM PST

      [ Parent ]

    •  Respectfully, an irrelevant question... (0+ / 0-)

      ...in the context of prisons.  In that context, the real issue is whether the profit motive becomes more important than the supposed real motivation, the punishment of crime.  It is impossible that profit would not motivate prison operators and governments to incarcerate at least some percentage more individuals than would be jailed by the state alone.

      We reach for the stars with shaking hands in bare-knuckle times.

      by TheOrchid on Fri Feb 17, 2012 at 07:22:50 AM PST

      [ Parent ]

  •  It should scare you (5+ / 0-)

    Those interested in monetizing any and everything have a weapon that's difficult to counter: the "metrics." Metrics of their own selection, reviewed by oversight regulators of (far too often) their own choosing.

    The Private Sector isn't inherently evil. But an unconstrained , unaccountable, unregulated Private Sector seems to be much more often than not.

    When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

    by Egalitare on Thu Feb 16, 2012 at 04:28:56 AM PST

  •  I started thinking more about this (4+ / 0-)

    tendency during the health care/insurance reform debate.

    Immediately after hurricane Katrina, there was a real and dire need for basic necessities by many thousands of people. Would it have been okay for some person or entity to charge desperate people twenty or even fifty dollars a gallon for bottled water? Of course not. That would be profiteering, which is against the law, not to mention morally wrong.

    Yet when it came to removing profit motive from the health insurance arena, most, if not all, conservatives vehemently supported insurance companies which were doing exacly the same thing - holding the necessities of life hostage to profit.

    I have real issues with privatization of state functions. The contention that a for-profit company can provide a service for less than government conveniently ignores the fact that profit is an additional cost certain to be levied on taxpayers.

    All processes have costs, flaws and inefficiencies increase them. The difference in allowing the profit motive into a process where it does not need to be, is that that cost cannot be corrected. Any other cost/flaw, to a greater or lesser degree, can be.

    The typical bogeyman of the right wing is that government is inefficient and thus more costly to taxpayers. While true in may instances, the cure is not adding another layer of cost (profit), but fixing other flaws in the system.

    If I find out that my car needs $500 in repairs, I do not abandon it because Hertz or Avis will rent me one for $20/day.

    The final, and to my mind, most damning element of privatizing is the corrosive effect of the profit motive on the rest of the system in question. The quest for additional profit will typically lead to more flaws being introduced into the system.

    Trickle-down theory; the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows. - J.K. Galbraith

    by Eric Twocents on Thu Feb 16, 2012 at 04:56:49 AM PST

  •  Public schools are one of the last big pools (3+ / 0-)

    of taxpayer money out there. Given the fact that there are thousands of school districts out there, with school boards filled by, in some instances, members who actually know next to nothing about education other than the experience of being a student, for-profit entities see districts as being ripe for the picking. Now that there are so many states in deficit, with Republican legislators in control, we now have a perfect storm for the destruction of public education as we have known it. I, too, fear for our schools, our teachers, and our students, given the determined effort to demonize public schools and the teaching profession.

    "Experience declares that man is the only animal that devours his own kind, for I can apply no milder term to the general preying of the rich on the poor" - Thomas Jefferson "I don't care about the very poor." - Mitt Romney

    by bigrivergal on Thu Feb 16, 2012 at 05:02:17 AM PST

  •  They're Flat-Out Taking Over, It Should Scare You. (4+ / 0-)

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Feb 16, 2012 at 05:18:05 AM PST

  •  The Underlying Theory Supporting Privatization (3+ / 0-)

    Is that public institutions are inherently inefficient and that using a private institution will pay for itself because it will have to competitively bid against others in the free market and create efficiencies that not only cover the bid, but also a margin of profit.

    But the truth is that most private vendors will choose to cut corners than work hard to find actual efficiency while also producing a quality product or service. The theory only works when the public institution rigorously oversees the vendor's activities and holds their feet to the fire concerning their obligations under the contract. What usually happens is that the vendor bribes the regulator and regional legislators to look the other way.

    I have yet to read a definitive study that compares the relative efficacies between public and private organizations as it relates to public products or services. If anyone knows of such a study, I would appreciate a link.

    •  "inherently inefficient" (2+ / 0-)
      Recommended by:
      teacherken, historys mysteries

      That's all in the way an issue or circumstance is presented. And far too often "efficiency" is simply an aspirational sounding, inoffensive substitute for "profitable."

      Efficiency doesn't mean that everyone gets more "good" for less money. It means that the Private Sector gets to carve and shape "the market" to maximize profit and "externalize" those inconvenient bits that are resistant, if not immune to profitability.

      I ran across this gem just a few days ago: U.S. overbuilt in big houses, planners find.

      One of the features of the "Efficient" Private Sector is that it ALWAYS looks through the MicroEconomic lens. McMansions are the "most profitable" house to build (just as big vehicles were the "most profitable" for the Big Three to build - what a coincidence!), so that's what we'll build.

      Without regard to the actual demand for.

      Did anyone actually believe that there were EVER enough households with sufficient income to purchase and maintain 40 million McMansions?? No, but each of hundreds of homebuilders and the financiers who approved the developments were looking only at their piece of the market.

      When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

      by Egalitare on Thu Feb 16, 2012 at 06:35:49 AM PST

      [ Parent ]

  •  Toll roads (4+ / 0-)

    Now there's a boondoggle.

    You have a tollway authority run by Rick Perry's cronies, who donate a good chunk of their profits back to Rick Perry's campaign.

    Never mind that you now have a private party that has a vested interest that the state not fix the free roads in the area, or not build mass transit lines parallel to them (as they do with the other two main expressways in Dallas.)

    27, white male, TX-26 (current), TN-07 (originally)

    by TDDVandy on Thu Feb 16, 2012 at 06:02:05 AM PST

    •  similar principle in privatization of military (1+ / 0-)
      Recommended by:
      historys mysteries

      illegal to use tax dollars for political contribution

      but contract out, and part of taxes paying for contracting seems to come back in political expenditures, even if not in direct political contributions to candidates, although there are loopholes that seem to allow that as well

      "what the best and wisest parent wants for his child is what we should want for all the children of the community" - John Dewey

      by teacherken on Thu Feb 16, 2012 at 06:15:46 AM PST

      [ Parent ]

  •  theory doesn't work because of specialization (0+ / 0-)

    The theory is that the state will contract out this public sector outfit every term of years and get the best lowest bidder contractor. The fly in that ointment is specialization. If you have contracted out your prisons to LockThemUp Inc, and they have done a term and bids come in for the next term, LockThemUp Inc, even if they are not the highest bidder, are still likely to be the state's best bet because they are now specialized in these  prisons. They have the know how on how to run them. So ThrowAwayTheKey Corp isn't going to be able to just waltz right in and take over.

    I've seen this with charter schools (which must be run by not for profits in IL), even when one is doing poorly, no one really wants to shut them down because they are specialists with whatever pool of students they are serving and already have relationships with the parents.

  •  I boil it down to one simple concept... (0+ / 0-)

    Do you want to live in Bedford Falls or Potterville?

    In an insane society, the sane man would appear insane

    by TampaCPA on Thu Feb 16, 2012 at 08:42:28 AM PST

  •  teacherken, the answer to your question, imho, (0+ / 0-)

    the US has created a justice system based on profits for corporate holders of prisons.  

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