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A Challenge to the Common Good Faith Reflections on Privatization Justice and Witness Ministries

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A Challenge to the Common Good Faith Reflections on Privatization Justice and Witness Ministries a challenge to the common good Faith Reflections on Privatization Justice and Witness Ministries The Values That Drive Privatization “Me First” vs. “Me and You” INTRODUCTION Gone are the days when compassion tempered competition. Advocates of American radical individualism paint govern- Ron Stief ment as a hindrance, rather than a help. An example is the The American Dream is a powerful concept for most peo- poll posted on the Web site of an Ohio member of Congress, ple in the United States. Individuals are counseled nearly a poll claiming that 44 percent of his constituents want to from birth to live by the value system that requires “pulling abolish the Internal Revenue Service (IRS), the agency themselves up by their own bootstraps.” Children are taught charged with collecting the taxes that pay for government to believe that “the best way to get something done is to do services. Critics like this public official impugn government it yourself.” Members of American society consider them- without acknowledging that even if government and the selves rugged individualists; they are conditioned to equate IRS were eliminated, somehow society would still need to freedom with capitalism, placing ultimate trust in the mar- pay for services like roads, airports, prisons, the military, ket and believing that “what’s good for General Motors is safety-net services, health care, police, fire protection, and good for the country.” The American Dream is closely education. What if government were to contract out such linked with what is said to make America great—economic services to the private sector? Wouldn’t society still need to freedom and prosperity. And usually this freedom is exclu- collect taxes to pay for them? sively linked to the success of the individual, almost as “Can’t the private sector really do it better?” is another of though community didn’t exist. The private market has the catchphrases of American individualism. Wouldn’t it be become for many a metaphor for the American Dream, a possible to shut down what advocates of privatization call place where its promoters believe all are free to succeed. “the inefficiency of government-run bureaucracy?” The prosperity that many in the United States have Wouldn’t there be some satisfaction in launching large-scale enjoyed in the post-war period, built not just on capitalism privatization in the United States—in health care, schools, but also on the civil rights movement and the social safety- prisons, the military, public utilities, and social security (and net programs of the 1960s, has shrunk and is poised to dis- don’t forget the post office)? appear for all but a few in today’s leaner, meaner era of gov- The reflections collected in this volume explore what ernment budget cuts and growing inequality. Privatization of would be the consequences of the radical privatization now government programs is contributing to this decline. In this being proposed by conservative think tanks and those in the new privatized American theology, government is often current federal administration, Congress, and the state leg- seen as a meddler, an interference in the private market. islatures who are strong supporters of replacing public with privatization 1 private services. These essays explore six institutions in quality product, and if competing firms facing the same con- which privatization has already taken place or where it is ditions feel the same way, then consumers will have poor- being actively discussed: quality goods and a polluted environment. The “accountability of the market” ignores other realities in Privatizing Water the “real world” provision of services. Advocates ignore prob- Privatizing Social Security lems that arise when an individual’s priority, for example, low price or convenience, is not in society’s best interest. The ulti- Privatizing Health Care mate effects of such choices may bring us a polluted world or Privatizing Public Education perhaps poorly educated children, whose parents selected a Privatizing Prisons bad school because of its location near a parent’s workplace. Everyone has observed private firms in the real world that Privatizing the Military have survived despite their shoddy work, because they appealed to some customer value other than quality. The specific pieces are followed by an appendix that Advocates of privatization neglect to point out that a sys- examines the sources of advocacy for privatization, because tem of accountability based on the market will automatical- it is important to think about why privatization has sudden- ly create winners and losers—consumers of the services pro- ly become such a pervasive issue across all kinds of institu- vided by successful businesses and those consumers whose tions. While these essays surely do not consider every type service is interrupted when businesses are held accountable of privatization being discussed, they do explore many of the by closure. This is a particularly serious situation in the pro- greatest concerns. This resource is presented in the hope vision of human services, such as health care and education, that, with an eye to God’s reign in the world, members of where markets incorporate instability in service provision. congregations of the United Church of Christ will think Privatization also favors customers who can afford to pay together about the role of public services and the market- more. Privatization shuts out those with fewer financial place in a good society. means through what are really pay-to-play schemes. It may There are important underlying issues that need to be be fine to let the price of a new car or television be dictated explored more theoretically as a preface to the specific essays by the market and then let the market determine who can in this volume. The private sector is best for handling some afford to buy a car or television. Not everyone depends on a functions, but a nonprofit, publicly accountable organiza- new car or television. It would be incredibly foolish, howev- tion like a government, where costs are paid by taxes, not by er, to let access to education, health care, clean water, or consumers, is best for handling others. What are the core safety be dictated solely by whether someone can pay for differences when services are provided by government and these services. Widespread privatization of the services dis- by the private sector? cussed in this volume would commodify many of the things One difference is accountability. Government services traditionally considered basic human rights. It is important have traditionally been made accountable by law to insure to consider the consequences of brokering what has previ- the public good. Members of the public can voice their sup- ously been guaranteed for everyone, and surely the church port or objections and regulations can be imposed; ultimate- should pay attention to the inequities that would result. ly government is accountable to voters. The checks and bal- The process of privatization adds profit making to a serv- ances of the three branches of government contribute to the ice that has previously been provided by government, a non- accountability of the system. profit organization. This actually raises costs. But advocates Advocates of privatization paint public services as the of privatization assume the market will work more cheaply. turgid work of bureaucratic “government monopolies.” While public services are often criticized for being expensive Private services, in contrast, are said to be regulated by a and wasteful, largely due to the huge sums needed to serve market that measures their success by their profitability. The millions of people, studies show that any cost savings assumption is that customers can “freely choose” from a accrued through privatization are generally due to the lower number of private firms that compete to provide services wages and reduced fringe benefits paid by private firms. efficiently and cheaply. Poor-quality programs will automat- Exchanging decent jobs for poor ones is not good for work- ically close, according to this theory, and those of the high- ers or society. Those who simply want to diminish the role est quality will make a profit and thrive. Ultimately, howev- of government often pose privatization as an alternative, by er, private firms are neither accountable to the public nor implying that if government were removed from the role of even to their customers. Instead they are accountable to providing services, the services would improve and be shareholders. If it is cheaper to pollute or produce a poor- cheaper. There is no evidence to support such an allegation. 2 privatization Tax-cut fever often accompanies a frontline strategy of at public expense. There have been protests in Argentina, privatization. Tax cuts that diminish public investment and Chile, Bolivia, and Mexico, as people have discovered that degrade services can be used as a rationale for privatiza- the private sector is more interested in profit than provision tion—a preface to shrinking government. There are some in of services. And after the collapse of the Soviet Union, Washington, D.C., who hope that when the industries and institu- alarmist reports on “the tax bur- “the greatest sin is that of thinking tions of the old Soviet empire den” will cause citizens to support began to fall apart under the all the proposed federal and state that freedom is the freedom to do weight of decades of mismanage- tax cuts. Congress took advantage ment, lack of investment, corrup- of this gap in our public under- whatever we want and not freedom tion, and loss of public faith, the standing of tax policy to pass a $1.4 new utopian ideal of “markets” trillion tax cut in 2001, and this to do the right and the good” quickly filled the vacuum as year President Bush has proposed a —Robert Bellah Western consultants and business $726 billion tax cut, which would interests swooped in.
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