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. Sudden pri- eliminate taxes on dividend-investment income. Many in vatization across the former Soviet republics exacerbated Congress support the president’s proposed tax cuts, which extensive layoffs, massive bankruptcies, starvation, social will overwhelmingly benefit upper-income Americans, but unrest, and a climate of chaos that resulted. Corrupt gov- for the huge majority who depend on public services, feder- ernment was merely replaced by another form of corruption. al tax cuts would translate into guaranteed ongoing cuts in There is a biblical and theological dimension to the issue programs as varied as public education, health care, child of privatization. Sociologist Robert Bellah, author of the care, Medicare, Medicaid, veterans assistance, schooling for best-selling Habits of the Heart,2 notes the injunction of Jesus children on military bases, food stamps, farm programs, in Matthew 25 to care for the poor and contrasts Jesus’ con- environmental protection, and first-responder homeland cern for the least among us with the self-serving “me-first security (police, fire, and emergency workers). culture” that characterizes privatization. Bellah identifies a William S. Gates Sr., father of the much more famous Bill desperate need for conversion to community at a spiritual Gates Jr., in his new book, Wealth and Our Commonwealth: and ethical level during our times when society has become Why America Should Tax Accumulated Fortunes,1 observes characterized by a “decline in civic responsibility and a self- that in a democracy it is not necessarily true that “what is ish withdrawal into monetary aggrandizement.” “Above all, mine is mine, and what is the government’s is not mine.” today the greatest sin is that of thinking that freedom is the “One way or another,” according to Gates Sr., “a certain freedom to do whatever we want and not freedom to do the amount of money must be paid in taxes to the U.S. govern- right and the good,” Bellah observes. If there is one biblical ment to support its activities.” The wealthy and powerful mandate to consider community over the individual, it is have been able to privatize their personal and family needs Jesus’ commandment to love our neighbor as ourselves. through private schools, private security guards, private This set of articles examines proposals for radical privati- health insurance, private retirement investments, private zation in the United States and looks for alternatives. The ownership of books and learning tools, and private trans- essays conclude that the best step toward a strong and portation, notes Gates. Many wealthy people don’t need enduring U.S. democracy is to preserve a public system that government services; they seek tax cuts to avoid paying for provides for all citizens, and especially those with greatest such services that don’t directly benefit them. The rest of us, need, while encouraging private development in areas however, “depend on the existence of strong community where the profit motive can be expressed without leaving and public institutions.” Libraries, state parks, municipal anyone behind. pools, public schools, police and fire, garbage services, and dozens of other public needs come to mind. Who provides The Reverend Ron Stief
privatization 3 Privatizing Water Profits Over People Wallace H. Ryan Kuroiwa
“If the wars of this century were fought over oil, the wars to subsidize private firms, who bid for contracts to have the of the next century will be fought over water.”1 These words, rights to offer water delivery services. spoken by the vice president of the World Bank, Ismael In the United States, deregulation is converting water Serageldin, in 1995 have proven to be tragically prophetic. into a commodity to be bought and sold to the highest bid- Wars over water are occurring with greater and greater fre- der in areas of rapid population growth. In 1992, for the first quency throughout our world. Water shortages in countries time, large farmers and landowners were given the right to like India, China, Ghana, and sell their water to urban areas. Mexico have fueled conflicts, We see today how the Southern California cities and both verbal and physical. These farmers were legally allowed to buy conflicts are not confined to contemporary “pharaohs” of the water from Northern California developing countries, either. In farmers, hoard it, and sell it later, the United States, California, world have used the rules of the when the price was higher.3 On Arizona, and Nevada have long the consumption end, the news is been engaged in water rights dis- global economy to appropriate no better. Corporations take putes over the Colorado River. advantage of this market in water Internationally the United States large shares of the world’s water by buying precious water to use in and Mexico have fought over their factories and disposing of rights to waters from rivers that so that people have to come to contaminated waste water without border the two countries. having to pay for clean up. In Vandana Shiva helpfully them to buy this necessity of life. Albuquerque in 1996, residents points out that these water wars tore out their lawns as a water- are traditional—fought with guns and grenades, as well as conserving measure, only to have large corporations like paradigm wars—disagreements over how we perceive and Intel increase their use. To add salt to their wounds, resi- experience water.2 At the heart of this conflict lies the trend dents had to pay four times as much as Intel for water. toward privatization of water and those who resist it. Under privatization’s rules, water is considered separate Supporters of privatization argue that firms in the private and discreet from the land on which it is found. Thus, the sector are able to provide what had formerly been done by owner of the water can extract it, transport it great dis- government better, more efficiently, and cheaper. They tances, and sell it at a profit far from the place where the maintain that the track record of publicly maintained serv- water originated. This often results in water shortages in ices, in this case providing safe and clean water, is not a good rural and farm areas, where the extraction occurred. one. The private sector, because of competition between companies who want to provide the service, is said to be a better alternative. If one company does not do a good job, BIBLICAL AND THEOLOGICAL they argue, someone else who does can be hired. REFLECTION Strongly supportive of the philosophy that competition Read Genesis: 41:25–37; 47:13–21 in the private sector can provide services more efficiently and cheaply, the World Bank and International Monetary The story of Joseph and the famine gives us insight into how Fund have long forced potential borrowers to privatize pub- we understand what is going on around us. Although Joseph lic services like water as conditions for loans. Thus a grow- is considered one of the heroes of the faith in our Judeo- ing number of countries have been forced to privatize the Christian heritage, let us consider this story from a different rights to water in order to receive badly needed loans. These perspective. loans are then packaged into what are called public-private Although the passage deals with food, it holds remarkable partnerships. Millions of World Bank dollars are being used parallels with water in our day. Water, like food, is a basic
4 privatization necessity for life, and therefore can be treated similarly. In the DISCUSSION AND REFLECTION story, Joseph has endeared himself to Pharaoh because of his 1. Is water a commodity or a basic necessity of life that industry, guile, and loyalty. Pharaoh has a troubling dream should be guaranteed to all? Why? and approaches Joseph to interpret it (Gen. 41:1–24). Joseph tells Pharaoh that the dream is intended to warn him of an 2. Consider water stewardship. How can we better manage impending seven-year famine. Joseph further interprets the the consumption of water? Whose responsibility is it to dream to mean that Pharaoh is to store up grain against that lead in using water wisely? crisis, and Pharaoh agrees to the plan (Gen. 41:25–37). The 3. Consider your own church. What are some ways water dream becomes reality, and in the midst of the subsequent can be conserved better by your congregation? What famine, the Israelites are forced to come to Pharaoh for help. about your community? City or town? Joseph, on behalf of Pharaoh, uses the leverage he has gained by having the only food in the area, to buy all the land and make the Israelites slaves (Gen. 47). PRAYER This story gives us the backdrop for the bondage and O fount of all life, we thank you for fresh, clean water. We oppression of the Israelites. It also provides the prelude to pray for places where this basic element of life does not exist. the freeing of the slaves and exodus. But it also can offer Help us work for policies here and throughout our world, so another insight. Consider what happens here. This story that all may be assured of this basic need. Amen. portrays how control of a basic necessity for life can provide unmitigated power over the lives of others. It shows how The Reverend Wallace Ryan Kuroiwa that power leads to the oppression of others. One can argue
O fountain of all life, we thank you for fresh, clean water.
privatization 5 Privatizing Social Security Destabilizing the Future Edith Rasell
One of the most effective ways society cares for those half of all people over age sixty-five would live in poverty. who cannot care for themselves is through the Social Moreover, no matter how long someone lives, their benefits Security program. Social Security provides income to some continue. People cannot outlive their income as they can in forty-six million beneficiaries, one in every six Americans many retirement programs. Finally, one of the most impor- including more than three million children. While two- tant social benefits is that the program is risk free. So long thirds of the beneficiaries are retired workers and their fam- as the United States exists, assuming Congress does not ilies, one-third are disabled workers and the families of make radical changes in the program, beneficiaries will deceased workers. receive their benefits. In many ways Social Social Security is able to fulfill Security is similar to other these goals because of the way it is retirement programs. Workers “Religion that is pure and set up. The tax money that pays become eligible for benefits by for the program (the FICA line on making contributions to the undefiled before God is this: a worker’s pay stub) flows to a sin- program. Higher paid workers gle pool out of which all benefits make larger contributions and to care for are paid. In any given year, most of receive larger benefits. But the money coming in is paid out to unlike other retirement plans, orphans and widows in beneficiaries. Working people Social Security is a social insur- today pay the benefits of the gen- ance program with larger social their distress.” eration that came before them. goals, such as reducing poverty, However, for roughly twenty years guaranteeing benefits for as —James 1:27 the program has been designed to long as a beneficiary lives, and run a surplus; more money is com- protecting beneficiaries against ing in than needs to be paid out in inflation. These functions will benefits. The excess is used to pur- be damaged by privatization. chase treasury bonds that will be Unlike many retirement programs, benefits are not deter- held until a future time when money needed to pay benefits mined solely by how much a person earned and what he or exceeds incoming revenue; then the bonds will be cashed she paid into the program. Additional factors also affect out. The combination of tax payments and the saved treas- benefit levels, for example, the family size of the beneficiary. ury bonds will completely fund Social Security benefits for A beneficiary with a spouse or children at home receives a the next thirty-eight years. Even seventy-five years from now, higher benefit than another with no family. Benefits are also with no increase in the tax rate, fully two-thirds of benefits automatically increased each year to keep pace with infla- will be covered. The program is extremely sound, while in tion. This is very important since at typical inflation rates, most other government programs—or private ones—fund- buying power would otherwise decline by one quarter over ing even a few years ahead is uncertain. just ten years. For some years there have been discussions in But even among beneficiaries with similar family sizes Washington, D.C., about “privatizing” Social Security— facing similar rates of inflation, benefits are not just propor- that is, creating private, individual accounts within the tional to lifetime earnings. Social Security disproportionate- Social Security program. As with a 401(k) retirement ly increases benefits for lower earners. A retiree who when account, the worker would determine how the funds were working had earnings twice as high as another will receive invested. Benefit levels would be determined by the amount benefits that are less than twice as large. Social Security keeps of money paid into the private account and the success of many people out of poverty. Without Social Security, over the investments. What would happen to benefits for dis-
6 privatization abled and deceased workers and their families is unclear since BIBLICAL AND THEOLOGICAL a worker might be killed or become disabled before accumu- REFLECTION lating sufficient money in his or her individual account. Private, individual accounts would change the funda- Read Isaiah 1:16–17, Psalms 68:5, James 1:27 mental character of Social Security by introducing the fol- The book of Isaiah begins with God’s charge that the lowing factors: Israelites have failed to live up to their covenant. This is fol- lowed by instructions about what is needed for repentance. • Risk—Workers’ core-retirement income would be put at Isaiah gives instructions from God: risk from the ups and downs of the stock market. •Winners and Losers—While currently no one gets Wash yourselves; make yourselves clean; rich on their Social Security benefits, most everyone remove the evil of your doings from before my eyes; gets by. Under privatization, some people whose invest- cease to do evil, learn to do good; ment choices were especially wise or lucky or who retired when the stock market was up could do very seek justice, rescue the oppressed, well. But others could fare poorly. defend the orphan, plead for the widow. —Isaiah 1:16–17
• Loss of Extra Help for Low Earners—The current Compassionate and fair treatment of orphans and widows system that provides special benefits for people who and all the poor and oppressed is central to God’s call to received low pay when working would be lost if benefits repentance. The charge to care for widows and orphans were determined by the size of each person’s own occurs repeatedly throughout the Hebrew Scriptures and the account. New Testament. Psalm 68 calls God the “Father of orphans • Loss of Benefits Tied to Family Size—Benefits would and protector of widows.” The power and protection of the just depend on the money in the private account. mighty God would watch over these vulnerable people. • Loss of Automatic Protection against James is also clear about the paramount importance of car- Inflation—The Social Security program currently pro- ing for at-risk groups: “Religion that is pure and undefiled tects against inflation. before God is this: to care for orphans and widows in their distress”(Jm 1:27). • Higher Administrative Costs—Social Security is very In New Testament times and up until the last century, cheap to administer. But managing mutual funds, stocks, there were very few government or social programs to care bonds, and other investments is expensive, costing about for those unable to care for themselves. The economically 1.5 percent of the value of the account annually. Over marginalized relied on charity, which may or may not have the forty-plus years of someone’s working life, these fees been available when it was needed. Nonetheless, there was would reduce the total value of the account by 30 per- a well-recognized obligation, placed by God on God’s peo- cent compared to just 1 percent in Social Security. ple, to care for others who could not care for themselves. •Need for an Immediate Tax Increase—Higher taxes In the United States today, widows, orphans, and the would be immediately necessary to continue payments aged who cannot work to support themselves do not depend to current beneficiaries while allowing current workers solely on the charity of others. During the 1930s, the public, to make deposits in their individual accounts. acting through its elected representatives, established a social insurance program, Social Security, that covers near- The Social Security program was established during the ly everyone who is unable to work. Workers’ contributions Great Depression of the 1930s, when it became very clear pay benefits to the previous generation of workers and to the that individuals could not just rely on their own efforts and disabled and survivors of deceased workers, who paid bene- those of their family. Society—in the form of government fits to the generation who came before them. Since the programs like Social Security—had to step in to reduce 1930s, each generation has worked together cooperatively poverty and ensure an adequate income for those who had through Social Security, accepting their obligation to pro- too little. It is easy during more prosperous times to forget vide for the people who preceded them. But today when society’s joint responsibility to care for today’s widows, there is a strong focus on individual responsibility, recogniz- orphans, and others who cannot provide for themselves. ing and accepting this joint obligation to care for others has Privatizing Social Security would further reduce society’s become less popular. Privatizing Social Security would break ability to address poverty and want. down this collective effort to care for the ones who came
privatization 7 before us. The broader aims of Social Security—guaranteed PRAYER income for as long as one lives, special benefits for low- Loving God, creator of all life: We know that our skills and income beneficiaries to protect them against poverty, and talents, our health and strength, our words and thoughts all extra benefits for beneficiaries with families—would be lost. come from you. But too often we forget. Help me remember that I am a great and wonderful part of your creation, not DISCUSSION AND REFLECTION because of what I do or what I say, but because I am made in your image. I am great because I love others, not because 1. Does society have an obligation to provide everyone— others love me. I am great because of what I give, not including retired workers, disabled workers, and the sur- because of what I receive. You have given us a world of vivors of deceased workers—with an adequate income? abundance with plenty for all—if it is shared. Help me to 2. “I may make plenty of money but I work hard for it. I love and share with my neighbors so that they do not have put in long hours and worked hard to get where I am. too little and I do not have too much. We know all this is Why should I give my money to someone else who does possible through you, the one who transforms us with your not deserve it?” What is your response to this common love. Amen. feeling? Edith Rasell, Ph.D.
Privatizing Health Care Undermining Equity Barbara Baylor
The United States faces serious challenges in health care medical procedures, many uninsured patients and family as it enters the twenty-first century. Health care is rapidly members engage in various fundraising activities and request growing more expensive; currently national health care donations. Although the United States spends $4,637 on spending, as a percentage of the gross domestic product, is health care per person, more than any other nation, an approximately 13 percent, quickly approaching 15 percent. amount totaling $1.3 trillion in 2000, and although America is While part of this increase in healthcare costs is due to bet- ranked the best in the world in treating disease, it ranks thirty- ter technology and better treatment, as reflected by increas- seventh in the world for health outcomes, with relatively high ing longevity and quality of life, there are alarming rates of infant mortality and uneven life expectancy among pop- inequities in our healthcare system. ulation groups. America’s healthcare system is one of the most expensive The healthcare system is undergoing enormous change, in the world, yet it leaves millions without health insurance including corporatization of nonprofit institutions, growth and with inadequate care; the United States is the only of managed-care organizations, and a proposal to privatize industrialized nation that does not guarantee access to med- the Medicare program, the health insurance for the elderly. ical care for its citizens. More than forty-one million Privatize is the mantra of the moment. The Bush adminis- Americans, one in six, have no healthcare coverage at all. tration’s proposal to transform traditional Medicare into Few Americans have sufficient health insurance to cover what President Bush argues is a more cost-effective system of their costs if they actually have a serious illness or hospital- managed care is perhaps the most evident example of priva- ization. Six hundred thousand Americans went broke last tization. And while expanding individual choice is often the year to fund their health care;1 each year eighteen thousand justification provided for these changes, it is becoming uninsured Americans die prematurely because of lack of clearer that the administration’s primary focus will be cut- access to appropriate healthcare services. Healthcare ting costs for government, not for patients. There has been expenses are the number one cause of family debt and bank- no comprehensive vision presented that would address ruptcy across the United States. Confronted with high-cost healthcare inequities in America.
8 privatization Traditionally, medical care in the United States has been reason the program faces higher costs than ever before. The comprised of public medical systems and a mix of nonprofit impending retirement of so many baby boomers will further and for-profit providers. Its goal has been to provide the best increase costs.7 health care possible for people at all economic levels—to help Of the more than forty million people without health all people live longer, healthier lives. Those who wish to pre- coverage, almost all are under sixty-five years of age. That’s serve this system believe that because Medicare covers all increasing the pressures of market “The problem with privatizing health people at the age of sixty-five competition through added pri- and above in what is a universal vatization could lower the quality care is that it becomes a business, and health plan; seniors are the of health care without reducing most insured population of all the cost. Privatization would also like most businesses, the design is to Americans.8 Why reform or reduce the involvement of gov- change a program that is so suc- ernment and, to the extent that earn a profit. . . . business does not cessful? The goal is to save costs to the government are money, supposedly through reduced, expenses will likely belong in the realm of meeting basic competition. The president’s increase for individuals. Shirley vision for the “reform” of Douglas stated, “The problem population health care needs.” Medicare is a three-tiered sys- with privatizing health care is tem in which beneficiaries that it becomes a business, and —Shirley Douglas would choose how their health like most businesses, the design is care would be administered:9 to earn a profit. While business is not in and of itself bad, busi- •Traditional fee-for-service Medicare would remain with ness does not belong in the realm of meeting basic population some assistance for prescription drug expenses. health care needs.” 2 And according to Congressman Sherrod Brown, “There is a risk in creating an economy and a society • Beneficiaries could also opt to enroll in managed-care that is devoid of public conscience.” 3 plans, much like HMOs offered through Medicare Plus Proponents of privatization in health care have argued Choice. These plans would receive a government subsidy that increased privatization would enhance individual for providing a drug benefit to enrollees. choices of insurance plans and would foster innovation and •The third option and Bush’s preference is enhanced reduce inefficiencies.4 The process of privatization would Medicare, in which private insurers would compete for shift increasing responsibility to the private sector, where beneficiaries’ business by offering preventive health cov- providers compete. Some advocates of privatizing simply erage, a cap on catastrophic costs, a drug benefit, and distrust government services: “get government out of health other options not found in traditional Medicare. insurance no matter what the cost.” Some wish to maximize Beneficiaries would purchase insurance policies and profit, through private insurance companies’ denying bene- would receive a government subsidy to offset some or all fits and instituting incentives to withhold care.5 of the cost of the premiums, while the size of the premi- Proposed reforms in Medicare are the clearest example today um itself would be set by the insurance company. of the pressure to privatize. The Bush administration argues that private insurance companies can provide cheaper health Opponents of the Bush proposal fear that in this three care to seniors, and therefore the federal government would tiered system, the first option, traditional fee-for-service save money if more Medicare seniors were in managed-care Medicare, would be seriously underfunded, leaving those style health-insurance plans.6 Medicare was originally created who choose this option with inferior and inadequate med- to fill the gap of health insurance coverage for older Americans ical care. Another problem is that HMOs also seem to be and, later, the disabled. Before Medicare, nearly half the elder- less efficient than Medicare. Medicare currently spends ly lacked health insurance. The private sector either refused to under 3 percent on administrative costs compared to an provide insurance coverage to the elderly, who obviously have average of 15 percent by HMOs.10 Another danger, as a greater health risks than younger people, or made the coverage recent Public Citizen report discovered, is that many HMOs so expensive that seniors could not afford to pay the premiums. participating in Medicare Plus Choice plans offer unreliable Lack of health insurance meant seniors had to pay for health coverage.11 HMOs don’t stick around when things don’t go care out of their limited retirement incomes, leaving many eld- their way. After their requests for higher reimbursements erly citizens poverty stricken or without needed care. Medicare from Medicare were rejected last year, more than one-fourth has helped people live longer and live better, and for this very of the HMOs participating in Medicare quit, leaving behind
privatization 9 some 450,000 Medicare beneficiaries.12 From 1999 to 2003 a without the comfort of attendant care, pain relief, medica- large number of plans left Medicare, dropping 2.4 million tion, and counseling for themselves and family members Medicare beneficiaries. For-profit insurers have dropped simply because they cannot pay. Some families are being subscribers at two and a half times the rate of not-for-profit forced to spend all their savings to care for loved ones dis- providers. Another serious consequence of moving to a pri- charged early from hospitals. At the same time, nursing vatized Medicare program is that Medicare beneficiaries homes are receiving residents with the need for greater care would have significant difficulties understanding their very without a corresponding increase in funding. As result, resi- complex system of options. Who would help fragile senior dents who can afford it are supplementing their nursing citizens make decisions about health insurance purchases in home care with private duty nurses and personal attendants. a market-based system? Again, more out-of-pocket spending for the patient and Medicare has become a fundamental part of the fabric of their family. our country. It has helped people live longer and live better. It has also been very cost effective. Over the past thirty years, the growth in per-person costs in Medicare has been BIBLICAL AND THEOLOGICAL slower than in private health insurance. Bringing private REFLECTION insurers into Medicare will only lead to higher costs. Rather Read Genesis 1:27 and Matthew 25:31–46 than move to a privatized system for Medicare, it would be better to improve the existing infrastructure, one that has The creation story in Genesis 1 affirms that every person is served elderly and disabled citizens effectively for over thir- created in God’s image. Health is not a luxury, nor should it ty years. The truth is that the private sector cannot provide be the sole possession of a privileged few. We are all created high-quality health services at a lower cost. Paul Elwood, in the image of God, and this makes each human life as pre- the “father of managed care,” has stated that the private sec- cious as the next. By “pricing out” one-sixth of this country’s tor is incapable of improving the quality or correcting for population from healthcare coverage, we mock the image of the extreme variation in health services across the country. God and destroy the vessels of God’s work.14 Justice would According to Elwood, government intervention is necessary guarantee every person access to decent health care as an and inevitable: “Market forces will never work to improve essential human right. The same theme is used by Jesus in quality, nor will voluntary efforts by doctors and health his teaching about the nations of the world in the scripture plans. . . . Ultimately this thing is going to require govern- story. The teaching could not be clearer: when we look into ment intervention.”13 The private sector is not and cannot the eyes of someone who is sick, it is Jesus we see. When we be a panacea for our healthcare problems. encounter someone whose suffering is intensified because Another example of the danger of privatizing health care health care is denied, it is Jesus who is present in the agony has occurred as large, for-profit hospital networks have of the marginalized one.15 bought out nonprofit community healthcare institutions. Our Christian ethic is the moral framework by which we This corporatizing of hospitals has resulted in upheavals in decide what is right and what is wrong. An ethical system is what had previously been stable local systems, patients values based. Some of the values that comprise our ethical scrambling for new health care, high unemployment, hospi- code are dignity, equity, justice, honesty, and respect. A dif- tal losses, and cutbacks in key community services. ferent ethos underpins the public and private health sectors. Finally, for-profit home health care is expanding rapidly The public sector ethos, closer to our Christian ethics, is one in the United States. As insurance companies have forced of inclusiveness or universal entitlement. The private, for- hospitals to discharge patients earlier and sicker, the empha- profit sector is more oriented to exclusiveness, allowing those sis for care and the funding has shifted from hospitals to who have money to participate, while excluding those who home-care services, nursing homes, and community-based cannot afford to pay.16 The debate around privatization in services, thereby creating a growing demand for out-of-hos- health care is a debate about the fundamental values of our pital care. The trend of shorter hospital stays has created society. The principal healthcare value of the United Church greater sales opportunities for private home-care providers. of Christ and many other faith traditions is justice, achieved This shift from hospital to home care may be cheaper for the through comprehensive, affordable, high-quality health care hospitals, but except for the patients with ample insurance that is accessible for all. Privatization threatens to erode this policies, the extra care is either paid for by the patient or by core healthcare value when profit motive and market com- family members. The people assured of adequate home care petition replace the concept that health care is a basic right are those who privately can afford it. Many people are going and not a commodity to be sold to the highest bidder.
10 privatization DISCUSSION AND REFLECTION 2. Shirley Douglas, national spokesperson for the Canadian health coalition, Toronto Health Care Workshop, University of 1. Share a time when you were able to sense the presence of Toronto, March 2002. Christ in someone who was ill, suffering, or in need. 3. Sherrod Brown, “Privatization: Undoing America’s Sense 2. Do you agree with the statement that, “privatization is of Community,” excerpts from Cleveland City Club address, February 1999. the solution to the health care crisis”? Why or why not? 4. Thomas Rathwell, “Privatization and Health Care: Some 3. What are the implications of your understanding in ques- Ethical Considerations,”
In Jesus Christ you have given us life, brought ministry, forgiveness, healing, and peace. . . and you have continued the healing ministry among us to this day.
privatization 11 Privatizing Public Education A Threat to the Common Good Jan Resseger
Vouchers—tax dollars given to parents to pay tuition at tional three times. The voucher program in Cleveland redi- private and parochial schools—are the perhaps the most- rects money away from Cleveland’s public schools and serves discussed example of privatization of public services. Only the few (4,000 voucher students) at the expense of the many three school-voucher programs currently operate in the (77,000 students in the public school system). In the United States—in Cleveland, Milwaukee, and Florida, 2001–2002 school year alone, the voucher program cost the where a small voucher program continues while on appeal city’s public schools more than $8 million in state after its having been found illegal on state constitutional Disadvantaged Pupil Impact Aid, the funding created by the grounds. Despite wide media attention, currently only Ohio legislature to assist school districts with a large per- approximately fifteen thousand children are using vouchers centage of children in poverty.3 Like many urban districts, nationwide, only one-tenth of 1 percent of school-age chil- Cleveland faces the challenge of providing extra education- dren,1 while more than 90 percent of all children in the al and social services for children to counterbalance the United States attend public schools. Although President effects of poverty and racial discrimination. Bush proposed vouchers as part of his No Child Left Behind While proponents of market “choice” extol vouchers for Act, they were removed by Congress, and although propo- improving public schools through competition, critics of nents of vouchers have secured enough signatures to get vouchers raise serious philosophical questions, on top of voucher programs onto referendum ballots, none has ever concerns about spreading scarce resources even thinner. passed. It is clear that while there is much talk of vouchers, People who promote vouchers allege that the rights of the they remain controversial and relatively unpopular. individual are paramount and that the choices of the aggre- The Cleveland program was challenged in federal court gate of individuals will by definition constitute what is good on First Amendment grounds, because more than 99 per- for the community as a whole. Opponents of privatization cent of the vouchers have been used at religious schools,2 are likely to point out that the needs of individuals and the many of which have required children to participate in reli- needs of the community are different and must be carefully gious instruction regardless of their family’s faith tradition. balanced to protect the vulnerable and powerless. Political On June 27, 2002, in a 5-4 opinion, the United States philosopher Benjamin Barber rejects, “That proud disdain Supreme Court found Cleveland’s program constitutional for the public realm that is common to all market funda- because the vouchers are given to the parents, who have a mentalists, Republican and Democratic alike. . . . range of secular and religious choices. The United Church Democracy . . . demands the consideration not only of what of Christ’s (UCC) Justice and Witness Ministries, which individuals want (private choosing) but also of what society had joined an amicus brief opposing vouchers in this case, needs (public choosing). These ends are public, the res pub- repudiated the Supreme Court for affirming the use of pub- lica that constitutes us as a common people.”4 lic money to pay for mandatory religious instruction. Because 90 percent of children in the United States Although the United Church of Christ has always defended attend public schools, a system of excellent, well-funded pub- the right of parents to choose private or parochial schools, it lic schools is society’s best hope for universal economic par- has historically supported public investment in the schools ticipation. In earlier agrarian societies, the skills for partici- that serve all children on behalf of the community. pation in remunerative work could be passed on from parents While the court case focused entirely on the establish- to children. Even in the industrial nineteenth and twentieth ment of religion under the First Amendment, many of the centuries, many skills could be learned on the job through most serious concerns around vouchers involve public poli- apprenticeship or work experience in factories. In contrast, cy. The UCC Justice and Witness Ministries has criticized today’s well-paying jobs require sophisticated literacy, Ohio for creating a program that removes financial support numeracy, and computer skills. Those who are formally edu- from severely underfunded public schools in a state where cated can prosper; those without a high school diploma are the school-funding system has now been found unconstitu- left few opportunities other than minimum-wage jobs in the
12 privatization service sector, where even when two parents work full time a many state legislatures. Currently thirty-seven states consti- family of four cannot rise above the federal poverty level. tutionally prohibit public funding of religious schools, and Sociologist Robert Bellah emphasizes the civic role of because the federal Constitution does not automatically public education: “However pluralistic its forms, educa- override a state’s constitution, any state may prohibit vouch- tion can never merely be for the sake of individual self- ers. The future of vouchers will therefore depend on how enhancement. It pulls us into the common world or it fails state supreme courts interpret their own constitutions. altogether.”5 Democracy requires that all citizens can Several states have established tuition tax credits, anoth- understand and evaluate complex er form of privatization, in social issues, be informed enough . . . the pluralistic society in the which individuals receive to vote intelligently, be able to tax breaks to compensate serve on juries, and understand for the cost of private each other’s points of view. twenty-first century United States school tuition. A study Education provided privately conducted by Arizona would equip for public life only State University, however, the children of parents with the challenges society’s willingness to demonstrated that instead means, the personal connections, of expanding opportunity and the ambition to be active for poor families as intend- choosers. Public schools poten- work for a level of consensus ed, Arizona’s tuition tax tially enable all children to real- credits are benefiting mid- ize their promise, and when dle-class and upper-income schools do a good job, they necessary to support schools parents. The average tax ensure for each citizen an oppor- credit of $856 makes up tunity to contribute. Public that authentically represent the such a small part of the schools thereby improve our col- median private elementary lective well being by developing school tuition of $3,175 the gifts of each one. dreams and values of that only families with sig- Many fear that an education nificant means can afford to marketplace will exacerbate the make up the difference.7 polarization of society. Public many cultures. Through this form of school engagement is among the privatization, Arizona remaining places where adults has reduced its capacity to come together to develop shared dreams and expectations fund public education without expanding educational for all children and for the nation’s future. For parents and opportunity, the program’s stated goal. children alike, public schools have the potential for building In another form of privatization, school boards, con- consensus amidst diversity. While the nineteenth- and vinced that private companies can run schools more cheap- early-twentieth-century common school was seen as the way ly, have contracted out the management of schools, clusters to assimilate immigrant children into a dominant and seem- of schools, and in some cases entire districts. Baltimore and ingly homogenous society and to unite those in the cities Hartford terminated private contracts when it became with those on the frontier, the pluralistic society in the apparent their districts were not improving as promised. The twenty-first century United States challenges society’s will- most recent example of large-scale privatization has ingness to work for a level of consensus necessary to support involved the School District of Philadelphia and Edison schools that authentically represent the dreams and values Schools. In December 2001 the State of Pennsylvania paid of many cultures. According to educational philosopher Edison $2.7 to develop a plan for the district, an arrange- Walter Feinberg, “The common school must be involved in ment the Pennsylvania auditor general later called “a sweet- teaching students both to speak from the knowledge that heart deal.” Edison’s consultants not surprisingly advised their cultural identity provides and, as audience, to hear the Pennsylvania to hire Edison Schools as the manager.8 While voices of others.”6 Edison was eventually hired to run only twenty of the dis- Now that the U.S. Supreme Court has found vouchers trict’s 260 schools, the disadvantages of turning over public constitutional, there will be attempts to expand their use. A services to a for-profit firm became immediately clear. Early voucher bill for the District of Columbia has been introduced in October 2002, after the collapse of Edison’s stock on Wall in Congress, and vouchers will likely also be introduced in Street, the school superintendent had to seek a legal injunc-
privatization 13 tion to force Edison to guarantee “that Edison’s assets in city Malcolm Warford interprets the mutuality implied in the schools, such as textbooks and computers, would go to the concept of the public: “At the heart of the public is a set of district and not be reclaimed by lenders in the event the personal, social and economic relationships that exist company filed for bankruptcy.”9 between ourselves and others. In this regard citizenship is Finally, as states have established charter schools, private nothing less than the way we care for these relationships.”11 companies have sometimes found a way to insert themselves While the Bible never specifically names public educa- into the role of management to make a profit. While in some tion as an institutional part of community, because agrarian states charter schools are well societies in biblical times had regulated and fill a specialty “At the heart of the public no system for formal education, niche or reflect the vision of our Christian theology of educators with a dream, in is a set of personal, social and mutual support, care, and nur- other circumstances private turing has caused the United entrepreneurs have taken Church of Christ historically to advantage of loopholes in state economic relationships that exist support a system of universal law to profit from what was formal schooling, managed designed as a not-for-profit ven- between ourselves and others. through the public sphere, to ture. Because Ohio law grants a enrich all the members for the charter school the full basic aid In this regard citizenship is nothing mutual benefit of all: “The amount for any child enrolled, inclusiveness of the public the Ohio Virtual Academy has less than the way we care for schools is taken as an image of been openly collecting $4,814 God’s all-encompassing purpos- per child, while admitting that these relationships.” es. Affirmations regarding the as a cyber school, it supports ultimate purpose and meaning home schooling for less than —Malcolm Warford of human life support the $1,000 per child by providing a necessity to ‘secure for each computer, an on-line curricu- child of God that education lum, and books and educational materials, without paying for which will fully develop his or her capacities and which will teachers or the services of a school institution.10 Here is a case enable that person to serve as a responsible person in the where a state legislature abandoned the public interest by common life.’”12 Our theology would cause us to appreciate neglecting to regulate privatization. public education as among our nation’s most powerful insti- tutions for overcoming widespread poverty and injustice, if we would choose to understand public finance as a way to BIBLICAL AND THEOLOGICAL share God’s abundance. REFLECTION
Read 1 Corinthians 12:14–26 DISCUSSION AND REFLECTION In this well-known passage from 1 Corinthians, Paul writes 1. Identify a dozen important functions of government and about the church as the body of Christ. Paul’s description then prioritize them. How do the members of your group may also be read as an exploration of the concept of com- value public schools among all these governmental munity itself, and the community Paul describes is not responsibilities? unlike twenty-first century communities across the United States. The body is a metaphor for the connectedness of the 2. How do government agencies and employees represent member parts and for mutual dependence, each one with the caring role of government? In your opinion, is this a needs and each able to serve the others. Paul emphasizes the description of the popular view of government today? importance of unity and a sense of belonging in the midst of Have you noticed changes over time in the way people a wide diversity of roles and gifts. Paul’s community embod- understand the role of government? ies responsibility and caring, especially for the least privi- 3. Stewardship is not only the money we give to the church leged and most vulnerable. Historically, in the United but also our best use of all that God has entrusted to us. States, our society has protected the needs of the whole Consider taxes as a way of sharing God’s abundance. community, the body, with public services paid for with Does this context of public stewardship challenge the taxes and regulated by law. In a 1980 UCC resource, way you feel about paying your taxes?
14 privatization PRAYER 4. Benjamin R. Barber, “A Failure of Democracy, Not Capitalism,” The New York Times, July 29, 2002, A23. Compassionate God, forgive our blindness to the power of 5. Robert Bellah, et al., The Good Society (New York: your rich blessings. Open our eyes to see and our hearts to Vintage, 1992), 176. share your abundance to support children and their educa- 6. Walter Feinberg, Common Schools: Uncommon Identities tion. Help us to recognize the personal, social, and econom- (New Haven: Yale Univ. Press, 1998), 245. ic relationships that bind us together and to care for those 7. John Gehring, “Arizona Report Finds Poorest Gain Little relationships as citizens. Help us remember always that if From Tax Credits,” Education Week, April 10, 2002. one suffers, all suffer together. We pray for your compassion 8. Catherine Gewertz, “Pa. Auditor General Blasts Edison and your justice. Amen. Contract,” Education Week, Nov. 27, 2002, 3. 9. Martha Woodall and Dale Mezzacappa, “District Delays Ms. Jan Resseger
Open our eyes to see and our hearts to share your abundance to support children and their education.
privatization 15 Privatizing Prisons Exploitation or Rehabilitation? Sala W. J. Nolan
The prison system in America is inextricably entwined with until the intervention of organized labor, manufacturers, and private enterprise. Subsidiary businesses supply food, labor, farmers who strongly opposed competitive convict leasing. uniforms, security systems, and building materials. Major cor- Since the beginning of the twentieth century and until porations use prison labor for telephone sales, and airlines use recently the tradition of American correctional institutions prison laborers to book flights. And very recently there has has been to consolidate all management and ownership func- developed a growing practice of contracting prison manage- tions of prisons under governmental umbrellas.1 2 ment to corporations: the privatization of incarceration. So what has happened to bring privatization of prisons to The history of private industry and prisons is long and the forefront of policy once again? deep. Shortly after the first English colonists arrived in Virginia in 1607, convicted felons began to be transported • First: This is a large industry. The United States has the to North America (and later to Australia) by entrepreneurs highest prison population rate in the world. Most coun- who, in exchange for transport, sold them into indentured tries (about two-thirds) imprison 150 or fewer people for servitude. This practice allowed European states to impose every 100,000 citizens; the United Kingdom has 125 punishments without supplementing their administrative prisoners per 100,000, high for European Union coun- structure or costs, and it transformed the administration of tries. In contrast, the United States imprisons more than criminal justice. Modern prisons in America only emerged 700 people for every 100,000 citizens. The U.S. rate is in the eighteenth century as a viable alternative to servitude higher than, but more comparable to, those of Russia or death. Modeling their system after English criminal jus- (665), the Cayman Islands (600), Belarus (555), the U.S. tice, Americans relied on privately operated facilities. For a Virgin Islands (550), and other areas of the Caribbean.3 fee, states allowed independent contractors (jailers) to The wider criminal justice system includes people who supervise prisoners inside state-owned facilities. Only the are on probation (serving sentences outside of prison) or most basic services were provided by these jailers. Prisons are paroled (released before the sentence is complete). were crowded and unsanitary, and women and children were Including parolees and probationers would bring the total incarcerated with men. It was generally understood that jail- number of people in the justice system to more than 6.5 ers could charge money for almost any benefit. It was also million—or one out of every thirty-three adults in the common for jailers and business owners to increase their United States.4 income by employing prisoners as laborers and craftsmen • Second: Prisons are a growth industry. Mandatory mini- and selling their work and wares. This became an important mum sentencing, “three-strikes” and “career-criminal” practice in the South, where cheap labor was scarce after the laws, and the war on drugs have caused inmate popula- Emancipation. The practice of private contracts for prison- tions to soar. The inmate population of the United States ers effectively returned significant numbers of emancipated has more than quadrupled since 1980, when about people to plantations as cheap or free labor. By 1885 thir- 500,000 people were incarcerated, to more than 2.1 mil- teen states had formal leases to provide inmate work forces lion today. Parole and probation populations are growing to private enterprises. Through the nineteenth century, the as quickly as those of inmates.2, 4, 5 costs of incarceration were a galvanizing issue, and private industry was generally seen as a less expensive and more effi- • Third: Prisons are overcrowded. The U.S. Department of cient way to institutionalize people.1 2 Justice estimates that the number of prisoners in federal San Quentin, established in mid-century, was the first pri- and state prisons is more than 34 percent beyond capaci- vately owned and operated prison enterprise. However, wide- ty. This has occurred at a time when states’ ability to spread scandals and evidence of gross mismanagement in pri- finance construction and staffing of prison facilities is vate prisons soon surfaced, and by the twentieth century, shrinking. Although states have generally slowed or ownership and management of prisons became a government stopped building facilities, the federal government is function. Prisoner labor continued to be expected to generate building or contracting for an increasing number of pris- significant revenues for jailers (now government officials) ons for federal purposes.
16 privatization • Fourth: The financial market in criminal justice is public. The profit trend has shifted. CCA’s stock, which extremely large. In 2002 the federal budget appropriated once traded as high as $44 per share, dropped to 18 cents per $4.7 billion for prisons, an 8 percent increase over 2001 share by year’s end 2000. The corporations now see them- that allowed for new prison construction and additional selves in a time of transition, and Wackenhut and CCA contract bed space. These additions are necessary to pre- recently scored significant contracts for the rapidly growing vent further prison overcrowding federal prison population, which but only account for physical includes deportable aliens. Since plants. Last year’s federal budget Since the beginning of the 1996 the number of non-U.S. cit- alone included $1.3 billion for izens in federal prisons has U.S. attorneys, $1.5 billion for twentieth century and increased by 62 percent. CCA the Drug Enforcement until recently the tradition alone expects to collect $780 Administration, $3.5 billion for million in revenues in the next the FBI, and the first installment of American correctional ten years by filling two prisons it of a $500 allocation to increase had built on speculation.8 border agents and to provide institutions has been to services to immigrants.6 BIBLICAL AND Criminal justice systems have consolidate all management THEOLOGICAL turned to private providers for REFLECTION and ownership functions of prison management at the federal, Read Matthew 6:24 state, and local level, and there is increasing emphasis on private own- prisons under governmental Privatization in criminal justice ership of the physical plants as well. umbrellas. raises deep faith concerns. If we By year’s end 2001, private compa- believe that redemption and reha- nies managed 158 facilities for state bilitation are available to all God’s and federal governments and an additional forty-seven local children, must we not make provision for prisoners to have jails. Most privately operated prisons are in the South and opportunities to redirect and grow? If we believe in dealing Southwest regions. Privatized Texas prisons far outnumber fairly with one another, by what right do we allow prisoners those in other states with forty-two prisons; California has to be exploited for their labor and given nothing in return? the second highest number with twenty-two. All other When we render our taxes to Caesar, do we intend these pub- states have fewer than ten. Four are located in Puerto Rico. lic funds to be entrusted to businesses that profit only a few? The corporations that run these facilities receive more than When government contracts with private companies to $1 billion each year from public funds.2 manage prisons, the corporations must place the well being In the 1990s, private prison management prospered. The of stockholders first, before the inmates they house and the Corrections Corporation of America (CCA) was founded in public from whom they receive money. What interest has 1983 with capital from Kentucky Fried Chicken. CCA is private enterprise in teaching skills to inmates so that they the oldest and largest private sector correctional company, can make whole lives? What interest has private enterprise and it showed an annual income of more than $100 million in reducing recidivism? To do so would only reduce the in 1995, that more than doubled by 1996. Wackenhut prison population and thereby reduce corporate income. Corrections produced revenues in excess of $150 million Governments are flawed, just as individuals are flawed. But yearly and has been listed among Forbes Magazine’s “200 governments are accountable to citizens. It is in the public Best Small Companies,” with sustained growth of at least 10 interest of a good society that prisoners be educated, taught percent per year. Esmore Correctional Services is the third skills, treated when they are ill, and counseled when they are largest publicly held operator of correctional and detention troubled. It is in the public interest of a good society that pris- facilities with a compound average growth in the mid-1990s oners be treated fairly by a staff that has been adequately of 36 percent.7 trained. It is in the public interest of a good society that a prison While private prison companies were once viewed as a is a relatively safe environment and not one that inherently panacea to providing inexpensive prison management for places its prisoners and guards in extreme danger. government and were expected to produce big profits for Government shares with our faith the fundamental idea investors, in recent years they have been plagued by vio- that we are responsible for one another. It is in service to lence and escapes. There has been serious criticism of guards one another that we give our service to God. We are not not sufficiently trained, prisoners not well treated, and labor called to profit. We are called to the Spirit that binds us all, used to profit investors with no benefit to inmates or the one with another.
privatization 17 DISCUSSION AND REFLECTION PRAYER 1. What are the fundamental purposes of prisons? Prisons Holy Spirit, Creator, God of us all: Teach us to serve one separate people who commit crimes from people who another. Teach us to claim one another as sisters and have been or may come to be their prey. How do we dis- brothers, all your children, ready for redemption. You have cern the differences between separation and isolation and guided us with your love and your example. Let us put your protection and shunning? What of rehabilitation? will before our own. We claim you as our own and praise your name. 2. A crime is an offense against us all, and that is why pris- oners are said to be paying their debt to society. How is The Reverend Sala W. J. Nolan
Teach us to claim one another as sisters and brothers, all your children, ready for redemption.
18 privatization Privatizing the Military A Danger to Democracy Edith Rasell
In many nations, including the United States, only a few and other perks in addition to salaries much larger than specially sanctioned groups—such as the military—can law- their military pay. fully use force against another person or destroy private prop- But there are larger questions involved. Private contrac- erty. But there are also extensive arrangements designed to tors can constitute a private army operating below the ensure these special powers are carefully kept in check. awareness of the general public and even below the over- Members of the military are subject to special military codes sight of Congress, including Congressional committees of behavior and discipline. The military is under the control specifically established to monitor armed services and intel- of the president, the commander-in-chief, who is elected by ligence agencies. Contractors allow U.S. intervention in the public. Congress is the only body empowered to declare war. places and situations where scrutiny is “undesirable” To carry out its duties, the military has long relied on civil- whether by the “host” country, Congress, or American citi- ians outside its ranks to provide a wide range of products and zens concerned about their government’s actions. The services, everything from uniforms and guns to secretarial Defense and State Departments or the White House may and cleaning services on bases at home and abroad. But in use contractors to evade congressionally set limits on troop recent years, contracting out, or privatization, has grown rap- deployments or activities. idly. Military contractors are engaged in expanded roles in The use of contractors can raise serious questions about new settings, including war zones. Potential problems arise oversight and congressional control of force employed by when civilians employed by a contractor replace active-duty the U.S. government. Until recently Congress limited the military personnel engaged in military roles. Contract U.S. role in Colombia to antinarcotic activities. Private employees running the cafeteria at a military base in the contractors were employed in the operation, and some were United States are probably not a problem. Contract employ- even killed while engaged in these activities. In 1999 a ees replacing U.S. troops to patrol the streets of Bosnia or plane shot down by guerrillas was found to be filled with train the Nigerian military could well be. And while these sophisticated electronic equipment. Newsweek quoted “a civilian soldiers are not technically allowed to engage in source familiar with the mission” saying the plane was used combat, and while many of them do not even carry arms, for surveillance of guerrillas. This was a direct violation of their expanded role raises serious questions nonetheless. the Congressional ban on counterinsurgency activity.2 Military contractors are private, for-profit firms. Another example of the perversion of U.S. policy that Contractors’ employees are not under the command of the can easily happen when using contractors is the 1980s Iran military, even in a war zone, but are accountable to their Contra operation. Arms were sold to Iran in violation of employer, a private firm. The primary responsibility of these U.S. policy. The funds received from these sales were ille- firms is to maximize profits for their shareholders, not to fur- gally diverted and used to arm the Nicaraguan contras, an ther the interests of the American people or the goals of activity prohibited by Congress at that time. The work was U.S. military or foreign policy. directed by national security staff working for the White Supporters of contracting out argue that it saves money. House but was largely carried out by contractors. This so- However, there is little evidence to support this claim.1 The called off-the-shelf operation led to the conviction of eleven military brass is generally positive about contracting out people including two White House national security advi- although their conflict of interest on this point must also be sors. More recently, the New York Times reports that con- recognized. Upon leaving the military, high-ranking officers tractors have been used in Nigeria, Macedonia, and other can move into very well-paid leadership positions in con- hot spots where the U.S. government would like to stay tract firms, cashing in on the skills and expertise they anonymous.3 When a United Nations arms embargo acquired during their military careers. As top employees of restricted American military activity in the Balkans, private private, successful companies, they receive stock options military contractors were sent in instead.
privatization 19 There are also issues of accountability and liability. In BIBLICAL AND THEOLOGICAL 2001 a plane transporting missionaries in Peru was shot REFLECTION down by military contractors working with Peruvian gov- Read Proverbs 2:1–15 ernment officials engaged in antinarcotic activities. Two In today’s world essentially all countries have military forces. passengers were killed, a mother and her son. The husband Most nations claim they are to be used only for defensive who survived “asked” and purposes. But however military threatened to sue the U.S. gov- personnel and weapons are used, ernment for $35 million in com- “If you cry out for insight, and whatever the justification pensation. Approximately one for their use, wars do horrible year later, he settled with the and raise your voice for damage. By some estimates, Bush administration for an understanding; then you will about 180 million people were undisclosed, smaller amount. killed in twentieth-century wars, There are other dangers. We understand the fear of the lord and and most of these wars occurred know that campaign donations before weapons of mass destruc- to candidates and political par- find the knowledge of God. tion were available. ties reap benefits for the donors. While some people argue that Americans must be concerned Then you will understand there is no reason ever to engage that billion-dollar military con- in war, everyone can agree that tractors who would profit from righteousness and justice and the destructive power of military U.S. intervention around the might must be used judiciously. world can exert undue influence equity, every good path; for wisdom Before the United States uses over U.S. foreign policy, military force against another nation, we strategy, and the size of the pen- will come into your heart, and must first seek wisdom through tagon budget and what it buys. knowledge will be pleasant to prayer, public discussion, con- There is also the potential for gressional debate, and a full con- graft and corruption. Consider your soul” sideration of all options by the the Bush administration’s plans White House. “If you cry out for for rebuilding Iraq after the war. Proverbs 2 : 3, 5, 9–10 insight, and raise your voice for The administration recently understanding; then you will asked five companies to bid on understand the fear of the Lord and find the knowledge of $1.5 billion in reconstruction work in post-war Iraq. Despite God. Then you will understand righteousness and justice the extensive experience of these five companies, interna- and equity, every good path; for wisdom will come into your tional-aid organizations and firms from other countries were heart, and knowledge will be pleasant to your soul” not allowed to bid. The five companies who received the (Proverbs 2 : 3, 5, 9–10). invitations contributed $2.8 million to political candidates Any attempt to skirt this discernment process, to employ and parties over the last two election cycles.4 Included force or threats of force against another nation or people among the five firms is Kellogg, Brown & Root, a subsidiary without careful consideration, is foolhardy. Private military of Halliberton Company, the company headed by Dick contractors used to replace active-duty military personnel in Cheney at the time he was picked to be George Bush’s run- military and not only support roles can short-circuit the ning mate. normal process of checks and balances within our political With careful oversight and attention to avoid conflicts of process. The risks to democracy, to justice around the world, interest, some military services—things like managing base and to peace are grave. housing and food service—might safely be privatized. But other types of privatization raise troubling questions and should be avoided. The possibility of cost savings and con- venience should not outweigh the grave dangers associated with the use of contractors in roles more properly left to the military, directly under the control of the president and Congress.
20 privatization DISCUSSION AND REFLECTION PRAYER 1. In the interests of national security, should the president God, we know you are the only source of true power. Only be allowed to engage the military in operations overseas though our relationship with you will we know true safety and without informing Congress? Should the president be security. Help us to remember always that we are our brothers’ allowed to engage private contractors in military opera- and sisters’ keepers. You call all people to wholeness. Our tions? What should be the role of Congress in this case? nation has enormous power to do good and to do harm. Help us to be attentive to your voice so we will know how to best 2. In your judgment, in order for a contract firm to consis- use our resources to do your will in the world. Amen. tently produce promised products in an efficient, cost- effective, and timely way, what kind of process should Edith Rasell
Help us to be attentive to your voice so we will know how to best use our resources to do your will in the world.
privatization 21 Appendix Where Is All the Talk About Privatization Coming From? Jan Resseger
Why is there so much talk lately of privatizing the serv- tle before it even begins—by crafting an obviously constitu- ices that always in the past were provided publicly by gov- tional school choice program that opponents can’t effec- ernment? The reason is not, as it has been made to appear, tively challenge.”1 Clearly the paper furthers Cato’s stated that government services have suddenly diminished in qual- support of “limited government, individual liberty, free mar- ity. Instead, a small number of groups supporting privatiza- kets.”2 Cato’s resources to promote the privatization of edu- tion have banded together very effectively to formulate pol- cation reflect its libertarian principles; they do not consti- icy, promote their ideas, and thereby transform the national tute an independent analysis of public school management, conversation. Recent activity around the issue of school operations, curricula, or pedagogy. vouchers is an example. While it may appear that talk of The Manhattan Institute’s Center for Civic Innovation is vouchers is simply bubbling up from the grassroots to emerge another example of a think-tank openly supporting research in court cases, state constitutional amendments, and media to further its stated agenda. Its Web site states: “Education campaigns featuring concerned parents, in reality voucher reform is the top public policy concern today. . . . One of the advocates have pursued a narrow political agenda but made most important areas of research for our experts will be the it appear to be a broad grassroots movement. They have cal- need for school vouchers. . . . CCI has released a number of culated every stage—developing public policy background studies by Dr. Jay Greene demonstrating the power of school materials—organizing state legislators to sponsor bills—pro- choice. . . . Dr. Greene ranked each of the fifty states accord- viding legal assistance—advertising on television. ing to the degree of freedom they afford parents to choose Advocates for privatization of education often cloak the how to educate their children.”3 The Manhattan Institute conversation in idealistic-sounding language—individual- uses the degree of parental choice as its sole measuring stick ism, parental rights and freedom, political and economic of quality education, while public school educators and freedom, limited government, individual liberties, free mar- advocates would likely examine class size, teacher quality, kets, and strengthening democratic capitalism—when in academic expectations, and indicators of equality of oppor- fact they are advocating for profits for private companies, tunity. reduction of the kind of regulation that has historically pro- Clint Bolick was one of the litigators defending vouchers tected the public interest, and elimination of community in the Cleveland Zelman case, in which the U.S. Supreme institutions designed to meet the needs of the broad public. Court in June 2002 made it legal in particular circumstances Advocates for vouchers employ loaded phrases to smear for parents to be granted public vouchers to carry to private public schools, like “big government,” “the public school and even parochial schools. Bolick also served as one of the bureaucracy,” “public monopoly schools.” While vouchers attorneys who successfully defended the Milwaukee vouch- are posed as the road to quality schooling, this conversation er program through the Wisconsin court system. Bolick is is really instead about economic philosophy—market capi- vice president of the Institute for Justice, that describes itself talism and privatization. as “the nation’s premier libertarian public interest law firm.” The Web sites of particular policy think-tanks make it Here is how the Institute for Justice describes its mission: immediately clear that their work to develop support for pri- “We are in courts across the country preserving freedom of vatization of education reflects a political agenda. In opportunity and challenging government’s control over February 2003 the Cato Institute released its Policy Analysis individuals’ lives.”4 On its Web page, “Advancing School Paper No. 466, “True Private Choice: A Practical Guide to Choice,” the Institute for Justice describes the wave of law- School Choice after Zelman v. Simmons-Harris.” Author suits it will take across the states to challenge clauses in Marie Gryphon advises that, “This paper . . . provides advo- more than half of the fifty state constitutions prohibiting the cates, lawmakers, and concerned parents with a clear expla- use of public funds in private and religious schools.5 nation of the rules that the Supreme Court has established The American Legislative Exchange Council’s Education for school choice. It includes examples and strategy advice Task Force describes its mission as “to help promote excel- to help proponents of school choice win the next legal bat- lence in our country’s educational system . . . by advocating
22 privatization for strong accountability in public schools and advancing 2002 the U.S. Department of Education granted $600,000 education reform policies, such as charter schools and to BAEO for its television advertising. When the grant was vouchers.” 6 According to the liberal group, People for the made to BAEO, U.S. Undersecretary of Education Gene American Way, the American Legislative Exchange Hickok announced, “We want to change the conversation Council (ALEC) claims a mem- about parental choice by positive- bership of 2,400 state legislators,7 ly influencing individuals who are whom it serves by providing back- It is important for consumers of resisting parental choice options ground and model legislation on and get them to reconsider their particular targeted issues. ALEC outlook.”11 has posted a model bill, the information to pay attention to The Lynde and Harry Bradley Education Certificate Act, that Foundation of Milwaukee is one can easily be adapted by any state who is developing it . . . and of several foundations that inten- legislature to establish a voucher tionally fund organizations sup- program, “by providing to parents who is paying for it, because porting privatization. The foun- the opportunity for the exercise of dation’s Web site describes its parental choice in the selection of what may appear to be a mission as, “devoted to strength- schools for the children . . . [in] a ening American democratic capi- program whereby children with spontaneous new trend may talism and . . . limited, competent educational certificates, requested government.”12 The foundation’s by parents, may be admitted to instead be the result of a annual report criticizes large, gov- public or private schools partici- ernmental institutions in which, pating in the program.”8 Although according to the Bradley the model bill purports to improve calculated strategy, in this case Foundation, “authority and educational quality, its sole pur- accountability tend to flow away pose is to promote privatizing to promote privatization. from citizens toward centralized, schools. bureaucratic, ‘service-providing’ Finally, there are groups institutions.”13 The Bradley designed to create the impression of independent, sponta- Foundation’s goal is quite simply to reduce government serv- neous, broad public support for vouchers, when in fact they ices. It should, therefore, be no surprise that the Bradley are well-funded programs of institutions that support priva- Foundation has been a strong supporter over the years of the tization. One such group is the Black Alliance for Cato and Manhattan Institutes, the Institute for Justice, the Educational Options (BAEO). According to its Web site, American Legislative Exchange Council, the Black BAEO purports to improve school systems serving “poor Alliance for Educational Options, and other pro-voucher children of color living in urban areas.” “We need systems groups. This foundation is leveraging funding across the that truly empower parents, that allow dollars to follow stu- whole spectrum of promotion of privatization of K–12 edu- dents. . . . We do believe that parent choice must be the cen- cation in the United States. terpiece of strategies and tactics aimed at improving educa- Economist Paul Krugman writes: “Money buys political tion for children.”9 The BAEO has launched television ads influence; used cleverly, it also buys intellectual influence.”14 in which African American parents describe vouchers as the The National Committee for Responsive Philanthropy way to help their children. This campaign would only (NCRP) concludes that politically conservative foundations appear, however, to be grassroots. The BAEO is a project of like the Bradley Foundation, “departed from grantmaking the Institute for the Transformation of Learning at norms in the philanthropic sector by funding extremely Marquette University and has received millions of dollars aggressive and ideological institutions routinely committed from the Lynde and Harry Bradley Foundation for its media to influencing budget and policy priorities, maintained an campaign. According to the Christian Science Monitor, the unusually strong focus on national public policy institutions, BAEO spent $3 million in the early phases of its television- and demonstrated a preference for the marketing of ideas in advertising campaign to promote vouchers and undermine their grantmaking . . . [through] sophisticated and effective public education in Washington, D.C., and other cities.10 media outreach strategies.”15 NCRP President Robert The current federal administration favors privatization. Bothwell comments, “Millions effectively spent by conser- President Bush has introduced numerous proposals for fed- vative think tanks have enabled them virtually to dictate eral vouchers (none yet passed by Congress), and in fall the issues and terms of national political debates.”16
privatization 23 The groups described here and others like them have 4.
The best step toward a strong and enduring U.S. democracy is to preserve a public system that provides for all citizens, and especially those with greatest need, while encouraging private development in areas where the profit motive can be expressed without leaving anyone behind.
24 privatization
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