And then read, at least, the conclusion of this.
Privatization has both negative & positive connotations depending on the political affiliation. Republicans generally see it as cheaper & better managed while Democrats see it as poorly managed , and depending on what is being “privatized,” Democrats think that these shouldn’t have a vested monetary interest. Both Republicans & Democrats are wrong in their thinking.
Privatization is a misnomer for what it really is. Take, for example, the Orlando-Sanford International airports opposition to the TSA’s intrusion of privacy. Their only other solution was to let a private organization do it. This doesn’t solve anything. The problems are the laws that force the TSA as well as the private security firm. Does anybody really care if they are being fondled by the TSA but no one else? It isn’t about WHO the person works for. It’s about somebody doing it at all. So we see here that there are cases in which privatizing something doesn’t really matter because the problem is actually Congress & the president. How then is it possible to privatize security? A real privatization of security in airports? You allow the airports to create their own rules on security. This means that they can respond to the consumers requests rather than have to deal with bureaucracies or political pressures. It also means they can pass along the responsibility over to airlines. This is not a strong argument against what is known as “privatization” but it surely does shed light on the problem of that government has the monopoly on force. This monopoly leads me to my next point.
When government “privatizes” something, they are just handing down their roles to whomever they choose. This is not privatization in the capitalistic sense. It is generally recognize that governments have a monopoly on what they do. Examples would be police, fire, security, etc. When a government “privatizes” something they are simply just granting a private company a monopoly over whatever it is the government has “privatized”. When government subs out their duties to a private company, they are just giving that corporation a legal monopoly. This isn’t always based on merit but usually political influence or favors. So while corporations may have to compete to get the contract, it doesn’t necessarily mean it’s going to go to the best corporation nor does it mean it’s truly been privatized where companies have to compete.
Undoubtedly, handing over a government duty to a private corporation is much cheaper, as seen by privatizing jails. However, this still lacks actual competition. These private companies are exempt of competition once the government has contracted out their duty.
Now it’s abundantly clear that the Republican sense of privatizing something is not the capitalist sense. Democrats, on the other hand, are criticizing something that isn’t true privatization. We also see that there are two main problems; laws that force private businesses to do what the general public opposes and “privatizing” something is merely a government granted monopoly. That is not subject to market forces.
A friend of mine showed me this website. It was made because the author is “tired of the government bashing that is constantly coming from the political right.” This particular post was made to show how government helps throughout your day. In just the small ways. I don’t want to argue against this on a micro aspect. This isn’t Henry Hazlitt VS John Maynard Keynes. Instead, I want to take parts that I just find to be the most ludicrous and explain what’s wrong with the thinking. Please take the time to read the article if you get the chance. I will argue in three sections: morning, afternoon, and night.
The morning starts with you waking up to a clock radio. The author explains that the FCC is the reason why you can listen to your favorite station because the FCC makes sure that no airwaves overlap. However, the FCC is broken into seven different bureaus. In this particular case, it is the International Bureau. Assuming that there is a free market failure in the case of overlapping airwaves (this assumption is not based on any evidence whatsoever), this could actually be a reason to keep the International Bureau. Not the entire FCC. From there, the author explains how government keeps the air clean through pollution laws. As I noted in an earlier post, although, on a local scale the government helps, overall, the free market has been the reduction of pollution through technological advances. After you wake up breathing fine because government provides you with clean air, you turn on the coffee maker to find there is magically no electrical shortage. The author says it is because the government inspects the house and gives licenses to qualified electricians. Of course the free market has nothing to do with the advances in homeowner safety. It’s because the government inspects it to make sure its fine because it offers a monopoly on licensing (thus discouraging people from getting into the field). While you’re drinking your coffee, you make eggs and have an epiphany. I can eat these eggs with confidence that I won’t be sick since the government passes strict regulations to make sure I don’t get sick. Never mind the fact that government doesn’t serve the interests of businesses. Or the fact that it took the Food & Drug Administration seven years to allow radiation pasteurization (the most effective way of killing bacteria including the one mentioned in the article, salmonella. Also it cost a lot of money for meat packaging businesses for recalls because of E.Coli. And not to forget peoples lives). After your finished your safe foods, thanks to the free market, you go into the shower. It’s here you do a lot of hard thinking. Then you come to the conclusion that government is the only way that private property exist. Which the author would applaud you for in your deep shower thinking. You forget one thing, though. The fact that private ownership is directly related to labor. If one does not own land, one cannot own a product of the land (or their own labor). Private ownership was not granted by government but connected by labor. The author then makes the claim that government helps you own land by tax deduction. How sweet of the government. Letting me keep some of the money that I earned. This is by no means an argument that government is good. After you take a shower, you go to the bathroom. Of course. How could I forget the toilet is where the second most miraculous thinking gets done? You think to yourself, “thank God the government gets rid of my waste.” Of course this only because private companies can’t do it. I mean, what exactly are septic tanks for? As you get dressed you watch the National Weather Service that gives you the forecast for the day. This great government agency can save your life by alarming you of tornadoes and hurricanes. Something the private sector can’t do.. Oh wait, maybe I was wrong.. Before you leave you take your pharmaceutical drugs that cost an arm & a leg because the government doesn’t allow you to buy drugs from other countries (government granted monopoly again). After you drop off your children at their day care (which is immensely expensive because of greedy business people, so it’s a good thing government grants a tax credit!) without getting dog poop on your shoes because government laws force people to clean up after their pets (a very effective law, if I do say so myself because this NEVER happens to me), you drive to work. Now, this is where you’re the absolute most safe. This is of course due to government regulations. The government’s efficiency when it comes to the free flow of traffic (which reduces the pollution. And it’s a good thing government always prevents gridlock or waiting at lights forever because this wouldn’t be good for the environment). At your work you look at all the diversity around you. You conclude that this is because of federal laws that require companies to hire people of all race, religion, and disability, so people aren’t discriminated against, like a big beautiful rainbow. Oh, thank God for government. You then forget about how that same law causes discrimination against people that may be qualified for the job but can’t be hired. Or perhaps the person that is willing to take a lower paycheck to do the job because their skills aren’t up to par with the competitions.
Your morning has been such a wake up call to the beauty of government regulations. You can’t help but to bask at the perfection of government as you eat your soup that has all the ingredients listed on it because the government makes sure you know what’s in the food. Never mind the fact that “the right” never argues against fraud (mislabeling) or harming others (by putting something bad in the food). You recently check online at your favorite food place, McDonald’s. You notice something peculiar. They voluntarily list their items with the nutritional values on their website. You think to yourself, “that’s weird, I never knew they would adapt to what consumers want.” After your done eating, you run over to the ATM machine. Luckily you have money in there. It’s a good thing government backs banks. A lot of the times in economic depressions banks will fail. Those damn market failures cause banks to fail so I lose money. Later that night you’ll find out the government causes depressions when you read Hayek’s theory of the Business Cycle. You’ll also be furious when you find out the rising prices of things such as your gas is because the government does quantitative easing which in turn causes inflation which is a big cause of rising prices. Back at your office, you phone your mother at the hospital she’s at. Thank God for Medicare. Without it no one would be able to afford to go to the hospital. You forget, though, that if no one went to the hospital, they’d go out of business so in order to compete, hospitals would have to lower prices. Then you realize that because of a third party payment system, hospitals can charge an outrageous amount of money because it’s paid for by insurance companies and the government. Damn, you think, maybe we should find an alternative to Medicare.
Before you realize that government causes inflation by promoting deficit spending, you pump up your gas happily because gas prices are low. You think, “wow, I am glad government protects people from price gouging!” Then it occurs to you that any time the government has investigated price gauging from oil companies, they never find any evidence. Weird.
I am going to stop here with the going through the day. The rest of the article just talks about small government helps. Notice in the evaluation of the day, there are no government failures. Only market failures according to the author. This is outrageous. Does the author really think that everything is a perfect governmental utopia? I hope I cleared up all of that. This author’s utopia is actually a dystopia.