Friday, August 18, 2006

no good alternatives.

not surprisingly, my comments about privatisation generated a bunch of comments. kevin and josh and others have recently described this phenom. for better or worse, those of us who don't believe in the 'kill everyone else' framework are kinda on the same side. i'm glad that we are lining up on the same side - but let's acknowledge that there are some weird political marriages taking place.

anon writes:
"There are a whole range of government services that could be privatized, and the arguments are different for each of them. Cost and efficiency are not the only criteria -- there are also matters of control, of fairness, of the function of government to act as a redistribution system, and of the role of these serves as the glue which holds the commonwealth together.

Water seems to me like one of the things you would least want to privatize. It's a natural resource that belongs to everyone -- and is also needed by everyone. The poor are as dependent on it as the rich, and lack of safe water leads to disease, which again affects everyone. The very idea that somebody ought to make a profit off it -- and be able to turn off the tap for non-payment -- is morally offensive.

Natural monopolies or near-monopolies, like roads and railroad lines and (until recently) phone service, are also problematic in varying degrees, in part because the proprietors are being granted an exclusive license and in part because the public has no good alternatives. I'm especially concerned by the move towards private toll roads -- there's one current case where the state government has had to promise not to upgrade the public secondary roads nearby for the next 10 or 15 years.

Non-monopolistic provision of social services -- where competition keeps the providers small, honest, and eager to prove themselves -- may be the one area where private really can be better.

Another factor to consider is whether the private company is being paid by the government or by the citizens. Despite the threat of corruption, the former has definite advantages, since the government has far more clout than private citizens to enforce rates and standards, not to mention public health and national security concerns.

There's also the issue of redistribution. Contrary to what the libertarians like to claim, the earliest governments were *not* created to protect private property through police and military power, but rather to maintain public infrastructure (notably irrigation systems) and to ensure that wealth and essential goods didn't accumulate in the hands of a few. At the chiefdom level, redistribution was accomplished informally through cultural institutions like gift-exchange systems and potlatches. But the first civilized states were overwhelmingly involved in large-scale collecting, storing, and doling out of food supplies -- just think about setup assumed by the story of Joseph and pharaoh and the seven lean years.

Perhaps the most frightening examples of privatization are those, like water and toll roads, which place the poorest among us at the mercy of for-profit corporations with no incentive to provide for their well-being or make their lives more sustainable. But any change which reduces public accountability and restricts people's sense of acting together for their mutual benefit chips away at the concept of citizenship and unravels the fabric of society itself.
all good points - but we need to acknowledge that publicprovision=good argument is invalid for a number of reasons. firstly, we have the efficiency argument - and secondly, we have the corruption argument.

i dont doubt for a minute that water should be delivered really really well, and cheaply, and cleanly.

the only question is 'how?'


doomsy said...

I agreed with a lot of the final paragraph of anon's comment, but I also realize that we should continue to look at services that could be privatized.

The easiest example I can think of here in Pennsylvania (a US commonwealth, not a state, inferring more "big brother" puritanism) is the selling and distribution of alcoholic beverages, which is run by the "state store" system (the state stores have improved their service and pricing over the last few years, but aside from the fact that the state store employees are a powerful Democratic voting bloc, there's really no good reason to oppose privatization).

Great minds really must think alike, as they say; I posted something a minute ago about Joe Sestak, running for the U.S. Congress, who opposes privatization of Social Security, for example (hope it's informative)...

romunov said...

Check Sweden, Finland, Denmark, Norway...

Anonymous said...

Ask troops serving in Iraq who suffered through contaminated water and unreliable food deliveries from Halliburton et al what they think about the magic of the private sector.

- mercury

mamayaga said...

Why does everyone assume that corruption arises when we rely on governmental services and not so much when the servies are privatized? One of the best examples of corruption in private business is in the health care sector in the U.S. Not only do private healthcare corporations rather routinely cheat the government in billing for publicly reimbursed services, healthcare executives very commonly run schemes that enrich themselves at the expense of their own companies. Thus we have yearly double-digit inflation in health care costs even as the quality of the service deteriorates almost to third world standards. The recent news about executives back dating their stock options is another example of private sector corruption, as are all cases of insider trading. At least with governmental corruption there is a possibility that voters might be able to turn the rascals out. With private sector corruption that possibility is much more remote.

lukery said...

good comments all round. thnx.

mercury - I'm not arguing that the market place is magic - only that i don't have any ideological bias against privatization generally.

Halliburton is a disaster (for a bunch of different reasons)

lukery said...

doomsy - yep - i guess that's my point. should we privatize the wilderness? nope. but that doesn't mean, for example, that it's wrong to consider a private company cleaning public toilets.

lukery said...

mamayaga - thanks. you are correct. i didn't mean to imply that govt provision = corruption. as i noted in my original post: "should it be delivered by govt, or the private sector? I don't know. If the people involved are corrupt, it might not matter all that much."

i'm not exactly sure whether the back-dating of the options was illegal or not - and that points to the larger problem, it's often the legal stuff that is outrageous (altho that is often perpetuated and/or made by the ostensible corruption in the lobbying/legislative process)

LeeB said...

Mamayaga - Teee-rific post! I couldn't agree with you more. Lordy! How on earth could I have forgotten about health care.

Our current system, even without corruption, isn't saving us any money whatsoever because overhead amounts to . . . what? I don't remember . . . about 16% to 20%?? - an astonishing figure when put up against the government payor, Medicare, which operates very well, thankyouverymuch, at an administrative cost of 2% - 3%. (That one, I do remember.

If we were to switch to universal health care based on Medicare - a payment system already in place - we would take the profit motive out of the payment system. We could eliminate insurance premiums as a business expense, substitute somewhat increased Medicare taxes across the board (with full participation, no income exceptions or income "caps") and cover health care for every single person in the United States.

I'm told that of all the industrialized nations, the U.S. is the only one that does not have some form of universal health care. If true (and I have no reason to doubt it) that is appalling. For those who would holler that it would INCREASE costs, a quick look at who pays for emergency health care for the now 45M uninsured would be instructive.

In a world of my design, we would jump at the chance to put this in place, split the difference with employers getting reduced costs/employees getting pay raises), and those insurance executives could go get themselves an honest job instead of profiting off the misfortunes of their neighbors. (Hang on, Big Pharma, we're coming for you next!) Who, in their right mind, wouldn't be thrilled to get the protection racket out of the business of designating accountants to decide if you, your child, your family members, are eligible for some life-saving procedure?!

Lordy! (Lee! Take a breath, fer cryin' out loud . . . )

Okay, okay . . . and it should be noted this is not a scheme to reduce the compensation of health care professionals. All this does is provide a sensible, substantially-reduced-admin-expense method of covering legitimate costs. Also remember, the time was that hospitals were not run for profit; what an abomination! That concept produced Bill Frist. Urghhhhhh.

Cuba has universal health care, and I heard recently, is rated among the highest quality in the world.

Oversimplification, I'm sure, but there really is NO excuse for the abomination health care in the U.S. of A. has become.

The cure for it - for health care and every other outrageous example - is public funding of elections.

Okay. I'll shut up now.

Anonymous said...

Thanks, LeeB. And here's a well-kept little secret: The federal govt already runs the best health care system (both in terms of quality and cost effectiveness) in the U.S.:

LeeB said...

Anon -

Great. This is great. I've PDF'd a copy for keepers. So, now we have a large proven system that can't be dissed as too radical. All we need is to get rid of the political types who are this very minute cutting the funding to the VA and who are so bought-and-paid-for by insurance companies and Big Pharma that they will NEVER consider such a change.

Next up: Public campaign financing.

Wouldn't it be refreshing to have congresscritters who were working for US, and because they didn't have to spend every other waking moment raising money for the next election, they would have time to read bills before voting on them, among other things. Then lobbyists could be making appointments for meetings and leaving their checkbooks back at the office. And individual constituents would have better luck getting their own appointments, too. Whatta concept!

But some private company that pays its employees a living wage with paid holidays, etc., can have the janitorial contract and another one can have the hot dog stand.

Anonymous said...


That anon was me (sorry, can't get the hang of these newfangled toobz). The resistance to using a VA model for the rest of us would be massive. Not only the entire private health system, but if it were done incrementally, by expanding the VA's patient base, the veterans themselves. The VA has looked into expanding access to say, the families of vets, and there has been fierce resistance. In part this is because some VAs still have access problems with long waits for enrollemnt or appointments and in part because many vets look on their health care as something they have earned and resent the idea of sharing with people who haven't earned it. This attitude apparently is strongest among WWII vets so may dissipate over time.

That's not to say, however, that the VA model couldn't be adapted for a separate single payor system. Just need to convince those big insurance companies and big health care corps to commit hara kiri. Yeah, right.

mamayaga said...

still messing up:

anon (last two times)=mamayaga

LeeB said...

mamayaga - Thanks!

Thanks for both the posts and the ID!

I guess you figured out that when you choose "other" as an ID, then click into the name field, it will bring up your name already typed and ready to click it into place. Also, I suspect if this site works like a bunch of others, if you create an account, your name will just automatically be there when "blogger" - the default - is selected. Mebbe Luke or somebody will enlighten us.

You raised some very good points, not the least of which is that the VA system presents a wonderful model. And as for the "big health care corps" being willing to commit "hari kiri" . . .I think that is where the public campaign financing comes in. No need then to leave it to them; we give them a nice big push. :-)

We are really faced with a huge crisis (on so many levels) that simply demands we get busy and choose what kind of a country we want to live in.

lukery said...

thanks mamayaga, fp'd again.

i wonder how the VA will deal with the new influx from the latest wars. Pretty easily i guess, becuase the numbers don't look very high (versus the existing capacity).

There are (some) terrible problems in the VA system as well that sibel described in the Dirty Dozen interview here