Privatization, Non-Profits, and Disinheriting the Public

26 06 2012

Privatization has been accelerating at break-neck speed (and in ludicrous ways) the last thirty years or so, in part because of the decline in government revenues and the general growth of the neoliberal consensus that assumes the profit motive brings with it ideal efficiency. It is also an efficient means of weakening the labor movement, because employees of a government contractor are covered by a different, considerably weaker, set of labor laws than employees of a state actor.

But privatization isn’t new; in fact, privatization of public services was quite common back in the day, and by back in the day I mean ancient Rome.

The late Roman Republic grew quickly as a result of conquests and voluntary ceding. There was no time to inculcate Roman civic values and grow the necessary institutions to ensure administration along Roman lines. Instead, what the Roman Senate, Consuls, and other governing bodies did to guarantee the provisioning of necessary public services and the gathering of taxes was to contract powerful local men, called Publicans, to provide these services and gather these taxes.

The Publicans in turn grew immensely wealthy with these government contracts, and thus were able to flex significant political muscle in Rome itself, through the buying of tribal leaders in elections and the funding of foreign adventures for ambitious soldiers and politicians. It was a textbook rent-seeking loop.

The privatization craze may be leading to similar results in the U.S. (hopefully without the foreign adventures, although, you know; military-industrial complex). Stories have been popping up with increasing frequency indicating that privatizing the provisioning of public goods is creating wealth, but not, you know, provisioning public goods any more efficiently.

First, here’s Paul Krugman on the privatization of the prison industry–he touches on several of the key points, so I’m quoting at length:
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How & Why a Democratic President Privatized Our School System

3 11 2011

Barack Obama is presiding over the beginning of a process that will inexorably result in the privatization of our school system. That doesn’t mean of course that all of our schools will be owned by big corporations; rather it means that within the next five to ten years, our largest school systems will be enmeshed with the private sector, and the regulatory framework that encourages same will be defended vociferously by a new and fierce network of rent seekers. Within a generation, “public schools” will be public only in the sense that they will rely on primarily on government money–similar in that way to the defense industry.

This is bad. Despite the neoliberal fascination with en-marketing everything to appease the Market Unicorn, competition and market forces will not “fix” education (which, coincidentally, is only broken in those places where poverty is high). It will however do these things:

(1) Inherent Decline in Quality. In order to provide the market signals necessary for competition to operate, it will reduce education to quantifiable superficialities (i.e., “high stakes testing”), undermining critical thinking and creativity, particularly in poorer communities.

(a) Commodification of Curricula It will thus give rise to a huge, and by necessity centralized, curricula development industry with a business model that incorporate rent-seeking by necessity.

(b) Institutionalizing Clout and Corruption as Market Advantage.It will encourage lobbying and market-exclusion behavior from the politically well-connected who can use political influence to design standards that benefit existing school-systems.

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Never Mind the Millionaires, Here Come the Teachers Unions

1 03 2010

The crusade to privatize Chicago’s (and America’s) public schools is not the same thing as a desire to reform our schools. You can believe in charter schools within a public school system to innovate curriculum (I do) and believe that there has to be some peer review process to allow schools to get rid of bad teachers more easily (I also believe this) without buying into the massive privatization scheme being sold as the only way to reform education. Our schools are failing and we need to address that problem. Is injecting the profit motive into school districts, unraveling civil service protections and slashing pay and benefits for teachers, and allowing “problem” children to fail the only way to do it? Privatization zealots want so desperately for you to believe that, but in order to believe it, you have to make some extraordinary and irrational assumptions.

For the school privatization behind Renaissance 2010 to make any sense, you’d have to think that something in the order of 1/3rd of Chicago’s teachers are bad teachers that should be fired (the union has shrunk by an estimated 5,000 teachers in the last ten years), you’d have to answer “yes” to the first follow up, and have to be oblivious to the fact that it was highly-paid “education professionals” who hired them (and kept them long enough for them to get tenure).

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