Limits To Privatization

Transferring public services and public assets to private ownership is not an entirely new idea. Governments at all levels in the United States have for years contracted out many services. However, under the recently coined label "privatization," such policies now come recommended as a more comprehensive approach to the problems of modern government than ever before. However, the choice is not public or private but which of many possible mixed public-private structures works best. The advocates of privatization use the more moderate ideas to gain plausibility for the more radical goal of government disengagement. The conservatives' view of government as an economic black hole misses what government adds to the productive resources of society and overstates what government takes away. There is a lesson about privatization: governments will continue to be held accountable for economic growth and security. Thus, most privatization efforts would be politically unpopular. The most common privatization proposals would hardly diminish the domain of special interests. Advocates of privatization show an undue tenderness toward private contractors and an undue hostility toward public employees. Although privatization aims to shift services from the public to the private sector, it could end up making private institutions more like public ones. Finally, where the government represents the nation and seeks to speak with one voice, it needs public servants loyal to its highest interests, not private contractors maximizing their own. Although privatization is appealing, the ever-changing public-private mix is necessary in providing public services. (Includes 29 reference notes.) (KC)