Privatization

In the news in the US, there have been efforts to make currently government run programs or services run by private hands. The prevailing theory is that the private group which will run the service will cut out the waste and make it run more efficiently. For instance, Indiana privatized the public assistance program just recently.

I have a problem with this system. The groups which benefit from privatizing are typically just the ones running the show. It also shifts the goals of the service, from making a good service to making a profit.

Concur. David *grrr* Cameron is trying to do the same to the NHS. And we're baying for his blood.

Concur. If governments are going to de-Statize something, they should hand administration over to the collective of the workers, not sell it to a corporation.

edited 28th Jun '11 4:52:05 PM by SavageHeathen

but it very much depends on the corporate culture. In Japan, insurance prices are low and treatment is swift, despite, if I recall correctly, the entire system being private.

Generally, the alternative is cutting the program altogether, since the reason for privatization is a growing lack of money to fund the service to begin with...

If the choice is no service at all, or privatized service... I think I'd rather have the latter.

But their care is technically universal, as your care can be state-funded. America is the ONLY O.E.C.D. nation to not have true universal healthcare.

...which is probably in a lot of cases connected to the idea that the service started out public because it can't easily be run for profit, at least while maintaining required access standards. "Waste" and "inefficiency", from a corporate perspective, often overlaps with "providing service to all".

edited 28th Jun '11 5:01:43 PM by Jinren

Concur. Streamlining private 'public' services means that services which would technically make a loss (but still serve people) would get cut.

^^ This.

The NHS should not be privatised. For one, a competitive public option ensures that the poor aren't boned over by companies.

edited 28th Jun '11 5:04:52 PM by AllanAssiduity

Thank you. I sure as hell don't want that.

You going to the J30 on... the 30th? Held in ALL MAJOR CITIES!

@Jinren I don't disagree with the assessment... but the question still remains: Would you rather have no service, or shitty service?

Because that is, essentially, the choice when (state/local)governments want to privatize things. The government can no longer feasibly pay for the service and must either cut it entirely or "sell" it off.

Note:I only mean state and local governments when discussing privatization (like the one in the OP example), as federal governments are supposed to be under the idea of "unlimited funds."

edited 28th Jun '11 5:07:41 PM by Swish

Limited, compare to none, I guess.

edited 28th Jun '11 5:07:50 PM by Inhopelessguy

^ Uh, yeah. Limited is better then none.

Service that is poor is superior to no service, hands-down.

edited 28th Jun '11 5:09:53 PM by AllanAssiduity

If there really isn't any public money, I guess the purist answer would be to say restructure the whole thing and not pretend it's a public service any more.

I don't have a pragmatic opinion... would require having a real-life vested interest in the specific topic under discussion. I don't think this question can be adequately addressed for the general case.

edited 28th Jun '11 5:12:43 PM by Jinren

Well, I think we should be discussing the OP's point which is that private 'public' services are more profit-based than if they were public. Which is true. As stated, the loss-making arms will be torn off - even if they supply vast amounts of people.

But, then again, public services are cut because of funding. Which is when the loss-making parts get thrown away anyway.

@Swish: No government should ever be on the idea of unlimited funds, because that's simply false. Eventually, you do run out of other people's money.

I suppose this is more a general topic about privatization. I am of the opinion that most of the supposed Pros of privatizing government run things are actually cons. This includes using military contractors to develop weapons. Typically, the companies which take on the tasks were chosen by the Congressional person because they get kickbacks.

For instance, it turns out today that Boeing charges 177000% for helicopter parts. I can't help but think that it would be better done by another company.

Most of the time I find the reasoning is actually just political corruption. They'll sell the idea to the public that something is better run as a private service but what they're actually doing is simply selling the entire operation over to a friend.

If they actually do believe in privatising services, then in most cases they're likely to be wrong.

a) Just because the organisation/corporation running it cut costs doesn't mean it translates into a single dime of lowered taxes paid for it. Private corporations are there to increase profits, so by definition they're attempting to limit what they provide and still charge the same or more for it. (Anecdotal gripe: People thought the student loan service was terrible and ran at a horrid "loss" under the government because the service was slow and they kept forgiving debt. So they privatised it. Yay. Now you get people who randomly charge students interest or loan payments while they're still in school, get tens of thousands of complaints and angry phone calls that get cut off by their customer service, higher interest rates and very limited debt forgiveness. Oh and we still pay the same amount of taxes for this crap and our education system is now getting underfunded.)

b) As was already stated, the point of many services isn't to make a profit. For instance, nobody in the education system expects any of the students to give money to it except indirectly in the future via taxes (which funds everything, not just education). In many cases it runs at a horrible loss, especially in poorer neighbourhoods and inner city regions.

edited 28th Jun '11 5:37:36 PM by breadloaf

@Enkufka: It's really hard to work out how much is extortion & corruption and how much is simply incompetence, bureaucracy, and other such. Sometimes the $500 hammer (as an example) is $500 because the military insisted on a custom specification or materials completely different from civilian spec, whether or not it was necessary; or because the amount of bureaucracy and paperwork involved in being a military supplier is the actual cost, just amortized across a very small production run. If the contract is $500k for a thousand hammers, it can be that only a third of that money or less is for the actual production of the items; R&D, paperwork, approvals, testing etc. could easily end up costing more than the goods themselves.

Precicely. Governments have a duty to provide those services. Unless we manage to turn to social capitalism, i.e. the company takes social, political, and environmental responsibility for action, the companies want that bottom line. Privatising, on the whole, screws shit up.

To add to your example, the British train network. Under the government, trains were reasonable. Under Network Rail, we still pay through taxes AND rising fares. They also do terrible jobs of fixing when stuff goes wrong. And then, they also cut the tram services in most major cities, which hurt many at the time.

edited 28th Jun '11 5:45:28 PM by Inhopelessguy

@Morven, that I can understand. But there is a point at which it is no longer about meeting design specifications and all about price gouging.

http://www.pogo.org/pogo-files/alerts/national-security/ns-sp-20110623-2.html

This is from a Do D audit. in the link I provided are links to the Do D report.

Who's D o D... Dept. of Defence?

Yes. Its military and spy stuff, I think.

Ah, those do sound like reasonable issues. Most of the ones that make it to the press ignore the fact that milspec frequently means that things cost way more than the civilian equivalent.

To me, that sounds like some people in the Army are actively collaborating in the overcharging, which is extremely likely.

That's ridiculous!