Privatization: Letting Foxes in the Henhouse

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Recently I read Rachel Maddow’s book, Drift: The Unmooring of American Military Power (2012). I’m a bit late to this party, perhaps, but the book brought some issues into sharp focus for me. In particular, this issue of privatizing services – in the case of Maddow’s book it’s military services – that were once performed by our government. Now we pay for them. (Note: I wrote more on Maddow's book here)

In the Iraq War we saw the explosive growth of contract workers used for military and political purposes. The Washington Post wrote in 2006 that there were 100,000 private contractors in Iraq. But even before that we were moving in this direction. Maddow tells us that in,

1992, the US Department of Defense did a few hundred million dollars worth of business with companies like Brown & Root Services Corporation, which was owned by Halliburton with Dick Cheney as CEO. By the time President Clinton left office, the Department of Defense had formalized more than three thousand contracts valued at around $300 billion. The Pentagon wasn’t even able to state definitively how many private workers were on the military’s payroll through these contracts – estimates ranged from 125,000 people up to 600,000. (p. 174)

The Iraq War gave us a chance to see the process in a “real war” and it seems certain that we’ll see more wars and “conflicts” and “interventions” run this way. It’s a political win-win situation. No draft – because certainly politicians are good enough historians to have learned that lesson. And public willingness to support the war may have waned far sooner if young Americans from Main Street had been subject to a draft.

So, the brunt was borne by the consultants — about whom it has been pointed out were paid to take that risk — and there wasn’t any political hazard in it for the “deciders” in Washington. We have privatized violence.

And then there is the private prison industry lobbying like mad against the decriminalization of narcotics because quite sensibly they understand that if you decriminalize narcotics you won’t need as many jails, and that’s bad for business. A 2011 report by the Justice Policy Institute details the amounts of money spent by for-profit prison companies and,

While private prison companies may try to present themselves as just meeting existing‚ demand‛ for prison beds and responding to current ‚market‛ conditions, in fact they have worked hard over the past decade to create markets for their product. As revenues of private prison companies have grown over the past decade, the companies have had more resources with which to build political power, and they have used this power to promote policies that lead to higher rates of incarceration. (Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies, p. 2)

And there’s the difference: government provides these services to meet a public need while corporations provides these services to make money. And the drive to make more and more money is ever-increasing. Either there has to be more demand for the service or they have to charge more for it.

Is there a clearer illustration of just how offensive privatization of key government services can be?

In a properly regulated democracy there ought to be certain functions that are operated by the government and the populace participates in – by voting, by first-hand participation and by paying taxes. But the accelerated pace at which we’ve been privatizing government services has redefined our democracy. Citizens can ignore the uglier parts of our system, politicians can avoid sticky situations and corporations can get rich as what used to be government responsibilities are subcontracted out to private parties. It is noteworthy that the private parties are a few companies who are owned by and run by people with political connections – it’s no mistake that these services have been privatized and it’s no nebulous military-industrial complex. It was the concerted efforts to expand corporate enterprise into government services.

And, we must have learned by now that corporations are not in this for the public good. If they were they wouldn’t be stashing money in tax havens, creating synthetic derivatives, pouring money into politics and stripping regulations that affect safety and the environment. The education and safety of American citizens shouldn’t be subject to the whims of corporations and the salaries of CEOs. We’re letting the fox into the henhouse.