Should Markets Govern? - Frank Emspak

One of the strengths of the privatization movement has been their success in getting people to adopt their statement, "It's my money and I want my taxes reduced." To some exent this is a statement of greed, but I believe it also reflects the reduction in the standard of living of working people over the past 25 years. If we are to counter this powerful notion, we will have to think how to raise the standard of living and redistribute wealth so that the social base for the anti-tax movement is limited.

Also, we need to make it understood that competition yields monopoly. Competition leads to monopoly because the cost of entering a business the first time is usually high: thus, in a second round of bids, the bid of the initial contractor is likely to be lowest. Or, if that initial contractor must cover its costs by gaining that contract again, it may deem it wise to buy its competitors out. Competition yields monopoly.

As to the question of whether markets should govern, the answer obviously is no, but we need vision to overcome the general acclaim for competition in this country, a vision based on notions of democracy, a vision with some reference to reality.

There is no evidence that privatization of public services has yielded one single benefit. When we privatize, as we did in Wisconsin with W-2, we have greed, theft, non-provision of services, and illegality; certainly not efficiency and provision of services. Examples can be seen in medical care, railroads, and transportation. In 1998 in Milwaukee we can cite the sale of part of the water system.

By definition privatization means that decisions are taken out of the public realm and put into the private realm where decisions are made for the benefit of stockholders. Should we make decisions on the basis of public need or on the basis of private profit?
Market decisions are made in the interest of profit. Public decisions must be made in the interest of people, ideals, perhaps sharing, perhaps in the interest of the environment. Even in the matter of global warming private interests want to have pollution credits so they can still make money. I want to survive in good health with money as a secondary object.

Government can regulate private activities, but in the private sector fundamental decisions are, by law, private. And there is no evidence that privatization lowers costs, provides more service, or is more responsive to people. Calling for the privatization of public services because of the alleged misdeeds of some employees makes no sense. Public employees like all employees can be held to standards of performance. With competent public oversight, a public employee who does not meet the standard can be dealt with appropriately. It is almost impossible to measure the costs of privatization because many of the costs are hidden-costs of resuming the function if the private business fails and the public body has lost key technical services or equipment, the cost if people get laid off, the loss of information that elected representatives should have.

It is incompatible with democracy for markets to govern, and if we want a democratic and open society, we need to reestablish that idea.