The Roots and Reasons of Privatization

[Celerity]

https://forgeorganizing.org/article/roots-and-reasons-privatization

This excerpt originally appeared in The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back published by The New Press. Reprinted here with permission.



A Very Brief History

Understanding privatization means understanding that it is first and foremost a political strategy. It was born this way, and so it remains, but it has also become a grab for billions of dollars in contracts and fees. In the years since it sprang from the mind of Milton Friedman as a way to undercut government “monopoly,” it has also become a way for profiteers to tap into the $7 trillion of public revenue (which swelled to $9 trillion during the COVID crisis) spent by local, state, and federal government agencies each year and carve out a piece (sometimes a very big piece) for themselves. Privatization has also in recent history become remarkably bipartisan—Democratic president Bill Clinton arguably did more for the privatization project than did his Republican predecessor Ronald Reagan. And it has become surprisingly pervasive, to the point where there are now 2.6 times as many federal government contractors as there are government employees, and there is literally no public good that is not at risk of being privatized. But it started very humbly, with ideas from the conservative intelligentsia that became a way to achieve political ends without incurring public disfavor.

School Choice and the “Iron Fist” of the Bureaucrats

In the 1950s, conservative economist Milton Friedman felt increasingly out of step with what he saw as “the general trend in our times toward increasing intervention by the state” and “the trend toward collectivism.” He strongly preferred a government that provided only enforcement and avoided providing any services. Yet he also believed that democratic governments tend to naturally grow larger due to self-interested groups and the self-preservation instincts of politicians and bureaucrats (in Friedman’s imagination, people often seem incapable of acting for the common good). Privatization was an effective, though imperfect, counterweight to these tendencies. In his landmark 1955 essay on school choice, Friedman admitted that few citizens would want to do away with universal public education, and suggested providing parents with “a specified sum to be used solely in paying for [their child’s] general education” and allowing them “to spend this sum at a school of their own choice.” This would satisfy a public desire while preventing the growth of bureaucracy. Sixty-two years later, President Donald Trump chose a secretary of education whose only experience in education was her advocacy for Friedman’s ideas, now packaged in the consumer-friendly term school choice.

Friedman’s vision for market-managed public services was remarkably clear-eyed; he was under no illusion that any profit-generating enterprise would act for the common good. He lambasted the very idea that a business could have social responsibilities, and insisted that executives have responsibilities only to the business owners. To even suggest a responsibility to something larger was to invite “the iron fist of Government bureaucrats.” So Friedman’s voucher-supported private schools, despite taking public money, would have zero responsibility to the public. The implications were clear by the time Friedman’s essay was published. Brown v. Board of Education had already spurred a “school choice” movement in segregated states. Private schools, bereft of social responsibility, offered something their white customers wanted—segregation— and politicians hoped to support this deplorable choice with public money in the form of vouchers. The racial implications of privatization should have been perfectly obvious to a man of Friedman’s intelligence, but they apparently did not enter his thinking until someone pointed them out to him, after his landmark essay was largely complete. The issue of how the free market encourages racial segregation gets no more than an awkward footnote.

Outside of Friedman’s self-generated bubble, school choice was a raw expression of white supremacy. The white parents of Prince Edward County, Virginia, were happy with their public schools until the court forced those schools to accept black children. Vouchers came into play as part of a segregationist strategy that started with the county’s pulling funding for all public schools. Next came a “tuition grant program” that gave parents vouchers up to $150 for private school. White parents rallied together to create a “segregation academy” that could legally bar black students. Prince Edward County ultimately closed its public schools completely and chained their doors. This example inspired racists everywhere; in 1969 over two hundred segregation academies were thriving in the South, and seven states had instituted voucher programs. The Prince Edward County school story offers a clear example of the ways in which privatization helps the powerful and well connected circumvent civil rights and the law. Putting public goods in private hands helps them evade accountability and protections. It prioritizes individual choice, even if that choice is one of racial oppression. While Friedman first devised privatization as a way to avoid the iron fist of government, his vouchers merely forged another fist, one specifically designed to curtail the rights of African Americans and other racial minorities.

The Reagan Revolution and Privatization’s “Golden Opportunity” .................

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[rampartc]

1. in dod privatization was directed by "circular A76"

and essentially resulted, during al gore's "reinvention of government" in my retirement at age 48.

iow. they continue to pay me NOT to do my job and in fact i am contractually forbidden to take a job in my field.

this has not saved any money nor resulted in much mission efficiency, either.