The New Yorker has a short, must read piece that I’ve been intending to post since reading it a week ago, on the privatization of public services and regalian functions of the state in the US. It thus opens
Republicans have been touting the inherent superiority of the private sector over the public at least since the Reagan era, but in the past few years it seems to have congealed into an unassailable mantra: the free market as the ultimate guarantor of good services, low costs, and a free and happy citizenry.
But as author Margaret Talbot argues—and in linking to important investigative reports on the prison industry in Louisiana and a for-profit college—, the notion that the private sector does everything better than the public is a delusion. I’ll go one step further: it is a complete lie. I’ve already posted on the legitimacy issues related to privatizing regalian domains of the state. But privatization cannot even be defended on efficiency grounds, as the private sector does not do it better. It invariably underperforms and not only does not save the taxpayer a penny but imposes costs through hidden externalities. As it happens, Paul Krugman touched on precisely this issue in his last column, on the privatization and degradation of essential functions of government, discussing in particular the horrors of privatized halfway houses in New Jersey, which was the subject of a series of investigative reports in the NYT. It is high time for liberals to stop being wimps on this issue, to oppose privatization, and defend the public sector.