Why Privatization is a major threat to our democracy
What’s happened?
Shared resources among all Americans with government spending and support focused on the general good was once core to what it meant to be an American. It was known as public works, public education, public utilities, and public health.
That belief has since been eroded, starting with Ronald Reagan’s premise that “government is not the solution, government is the problem.” The social contract which supported the Four Freedoms in America has been replaced by magical thinking that assumes the private sector knows best how to manage and administer shared public goods and resources.
What’s the result?
Crony capitalism dominates our society whereby by a few wealthy individuals and corporations exert outsize influence on our economic and civic lives. There is literally no formal power base capable of challenging these “rulers.” Worker unions are weak or no longer exist. Political leaders and parties are dependent on wealthy donors including super PACs.
Extreme inequality of wealth as risks of daily earning and living are shifted to individual workers and families. For the last 50 years, the basic costs of living including healthcare, housing, transportation and education have skyrocketed for most Americans compared with the meager growth of earned wages and benefits. Three quarters of working Americans (78%) are living paycheck to paycheck, with more than half dependent on credit to survive.
Self-fulfilling prophecy that government doesn’t work. If you cut funds for government programs or shift taxpayer dollars to private sector providers, you inevitably damage the effectiveness of the remaining public institutions. Private contractors for schools, prisons, utilities, defense, and more are driven by profits for investors, not public service so everyone suffers except the investors.
Why is Privatization such a big threat to our Freedom from Want?
Privatization of public goods and services destroys the social contract that binds a society working for a common good. By awarding monopolies or favored status to private contractors, public officials abdicate their responsibility and accountability for any results. The ordinary taxpayer ends up paying…and paying…and paying.
A future dominated by privatization of public services such as highways, airports, sanitation systems, utilities and water systems would be a disaster for most people. Privatizing the parking meters in Chicago in 2008 serves as a great example. The deal supplied needed cash to help balance Chicago’s city budget but it also gave investors like Morgan Stanley the right to collect all revenues for 75 years in exchange for an upfront payment to the city. After hiking rates, the new private owners are on track to make their investment back by 2020, not to mention the $41 million and counting in fees for “lost revenue” they receive from the city every time a road closes.
In 2017, reporter Rebecca Burns summarized the threat: “By wresting control of key policy decisions from elected government and locking in deals for periods that often exceed human lifetimes, privatization hobbles our collective power to address some of the most pressing challenges we face, from fighting climate change to dismantling racial and economic inequality.”
What can we do stop the growing threat to our Freedom from Privatization?
Get educated. Subscribe to In the Public Interest website and donate to support its research. It provides guides and handy evaluation checklists for any community considering “public-private partnerships.”
Dismantling Democracy, by In the Public Interest Executive Director Donald Cohen, is a free PDF that tells the story of the 40-year conservative attack on government and sketches a pro-public strategy for fighting back. His latest book makes clear how dangerous the concept of privatizing public goods can be to our democracy, The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back.
Choose your own public space of interest such as education, prisons, healthcare, utilities, banking, and transportation and find like-minded citizens that want to learn more. Watch this video as a good place to start.