What does "privatization" really mean? Before I answer, right from the outset, a detour. Who should be eligible to vote in federal and state elections? Setting aside arbitrary restrictions that target more the ability than the eligibility to vote, we more or less take it for granted today that any citizen who has reached the age of majority (18) is eligible to vote. One person, one vote, and all weigh equally in the result. When I talk about the US being a "democracy," this very broad definition of voting rights are at the core of it. I do understand, of course, that we have a "representative democracy" -- that is to say, we vote for those who will "represent us" in the actual passing of legislation that binds us all. There is also an element of democracy within the legislature, where the actual passing of legislation most often requires a majority vote within the legislature. Because this ability to weigh in on matters of import represents real power, it is not surprising that there are all sorts of partisan machinations to influence the selection of particular representatives. Once elected, it is not surprising that there are all sorts of partisan pressures to insure the representatives actually represent the partisan interests. There are any number of fault lines between the individual "voter" and the "representative" that pervert the process, and the significant distrust of elected officials represent an awareness of, if not an actual understanding of, those fault lines. As the recent presidential election demonstrates, the role of "money," for example, in the outcome of an election is at best ambiguous. Although money for advertising and campaign infrastructure is important, and without monetary support one cannot hope to run for statewide or federal office, it is not decisive. Spending the most money no doubt helps, but does not guarantee that one garners the most votes. Once elected, the role of money becomes even more ambiguous. I do not believe that corruption of the common sort, outright quid pro quo bribery, is common within government, at least not yet, but there is little question that money and monied interests have more "access" to legislators than the average, individual voter. Money may not buy a particular vote outright, but it does buy the time and space necessary to educate and persuade the legislator to a point of view. The more technical the legislation -- i.e. the more it deals in arcane matters of importance to a particular industry -- the more significant that time and space become.
So again, who should be eligible to vote in federal and state elections? It was not always the case that any citizen had the right to vote. Generally speaking, "The United States Constitution did not originally define who was eligible to vote, allowing each state to determine who was eligible. In the early history of the U.S., most states allowed only white male adult property owners to vote." For many of the founders, of course, this was precisely as it should be. Although there has always been the desire to exclude "deplorables" from the voting franchise -- e.g. "in several British North American colonies, before and after the 1776 Declaration of Independence, Jews, Quakers and/or Catholics were excluded from the franchise and/or from running for elections" -- and the impulse to exclude is alive and well, even if the legal framework no longer permits it. I am still struck the Public Policy Poll that revealed "only 53% of Trump voters think that California's votes should be allowed to count in the national popular vote. 29% don't think they should be allowed to count, and another 18% are unsure." To the best of my knowledge PPP didn't ask whether Muslims, particularly black Muslims, should be allowed to vote, but one can perhaps guess the result. Setting aside, however, this impulse to exclude "deplorables," the more fundamental reason why "adult property owners," in particular, were enfranchised to the exclusion of others was a belief that those who "owned" America should also "control" America. At issue were property rights. I do not know how deep it goes in the human psyche, but this fundamental notion of "what is mine is mine" runs deep in the American psyche. One didn't want to extend voting rights to those without property, in part because they constituted a majority of the people, and there was a fear that the "majority" would exercise their voting right and the taxing power of government to divest the property owning minority of their property. It is probably not surprising that those who own a good deal of America today hold similar views. "What is mine is mine," after all, and their fears have been borne out across time. The progressive income tax is the first apostasy, and the redistribution of those tax revenues to social programming was the second apostasy.
There is, in other words, a fundamental tension between "democracy," defined broadly as the extension of voting rights across all citizens, and those who feel that voting rights should be restricted to the "propertied." No one, of course, is completely without property, and the line one draws differentiating those who do (from those who don't) have sufficient property to qualify for voting rights, and consequently governing rights, will always be somewhat arbitrary. Generally speaking, "democracy" has been winning, and "each extension of voting rights has been a product of, and also brought about, social change." The property qualifications for white men were nibbled away from 1792 (Kentucky) to 1856 (North Carolina) during the periods of Jeffersonian and Jacksonian democracy In 1870, the fifteen amendment extended the franchise to non-white men and slaves. In 1920, the nineteenth amendment gave women the right to vote. And there were other victories for inclusion leading to the present day. One might suggest that the victories are only apparent. While technically able to vote, there are any number of ways, legal ways, to prevent the undesirables from exercising their franchise, the Jim Crow laws being the most egregious case in point. While the Jim Crow laws have been challenged and over-turned, the impulse nevertheless remains, and new ways to limit the franchise are sought -- the current voter ID laws, for example, while technically applicable to all disproportionate affect African Americans and others at the low end of the economic spectrum. Likewise, while "democracy" seems to have prevailed against property qualifications, the impulse nevertheless remains. One might, for example, look to conflicts over the size and role of government as a dog-whistle for the idea that only the propertied should be allowed governing rights. Those who advocate for a strong, activist government are on the side of "democracy," while those who advocate for limited government are for the propertied. For many reasons, my previous statement will seem counter-intuitive, particularly for those on the far right who more or less advocate for a federal government limited to border security. They imagine a "free" world where governments don't intervene in our lives. Unless, however, they are willing to forego most of the conditions of modern life, there are any number of "private" agencies, under "private ownership," that intervene in and to one extent or another control our lives, and do so for their own benefit. These "private" interventions are not necessarily to the detriment of the people. The "private" interest of the owners and the broader public interest may coincide very nicely, thank you very much. Theoretically speaking, a free market insures the convergence of interests as people buy what they need and want, and competition between suppliers insures that prices do not escalate beyond the means of the people. The goal of private agencies within capitalist societies, however, is not to maximize benefit to the people, but to maximize profit, and the interest in profit will always trump the interests of the people when the two come into conflict. A strong, activist "democratic" government can help insure profit does not trump the people at large.
Consider, for example, wages and the environment. In a previous post, I argued that as Americans, we have grown accustomed to exploiting China for cheap goods, predicated on two factors, low wages and lax environmental standards. As the Tiananamen Square protests demonstrated, the Chinese do not have a strong "democratic" government. They may have a strong government, but its strength was used autocratically to forcibly suppress the protests "after the government declared martial law. In what became widely known as the Tiananmen Square Massacre, troops with assault rifles and tanks killed at least several hundred demonstrators trying to block the military's advance towards Tiananmen Square. The number of civilian deaths has been estimated at anywhere between the hundreds to the thousands." Unless we are willing to accept "Chinese" conditions of low wage employment and virtually uninhabitable cities, which the limited government GOP seems to actively endorse with its opposition to raises in (or the abolition of) the minimum wage as well as the environmental regulation of the EPA. We could, in relatively short order, become China! Imagine, as Marc Lallanilla of Live Science reports, "thousands of dead, bloated pigs floating down the river that supplies Shanghai with its drinking water. Air pollution in Beijing so impenetrable the U.S. Embassy's air quality measuring station can only call it 'beyond index.' Industrial towns where rates of cancer are so high they're known as 'cancer villages.'" What's a bit of lead in the drinking water of Flint, when we can have that? And, like China, we wouldn't want to regulate away the boon, so we too should adopt "the Chinese government's stony silence about anything that might imperil the country's economic development — including environmental regulation." Although a significant segment of American society seems to yearn for a "strong" government, on the Chinese model, it is questionable whether we could also accept the Chinese conditions of low wages and an uninhabitable landscape. And how low is low? As the NY Times reports, even "Chinese shoemakers are building factories in Africa, where wages are about $40 a month, compared with $400 in China." Could Americans live on wages less than $500 a year to steal back the factories from outsourced Chinese factories in Africa?
Consider, for example, the current debate over health care. The editorial board of the Washington Post asked, "Americans are dying younger. Will the government do anything about it?" The pretext for the headline was a decline in life expectancy, for the first time since 1993. "According to the National Center for Health Statistics," they report, "Americans died at a younger age, on average, because of increasing mortality from heart disease, strokes, drug overdoses, diabetes, accidents and other causes, pushing the death rate up 1.2 percent." As they go on to suggest, one focus could be on diseases of despair, and they have dedicated a series to the rising toll of Drugs, alcohol, marketing and lax federal oversight and how they are working to "defy modern trends of mortality, perhaps most starkly among middle-aged white women." Of particular concern is the rise in opioid and alcohol addiction in white, rural America, the heartland that voted for Trump. While one should not jump to conclusions, it perhaps interesting that the top ten states for life expectancy include California and New York, with only one reliably red state, Utah. The bottom ten states for life expectancy are reliably red states, including Mississippi and Louisiana. Although one shouldn't read too much into the correlation, it is striking that lives are longer in the bluest of the blue states, shorter in the reddest of the red states, with all those "swing" states falling out between. Likewise, one can't tell if a single year of data represents a trend, but as the post goes on to point out, "even if not, the public-health challenges are huge: Too many people are dying of preventable causes, and many more are dying of diseases for which research could eventually deliver cures." And it seems clear that government, both state and federal, have a role. "The next Congress and president appear set on significantly curbing government health programs," and while it is debatable how government can and should intervene, I agree with the Post that "They should target real waste, not hobble the government’s ability to improve Americans’ health."
The Washington Post noted that the US spends more on health care than any other country, and listed three drivers of the high cost. "Chronic -- and often preventable -- diseases are a huge driver of personal health spending," they reported and one of the three most expensive diseases in 2013 was diabetes at $101 billion. Not all diabetes is preventable, but those forms associated with obesity and alcoholism are. While I don't think government has a role regulating the size soda we drink, even so, as they report elsewhere, the cost of treating diabetes keeps rising. "A version of insulin that carried a list price of $17 a vial in 1997 is priced at $138 today," they report, and "another that launched two decades ago with a sticker price of $21 a vial has been increased to $255." And why? The reason is fairly simple, and reminds us again that the goal of private agencies within capitalist societies is not to maximize benefit to the people, but to maximize profit, and the interest in profit will always trump the interests of the people when the two come into conflict. In today's world, one of the more valuable pieces of "property" that one can own is a patent, particularly a pharmaceutical patent, in part because it eliminates a core element of the free market, competition. Others cannot infringe on the pharmaceutical's intellectual property rights, and consequently the pharmaceutical companies can charge what the market will bear. In the case of life-saving drugs, like insulin, the market will bear quite a lot. So "seventy-five years after the original insulin patent expired, a point at which drug prices usually decline," in part because competition between suppliers drives down prices, "three companies have made incremental improvements to insulin that generate new patents and profits, creating a family of modern insulins worth billions of dollars." One might argue that the improvements, insofar as they actually are improvements, justify the costs, and we do want the pharmaceutical companies to continue investing in research that leads to actual improvements. Not all improvements, however, are actually improvements. As David Nathan, a Harvard Medical School professor suggests, “I don’t think it takes a cynic such as myself to see most of these drugs are being developed to preserve patent protection. The truth is they are marginally different, and the clinical benefits of them over the older drugs have been zero.” Nevertheless, insofar as insulin is a life-saving drug, the consumer is held hostage as "older drugs" are discontinued or priced to match the newer, patent-protected versions. The pharmaceutical companies are not going to call themselves out on the exploitation of the consumer, and curbing government health programs of the sort that could independently call them out does not seem like a prescription for a healthier system. That we spend more on health care than any other country, and are dying younger for all our expenditure, seems the real waste.
So, back to the initial question, what does "privatization" really mean? It means decreasing the size and/or effectiveness of "regulatory" government, particularly those agencies that serve to restrain and hold capitalism accountable on behalf of the people -- agencies like the Department of Labor, the Environmental Protection Agency, the Food and Drug Administration, and the Centers for Medicare and Medicaid Services. In doing so, power is transferred to any number of "private" agencies, under "private ownership," that intervene in and to one extent or another control our lives, and do so to maximize profit. These "private" agencies are not "democratic" in any meaningful sense of the word, and those who benefit most from them are those who own and those who run them. This might be OK, if we lived in the free-market world of our imagination. The Schumpeter editorialist for the Economist, lists a couple of basic ideas, "repeated ad nauseaum in every business book," that have little bearing on reality. The first is that "business is more competitive than ever." He points out that "the most striking business trend today is not competition but consolidation," and consolidation is "particularly advanced in America" where those engaged in monopolistic activities "are enjoying record profits." This impacts the second basic idea, that "we live in an age of entrepreneurialism." He points out that "the evidence tells a different story," and "the rate of business creation has declined since the late 1970s" in America, and "in some recent years more companies died than were born." Technology seems to be the glowing exception to this decline, with the outsized fortunes of the Mark Zuckerbergs, the Steve Jobs, the Bill Gates of the world serving as companies on the hill. Having said that, however, high growth start ups are rare, and "technology is high on the list of industries that are concentrating." As the Schumpeter columnist points out, "In the 1990s Silicon Valley was a playground for startups. It is now the fief of a handful of behemoths." Although the Schumpeter columnist addresses the myth that "business is getting faster" by suggesting that "firms often waste months or years checking decisions with various departments (audit, legal, compliance, privacy and so on) or dealing with governments' ever expanding bureaucracies" -- suggesting of course that we should decrease the size of regulatory government -- but it could be that the emerging handful of behemoths are less efficient simply because they are outsized behemoths. Privatization means transferring power, not to small, lithe, competitive and entrepreneurial companies, but from one leviathan to another -- the large, lumbering, monopolistic private sector.
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