Tuesday, June 15, 2004

That's Not Private

Matthew Yglesias inadvertantly brings up a language issue that bugs me:
a friend and I observed a private garbage truck operating outside the bar. These guys loaded the trash bags onto the truck faster than anything I'd ever seen. Certainly it was way faster than anything the public sector had ever done. "Free markets work," I said, "I'm going to become a Republican." My friend knows that debates and said, "sure, but where's the accountability?" Soon enough the traffic light turned green and cars began moving accross the street, revealing that, in their haste, the crew had actually strewn all sorts of garbage -- newspapers, mostly, but no small quantity of glass -- all across the stree. Where's the accountability indeed? I'm staying on the left.

That's not "free market." That's outsourcing. Private companies do the exact same thing. It is merely accidental that the outsourcer is "public" and the service provider is "private." The government still takes responsibility for the service. By Yglesias's (implicit) definition of "private" -- directly administered by the government -- a service would only be public if it were done by machines or slaves owned by the government, or by elected officials. I call it public if government pays and determines who gets the contract. It doesn't matter whether the actual corporation which provides the service is private or public any more than whether the person or machine who does the work is. (Of course, it is private relative to Communism, in which all actions are under direct government control, but that's not saying much, and Communism's not on anyone worthwhile's top ten list for good governance ideas nowadays.)

Those who criticize government outsourcing and use the word privatization are obfuscating the issue. Being a Liberal/Libertarian/Radical Capitalist, I would have to say that privatization is always good in non-force-prevention services. That doesn't mean I believe outsourcing is always good. On the contrary, I can, perfectly consistently with my political philosophy, believe that sometimes it is good for government -- or, indeed, anyone who wants a particular good or service -- to keep a tight reign on how it's provided.

To be fair, advocates of government outsourcing also confuse the issue, talking about the increased efficiency of privatization as if outsourcing were the same thing. Privatization is something like dismantling the department of energy and completely deregulating power and dismantlingall other public power; or the Homestead Act; or selling off the Coal Mines in England; or what Russia did.

Of course, outsourcing is still sometimes a good thing; that's why companies -- private, rational, profit-interested, cost-cutting companies -- do it. So don't dismiss it just because it didn't work in one case; it worked in many others. (I remember reading from Jack Welch in Jack: Straight From the Gut that a lot of small business growth recently has come from companies like GE outsourcing their "backdoor" functions like food services for employees.)


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