Last week, Gov. Ned Lamont squared off against Bob Stefanowski and Rob Hotaling in their first debate. If this is news to you, don’t worry, you didn’t miss much. However, Stefanowski did appear to suggest privatizing, at least in part, state transportation infrastructure such as Bradley Airport.
Sadly, Stefanowski didn’t clarify what he meant, and the matter seems to have been dropped. Which is too bad, because we could really stand to have an honest conversation about privatizing government services.
So what does it mean to privatize services? Who has been doing it? When does it work, and when does it not?
These are huge questions! We’ve been grappling with them since the Reagan era, when turning to the dynamism of the private sector to reinvigorate or reinvent government was sold to us as a brilliant solution. Conservatives, especially those on the libertarian side of the fence, argue that government is bad at most things because they’re an unaccountable monopoly, and that they should sell off everything to the more efficient private sector to save taxpayers money. Liberals, on the other hand, argue that the private sector only wants to turn a profit instead of serving the needy, and that government services are best performed by a government that answers to the people instead of a corporation that answers to shareholders.
Which is right? Well … Hmm. Given that local, state, and national governments all over the world have been obsessed with privatization for the past 40 years, you’d think there would be some fairly obvious answers to whether privatization works.
You’d be wrong! Surprise, welcome to the 21st century, where everything is complicated and hard and all of the solutions we come up with are deeply unsatisfying.
Let’s delve into this topic.
Privatization can mean a lot of different things. Sometimes it really does mean shuttering government services and selling them to the private sector wholesale. A famous case of this is when the United Kingdom sold off its railways in the 1970s. This may be what Stefanowski was getting at when he was talking about Bradley Airport and the private sector.
But this kind of selloff isn’t very common, more often when we talk about privatization we mean governments contracting with outside companies to take over functions the government used to do. Sometimes these companies or organizations are nonprofit, sometimes they’re for-profit. There has been, for example, a big push by the state to outsource different kinds of social services to the private sector over the past two decades. This has been a good thing in some ways, and a very bad thing in others.
The state used to run several large facilities, like Norwich Hospital in Preston and Fairfield Hills in Newtown, where people with serious developmental and mental health needs could be cared for. These places held thousands of patients at their height, and were often accused of being poorly-run places where people could be stashed and forgotten. As attitudes shifted towards providing people with services in their communities instead of in big state hospitals, these facilities shut down, to be replaced by local centers, group homes, and other services. Sometimes these were run directly by the state, and sometimes they were run by nonprofits contracting with various state agencies. As time has passed, the state has increasingly leaned towards funding private organizations instead of providing direct service.
How’s that going? It probably depends on who you ask. On the one hand, more services are available in local communities, and that’s a good thing. But on the other hand, private companies don’t have to pay their workers as well as the state would, which has led to desperate situations for many workers and a strike last year.
But what’s the alternative? The whole reason for privatization is for the state to find “efficiencies” by contracting services out, but in some cases, “efficiency” seems like shorthand for “we pay our workers a lot less and they have no benefits.”
However, if contractors pay their workers well, the cost savings evaporate. At that point, what’s the advantage?
There are also many types of services that are not designed to make money, such as transportation and education, where privatization has never yielded much in the way of positive results. Remember the series of private companies that ran Hartford schools for a while? That didn’t go well, either.
And yet, government and private enterprise can absolutely work together to fill needs, and there are times when competition from the private sector has made government services better. The current state of space travel, for instance, is a very interesting example of the private sector filling a gap left by the defunding of NASA. Private carriers like FedEx and UPS complement the post office, providing a premium service. Bookstores and Amazon have made library services better. It’s often easier to get DMV services done through AAA, when you can.
Privatization, then, is a real mixed bag. Sometimes it can work out well, but it seems to require a lot of oversight and careful planning. Sometimes the private and public sectors can work together to create better, more forward-thinking services. A lot of the advances in green technology that are going to help get us through the climate change era are coming out of the private sector, paid for in part by public money. This is good. This works.
But, like anything, it’s not a cure-all. We have to be careful about which kinds of services get contracted out, and why we’re doing it in the first place. That ought to be the lesson: privatization can often save money, but the costs will still show up somewhere down the road.