If you talk to Republicans about the Government, they’ll tell you that the more we privatize, the better because of greater efficiency in the private sector. My answer has been that, aside from the greater efficiency being mythical (which is why Dilbert is about the private sector), the intrinsic problems are that privatization adds an extra layer of expense in the form of profits for stockholders and that the ultimate focus of the organization shifts from ultimate responsibility to the public to ultimate responsibility to stockholders.
This morning I heard a news report on NPR that reinforced my assessment. It concerns a lawsuit filed against the largest private prisons corporation in the US, CoreCivic, for actions in a prison in Georgia. How can a corporation improve its profits? One way is to reduce labor costs. The problem in this case is how CoreCivic is accused of doing that:
By forcing immigrant detainees to work for as little as a dollar an hour.
”Forcing” can mean anything from restricting access to necessities for those who refuse to placing those who refuse in solitary confinement.
Forced labor is illegal. Also, if you pay someone a dollar an hour you’re eliminating a job, because someone has to do that job and ordinarily whoever does is paid at least minimum wage.
Looked at in strictly economic terms (and ignoring both basic decency and the law), a Republican looking at this would argue that reducing that wage saves the public money, which might be a weak argument for privatization if we thought any of that savings would be passed on to the public, so instead it’s really no argument at all.
By the way, this sort of practice is limited neither to this prison nor to this prison company. This is not an isolated problem.
As a general rule, you get what you incentivize. Maybe I should say you get what you reward. If incentives are geared primarily around making stockholders richer - and this is not only a financial incentive, it’s a legal incentive because of Fiduciary Responsibility - we’re going to see results like these. It doesn’t matter what any given party says they want, what matters is where they put the vested interest.
If the primary vested interest is not in public service, the primary result won’t be either. And, in privatization, the primary vested interest can’t be.