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Privatizing Government: What’s at Stake?

Friday, June 29, 2012

In our increasingly market-dominated society, we have seen a strong trend towards privatizing government. Services and functions that have traditionally been provided by government - from prison management to schools to regulatory rule writing – are now being contracted out to independent agents through private markets for reasons largely relating to “efficiency”. Much of the scholarship pushing back against this trend focuses on showing the ways in which privatization has not led to greater efficiency, but in fact greater fraud and waste. While these arguments are undoubtedly important, there are also other fundamental issues at stake. As a society that seeks to have both a market economy and a democratic political system, there are certain tensions we need to be aware of and certain balances we need to get right. This includes understanding the values and requirements of democracy and the potential destructiveness of the market if it continues to be used as the fundamental organizing principle of economic, political, and social life.

The market, as a system, operates according to a logic that is fundamentally different from, and in tension with, that of a democracy. Oriented towards material pragmatism and devoid of any ethical language, the market can have a destructive authoritarian bent when it tramples over other important societal values, such as equality and justice. For example, with the opening up of the criminal-justice system to private companies, the drive to incarcerate and erect more for-profit prison-industrial complexes has surged. Although the rate of violent crime in the US has fallen by approximately 20 percent since 1991, the number of people in prison or jail has risen by 50 percent. Evidently, dissecting and farming off government to profit seeking market actors risks losing the accountability and responsiveness we demand from a democratic government.

Further, by deferring to the magic of market outcomes in carrying out government functions, the ideal of self-governance is completely undermined. Market reasoning strips public life of moral and political discourse; it deprives society of the opportunity to make collective decisions and exercise collective power over what ought to be done. To be sure, there are many technical advantages to a market system in terms of efficiency. However, there are many more political advantages to be gained from keeping government intact and fostering public accountability, involvement, and responsibility. These democratic ideals cannot come from leaving our fate up to the outcomes of the market, but rather must come from citizens’ practice in the exercise of power.

The encroachment of market reasoning into the public sphere can only serve to reinforce market principles and mores that weaken and depoliticize our political culture. Whereas democracy is meant to be a sphere of fundamental equals actively and responsibly participating in a decisionmaking community, the market is a sphere of isolated individuals with a single-minded focus on private, profit-maximizing interests. To allow the market to encroach further on our public sphere means allowing the further breakdown of community and solidarity, and the rise of concentrated, unaccountable power.

Undoubtedly, the market economy can be a valuable and effective tool for organizing productive activity. However, in focusing so much on protecting the market from society’s demands, we tend to forget about protecting society from the market’s demands. There is a very real danger involved with allowing market values to fully penetrate into our social relations and other valued spheres of life. In order to meet the requirements of democracy, we need to balance the market sphere with a robust and whole political sphere, and protect the integrity of our public institutions, goods, and spaces. This means having a clearer understanding of what markets can and cannot safely provide and be involved in.