Iowa’s recent very unpopular and poorly thought out experience with the privatization of the administration of Medicaid in Iowa makes one wonder what are the roots of privatization in this country and how pervasive is privatization. Much like guns or health care, no one else in the industrialized world does privatization (or profitization as many call it) like we do in the United States.
How was the right able to get the country to move from having most of their public services provided by governmental agencies to a point where even some of the most basic of public services are contracted out to a private supplier? For those of us who have had it happen to us but never understood why or what the driving force behind it was, Talking Points Memo has begun a series that will hopefully answer those questions.
So far the introduction and the first part of a four part series have been posted at the site. From the looks of the start this will be an extremely informative series and one well worth your time to read and understand.
Here is a little teaser from part one of The Hidden History Of The Privatization Of Everything:
“Austrian-born economist Friedrich von Hayek was the movement’s intellectual leader. His 1944 book, The Road to Serfdom, is considered to be the intellectual wellspring of anti-government, pro-market ideas and the privatization of public goods. The book was met with surprising success – with excerpts printed in Readers Digest and Look Magazine. It continues to be a significant influence on politicians, journalists, and business leaders. House Speaker Paul Ryan considers Hayek his intellectual guru.
Yet public support for government remained high throughout the postwar years as public services expanded and the economy grew. Hayek and his followers, therefore, were powerless to stem the continued growth of government activities throughout the 1950s. This began to change in 1962 with the publication of Capitalism and Freedom by economist Milton Friedman. Friedman was an effective promoter of two critical ideas: governments were just like markets and government was a public monopoly. Both of these became central arguments of privatization advocates in the 1970s and 1980s.
Friedman’s most important insight was that privatization didn’t necessarily mean cutting popular public services. The public still trusted and valued government programs; Friedman’s argument gave privatization advocates a new approach by making the distinction between government responsibility and government provision of public goods. You could put public services in the hands of private contractors while still maintaining the program. Friedman’s real agenda, though, was clearly about removing public responsibility as well. He called for the elimination of Social Security, the minimum wage, public housing and all national parks.”
A friend told me way back in the 80s that once the privatization started it will be impossible to stop, let alone reverse. This is an easy way for politicians to claim they are saving taxpayer dollars, even though they often are more expensive. Privatization is also an easy way to avoid blame when something goes wrong. This is near and dear to a politician’s heart.