While some have argued that privatization is an economically responsible alternative to public funding of services, such assertions often fail to address all aspects of private service provision. An informative article by Jennifer Light suggests that private operations can seldom serve the public efficiently without the assistance of the state. While it specifically focuses on the private security industry and the state-funded police that are no less burdened by calls for help, Light’s argument is applicable to a number of different industries. Light notes that, “While privatization is described as a ‘retreat of the state’ (Swann, 1988), evaluation evidence…reveals that the state does not retreat” (Light, 2001, p. 25).
What might the world look like if it did? The transition from public to private operation can be difficult, both on staff and the community being served. Operational changes are inevitable. In 1999, the Economic and Social Research Institute prepared a document for the Henry J. Kaiser Family Foundation which explained in great detail the conversion of hospitals from publicly-funded institutions to privately managed ones. Most hospitals chose to privatize because of financial difficulties caused by increased competition. The government’s refusal to subsidize institutions for those unable to afford medical care left many hospitals with no choice but to privatize. The complications inherent in this transition have been manifold. Notably, “Private organizations that were successful in negotiating agreements to purchase, lease or manage public hospitals were credible partners with a good track record in serving communities, including vulnerable populations” (Economic and Social Research Institute, 1999, p. 5).
Still, at some point we must recall that the primary motivation of a private for-profit organization is… profit. Will service be sacrificed in the name of revenue? While the aforementioned study has the wisdom to suggest that issues relating to access will need to be monitored by the community, the private company operating the facility might decide to label certain information as “proprietary,” thereby rendering monitoring difficult if not impossible. While it stands to reason that the financial stability privatization may provide has the potential to insure the delivery of no or low-cost services to the uninsured or under-insured members of society, the decision to privatize should be critically evaluated. Methods of ascertaining that the overall quality of services received is preserved should be available at all times.
The privatization of insurance companies serves to complicate the issue even further. Those citizens who cannot afford to purchase coverage, or those denied coverage due to a “pre-existing condition” as determined by the insurance company, often find themselves disenfranchised. While these individuals cannot be denied service, they can and are billed-and that debt can negatively impact credit, limiting the individual’s options for growth.
A final example serves to illustrate the possible dangers of privatizing an industry that has traditionally been funded by taxpayer dollars. Public libraries have long depended upon tax revenues to operate. In an uncertain economic climate, funding becomes a challenge. Conversely, library services are usually in higher demand. The twenty-first century public library provides a wide array of services, including but not limited to internet access, assistance with resume writing and the job application process, reference, programming, and readers’ advisory. In essence, the public library is a community center, a public good meant to insure free access to the information whose unfettered flow is essential for the successful functioning of democracy.
While a number of library operations have been outsourced, none of these has had a significant impact on the realization of the library’s mission. The American Library Association stresses the significance of the specific process being outsourced, insisting that, at times, outsourcing is in the best interest of the library. Privatization, however, suggests that the management of the library will be driven more by profit than by an interest in the public good. A report published by the ALA provides a thorough checklist for those considering privatization. Central to the ALA’s position on the privatization of public libraries is the role of the community in library operations. A privatized library system might refuse to allow the public to attend meetings on the grounds that the information disclosed therein was “proprietary” in nature. Furthermore, collection development would likely be managed from a single location by individuals who knew little about the actual needs of the community.
Privatizing the public library might also introduce bias into a system that strives to avoid it. The political orientation of the managing company might make it difficult to access information on certain topics, which could have the effect of making informed decision-making difficult. Accurate historical research might also be rendered impossible by the omission of certain information. Additionally, if the governing company chose to impose a fee for membership, the less fortunate members of society might quickly find themselves disenfranchised; excluded from matters in which they ought to have a stake.
In conclusion, while the strengths of capitalism have long been recognized and exploited, its machinations have also created deeply-felt divisions within our society. Efforts to privatize services essential to the protection and well-being of all citizens, and to thereby eliminate or reduce the need for state involvement, have financially polarized communities. Furthermore, they have seldom achieved their stated aims. Privatized entities are driven by one thing: profit. Income should not have a bearing on the extent to which certain needs can be met. Poverty can best be fought by insuring that basic needs are met,and that ideas on a wide range of topics are accessible to all.