The Trump campaign’s clarion call is that his chief qualification as a statesman is his roaring success in business. Leaving aside the dubiousness of his claims, what about the assumption that government should be run more like a “free enterprise”? We can discuss the major campaign issues in terms of the track record of government privatization over the years, and how they relate to the issue that neither of the leading candidates is talking about enough: inequality.
In a compendium of privatization disasters, the watchdog group In the Public Interest (ITPI) concludes that “government privatization disproportionately hurts poor individuals and families.” By shifting social costs onto the public, the market logic of “personal responsibility” serves as a pretext for a self-perpetuating spiral of social disinvestment.
One way privatization fleeces the poor is by making basic public services cost more. The received wisdom is that people will be more conscientious about “consuming” services when they have “skin in the game.” Yet this neoliberal market logic ignores the fact that what makes services so essential is exactly why they should cost less, not more. ITPI points to privatization schemes for water and electricity systems, which have hiked user fees for outsourced utilities, but suffered from a decline in the quality of services, and that spiking rates “particularly harm low-income residents and those on fixed-incomes.”
On the national level, under the semi-private Affordable Care Act, overall costs for the public health-care “consumers” are virtually uncontrolled, but the free market draws from unlimited spigots of government subsidies. Next year, even “wise” insurance “shoppers” are looking at monthly premium increases of over 10 percent. Plus, there’s only one insurance monopoly in some areas.
As economic security erodes and social services cost households more, they fall into a “safety net” that’s being ripped out from under them by the same privateering forces. One key example is the federal “welfare reform” that is entering its 20th year in 2016. Often billed as a pathway to “personal responsibility,” the welfare state has become a private bureaucracy: private contractors that process eligibility forms, and often run benefits programs.
In Florida, for example, the push for privatizing the administration of social programs in the early 2000s led to outsourcing of core bureaucratic functions. For federal food-stamp provision, the state instituted a data system for screening applicants under this supposedly more efficient “market-based” management solution. The contract led to massive data errors that produced cost overruns of $200 million.