Does a corporation have a soul? Or bean counters are going to count beans

17121923990_ba6b3b8fe6_zAn article today in The Guardian does an excellent job of deconstructing the ramifications of the right-wing “privatization” agenda.  See Ben Tarnoff’s “Privatizing public services could spell their demise – and the end of democracy”.   Tarnoff cites the underlying premise of the privatizers, noting:

“For years, they have advanced the argument that business will always perform a given task better than government, whether it’s running buses or schools, supplying healthcare or housing. The public sector is sclerotic, wasteful, and undisciplined by the profit motive. The private sector is dynamic, innovative, and, above all, efficient.

This belief has become common sense in political life. It is widely shared by the country’s elite, and has guided much policymaking over the past several decades. But, like most of our governing myths, it collapses on closer inspection.”

Consider Tarnoff’s take on healthcare:  “No word is invoked more frequently or more fervently by apostles of privatization than efficiency. Yet this is a strange basis on which to build their case, given the fact that public services are often more efficient than private ones. Take healthcare. The United States has one of the least efficient systems on the planet: we spend more money on healthcare than anyone else, and in return we receive some of the worst health outcomes in the west. Not coincidentally, we also have the most privatized healthcare system in the advanced world. By contrast, the UK spends a fraction of what we do and achieves far better results. It also happens to provision healthcare as a public service. Somehow, the absence of the profit motive has not produced an epidemic of inefficiency in British healthcare. Meanwhile, we pay nearly $10,000 per capita and a staggering 17% of our GDP to achieve a life expectancy somewhere between that of Costa Rica and Cuba.”

As Tarnoff notes: “A profit-driven system doesn’t mean we get more for our money – it means someone gets to make more money off of us. The healthcare industry posts record profits and rewards its chief executives with the highest salaries in the country. It takes a peculiar frame of mind to see this arrangement as anything resembling efficient.”

Tarnoff continues: “But government isn’t a business; it’s a different kind of machine. At its worst, it can be repressive and corrupt and autocratic. At its best, it can be an invaluable tool for developing and sustaining a democratic society. Among other things, this includes ensuring that everyone receives the resources they need to exercise the freedoms on which democracy depends. When we privatize public services, we don’t just risk replacing them with less efficient alternatives – we risk damaging democracy itself.”

Tarnoff has more – take a look – but I think you can verify his point of view in a variety of sectors.  What is going on with privatization is that the corporate sector, led by a group of super rich oligarchs, is monetizing every activity they can get a handle on, be it education, highway construction, nursing homes, or the media.  They’ve even done it with the private military contractors, the Blackstones, which allow transfer of public funds to the private section in exchange for security.

Here’s the bottom line – corporations provide a good model if what you want is to efficiently produce widgets, particularly if you ensure competition and set reasonable regulations for  employment of labor and protection of the environment.  But corporations at heart do not have a heart – they are enslaved by the profit motive, the obligation to shareholders, and the power of the ruling board.  That’s fine for maximizing profit, but works poorly if a human factor is involved.  The corporation doesn’t care if you live or die if it doesn’t affect their bottom line.  They can’t help themselves – they pay high priced MBAs to ensure they don’t waste a dime just to help someone out.  If they set the price of a drug, the issue is not whether people can pay, or how much does it cost to produce, but what price makes shareholders the most money.  That’s the wrong criteria if you are concerned about people with modest resources who are battling cancer or AIDs or diabetes.

In ideological terms, it is clear that a modern state must balance appropriate profit motives and capital accumulation – capitalism, if you will – with appropriate public sector programs addressing important human needs.  Call it what you will.  If we want public services that address human needs – such as universal education, or universal healthcare, or national security – the public sector should control resources necessary to ensure that the public needs are addressed.  This is not new; it was the foundation of FDR’s New Deal.  And yes, it is as simple as that.


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