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Privatization

 With budget squeezes, government agencies have been turning work over to the private sector and with remarkable results:

  1. Housing    Tenant management of public housing in one location raised rent collections 105%, cut vacancy rates 13%, cut administrative costs 60%, crime 75% and teenage pregnancy and welfare dependency 50%.  In other cities the same arrangement cut vacancy18%, robbery 77%, and crime 66%.
  2. Parks    Some have become self-sufficient.
  3. Transit    300 transit systems contract their services saving 10% – 50%.
  4. Fire    One fifth of Arizona’s cities contract with a private firm for about a third the national cost.  This has brought better service and lower insurance rates.
  5. Education   Many private schools consistently outperform public schools that have two to five times the money.
  6. Health   The growth of profit hospitals has caused non-profit hospitals to be more efficient by limiting charity care, increasing collections, and reducing staff.
  7. Justice    There is a rent-a-judge arrangement in Calif. which is fast and takes some of the load off the courts.There is “mediation” in many states which handles cases in 2-3 weeks instead of the usual 47 months.  It’s not as good as trial justice, but it’s faster, cheaper, and offers greater access.  Since it’s voluntary, clients are usually more satisfied.  Settling matters this way prevents major legal problems.
  8. Mail    Contracting rural mail to thousands of private carriers has brought savings of up to 2/3rds.  The success of UPS and Federal Express is well known.
  9. Sports    The ’84 Olympics were handled by the private sector with excellent results and a great surplus of money.
  10. Travel   Lower rates and more ticket outlets.
  11. Local  government    73% savings on janitorial work and 42% on refuse collection.
  12. Federal  government    Bidding saves 20%
  13. Regulation    The private sector regulates some electrical equipment (through Underwriters Laboratories).  This could be extended.  A manufacture would choose among private inspectors and have his work inspected at his convenience, which would save money.  He would pay for the inspection and pass the cost on to the consumer.The private inspector would be more honest as his company is liable.  To avoid penalties or loss of business, the company would have to do a good job.

    Private inspectors would bring order to the chaos of different local, state, and federal codes.  The public would get safe products faster, like life-saving drugs.  It would get the benefits of high technology made safe by private inspectors, not what we have now – high cost regulation with no sense of safety, and in some areas, a lot of bribery.

  14. Other countries    As of 1993, 29 of Africa’s poorest countries had sold 5% of their operations to the private sector.  After England sold Jaguar, sales doubled, l000 jobs were added, and the company made a profit.

Most government functions were handled by private agencies at the turn of the century.  Returning to this would break up public monopolies, which pay their workers 16% more [including benefits] than they would get in the private sector for the same work.  It would utilize people who are less credentialed but often more able (as private schools do).

It is opposed by bureaucrats and unions as it threatens their jobs and turf.  It’s also opposed by many liberals who are suspicious of profit and tend to think solutions should come from government. 

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One Response to “Privatization”

So excited I found this article as it made things much clearer!

  • Anonymous August 12th, 2011 8:33 pm
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