Government Contracting Ain't Privatization

I watched Bill Maher’s show on HBO where he interviewed Ron Paul. He hit Paul right out of the box with some of his more controversial sounding views such as his belief that the Civil War might have been avoided. Paul didn’t waffle on anything, and he didn’t come off as a nut or anything, but I was disappointed in Maher’s squandering an opportunity to air some views that are not usually covered in the mainstream media.

I was peeved by Maher’s and his panelists’ take on “privatization”. They evidently consider it “privatization” when a company is given a contract to perform a service for government. Is it any surprise that outsourcing government activity to Halliburton in Iraq, to contractors at Walter Reed, or to cronies of Bush in New Orleans results in disaster? Of course not. It’s still a government activity driven by the commands of central planners and as bureaucratically mismanaged as ever. That’s not “privatization”, that’s just plain old government contracting.

For me, to “privatize” something is for the government to stop doing it altogether or to give up its monopoly on doing it. Paul remarked that veterans would get better care if they were given vouchers to use at any medical facility of their choice instead of having to get treatment at government facilities. That’s closer to “privatization” than turning management of a VA Hospital over to a private company to run for the government. The key distinction for me is that the consumer or client gets to decide how to spend the money, and the vendors have to be responsive to them in order to succeed.

To “privatize” schools means for the government to stop operating schools and to allow schooling to be delivered in the marketplace. Setting up a charter school is not “privatization”. Contracting out school administration is not “privatization”. In my preferred scheme, the government would not even involve itself in schooling, but it could still work if the government wanted to give some families money to spend on education as they saw fit.