Paterson calls for the privatization of public goods

On September 30th Governor Paterson announced the creation of a new commission to study the potential for what are known as “public-private partnerships” here in our great state of New York. The Governor claims that this is for the economic crisis, though truth be told he called for the same thing on April 22nd claiming it would help the Upstate economy. This sounds pretty good at first glance, since everybody likes a “partnership,” which my desk dictionary defines as “a relationship between individuals or groups that is characterized by mutual cooperation and responsibility, as for the achievement of a specified goal” (American Heritage).

This doesn’t seem too bad, after all in these dark economic times we need more cooperation, more responsibility, more people working not for their own benefit but draw our society (in truth, our world) out of the hole that unregulated greed has drawn us all into. After all, the NY business community immediately threw in their support.

Yet names do not simply describe, but often serve the purposes of the namer. What is a private-public partnership and what does it do?

Basically, the Governor wants to take State assets—such as bridges, roads, state parks, or the Lottery—and either lease them to private companies or sell them outright on the promise that they will be “leased back” immediately to the State. The Governor says that he believes that
the private sector can be a source of innovation, allowing us to increase the value, efficiency and safety of assets like our aging infrastructure system

Lets address these points and look at them in the light of both the recent global economic crisis and the decades-old Upstate economic crisis. Is selling or renting our parks and roads the answer?

The first claim of the Governor’s I want to address is efficiency. Without a doubt, there is considerable redundancy and inefficiency in our State governments. Much could be done in particular to reorganize local governments so that services do not overlap; this would probably aid in making local government easier to understand and more accountable as well. But what type of efficiency is Gov. Paterson talking about? Sure there are some structural efficiencies that can be improved—but that does not require a private business, only an improvement in the management of State agencies. And the Big Dig shows us that private enterprise isn’t always efficient, cheap or safe. But really what they’re talking about here is State jobs.

Private businesses, simply put, save money because they pay people less.

They don’t (generally speaking) have good paying, well protected, union employees. If we’re worrying about an economic crisis these are exactly the type of jobs that need to be protected first and foremost. We don’t need more minimum wage jobs here in Upstate New York. We don’t need any more jobs without health benefits or paid vacations or protections… we certainly don’t need those few good jobs we have being replaced.

Secondly, Paterson speaks of increasing value. The question is “value to who?” The value of sale? Are we planning on selling our roads and parks? State assets are not owned as business assets are and our elected officials are not a corporate board. The fundamental difference is that the only value business assets have is in how much profit they can generate while the only value public assets have is in how much benefit they can give to society and its citizens. It is exactly this type of value that we need to be pursuing here now, as we are pulled down we need to be talking about how our government assets can be a buffer to help people through hard times.

If businesses are to make profit, value, from state assets they must fundamentally change their orientation from public benefit to private profit. This will, as Governor Paterson attests, involve innovation, but it will be innovation that changes the character of these assets. In order to make profit and also pay rent to the State, profit must be ground out of these assets—and if it does not come from cutting union jobs it will come from making us, the citizens and owners of these assets, pay for services that we have never had to pay for before. What was previously the right of all citizens will become the privilege of those who can pay.

Finally, the Governor claims that safety will increase. This is a vague term, but since we’re talking about infrastructure here, he is probably referring to making it so our bridges don’t collapse and the like. This is of crucial importance and I am glad the Governor is concerned about it. But why exactly will privatization make us more safe? This is a strong claim, and I need to know why taking our safety from the hands of those we elected (and who are nominally accountable) and putting it in the hands of those trying to make a profit is a good idea. Safety is important, but do we need to lease our assets, to privatize what was public to do it? Is this the best way of making our society better?

In the end, we need to remember the simple fact that the private and public sectors have fundamentally different motivations. The private sector has a single, driving goal: profit for its owners and managers. While some companies temper this profit drive with ethical concerns, they are not required to do so (especially in this increasingly unregulated society) and the benefits of unethical actions are numerous. The public sector, while it has its problems, is fundamentally oriented in a different direction. While individual bureaucrats may be corrupt and self-serving, governmental agencies are organized around the principle of public benefit not private profit.

Our decades-long Upstate economic crisis continues and continues to spiral downward as the global economy sinks. It was deregulation, greed and a lack of foresight that brought us here. All that Governor Paterson offers us is more of the same: more profits to corporations outside the Upstate region, more union jobs cut, fewer people with healthcare and a continued decay of public services that we will all come to rely upon more and more in the coming days.

What we need now is a bold vision for the future, not more of the same. Yes we need to talk about efficiency, safety, value and most especially innovation, but private enterprise is not the path in which we need to go.