They Want To Privatize Everything4 min read

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One of the most important trends afoot right now is the move to privatize as many government services as possible. Billionaires like Bill Gates, along with hedge funds, are pushing an agenda of privatizing public schools, and funding a PR push in support of that cause with films like “Waiting for Superman” and the NBC “Education Nation” that included a panel with the title “Does Education Need a Katrina?“.

This trend is fueled by the desire of the richest Americans to seek new income streams. Instead of spending their cash hoard on innovating new products or businesses that can create jobs and lasting economic activity, they’re engaged in a process of rent seeking, which has no productive value. By taking tax dollars that currently provide public services and channeling them to the private sector, which contracts to provide the service at lower cost – and therefore at lower quality – these wealthy individuals can add new income streams while also blunting any effort to raise their taxes to provide these services.

It’s not just schools that are targeted for privatization, however. As the New York Times reports, Santa Clarita has privatized its library – even though it wasn’t forced to by financial considerations:

A $4 million deal to run the three libraries here is a chance for the company to demonstrate that a dose of private management can be good for communities, whatever their financial situation. But in an era when outsourcing is most often an act of budget desperation – with janitors, police forces and even entire city halls farmed out in one town or another – the contract in Santa Clarita has touched a deep nerve and begun a round of second-guessing.

Can a municipal service like a library hold so central a place that it should be entrusted to a profit-driven contractor only as a last resort – and maybe not even then?

“There’s this American flag, apple pie thing about libraries,” said Frank A. Pezzanite, the outsourcing company’s chief executive. He has pledged to save $1 million a year in Santa Clarita, mainly by cutting overhead and replacing unionized employees. “Somehow they have been put in the category of a sacred organization.”

In his rather blunt and offensive way, Pezzanite actually lays out the stakes pretty clearly. In a county that has turned pursuit of profit into a civic religion, and that since 1980 has argued that all government activity and policy should be oriented around producing corporate profits, it is indeed an open question whether there is any room left for the concept of the government providing services directly to the people, without having to give an investor a cut.

Public libraries have been operating quite effectively and efficiently for over 100 years. The notion that one would privatize the library just so some company can make money was virtually unheard of, at least in California, for the last century. But that was before the era of Reagan, Schwarzenegger, and Whitman.

The privatizers’ method is the same: fire all the employees, regardless of how good at their jobs they are, so the company can replace them with cheaper labor, increasing their profits at the expense of quality services and middle-class wages. It’s wealth extraction at its finest, the corporate raider having shifted his target from an ’80s manufacturing plant to a ’10s library.

Why would Santa Clarita go along with this? It’s likely that the council are merely outliers, the first ones to make a highly ideological move that will be quickly taken up by right-wing (and some not so right-wing) councils across the state, demanding privatization to suit their ideological agenda and justified by overblown and misleading concerns about pension costs.

It’s true that I have more than a passing interest in this topic, as the husband of someone working at a public library. But it’s the bigger principle that really matters here. Public services should be provided for the benefit of the public – and not for the benefit of some company’s bottom line.

When profit becomes the primary motive, all else is sacrificed to it. It’s not what most Californians want for their state and their future, but unless we fight back hard, they will privatize everything, and keep the profits while we get stuck with the risks – and the losses.

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Robert Cruickshank is the Public Policy Director at the Courage Campaign. He is also a contributing editor at Calitics.com.

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