Paul Krugman on Privatization - Can Lead to Abuse and Corruption
Submitted by arlenegloria on Mon, 07/02/2012 - 14:07
...can lead to abuse and corruption
by Paul Krugman
Recently, The New York Times has published several terrifying reports about New Jersey’s system of halfway houses — privately run adjuncts to the regular system of prisons. The series is a model of investigative reporting, which everyone should read. But it also should be seen in context. The horrors described are part of a broader pattern in which essential functions of government are being both privatized and degraded.
First of all, about those halfway houses: In 2010, Chris Christie, the state’s governor — who has close personal ties to Community Education Centers, the largest operator of these facilities — described the company’s operations as “representing the very best of the human spirit.” But The Times reports instead portray something closer to hell on earth — an understaffed, poorly run system, with a demoralized workforce, from which the most dangerous individuals often escape to wreak havoc, while relatively mild offenders face terror and abuse at the hands of other inmates.
It’s a terrible story. What’s behind this drive to privatize government?
Right-wing politicians like to frame the issue as a conservative belief in the magic of the marketplace, in the superiority of free-market competition over government planning.
But the one thing the companies that make up the prison-industrial complex are definitely not doing is competing in a free market. They are, instead, living off government contracts. There is no market here, and no reason to expect any magical gains in efficiency.
And, sure enough, despite many promises, such savings — as a comprehensive study by the Bureau of Justice Assistance, part of the U.S. Department of Justice, concluded — “have simply not materialized.” To the extent that private prison operators do manage to save money, they do so through “reductions in staffing patterns, fringe benefits, and other labor-related costs.”
Privatized prisons save money by employing fewer guards and other workers, and by paying them badly. And then we get horror stories about how these prisons are run. What a surprise!
So what’s really behind the drive to privatize prisons and just about everything else?
One answer is that privatization can serve as a stealth form of government borrowing, in which governments avoid recording upfront expenses (or even raise money by selling existing facilities) while raising their long-term costs in ways taxpayers can’t see.
Another answer is that privatization is a way of getting rid of public employees, who do have a habit of unionizing and tend to lean Democratic in any case.
But the main answer, surely, is to follow the money. Never mind what privatization does or doesn’t do to state budgets; think instead of what it does for both the campaign coffers and the personal finances of politicians and their friends. As more and more government functions get privatized, states become pay-to-play paradises, in which both political contributions and contracts for friends and relatives become a quid pro quo for getting government business.
Now, someone will surely point out that nonprivatized government has its own problems of undue influence, that prison guards and teachers’ unions also have political clout, and this clout sometimes distorts public policy. Fair enough. But such influence tends to be relatively transparent. Everyone knows about those arguably excessive public pensions; it took an investigation by The Times over several months to bring the account of New Jersey’s halfway-house hell to light.
The point, then, is that you shouldn’t imagine that what The Times discovered about prison privatization in New Jersey is an isolated instance of bad behavior. It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.
Paul Krugman writes for The New York Times.