Carving Up Government

Little suspense was involved when President Reagan’s Commission on Privatization of federal services issued its 278-page report recently. The majority of appointees were advocates of privatization, and the commission relied heavily on the market-oriented Chicago school of economics. Its study of 11 programs resulted in recommendations of privatization or the contracting out of services to private industry in each case, from the U.S. Postal Service to the federal prison system.

The commission’s bias does not mean that many of its recommendations should not be considered seriously. There are many cases in which business could provide federal services more efficiently. Oftentimes the rationale for government’s original intervention no longer exists.

There is a fundamental flaw in the study, however, that tends to undermine its good points. The report is steeped in anti-government ideology and the virtue of economic efficiency. The social benefit of government too often is ignored; government services are inefficient by definition, and private services are necessarily better.

There also is the assumption that federal bureaucrats are consumed with their own job security and empire-building and have little concern for achieving the public good. There are such bureaucrats, of course, just as there are in business and industry. And it is more difficult to get rid of the bad apples from government, but the Civil Service also provides a stable and experienced work force.

In a political/economic statement that constitutes the final chapter of the report, the commission says that American society has become so diverse and ridden with special interests that it has become impossible for government to determine the general public interest except through laborious compromise. Therefore, major choices about the sorts of services that government should provide should be left to the private marketplace. Those who get the services should pay for them. Indirect subsidies, like those for rural mail delivery, should be eliminated because they are economically inefficient, and they should be replaced, if necessary, with direct support through general tax revenues. The problem is that if political choice is left to the marketplace, such services might suddenly be deemed unnecessary.

There always has been a clashing of interests in the American political system. Compromise always has been an essential ingredient in defining the general good. The American form of representative democracy never has been very efficient, either in reaching decisions or in providing services. But it strives to be fair and equitable. It takes care that essential services are provided to all citizens--not just to those who can afford to pay.

The President’s commission has many worthwhile suggestions, but its report suffers from its neglect of the fact that government is a social contract, not a business deal. Government provides services because it should. The service is there as long as there is a need and Congress wills it to be there. Business provides services to make a profit. The service is there only so long as the business executive finds it profitable to provide the service.