I’ll eventually tell you the reason I’m asking this, but right now I’m gathering reader sentiments to widen my expertise.
Here’s the issue:
Some people maintain that privatization of things like healthcare, education, and transportation (like railroads) is always better than things like government-controlled education, national rail systems, and national health systems (like the NHS in the UK and national healthcare in Sweden) because “market forces” will always do a better job than “control from above”. And indeed, at least for healthcare, in Sweden, the UK, and Poland there have sprouted parallel systems of private medicine because (presumably) the national healthcare system can’t do a good job. (Waiting lists for treatment can be very long.) I think Canada has largely avoided privatization of medicine.
Here’s my question to readers: do you agree with the privatization of healthcare, education, and transportation are almost invariably better than government-regulated or government-run entities?
What about funding for science research: should it also be taken out of the hands of the state and left to the private sector?
If you have good reasons for your opinion besides anecdotes or your gut feeling (e.g., studies of the effects of privatization), that would be appreciated.
I do not agree with the privatization of these services. I certainly do not think that funding of scientific research should be purely down to private companies either.
We have, essentially, privatization of health care now (the health insurance company model). I consider that a dismal failure. In general, I would agree that private companies tend to be slightly more efficient than government (because of competition). But, I trust government to more logical health care decisions because than private companies because exist to maximize profits and one can obviously maximize profits by denying benefits. If we had a single-payer health care system, we would also obviously save on paperwork and bureaucracy costs.
We have, essentially, privatization of health care now (the health insurance company model). I consider that a dismal failure. In general, I would agree that private companies tend to be slightly more efficient than government (because of competition). But, I trust government to more logical health care decisions because than private companies because exist to maximize profits and one can obviously maximize profits by denying benefits. If we had a single-payer health care system, we would also obviously save on paperwork and bureaucracy costs.
I do not agree with privization of services or research.
Neo-Liberalism the act of elimination of Public services and putting them into Private for profit hands has shown to be more costly, less helpful, the bottom line becomes profit not service or life. So NO. Not a good idea.
Just look at Kansas as an example.
Absolutely not. The argument that “market forces” do a better job is nonsense. In all cases, is always a conservative government which deliberately breaks it, and then says “see? id doesn’t work”. Things like education and healthcare should be public and accesible to all.
“a conservative government which deliberately breaks it, and then says “see? id doesn’t work”
This is precisely what four decades of free market true believers in the legislature have done to public education in Florida.
In Ontario, a little more than a decade ago, the Conservative Minister of Education John Snowden, was caught on tape (video) saying to a crowd of conservative supporter types something to the effect of “You have to create a crisis to get things changed.” They then went about screwing up publicly funded education, leading to one of the only massive full province wide teacher strike. It was a calculated move to soften the masses to accept charter schools, vouchers and the like. Their seemingly purposeful mismanagement of the system, continues to have repercussions even today.
Sorry — John Snobelen not Snowden (although I like the Freudian I had there)
Wasn’t it John Snobelen? I believe he bragged about being a grade-10 drop-out. One of Mike Harris’s wonder boys:-(. I was laid off for two years under those clowns. One of their “theories” was that anyone could teach math and computer science but they had to keep the hair-dressing teachers regardless of seniority.
Yeah, the Harris boys I think were the ones that made “ignorant” fashionable in Ontario.
Being not only ignorant, but mis-educated in bunkum is very popular in the USA. They think Democracy means their garbage is equal to the truth and facts.
And then the Ford boys ran with it…and are now being recruited by Harperman…
In other news, Go Jays. Kick the Royals’ butts!!!
Of course the “market forces” do a better job! How else could the shareholders get rich? /end of sarcasm …
Market forces have no empathy in fact when market forces are allowed to guide we and anyone else becomes a psychopathocracy since psychopaths do will in market driven environments. Not a pleasant place to live in.
Yep – this has been my experience with conservative governments as well.
(I just got invited to a Going Away Party for Stephen Harper- fingers crossed)
Market forces do not lead to the kind of competition right-wingers think they lead to. Instead of trying to provide better products/seevices than competitors, the usual MO is to cut ever more corners, to try to squeeze as much profit out of as little capital as possible. Market forces do not drive quality up. They are much ore likely to instigate a race to the bottom.
Generally speaking, I think privatization of healthcare and education would put the emphasis on the wrong things.
Maybe better, but not for everyone.
NO to both.
No way is privatization invariably better, assuming by “better” you mean “available to everyone”. A completely privatized system is better for the wealthy but not for others.
In the US, in 2015, I would think this is obvious. There are still far too many people who do not have decent health care available to them.
You better watch it with pinko talk like that – you’ll have to flee to Canuckistan!
Please, may I?
Actually, with the chances that one of the numerous Republican troglodytes may be our next president, I’m wondering how difficult it would be for me to flee to Canuckistan!
Wait until our federal election is over on October 19 to see if you still want to come here! If the PCs get back in, it may not be somewhere you’ll want to be.
Please don’t call them PCs. The Reform Party merger has killed anything “progressive” about the old Progressive Conservative party!
Well, they aren’t really Tories either.
I do not agree that privatizing public services is always the best solution. The problem is that there are very different incentives for these services depending on who owns them. A very clear example is prisons, which, when owned by the public have as a goal to keep society safe, either by confining dangerous people or rehabilitating them. When prisons are privatized their main goal is to profit economically, which they accomplish by keeping as many people imprisoned as possible. Not desirable if we don’t want families disintegrated because of minor offenses, which has been happening for a couple of decades in the US.
I am not opposed to public/private investments or privatization of public services as long as there is transparency and the public good remains a top priority.
Sweden and the UK do have competent public health care systems. However, the wealthy wants a system that’s better because they can afford it.
In the US we basically have a system for the wealthy that has abandoned those in need.
I don’t have a problem with a “better” system for the wealthy as long as good healthcare is provided to all.
No to both.
“Some people maintain that privatization […] is always better than […] government-controlled [… systems] because “market forces” will always do a better job than “control from above”…”
Here is where your postulation goes off in the wrong direction, for myself and others who object to government control: the ‘because’ is not the pragmatism of “better job” as you posit, but rather the philosophical position of freedom, meaning the individual’s absolute right to his life, including property. It is an objection on principle to the coerced confiscation of wealth/income from (supposedly) free sovereign individuals, to be piled up in government treasury, then disbursed as authority decides.
In this light, the discussion of “better job” is a non-starter; the entire project of political collectivism is condemned.
Right on!
“…but rather the philosophical position of freedom, meaning the individual’s absolute right to his life, including property.”
Your property rights are not about freedom but rather the governmental enforcement of a host of regulations on the ‘ownership’ of property. Why do you get to call your big government enforcement ‘liberty’ while the big government enforcement of the distribution of health care to all is called ‘coercion’?
Right on!
Government as protector of individual rights, including the property of every individual, is only that: protection against violations of a citizen’s sovereignty. Government cannot “enforce” freedom/property, it only protects it for individuals. There is no “host of regulations” granting/enforcing ownership; ownership is intrinsic to the existence of the human being.
“ownership is intrinsic to the existence of the human being.”
This is an empty claim. Sort of like saying that “God is the ground of all being.”
Ownership, however, might be useful in producing the sort of society we want to live in, but it’s a tool, not an end in itself.
Well said.
Why is the right to own property more fundamental than the right to life?
I’d extend that to the right to a good life worth living.
Anyway, we live in a society. Our quality of life is not independent of everybody else’s quality of life. As I understand it a significant impetus for government funded education was that an educated populace is more productive, and if the government is paying for it they have a right to determine what it should look like.
Furthermore I believe it is false to treat government as some sort of authority just telling us what to do. In a democracy the government is ours, it is OUR authority with power to direct what WE do as a society, and to collect taxes and spend them in ways that we feel benefits our community. If you don’t like what they do vote them out. If you find yourself in the minority then maybe you should consider that most people don’t share your vies, and maybe you are wrong.
Oliver Wendell Holmes Jr. — ‘I like to pay taxes. With them, I buy civilization.’
I don’t exactly agree, I’d prefer to pay no tax, but I think the rewards are worth acquiring, and I cannot buy them all on my own.
Then what; you want is live and let die. You would have fiefdoms and we can return to the surf-slave system once again.
Maybe you can find your own Gault’s Gulch but the rest of us like civilization. Give and take. But you have to have good people in the govt and it has to be good govt in itself. It isn’t automatically bad nor good. We have to make it that way. Right now the Plutocrats are making it their way.
Right now the govt is run mostly by and for the few, the proud, the super rich here. Why you never ever hear about how much being spent on one of those military expeditions to Pakistan or Iraq or a 100 others countries for any such war. But if it actually helps people directly here there is so much hemming and hawing about cost it is like a the worse thing to do.
Not sure exactly what you are responding to.
I meant that I don’t really like paying taxes but I accept that they are necessary. I’d prefer civilisation were free, but it ain’t.
Agreed.
The original comment is a philosophical disposition masquerading as economic theory. That argument does not rest on the results of it’s application, it rests on the theory that government is inherently dysfunctional and/or corrupt, if not flat-out evil and the theory that paying taxes, otherwise known as the wages of living in a modern, civilized society is tyrannical oppression. The results don’t bear this out. Which is why blue states are typically donor states and red sates are typically dependent states that can’t keep the lights on without help from the Feds. Or, why self-styled small government conservatives have trashed federal disaster aid in public, only to send pleading letter after pleading letter to the oval office demanding aid when their state is beset by a disaster.
@bobsguitarshop
No, the position I presented is not based on the notion that “government is inherently dysfunctional and/or corrupt, if not flat-out evil.” My position is that government is inherently magnificent. Entailed in ‘government’ is this, however: government is magnificent as long as it does not violate the individual rights of its citizens, including confiscation of wealth. A definition of a collectivist state as “modern, civilized society” is an atrocity.
Again, you’re comment is purely philosophical and, as I stated earlier, the results don’t support your theory.
@bobsguitarshop
Your dismissal of ‘philosophical’ is (to say the least) unfortunate, considering the awful reality of the cost of ignoring bad political philosophy, namely collectivism.
You might have “stated” something about ‘results’ but that is meaningless when you ignore the damage done by your pragmatism.
Please back up your assertions with some facts, even an anecdote.
I’m not sure what you think of as collectivism, but if you read my comment at #19 I actually endorsed a place for both private and public funding.
As far as philosophy is concerned, I will always dismiss the theoretical in favor of the empirical and I see the damaged cause by a lack of pragmatism in American politics every day.
I’m basing my argument on results rather than hyperbole. I’m not Chairman Mao because I disagree with your fundamentalist and, in this thread entirely theoretical, approach to economics.
Who do you expect to join the military to go in harm’s way – to possibly be killed or maimed for life – on behalf of preserving, protecting and defending your philosophical position and financial interest(s)? Does anyone owe you some sort of moral/ethical duty to do that? If so, on what basis?
Yeah because children starving in the streets and being allowed to have the freedom to work for bread in dangerous factories is just the price one needs to pay to stop the gummint from taking MY money and givnit to dose filthy little orphans. Let freedom Rain!!
Your arguments are selfish in other words!
Then why would your government not ensure the health and education of its citizens?
@ Diana MacPherson
A government’s job is to use force. This is inappropriate when it is wrongly given the task to “provide” services to citizens. Its force power should only be used in rectification of crime (violations of citizens) and attack (violation of the nation by outside agency).
In a political culture that I am describing, citizens would provide for their needs, not government. This includes group action such as insurance and pooling of aid. No ‘forcing’ necessary for those.
“In a political culture that I am describing, citizens would provide for their needs, not government.”
Please explain how.
“A government’s job is to use force.” Good heavens! What sort of government are you thinking of? I thought a government’s job was to implement the will of the people.
A government’s job is to use force? Rather than,say, look to the good of its people and protect the weaker from the predations of the stronger?
I will never understand Bircher types. They are simply bizarre.
@John O’Neall, exactly what I was thinking!
The problem I see with citizens providing for all their needs is the very reason governments successfully apply force (the idea of the Leviathan as Pinker describes it): it is (or at least should be) unbiased in application. This is largely achievable in a democracy.
If I have understood him correctly, Pinker says that violence has decreased to large extent because the state provides police and judicial services (mostly) without fear or favour, without bias. Ok it isn’t perfect, just a lot more perfect than the alternative previously tried, where private citizens provided their own justice.
We see the same sort thing with other services. Education systems designed to satisfy only private sector requirements tend to be narrowly focused and not a lot of use to cope with the vagaries of economic variabilites. Health care delivered purely on a fee for service tend not to provide good service for the vulnerable, such as women and children, the poor, and the disabled. That in turn tends to trap sup people in poverty and condemns them to a life of low productivity.
PS: in a democracy a government’s job be whatever we fornicating well want it to be.
That is, assuming government’s higher echelons aren’t paid puppets of some other entity/entities.
A lot of people have neither property nor those freedoms on which everything else rests, unless the Libertarian system makes it the first priority to provide these freedoms unconditionally (this would steer into the political left).
Right wing models usually omit or negate this (despite that Hayek has e.g. minimum wage in his system, which isn’t even enough). That leaves a lot of people hungry and they need a place to stay. They are therefore not free.
Right libertarians propose a “voluntary” slave society where people “freely” sell themselves to live another day, and call that free market. It’s a “free” bargain with one person having a gun to their head while they “voluntarily” agree to sell their left kidney, a place to sleep on the floor and a bowl of rice. Alternative, they can “opt” to drop dead, but only after they paid the rent for the ground they intend drop on.
I guess neanderthal society is more just. They can strangle the rent seeking parasite yuppie overlord and invent some other system, where in the right libertarian dystopia he just calls a private gang of police to protect his “rights” to exploit the poor, who can’t do nothing about it.
1+
Governments ARE citizens I don’t get your them vs us rationalizations. Them ARE us.
Is the government not tasked with, among other tings, ensuring domestic tranquility?
How do you propose that this magnificent government of yours do anything magnificent if you (the governed) don’t give it the resources to do so?
Before you bring up wasteful spending, think abou how much we spend on wars and the military.
As a veteran of the peace-time military (1984-1988), I can attest to at least the mis-directed spending. These were the Reagan years, when military spending went up. I was in a ‘showboat’ unit – the U.S. contingent to a NATO quick reaction force. These units were supposed to be the cream of the crop. Yet we drove 30 year old vehicles, used the same hardware used in Viet Nam, etc., while our allies had top of the line new equipment, etc. Point is, we SHOULD have been the recipients of this new influx of cash – we were the point of the spear, so to speak, yet it seems the DoD was too wrapped up buying $300 toilet seats and trying to make crazy Ronnie’s fantasies come true.
So paying for such nice things as clean running water, paved roads, lighting etc. are what to you? So you are a rugged individualist who still relies on others despite you lack of recognizing them. A bankrupt philosophy that just doesn’t work in the real world. L. Neil Smith is just like you in that area.
But it isn’t an absolute right, and AFAIK never has been in any civilized country for the entire span of history. You’re basically trying to equate ‘freedom’ with radical libertarianism and saying anything less isn’t freedom, but most people don’t see it that way. Most Americans think freedom of speech is achieved even without the right to directly incite violence. Likewise most people the entire world over think property rights are achieved even without the ‘right’ to not pay taxes.
Lastly, that sort of absolutism amounts to basically giving every individuals a veto power over collective decision making (because government taxation and spending is, in essence, us citizens exercising collective decision making). I don’t see how that could ever work as a system. In your world of inviolate property rights and no third party judicial system, how do you resolve disputes over property ownership? Thunderdome?
@ eric
“Likewise most people the entire world over think property rights are achieved even without the ‘right’ to not pay taxes.”
This is their error. And..notice that you had to state it as a negative. How would you postulate it as a positive?
“…giving every individuals a veto power over collective decision making…”
What gives the collective the right to violate the individual?
Also: i do not condone anarchism. The high judiciary’s job is to throw down any law that violates the individual rights of citizens. This is not only legit, it is crucial for proper government and rule of law.
Why should I need to? I’m not claiming taxation is a positive right; I’m claiming most people don’t see its presence as eliminating or destroying the right to own property.
The high judiciary, which you claim is legit.
You didn’t answer my last question, either; how exactly does this high judiciary do anything in your system, when the individual can always veto its authority to tell them what to do? And from whence does it derive its power? A social contract? Is that a voluntary social contract or not? If not, then you’ve just allowed taxation back in as a legitimate thing. If it is only voluntary, then yes your system is lawless anarchy because nobody has to obey it.
In which case there would be no laws. Laws are all about defining limits to the individual rights of citizens.
Laws are also about defining the limits of governments’ powers. A lot of law inherited by former British colonies was about restricting the power of the Crown.
“then disbursed as authority decides.”
No, it’s disbursed as your fellow citizens decide.
Whether stuff belongs to you or not is determined by society. This is fair, since society determined what you got in the first place.
Keep in mind that this so-called “freedom” that you value only means freedom for the wealthy.
I don’t sanction the power of my fellow citizens to dispose of my life and property.
And no, they, nor their government’s social constructionism did not determine what I earned.
And no, freedom means for every citizen.
“they, nor their government’s social constructionism did not determine what I earned.”
This is an astonishingly arrogant claim to make. You built your own roads and utilities? You have your own fire and police departments? You built your own schools? You created your own set of laws and institutions that made earning money possible? Your own fleets of warships that protects the borders?
This post and most of your others show a poverty of serious thought, just ideological assertions.
+1
Add to that, you chose your own genetics, you chose your own race?
Indeed.
He would have a truck outfitted to take the worse of the damaged roads and take any new technology to stay off the grid. It is a good way of not being dependent on it and save money. But some people want to also be free of others. To them total freedom from taxes and the things they pay for is the only freedom they recognize. Really hard core.
What your argument seems to reduce to is, your philosophy a priori trumps evidence. With the implication that your position is inherently morally superior. Given the evidence of all of history it is actually just the opposite, morally inferior.
Freedom, private property, individual rights has a stupendously greater record for the welfare of humanity than the multitudinous forms of collectivism visited upon it.
Please be aware that you are putting comment after comment up here, and I ask that you do not exceed 10% of the comments on this thread, something that is a guideline for everyone.
Ok. I’ll let my position stand as is. When others comment against it, please all should not assume I have abandoned its defense.
::: end :::
You can always pack up all your stuff, pack all your money in a big bag, and head for the woods.
As forthright a defense of group-think as I can recall seeing.
The woods are sadly lacking in resources and to live off them is a means of cleaning out whatever life forms are left after the staggering growth of human population. Fine for one or two, not everybody.
I support you, John. Most of your opponents seem to have absolutely no idea what they are talking about.
Sorry! I forgot John is a very common name in the English-speaking world. I meant John Donohue.
30 people think otherwise, but you and he know better. He gave no backing to his ideology.
30 people on a site where nearly all posters are left wing, and those who are not are, see just a few comments up, invited to leave? You think that counts as a mark against him?
Said John D. Rockerfeller.
That is an interesting view of history, but factually incorrect.
I’ve been begging him for some facts for about an hour.
Insurance is based on shared risk. But since every citizen needs healthcare why not spread the risk across the entire population?
Every man, woman and reptile for themselves is a sorry philosophy.
Fuck you, I’ve got mine jack is sorry economics.
True libertarianism would turn us all into rabid rats.
I think an honest libertarian would have no insurance policies at all.
I think it needs to be said that probably all of us think liberty, or freedom, are great things that should be cherished, but not to the extent that we sacrifice everything else.
I sometimes wonder how libertarians treat their kids. Do they (their kids) have to bring in an income from the day they are born? Otherwise they’d be sponging off their parents. And what do libertarians expect to get from their kids? It is fairly well established that raising kids cost money, and happiness (people without kids are rated as happier than those with kids). So are libertarians hoping to get some return on the investment? What? How? Care in old age? That sounds like an unfair burden on the kids’ liberty, after all it wasn’t their choice.
They would say – “But at least they’re OUR kids” As if a certain percentage of shared DNA should be the defining factor on how to treat and care for babies and children. It’s as if they have no knowledge of genetics, psychology, the ancestry of social species, evolution and the entire animal kingdom.
Perhaps a biology lesson is required?
Right-wing libertarians often forget that we are *social* animals (as a species). If we were sea turtles, with no social interaction beyond a brief mating, then our lives would not be so intertwined with each other. But we’re not. We’re social apes!
It is cut throat economics that would leave a civilization spread wide and the survivors very dangerous and volatile. The rest die off or leave. Very vigorous, but would it be a good life? I’d be happy to give them Idaho or parts of some of the big empty states to carve out on their own their way. Give them 100 years as see what its like then. Bob Heinlein figured out it wouldn’t end in freedom, it would end in dictatorship of the most ruthless. In the story “Coventry”.
What’s truly incomprehensible is that the people fighting healthcare for all are the obscenely rich. The billionaires backing the republican candidates for power. These people have so much wealth, they could not possibly need more billions. They have no way of spending their money in 20 lifetimes. Yet they are determined to block an increase in minimum wage, repeal ACA, and shrink social security. Go figure.
They don’t want more money for themselves; they want the largest percentage of the pie they can get, no matter the size of the pie. If that means that they have to shrink everybody else’s slice of the pie to proportionally increase theirs, even if their own slice shrinks a bit at the same time, that’s a sacrifice they’re willing to make.
b&
Yes, I think you put your finger on it. The driver here would be not simple greed, but an addiction to increasing social status. I have often felt that to be the strongest social motivator. The desire, not just to do well, but to do better than those around you. This likely stems from basic competitive urges which are, in fact, evolutionary adaptations. It’s not wealth and power that best attract mates, but the ability to flaunt it boldly. The show of wealth helps to solidify one’s position in the hierarchy.
“What’s truly incomprehensible is that the people fighting healthcare for all are the obscenely rich.”
Yes. You might just as well have worded that, “what’s truly obscene is that the people fighting healthcare for all are the incomprehensibly rich.”
I like it.
There are many ways to say that people are not all decent human beings. Some are assholes.
“What’s truly incomprehensible is that the people fighting healthcare for all are the obscenely rich.”
I don’t find it at all incomprehensible. It’s commonly believed, and may be true that we (the US) have the best healthcare money can buy, and the rich have the money to buy it. The believe anything that potentially reduces the health care industry’s profits will adversely effect their health care.
I’m sure the health of the health care industry is on the minds of a few billionaires, but, by and large, I think they operate at a somewhat more primitive level of analysis.
The problem with “taxes is theft of property” is that some services are required and do not lend well to privatization.
Courts to enforce contracts.
Military.
Police.
Prisons.
Fire department.
Some libertarians want more services, some less.
Most argue the services they want are absolutely necessary, but any more are theft of property by taxes and tantamount to tyranny. And they seem to miss the obvious problem, that if they can’t agree on which services are required and provide anything other than opinion, why should their opinion supersede the rest of society?
They want to pretend that there is a hard demarcation between necessary service and theft of property. But there isn’t, otherwise libertarians would agree on which services government should supply.
Some libertarians point to early in American history as a model, with volunteerism and/or import taxes. But those days are long past and England isn’t protecting the settlers anymore.
A decent military is expensive. Courts cost money, as do prisons, police and fire departments.
Libertarians want the right to make money and keep it all, yet some believe fire fighters, police and military should be voluntary positions. But they have the right to be paid for their work. Dangerous work at that.
Some libertarians suggest import taxes as a way to fund services.
A libertarian country would be based on contract law, with people only entering contracts willingly.
Taxing imports breaks numerous contracts that currently exist, and only hides the taxes, it still takes money from other people, either from the exporter, the importer or the purchaser.
There are libertarians who object to sales taxes, and import taxes. They are still taxes, they are still being taken from people. These are usually the people who suggest that volunteerism is the solution.
Why should imports be exempt from libertarian philosophy that taxes are property theft?
At the end it needs to be admitted that which services government supplies is simply a matter of personal opinion subject to the will of the majority, and the tax free society of libertarianism is simply a pipe dream.
“stop the gummint from taking MY money and givnit to dose filthy little orphans. Let freedom Rain!!
Your arguments are selfish in other words!”
Or “givnit” to brown people, or disadvantage people, or old people, or sick people, or disabled people. There’s a reason why Libertarians are disproportionately young (healthy) white males.
Living in the UK and having three separate medical problems I give thanks every day that I do not live in the US. And I am deeply concerned that we have a government that is daily pushing the NHS more towards a US style health system (though I’m not sure if system is the right word, perhaps shambles is more appropriate) by its failure to invest in the NHS. We currently have the farce in the UK of hospitals having record ‘debts’ because of the attempts to turn the NHS into a ‘market’ despite it being 100% government funded.
Investment in science research must absolutely NOT be left to the private sector. In both the UK and the USA the private sector is hopelessly short termist because of the effects of the stock markets.
As far as education and research funding, emphatically no.
Grade-school education: the objective is for everyone to be in the same boat. Allowing all these various private schools just fosters feelings of being special or different in the students.
Research: letting the private sector run it will only get us research that has a profit motive behind it. A lot of basic research doesn’t have a profit motive, but as a further incentive to governmental funding of basic research, a lot of basic research started with no profit motive expected in wildest expectations turns up something that develops into something of economic interest.
As to healthcare, I think we only have to look to the VA system to conclude that we shouldn’t have the gov’t running that. And if veterans had any sense, they’d lobby to dismantle that system in lieu of the gov’t picking up the tab at regular hospitals. I can’t imagine that it wouldn’t save the gov’t money as well. But if you want to make a veteran apoplectic, just try suggesting that.
I think we should look further afield and evaluate the health care systems of countries that have better health care outcomes than the US. There are plenty.
For a more positive example in contrast to the VA, take a look at Medicare.
Is the VA simply full of health care professionals who simply don’t care about veterans?
I believe they were severely underfunded. I’m not sure who’s doing that is.
Vastly underfunded. Nevertheless, once in the system, the care is very good – at least for the old white men I know.
My brother-in-law is a VA doctor, and a more caring soul you never will meet.
Yes. I’m always glad to hear of someone who doesn’t measure the worth of his life solely in monetary terms.
I think you are right about research. By all means, if the private sector want to research something they should, but some things are not always that simple. Business is required to show profit, and unprofitable research is likely to not happen or (as in the case of tobacco companies) hidden from the public and regulators.
I recall a case from decades ago, when a researcher wanted to study what happened to the litter and detritus that came from mangrove swamps that grew along the Queensland (I think) coast. What they found was that the swamps were important hatcheries for nearby fisheries, fed by that detritus. So they could mow down the mangroves to build resorts, and screw the fisheries, or they could leave them so the fishing industry could survive. If the research had been done by private concerns you can bet the results would have favoured resort builders of fishing businesses, depending on who paid.
No, I have seen the damages already done by the privatization in our schools, including bussing and maintenance.
A layman from South Africa. It depends a lot on the competence and priorities of the state. Here our govt. has wrecked most of what it touches – education is pretty much a shambles, the state railroad is a mess so that the busiest ports use the road system, which is deteriorating, the national airline has to get bail-outs, state health is often difficult and understaffed as well as corrupt. The state electricity provider is in deep trouble resulting in rolling blackouts: the list goes on.
Private alternatives exist for those who can afford it, and are pretty good, but expensive.
The prime motive of business is profit, and that often in the short term. Business is not altruistic. That would inevitably drive research funding into areas likely to produce a monetary return, and away from unhindered paths if inquiry. Having worked at fairly high levels of business here in the past, I have little trust of anything called a CEO.
Over here we are screwed either way. ( But Hili and Cyrus cheer us up ).
Interesting to see it from that side – super state intervention which is probably bureaucratic & interfering, rather than letting those who know what needs doing just do it.
Indeed, it all depends where.
First world – public sector pretty much every time.
Third world – private sector pretty much every time.
I would say it’s not as much about being a First world vs Third World, but a corrupt government vs functioning government. The corrupt government is, once again, a vehicle for maximizing a government official’s income,
…and therefore functions essentially like a tangle of private businesses, even if funded with public money.
Privatization of anything where government is a payer of last resort will be more expensive and less effective in the end, because the payment of last resort is not optional. Making it a government function drives incentives for fair and simple coverages, whereas for-profit corporations in particular have incentives more or less exclusively in the direction of, you know, profit.
The main way corporations protect their profit/shareholder goals is by externalizing all the risks they can. Eg, insurance companies skimming low-risk individuals and refusing to cover high-risk individuals – this both justifies higher premiums because of the artificially small pool AND results in greater costs over the full population because in the end someone’s gotta cover the uninsured, too, and that will probably be required at a point when their costs are highest.
Funding scientific research exclusively privately seems like an obvious nonstarter, because of the way that would pervert the research agenda by limiting what questions are deemed worthy of funding (and very much not – climate change, anyone?).
In democratic societies there is no difference between privately and publicly run companies, because both have the same task: moving the money of the many into the pockets of the few. How could their interest of making a profit ever coincide with our interest as customers?
Because in return for handing your money to a company, whether public or private, you receive goods or services. If you’re not happy with the standard of those goods/services you’re free to take your business elsewhere. Or at least, you can if those goods/services are available in a free market system with multiple providers, all keen to acquire your custom. If you’re living in a system where the only provider is a state-owned monopoly without competitors, then you’re stuck with whatever standard the state sees fit to offer, however shoddy or inefficient it may be.
It’s the same thing if the monopoly is not state-owned. Or if there is a cartel, which amounts to the same thing.
Yes, agreed.
Which is why capitalism needs to be regulated. Every private company tries to win 100% market share, but as soon as it does, the benefits of competition disappear. Fair competition must be maintained by an outside force – the government. In a capitalist system, the government needs to act as the umpire, or referee, making sure the private companies play fairly.
Dr. Coyne, the village of Homer Glen (a suburb of Chicago) decided to privatize their water system for local citizens. The price each month went through the roof! Did the quality go up? No. Did the service go up? No. My Mother-in-law’s water bill for herself in a little apartment was more than 5 times that of my whole single-family home (with lawn, multiple dogs, and multiple people).
I am against it for essential services. My personal belief for why single payer systems have long waiting times is due to lack of government support, not because the private sector is better. Have you ever tried to get an appointment at a new doctor? I have, and it frequently takes months.
Yes – when government health systems are properly run, they mostly do NOT have long queues.
I do not agree that privatization is better than government funded/operated programs. Science funding, especially so.
Umm. . . would you like to explain how basic research in, say, evolutionary biology, or space exploration, would get funded by the private sector. It wouldn’t. There’s no profit possible in such stuff.
I think maybe you misread his comment. Or I am very confused.
There are some endeavors that lend them selves very well to operation by the government and others that really don’t. If you want a relative list checkout the current economic structure of Russia and China.
For example, transportation falls into the could easily and neatly fit into the category of public monopoly – as does education.
the bottom line is taht there is a load of stuff the government does very well and another load that it does not do well at all.
For me, the enterprise or endeavor that best fits a public model is anything needs to be consistent over a range and would probably be regulated if it were private.
Well said.
There is a place for both privately and publicly funded research, but the bulk should, IMO be publicly funded. I’m sure everyone reading this site has heard someone state that Einstein had no idea of the myriad of technological developments to which his work would contribute. Corporate funding of research, as per market forces, is conducted with a profit turning discovery as it’s objective. It is doubtful that a corporation would’ve funded Einstein’s research without knowing it would result in something like GPS.
Then there is the potential for conflict of interest. From a 2007 Discover Magazine article:
“The EPA, for example, recently began conducting the first nationwide study on the air quality effects of large-scale animal production. Livestock producers, not taxpayers, are slated to pay for the study.”
Couple that with the fact that we know free market fundamentalist politicians such as George W Bush and Rick Scott (Gov. of Florida (R)) have tried to muzzle scientific research which does not support their agenda.
Lastly, the infallibility of the free market is an article of faith among many in the west. The folly of that position became painfully apparent in September of 2008. Scientia gratis scientia is highly unlikely in corporate funded research.
link to Discovery Article for those interested:
http://discovermagazine.com/2007/oct/sciences-worst-enemy-private-funding
Relative to Einstein, his paper on stimulation emission has led to the development of the laser, a multibillion dollar industry.
The best example of the value of government funded research is the microprocessor, which was developed because of the demands of the space program. Consider that Apple Computer and Microsoft between them are worth over a trillion dollars, all thanks to the development of microprocessors.
Quantum mechanics has led through solid-state physics to the transistor and thereby permitted cells phones, computers smaller than a barn and the Internet. How much money has been made off those. And the origins were all publicly funded. (Unless you think Einstein was funded by the Swiss Customs Office…)
It’s a myth that the microprocessor is a spinoff of the space program. It’s based on the earlier myth that the integrated circuit is a spinoff of the space program. And THAT myth is because at one point in the early 1960s, NASA bought a substantial fraction of then-current IC production from several vendors for validation/testing. But the ICs were developed at commercial firms and there were ample markets outside NASA that were driving development. The first big market win for ICs, for example, was the Minuteman II ICBM guidance computer. Many more ICs went into these than into the Apollo computers (a grand total of 75 of which were built.)
More generally, ICs came along because digital electronics was hitting a complexity/reliability wall. There’s a limit to how large you can make a computer with discrete transistors before the unreliability of soldered connections will ruin you. The Minuteman I computer, for example, worked only because of heroic and extremely expensive testing at various levels during assembly. This wall would have existed even if not a single rocket had ever left the atmosphere, and would have driven the market to ICs.
Seems to me a mixed strategy is often going to be better than either strategy on its own. Private systems are probably good at providing services that individuals are willing to pay for, but will undervalue services that only have a long-term or collective payoff. Government’s job is to do the things/provide the services which are important but which would probably not otherwise get done.
So, government or private research? Both. Government or private healthcare? Both. Government or private education? Both.
I agree. I’m astonished, though, that there are 156 comments as I write this and the word “mixed” only appears once (twice as soon as I hit “post”).
But the word both appears several times.
“Several” being the operative word. I haven’t done a formal count but just from scanning up and down the page, it sure looks like the “no it shouldn’t be private”s significantly outnumber the “it should be both”s.
Coming from the UK I’m most acquainted with the NHS – it is a treasured institution and the closest thing the UK has to a secular ‘religion’. Universal treatment is available all with no cost at the point of treatment. Dentistry on the NHS incurs a small additional fee.
A study in the Lancet from a few years back I think contrasted the NHS with other health services around the world and found that for every pound spent, outcomes were either similar or in some cases superior to more expensive private systems. Comparison to the US system was particularly stark where prices seemed to be hugely inflated for similar outcomes. So NHS value for money appears good.
Our last few governments (Labour included) have introduced private providers into the NHS, although the current Tory government is following this with even more ideological zeal. Hard to separate the hyperbole sometimes, but many believe that there is a concerted effort to underfund the NHS, say it isn’t working and then privatise large swathes of it. The fact that many of our politicians have shares in private health care companies is routinely mentioned in the same breath.
My wife works in the NHS as a clinical scientist and has seen private firms cherry pick the work they want to do. Typically high volume, routine diagnostic testing that they can make a profit from. The less common more specialist testing of specific diseases such as inborn errors of metabolism etc are less attractive. Particularly if they are rare genetic diseases only afflicting a few people. She also told a story about a private hospital nearby that performed an operation but didn’t have a blood bank. The patient bled out and was only saved by being rushed to an NHS hospital. Our press abounds of similar stories wherein private providers are happy to take the low hanging fruit but farm the difficult cases back into the public system.
In general, I just think having a profit motive attached to health care is morally dubious. There should be moral limits to markets and health is one of them. Michael J. Sandel at Harvard has a good book on just this.
I can see the benefits of a regulated capitalism providing me with goods and services – health however is not one of them.
There definitely are issues in the public system of queues and waiting which is not ideal. Many in the NHS would say this is due to underfunding – the rest of Europe currently spends more per person on healthcare than the UK. The right wing press scream that we just can;t afford this anymore, but it is often countered with the fact that the UK started the NHS in the post war era whenever austerity ruled and the country was on it’s back.
The right wing in the US has been screaming that we can’t afford the New Deal for the last four decades. The result is that I now belong to a generation of Americans for whom the same level of financial security on offer to our parents is, for most of us, a pipe dream.
I’m pushing 40 and because of a privately refinanced student loan and a period of 7 months of unemployment after being laid off, I have a garnishment on my paycheck. Couple that with stagnant wages, especially in media/production, and I, a college graduate with 12 years of broadcasting/production experience and an Emmy, take home about $1600 a month. That is a paltry wage in South Florida.
They’ve put us so far behind the 8 ball, most of us will never catch up.
That’s terrible. The game feels fundamentally rigged at the minute, and not in the middle classes’ favour. Whilst this level of predatory capitalism is not yet in full flight in the UK, we are going in that direction I fear.
If we don’t enact sweeping fiscal policy changes, there will to be an American middle class in a couple of generations. The politicians will call it that, but what we’ll actually have is rich, poor and destitute.
will not be
Complicated!
The idea of the NHS was a safety net. Before the war people paid the doctor if they could afford one which essentially meant a system similar to that in the US now I would say, but without modern medical benefits.
An NHS type system now has to fork out massive amounts of money as demand increases & people expect ridiculous degrees of care or go to doctors & demand antibiotics for colds. An aging population adds further weight to the crisis, especially if care for the elderly comes from the same funds. Older people are not healthy in old age due to (partly) avoidable 21st century diseases like diabetes & obesity, or unavoidable (?) forms of dementia.
We are entering an age when there are fewer & fewer in traditional employment due to mechanisation & automation, jobs that were once well-paid are disappearing. Yet population continues to rise. These questions will only get more pressing as demand rises.
Private companies will only run bus/train services or health services that are economical & many people with less money are left isolated without subsidised or state-influenced systems. So you either run the state for the benefit of a majority or you allow market forces to take over & have elites who benefit & then the rest of us.
I think you might enjoy Yuval Harari’s book Sapiens. He talks of how strong state & individuals mean weak families & communities (p.405). He talks about this sort of thing in a general way, without making particular value judgements.
http://www.theguardian.com/books/2014/sep/11/sapiens-brief-history-humankind-yuval-noah-harari-review
http://www.telegraph.co.uk/culture/books/bookreviews/11120947/Sapiens-a-Brief-History-of-Humankind-by-Yuval-Noah-Harari-review-urgent-questions.html
Funding for science – there is a book about that by Terence Kealey, that I read but have mainly forgotten!
“Sex, Science and Profits (2008) argues that science is not a public good but, rather, is organised in invisible colleges, which is why Government funding is irrelevant.”
http://www.buckingham.ac.uk/directory/dr-terence-kealey/
Myself, I would say some BIG things have to be pushed by state funding – space programmes or energy sources like fusion (if ever!).
Heh. Fusion and the space program are examples I point to of dysfunction in science/technology spending. They’re big efforts that persist more as pork barrel spending programs than because the results justify the expenditures.
Fusion, in particular, has extremely serious practical and economic issues. It’s unlikely that tokamaks, for example, will ever yield economically competitive reactors. This has been known for years (see Lidsky’s article in MIT’s Technology Review in 1983, for example). The reactors are simply too complex and costly to compete, even if all the plasma physics issues were solved. At this point, renewables are so much more likely to win the race to replace fossil fuels that fusion could be abandoned with little downside risk.
Sapiens is on the top of my TBR pile.
No. And no.
For-profit organizations optimize for one thing only: Short term profit. While that has its place, we also need biggers goals.
“bigger”. Damn.
Here are two links to articles that discuss privatization. I hope they are useful.
http://www.commondreams.org/views/2013/08/05/8-ways-privatization-has-failed-america
http://www.ncbi.nlm.nih.gov/pubmed/18724573
Not to get into a tedious debate (as these often are) but yes, absolute monopolies (as is usually the case with government systems) tend to become bloated and corrupt. Not to mention subject to political pressure on policies. A comptetitive system (heavily regulated industries are often not competitive because goveernment regulations often tend to support the established players and keep out newcomers) provides for more opportunities for efficiency and new approaches.
Good summary. One partial solution would be collective (Notice I am not saying government) control of some things, but with built-in means for you and me (as taxpayers or as customers) to modify it. I guess that is the whole problem of economics and politics in a nutshell.
Socically funded for example does not entail “government control”, at least if that’s meant federally. Smaller levels of organization can work on their own priorities, as can in principle organizations like SSHRC here (or the National Endowments in the US) – which ought to be at arms’ length.
Some of the bloat is ironically due to efforts to prevent corruption. A private corporation looking to buy pens has every right to pick a pen vendor based on CEO nepotism and pay $100/pen if it really wants to. But we don’t want our government doing that, so we add red tape to government conduct to prevent it. Then we complain about all the red tape slowing down government. 🙂
“A comptetitive system…provides for more opportunities for efficiency and new approaches.”
This does work…sometimes. But it depends on the industry. Any introductory economics course spends a lot of time on market failures. To say that a market solves all problems is an ideology, not an empirical observation.
“absolute monopolies (as is usually the case with government systems) tend to become bloated and corrupt.”
Bloated, yes. Corrupt, generally not for government systems.
*Any* sufficiently large organisation becomes bloated, and it makes absolutely no difference whether it’s a government bureaucracy or a large company. Read “Big Blues” (about IBM in its heyday when it had a virtual monopoly on computing) for example.
If a private company enjoys a monopoly, in fact, there may be *less* incentive to control costs than in a government department. They can always pass the costs on to the consumer and justify the price by quoting ‘costs’. `
I worked for the same water supply organisation
when it was both a local government department and a pseudo-privatised local government company. Instead of being ‘public servants’ whose responsibility was to the ratepayers, we became part of ‘profit centres’ whose only responsibility was to maximise the returns of our section. Under this model even maintenance had to become ‘profitable’ by charging out their time to the ‘asset owners’. The resulting exercises in bizarre and distorted accountancy wasted huge amounts of time and effort which – surprise – ended up being passed on to peoples’ water bills in a way that would have been politically unacceptable when we worked directly for the council.
cr
“when it was both a local government department and LATER WHEN IT BECAME a pseudo-privatised local government company”
Sorry for the ambiguity
cr
I am coming to see an economy as an organism of different parts. Some work better under capitalism and some under collective control. (Sorry if that word irks. I’ll accept a better one if you have it.)
Capitalism is great for building better mouse traps, computers and so on. It is null for fundamental research. As for education, it’s main goal is to form the elite who will work for the mouse-trap builders.
I live a good hour’s drive from CERN, where I have often been for professional reasons. It is something that just would never exist if private industry had to fund it.
Here in France, the health-care system is suffering from erosion by market forces pushing the government to degrade the public health-care system through inadequate funding. I think it is the same elsewhere in Europe. Things are definitely less good than they were 10-20 years ago. The wait to see an opthalmologist is currently six months.
Sorry for rambling, but it is clear that the three subjects Jerry mentioned — healthcare, education and transportation — should be collectively controlled. In fact, I think the list should be longer — add water and energy, to start with.
And infrastructure, public safety…
Obviously there are cases where privatization might be successful, but there are also some cases like privatized prisons (in the US) that seem to be have been across-the-board failures. Additionally, things like transportation are notoriously hard to profit off of – it’s hard to see how privatizing a service that is bound to not be profitable could be useful. Governments can absorb losses in those areas for the public good, but what incentive does a private company have?
In the US, where there is no publicly funded airline, congress has bailed out the airlines several times. No concessions to the public are made form these bailouts. So under that system, when profits are down the Airlines do the Oliver Twist with congress, “please sir, may I have some more.” It’s privatizing profit while socializing risk and that’s not the only industry that does this. We bailed out the banks without so much as politely asking them not to wreck the global economy again.
Bailouts aside, airports are built, operated, and policed by public agencies, and air traffic controllers are government employees. Private airlines could not exist without extensive public infrastructure.
I know the airlines get charged for airport services. I wonder if those funds cover it all.
Privatization maximizes profit. All other concerns are secondary, by law.
Efficiency plays a role sometimes, but primary concerns are minimizing costs and pushing externalities onto others.
Good for shoe shopping, not so good when shopping for cancer treatment.
I’ve rarely heard anyone say, “I love Comcast. If only they ran my healthcare, too.”
Funny. Comcast in charge of health care. Of course, imagine having the local electric company take on health care responsibilities. I think they might do a reasonable job. Electric companies provide a service that is highly regulated to be safe, secure, and reliable (as possible).
There is little capitalistic competition for electric companies. A bit more than previously.
A market is very difficult to accomplish for utilities….in Econ, these are referred to as “natural monopolies”.
How many companies do you want tearing up your streets to install competing power lines? or how many sets of power poles do you want polluting the landscape?
Even if you had more than one, at best you have an oligopoly, rather than the infinite number of interchangeable suppliers that perfect markets demand.
Your comment made me think that in the next several decades a number of medical treatments, procedures, diagnostics, medicines will have well engineered or administrative paths to maximized success. In many ways medical care will look a lot more like the design features for a safe bridge or standards set for maintenance of structural fatigue of an airplane wing.
Health care is headed into an economic realm where it will replicate systems utilized like DOT, NFPA, RoHS, etc. Private or not, it will be heavily regulated, because customers will know which treatments work and which do not.
You can’t know which medical procedures work and which medical procedures don’t work. Because of DNA, some procedures work for some people and don’t for others. That’s why they have directed therapy for some cancer patients. Even there, sometimes the improvement is marginal.
Seems like we already have some of that…certain insurers won’t approve procedures until certain tests are done, or won’t approve medications unless less expensive ones are tried first.
I hear some of my family members who are physicians bitch about administrative types overriding their own professional opinions, but I think they’re misguided on that issue. The people second-guessing them are physicians working for the insurance companies and often using statistical data that show what works and what doesn’t. They’re often in a position to know better than any individual doctor to know what’s best or at least what’s most cost-effective.
I vehemently disagree. I had an insurance company insist that I take a similar generic for a certain drug because the other was expensive. The previous time I tried that drug, I came down with rhabdomyolysis, and wound up in the hospital for several days as they flushed it out of my system (costing them around $30K). I had to threaten to sue them before they relented. The doctors doing the second guessing are paid by the insurance company, so they are biased. I also suspect they work there because they couldn’t make it elsewhere.
“I had an insurance company insist”
An anecdote does not refute a generalization.
“The doctors doing the second guessing are paid by the insurance company, so they are biased.”
Er, let me be clearer. I agree with you that insurance companies are motivated to reduce costs and this is potentially at odds with good patient care.
The overall principle that I’m defending is that having a disinterested third-party oversee the care provided by a physician is a good thing.
Having a private insurer provide this oversight is not ideal. The only forces that can act to balance out their desire to minimize cost is 1) bad publicity and 2) threat of lawsuits. They probably calculate that some mixture of good care, bad publicity, and legal fees provides optimal profits.
I have had experiences in both doctor and dentist offices where the provider used loopholes or imaginative reporting to help me get coverage where the insurance company rules were clearly not in the patients best interest. How extensive this kind of subversion is, I don’t know, but I am thankful that compassionate doctors serve to correct weaknesses in the insurance-based system.
If insurance companies found out, those providers would be mercilessly sued, investigated, deprived of licensure and career and income and status and peer friendships and destitution, leading up to such stress as to include divorce, as well. Abuse of power is easy, for large corporations with pools of lawyers. On the other hand, doctors and, I would assume, dentists are barred by law from even forming unions.
Incidently, did you know it’s against the law for one doctor to ask another what s/he charges for, say, a simple office visit? How newly graduated doctors are supposed to know what they’re worth and how much to charge is still beyond me.
So, it’s not just the patients who struggle with the concept of free market medicine in the USA.
“If insurance companies found out, those providers would be mercilessly sued, investigated, deprived . . . .”
In response, could ANY dentist or doc refuse to treat a given CEO tyrant?
One notes that Business is not required to “First, do no harm” in contemplating possible actions to take affecting flesh-and-blood human beings.
Once a doctor-patient relationship has been established [legal definitions required, there], a doctor can only stop treating a patient by carefully jumping through special legal hoops, in order to avoid being used for abandonment. That goes even for CEOS of insurance companies, and believe you me, those CEOs know how to legally arrange for patients to get abandoned, because no care means higher profits. They know enough to avoid being, themselves, abandoned. You can count on that.
“provider used loopholes or imaginative reporting”
The flip side of that is that you also have doctors sending patients for unneeded services in order to increase billables. Or they prescribe the latest medications because the sales rep is a drop-dead gorgeous blonde, or maybe there are just kickbacks.
The whole system sucks.
To rickflick (not sure where this comment will end up)
“How extensive this kind of subversion is, I don’t know…”
It is rampant. Every doctor (in the US) knows exactly which magic words need to appear in the note to get a particular test or procedure approved (it’s harder with medications, as it probably should be). Most will not outright lie about anything, but there are ways to get creative with the facts.
Interesting discussion. I was struck by the hysterical claims made by opponents to Obama’s attempts to introduce healthcare reform, that referred to ‘death committees’ in the UK’s NHS who supposedly sat in judgement of who gets what treatment. The reality, of course, is that in any system whether privately or publicly funded there will always be some budgetary limit somewhere and decisions will inevitably need to be made as to what treatments will be available and in what circumstances. Increasing the funding will push the limits outwards but they will still exist.
Under a privatised system the people making the decisions about what care to provide within these budgetary limits are answerable to shareholders who wish to maximise their profits. Under a publicly funded system, at least in principle, the objective will be to maximise the benefit to the population as a whole. Call them death committees if you must but there will inevitably be executives deciding on how to spend resources in either type of system and, speaking for myself, I prefer that their underlying motivation is not maximising shareholder value.
In the UK the National Institute for Health Care Excellence (known as NICE) evaluates drugs and other therapies for effectiveness, including cost effectiveness and provides guidelines to be followed by NHS hospitals and physicians in their prescribing practices. From time to time this results in patients not being able to get treatments that may be available in some other countries but which NICE has not recommended for use. The anguish of such patients – for whom the treatment may be viewed as a last resort treatment for their condition – is understandable but overall I believe that this approach helps ensure that national prescribing practices are in the best interest of the overall patient population rather than being driven by a combination of the commercial interests of insurance companies on the one hand and pharmaceutical companies on the other.
What is the availability and cost of supplemental insurance that will pay for treatments that NICE does not endorse?
“What is the availability and cost of supplemental insurance that will pay for treatments that NICE does not endorse?”
I don’t know the answer to that. When cases occasionally come to light of patients being refused a treatment they believe will help their condition it often involves a rare condition and an expensive and often relatively new treatment and crowd-sourcing approaches are then often pursued to raise money for the treatment.
In the case of electricity, there’s nothing that says the entity that lays the wires and the entity that provides the power must be one and the same. Electricity could, in principle, be sold much like internet service: you pay a regulated monopoly to provide basic connectivity, but then buy your actual services (email, web hosting, Netflix, and whatnot) from a competitive market.
In fact I believe the electricity market is moving in this direction, with individual consumers generating power via solar panels and selling it back to the grid through aggregating brokers.
“In fact I believe the electricity market is moving in this direction”
Yes, but it probably was beyond the technology when the wires were first laid down.
Still, it doesn’t change the nature of the problem. Someone still has to pay for the wires, lay them down, and maintain them.
Whoever does that is still a monopoly, even if they don’t generate the power. It’s not really an improvement; in fact, it might be worse, because you have two different entities involved in bringing power to your house.
Yes, someone has to maintain the wires. That doesn’t change.
But my local electric utility is now able to offer me the option of buying power exclusively from carbon-neutral producers. That sure seems like an improvement to me.
We have almost exactly that system in New Zealand. The electricity generators sell electricity to the wholesalers (or maybe retailers?), who on-sell it to their customers. The lines company (presumably) charges the retailers for the use of their lines. The system works (in that my lights go on when I turn the switch and I regularly get annoying phone calls from electricity retailers trying to persuade me to switch), but then so did the previous publicly-run system.
Previously, the government NZED (NZ Electricity Department) generated the power and ran the high-voltage transmission network, and local Power Boards (run by elected boards) distributed it. Arguably, only the government could have afforded the investment required to build the hydro dams. The privatised companies may be cashing in on this.
Whether the role of competition in keeping prices down, outweighs the waste incurred in paying for the marketroids and their advertising, and the dividends to shareholders, is arguable.
cr
Where I live, selling back to the grid means recovering a percentage of what it would cost to buy that same kWh, and if more goes to the grid beyond what was removed, it is not compensated. Additionally, the base fee for being connected to the grid is never canceled out; it must always be paid for in dollars and cents.
It varies state by state. I just received my first monthly bill having gotten my 16 panel array commissioned in mid July. Here in Wisconsin things are in flux due to a Public Service Commission that has been turned over to the utility interests. They’ve added connection charges that make the proposition of selling to the grid less attractive than it used to be, but still worth it from my point of view.
The energy world is bifurcating into new/clean interests and old/dirty ones. Eventually the new/clean will win but as long as Republicans like Scott Walker run this state progress will be slower than it should be. (That said, our neighborhood is installing about 85 or 90 kW worth of solar production this fall. My array is a bit short of 5 kW, larger than most in the hood.)
In terms of privatization of health care, I think you have to be careful. I have increasing doubts about for profit models in which a company will do anything to attract patients and make money. There is one local hospital, not too far from where you had to spend four hours the other day, that went for profit a few years ago, dropped all of its insurance contracts, and is now the most expensive hospital in the country. They are making money, but I really do not think that they are doing a an adequate job of serving the community. I would say the same of one widely advertised group oncology practice which seems to be proud of all the quackery that they offer their patients in addition to real medicine.
With that said, there are some major academic, not for profit medical centers that are doing the same thing, so that may be representative of a more systematic problem with medicine.
Personally, I was opposed to government intervention for many years, but I have come to believe that our health care system is so broken that single payer may be the only option that offers any hope of improvement. Despite what is said about the taxes that would be needed to run such a system, much of the money is already out there in the form of premiums, deductibles, and co-payments being made to the various insurers. It just needs to be redirected.
With regard to transportation, no passenger rail service in the world covers all of its costs through fares. All of them require massive subsidies from government, privatized or not. Financially, in the U.S., the standouts are Amtrak’s Acela high speed trains and New Jersey Transit’s Trenton local, both of which recover short term avoidable costs (above the rail costs like crew salaries, electricity, and routine maintenance) from fares, but everything else must come from taxes. Partial privatization has been routinely done in the U.S., and those companies make money on operations, taking in fares and government subsidies to make ends meet, while the governments pay capital costs.
One could argue that the private companies manage day to operations better than the government could, but the service catastrophe in Boston last winter may be evidence to the contrary. Despite what some cranks in Congress have to say about the subject, I don’t think there is strong evidence one way or the other which model is better, partially privatized or fully government run. Indeed, it was the government, both federal and the states, that rescued rail passenger service when the railroads were falling apart. Without that intervention, more of our cities would be doing what places like Los Angeles and Denver have been doing, spending billions and billions to replace what was lost.
Yes, privatization best route, including science.
Now the reasoning behind it.
If it’s important to you, why on Earth would you want to politicize it?
This is how government works:
Everything it controls becomes a political football to be held hostage or taken out behind the shed and shot. Maybe you want Obamacare. And what if it turns out to be awesome despite my own reservations? Well, it’s still a government program. It’s always going to be in danger of modification or defunding or over-complicating the next round of politicians that take over. If, as now, one party or a majority dislike something, they may taketh away or change to their liking. Never yours.
You’ll never get what you want if you continue to ask government to take care of your problem. If you could implement your own government program, your idea may start out as a wonderful solution but when you make it a government program, it’s bound to not be what you thought it would.
Before you can turn your idea into law, you have to gather a group of people who feel the same way about your plan and promote it. But since no one person is exactly alike as the other, you’re bound to make a few compromises to retain your support. Then you’re required to bring it to your Congressmen’s attention and if they wish to work with it, you’re going to end up with even more compromises and changes.
Once in government, your idea will go through various committees and debates. All participants in the plan will modify and change it to suite their needs. Your idea is slowly becoming someone else’s and will no longer represent your intentions.
When and if it gets past this point, you will not be the one to write the law, the politicians will. They will be the same politicians who made the many failed programs you object to now. Then once law, you will not be the one to enforce it, bureaucrats will. They will enforce only the parts they agree with and end up using it to appease their political cohorts.
Of course the new law will have its opponents, so it will end up before the courts which will have their way of interpreting it as well.
By the time your idea ends up running the gamete of government, it will not be what you intended it to be. It will now be another political football for the politicians to use against each other and to satisfy their political supporters. And you’ll look back on all that time you wasted asking government to solve your problem and wish you didn’t take this route.
And the worst part is that now everyone has to use it. Unlike a private system where if you’re unsatisfied, you could go elsewhere.
Well, there are middle ways. The French have some strange public-private structures (run as private companies, but with the state as principle — controlling — investor) which sometimes work well.
Jerry asked about specific subjects and maybe it can only be decided subject by subject.
Rather than arguing hypothetically, Eric, why not draw on the experience of countries that have actually done it — look at the way they’ve addressed these problems and the various strategies they’ve devised to overcome them (which aren’t the same in every case), and look, too, at how the health outcomes of those systems compare to the private scenario you advocate? You’re trying to imagine a system as if it had no precedent.
Not arguing hypothetically. This, in the USA, is how government works.
It’s also how healthcare doesn’t
So you mean the US is incapable of achieving something that every other advanced country in the world managed to do during the 20th century? You don’t seem to have much confidence in your country’s ability to learn and adapt. I find that sad.
The assumption is that every other country is better than the United States. That hasn’t been proven. Yet we have people risking their life to get here. That says a lot.
The assumption is that every other country is better than the United States. That hasn’t been proven. Yet we have people risking their life to get here. That says a lot.
People risk their lives to get to the US from developing countries that don’t have universal healthcare, like Mexico and points further south. They don’t risk their lives to get to the US from other advanced countries that have universal healthcare, which as you can see from my previous post are the ones I was talking about. That says a lot.
Also people are risking their lives to get into European countries with different economic models and different health-care systems to the US. There are many places in the world that are much worse than Europe or the US in terms of economic functionality, the rule of law, war, democratic rights, healthcare provision, etc, etc, so the fact that we have movements of people from these areas to Europe and the US doesn’t really say much about whether or not things can wok better in either the US or Europe.
On it’s own, no … but I wasn’t the one setting up “risking life to get somewhere” as a metric for measuring the desirability of a certain system of healthcare.
One can create legislation which “spins off” the institutions and makes the autonomous once they exist. Yes, there’s the “cut the funding” danger, but that applies no matter how one does things.
So, ought we turn the military over to a private concern?
No, that’s a reasonable function of government.
Which is to say also that no capitalist deems it a sufficiently profit-generating activity?
Hardly. War is good money. So are prisons, which I’m against private ownership of too. And here is why…
Government’s one and only duty is protecting the rights and property of the people. Armies and prisons are part of that. So when government diverts from that, it can’t get it right. Thus the failure.
Does government perform well with the military? Not always. Witness the accidental bombing of the Doctor’s Without Borders hospital about a week ago. But still, armies are a legitimate government agency.
You do not get to decide for me or others what we want our representative government to do. We decide together. These decisions are limited by the constitution, but within constitutional bounds, if we collectively decide we want them to do things in addition to protecting rights and property, we’re free to make that decision and you do not get to take that freedom away from us.
You wish that’s all government did and you may vote for candidates who will agree with you about the proper roles and limits of government, but your wishes are not constitutionally controlling on the rest of us. If the majority of constituents in a district elect someone based on the candidate’s promise to knit five red hats, then knitting five red hats becomes a proper role of government – because that’s what we the people decided it should be.
Put another way, our freedom includes the freedom to reject libertarian ideas of what government should be like.
Yes. It’s begging the question to define government as an institution whose “one and only duty is protecting the rights and property of the people,” and then to use that definition to answer questions about what the role of government should be.
“Hardly. War is good money.”
Well, sure, capitalist types are glad to manufacture and sell materiel to the government. But capitalist types have nothing to do with recruiting/persuading flesh-and-blood human beings to submit to military service and go in harm’s way to possibly be killed or maimed for life (on behalf of “maximizing share holder value”? ;). ).
How would a capitalist type (who would never view military service for himself as a smart economic move) induce one to enter the military, absent the non-monetary inducements of “duty, honor, country”?
Granting that there are a few humans who apparently crave the mercenary life for its own sake, and granting that there are certain areas of the U.S. sufficiently economically-blighted to prompt youngsters to view military service as economically attractive, it otherwise seems that the required monetary inducement would too adversely affect “shareholder value.”
What persons of sound mind and body do you think ought to submit to – and ought to be properly exempt from any expectation of submitting to – military service? You surely expect SOMEONE to join.
Studies show that after 9 years the profits go down. But doesn’t mean the unnumbered mercenaries still get paid big bucks. So do their corporations and others with much graft, corruption and shoddy work done is legendary just in shattered Iraq alone.
I agree with Eric’s assessment of how this would actually work. Just as the politicians use abortion and other issues to their political advantage- Obamacare, gay rights, for starters. Obamacare must be helping many people who otherwise wouldn’t have insurance. But wasn’t it heavily criticized, and exploited by the Republican contingent? They wasted lots of money contesting it all the way to the Supreme Court.
Further, I don’t trust the government to make good decisions about my healthcare. Indeed, insurance companies already do control many aspects of healthcare- medication, treatment, etc. Cutting costs by giving fewer, cheaper, less effective treatments are standard ways private insurance companies and Medicare (not private) keep the within the constraints of their allotted budgets. This falls short of achieving the goal- which is implicit here- that people should get the best healthcare possible in order to reduce suffering and promote thriving. It can be extremely frustrating when one is trying to get well and one’s insurance company blocks the best methods to achieve that! I’m fairly certain that our government- given its penchant for abandoning common sense and disregarding evidence- would fail miserably in this regard… Remember, many of our congressmen don’t believe that science can be trusted, that the Earth is 6,000 years old, and at least one (Rep. Paul Broun, see YouTube video) of our SCIENCE committee members has been quoted as saying that evolution and embryology are “lies straight from the pit of hell.” As many of our politicians, who are unfortunately the lawmakers, have famously proclaimed: they are not scientists. And, they don’t seem the least bit motivated to TRY and understand how science works.
I do not trust the current political body to successfully deliver healthcare. Perhaps lawmakers in those countries where socialized medicine works are more educated/reasonable and less prone to the kinds of manipulateness we’ve seen among our politicians.
Vis-à-vis politicians, what’s your take on demigod private corporate tyrant CEO’s?
What makes you think “the government” will decide your health care? Rather than the standards of practice being set at arms length by an appropriate body of experts and patient groups?
for essential services: water, energy, health, education – no to privatisation. the interests of the company involved is to the shareholders, not the customers/users of the service. I would put scientific research in a similar arena, though there are other things that come into play there. But I am not in favour of privatisation. in Australia, we have lost our national health care and have moved to a two-tiered system, with a third coming into focus. It’s not fun if you’re not wealthy.
There is no reason why the government or a public company is any better in many circumstances, but health isn’t one of them. The principal reason for this in the vulnerability of an unwell person – they are more often than not simply not in a position to make the best “market” decision when they are ill. This is even more difficult if their choices are limited, such as in a low population area or if cost is an issue.
What’s important though is the principles and goals of a healthcare system. The US system isn’t about the customers, and it isn’t about the whole population. It works for people who can afford it as long as they don’t get really sick, and it works for the people who make money out of it.
If the goal of your healthcare system is the health of your entire population, you need a single-payer system like that in NZ or Britain, with an Accident Insurance system like that in NZ. Lobbyists who are about maximizing profits for their companies should not have access to the government.
Government should be able to set targets around primary health like immunization, smoking cessation, diabetes prevention, cancer screening programmes, mental health problem identification, addiction, sex education etc that long-term improve the health of the entire population and reduce future costs. Countries that have a single-payer system do this, and their people are healthier and happier as a result.
A single purchaser of health reduces costs too. A healthy population is better for the whole country. It’s better for employers not to have to worry about the healthcare costs of the employees. Employees are more mobile if they’re not worrying about insurance. They’re more likely to take the risk of starting a new business (esp. women) if they don’t have to worry about health costs.
I’ve written too much now, so I’ll stop, but I’ve actually got a lot more to say, and about the other topics too.
On the healthcare issue I don’t see how anyone could disagree with this. However, the big time insurance companies in America would hate it.
Yeah, and they have lobby power, and probably buy politicians.
I was shocked when I discovered that a country that is all about capitalism doesn’t allow the sale of medical insurance over state lines. That would surely reduce costs and has to be the result of the lobbying of the companies themselves because there’s no good reason for it that I can think of beyond maintaining a monopoly.
Yes, it’s called job protection for the few and the well off. We have the same mess with the internet. Since capitalism seems to be the way on this business we have a few very large private firms that control the internet and the service you get. Everyone out in the rural areas get screwed. So the internet is also another place where we need government intervention.
That’s an area where we do OK. The government recognizes that high quality internet is vital to business and education, and, of course, primary production is a huge part of our export earnings. So they are rolling out high speed internet to even the most remote places. By 2025 it’ll be accessible by more than 99% of the population. It’s pretty close to being in all schools, including small rural schools already.
I wish Canada would do the same. The problem is it is a large country with a small population. The only way you’re going to get complete high speed penetration is if government does it because there is no profit in it otherwise.
Yeah. We’re about the size of the Japan and only c. 4.6 million people, so pretty spread out too, but not as much as Canada. As you say, it’s something that has to be done by government. There is a genuine case to be made I think for the benefit of all, no different to an electricity or telephone network in times past.
I was shocked when I discovered that a country that is all about capitalism doesn’t allow the sale of medical insurance over state lines. That would surely reduce costs and has to be the result of the lobbying of the companies themselves because there’s no good reason for it that I can think of beyond maintaining a monopoly.
They aren’t allowed to because each state is different an they would locate to a tax free or very low tax state and operate all over the country from there. Raking in the profits with the same care levels.
Thanks. Seems like another argument for a single-payer system to me. 🙂
The UK railway system was privatised by having the infrastructure run by one company, with franchises offered to private companies to run specific regions. The government has stuck to this plan come hell or high water, purely for doctrinaire reasons.
When one major franchisor decided not to continue with its obligations and ‘handed back the keys’ early to the East Coast main line the government was forced to set up an interim government agency to run it. When the franchise was up for renewal the government agency was barred from bidding, despite having done well and potentially being a serious contender: http://www.theguardian.com/uk/2013/mar/26/east-coast-rail-privatisation-ignores-failures
The UK government’s insistence that the rail system should not be state owned has resulted in the farcical situation where three quarters of UK railways are actually state owned; not by the UK but by foreign states: http://actionforrail.org/three-quarters-of-uk-rail-owned-by-foreign-states-research-reveals/
Some things, in my view, are natural monopolies. Breaking them up in order to create pseudo-markets makes little sense.
Although of course UK railways were originally built and run by the private sector, and only later become unprofitable when the state systematically rigged the market in favour of cars and against rail (by building roads).
I think you’ll find that railways in Britain were nationalised in 1948, when very few people could afford to own and run private cars. Widespread car ownership and the construction of the motorway system came to Britain only in the 1960s, almost two decades after the railways were nationalised. Your argument does’t stand up to the historical facts.
I’m not sure what you mean here, I wasn’t saying anything in contradiction to the above.
Should have said the more generic “road” rather than “cars”. Road travel (buses etc) was eating into rail profitability long before nationalisation.
Of course, the duplication of rail routes etc, caused by private sector competition in building them in the first place, may have had a bigger effect.
We use to have low cost effective trolley systems in the USA but the oil, tire, car companies along with road building couldn’t build that national highway system Pres. Eisenhower wanted for his ability to travel convoys of military across the nation quickly. So the companies were all bought up to scrap and the Nation of the Car was born. “Who Framed Roger Rabbit” actually deals with the concept.
Depends what you mean by “better”. If you mean better for an individual who has all the resources s/he might need to pay for any degree of available excellence, then private probably is better. But how many of us apart from Donald Trump and the Koch brothers are ever in that position? If you mean most cost-effective, then private is rarely better because the requirement to generate a profit from an operation raises the cost of the final product beyond what it needs to be if operating at cost.
It also depends on the nature of the service. If it’s something like a mobile phone network, where the technology allows multiple parallel services, there can be genuine competition between different services. If it’s something like landline phones or railways, which require an entire network of physical infrastructure that there is no point in duplicating, then the service is a natural monopoly and private companies building additional complete national networks is an absurdly wasteful extravagance. If something forms a natural monopoly that isn’t going to have competitors, then the temptation will always be to gouge the customer, so it makes sense morally for that service to be controlled in the public interest and for the public benefit. This is, I think, the clinching argument for public control of rail and road systems, landline telephones, public health infrastructure (water supply, sewerage etc.), medical care, education, and similar systems.
What we’ve had in Britain for the last thirty years, when natural monopolies like water supply, electricity supply and the rail network have been privatized, is an absurd fiction: since there cannot be genuine competition for any one person’s business (no one is going to dig a series of trenches to lay a new system of pipes to my front door to offer me a rival water supply), what we have instead is division of the formerly unified organization into a series of regional entities, each of which notionally “compete” with each other for the right to, effectively, bill you for the water that comes to your house. They have no real control over the quality of the “service” they provide — all they can do is accounting trickery to offer you slightly more or less preferential payment terms. So we have the huge inefficiency of multiply duplicated administrations for all these organizations — and consequently higher prices — all to satisfy the blind dogma that the “market knows best”.
I think it depends on the service concerned. Privatization can work when there is strong competition. For example the privatization of British telecom in the early 1980s unquestionably improved telephone service, almost overnight – no more two year waits for a telephone. I think you could make a similar argument in relation to the deregulation of airlines – although, that’s a little more qualified, I now live in a United hub so I’m subject to changing that opinion given the service I’ve received from them this year. Airlines will behave as private monopolies if given half a chance.
Another issue is privatization of sections of the military – I’m not convinced that subcontractors do a better, or even the same level of job, and I’m certainly not convinced that they do it for less.
In effective monopolies such as healthcare a pure private system such as that in the US does not work well (as one who has lived under both the USD system and the UK National Health service) in the US we pay the most money and get outcomes somewhere in the mid to late 30’s at a national level. However, there are other models of highly regulated private insurance (Germany and Japan I believe are good examples) where a private system can work well – but given the level of control it’s a quasi government system anyhow. so, given a choice between a government based single payer or private for-profit insurance companies I’d take the former, but the option of competitive not for profit insurers might give an acceptable or possibly better alternative.
Realized that I had missed a couple of question points.
Education – I would prefer to have strong public education – at a personal level that involved moving specifically to good school districts when our kids were young, although they both ended up at private schools for undergrad. (Function of living in a state with lousy public universities)
Research – clearly needs public funding. I’m not averse to private money in focused research (if you want to give me money to study prostate cancer I’ll take it) it can certainly supplement but it cannot supplant the public purse, since so much fundamental research has no obvious short term payoff.
Regarding privatization of the military:
I served 20 years in the US military and deployed to Iraq twice. As a senior non-commissioned officer (platoon sergeant) I was about paid $36,000 plus various benefits that came to another $25,000 (hazardous duty pay, healthcare, housing, etc).
Per this article in the Houston Chronicle, the average cost to support a soldier in Iraq in 2005 (the year of my first deployment) was about $400,000 per soldier.
http://www.chron.com/news/article/Cost-per-soldier-in-Iraq-war-zone-hits-record-high-1476868.php
A soldier from my unit became a low level military contractor providing security in theater to KBR (Kellog, Brown & Root). He stood guard on KBR properties and escorted workers between bases, basically the same thing he had done in uniform with me. His pay for a year in theater was $245,000. That is just his paycheck! Then tack on the costs that KBR passed on to the US government to support him in theater and there is absolutely no way that privatized military is cheaper than active duty soldiers. Contractors
In Japan their Health Insurance Companies are all non-profit. They fight over getting new clients and the costs are much better than here.
As far as health care goes, it is much better to have a public system. Anyone who does not see that is either rich, and does not give a damn about anyone else, or living on another planet. In the U.S. the health care examples we have should tell you without even bothering to look at better in many other places in the world. Every heard of Medicare? In the U.S. that means all of us 65 and older have pretty good coverage and I know of nobody who would say lets do away with it and try to find private insurance.
Private or public on other things is not always as clear. However, I think on the big ticket items you have to go public. Private simply will not work. Things such as a good rail system must be public. Name one place where private does the job…I can’t think of one. The only reason we have a highway system is because the federal govt. does it.
Privatization is real popular among republicans but in many cases the private cost more and the service is less. Lots of areas of the military have been privatized and the costs are extremely high.
Regulation can make private a lot better if done properly. Transportation was highly regulated in the U.S. until it was removed altogether about 1980. It quickly went to hell and has stayed there since. The idea of regulation in this area begin in the late 1800s with railroads and later with pipelines, trucking and airlines. The regulation was the ICC or Interstate Commerce Commission. Sometimes it was over regulating but instead of fixing it, they killed it. Today, you are on your own so good luck. The airline travel stinks, cargo by rail is almost bulk only and not good, and cargo by truck is, if you are the big company you get good service and otherwise, you get what you get.
No to both.
It is also unfortunately untrue that Canada has escaped medical privatization. There are semi-legal to out-right illegal clinics in various places, plus some legal ones of debatable relevance.
As for science: the public should pay for basic research (and a fair bit of applied – not so much technology, at least under the current economic model) because it simply isn’t profitable to fund curiousity, and that’s what’s needed. Even a wonderfully open minded place like the old Bell Labs was largely applied science, not basic, as far as I can tell. (Think, e.g., of funding Turing of 1936, as opposed, if necessary, to Turing of 1945 with the ACE.)
I am Canadian and don’t know about this. Maybe I am living under a rock. Doctors and hospitals are exclusively in the public sphere, and I think that is what this discussion is about: not about whether there are private, ancillary labs here and there.
There are private surgery clinics (e.g. Cambie Surgical Centre in Vancouver) that allow people that can afford it to get outpatient surgical procedures with little or no wait time.
I urge everyone to read my Dad’s books:
https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=lester+salamon
Leverage for Good: An Introduction to the New Frontiers of Philanthropy and Social Investing by Lester M. Salamon (Oxford University Press, April 2014)
“With the resources of both governments and traditional philanthropy barely growing or in decline and the problems of poverty, ill-health and environmental degradation ballooning daily, it is increasingly clear that new models for financing and promoting social and environmental objectives are urgently needed. Fortunately, a significant revolution appears to be underway on the frontiers of philanthropy and social investing that is providing at least a partial response to this dilemma. This book examines the new actors and new tools that form the heart of this revolution and shows how they are reshaping the way we go about supporting solutions to social and environmental problems throughout the world. Based on the Introduction to the full New Frontiers of Philanthropy book Leverage for Good: An Introduction to the New Frontiers of Philanthropy and Social Investing by Lester M. Salamon (Oxford University Press, April 2014) offers an accessible overview of these new actors and tools, an analysis of the forces promoting these developments, and an introduction to the challenges they still face.”
-http://thirdsectorimpact.eu/profile/salamon/
I staunchly oppose private health care and education. I believe that government has a duty to its people to provide for their health and education. Once privatized, only those who can afford health care and afford education can receive it. This, I think, leads to waste in society as people are not able to live up to their potential and contribute to that society.
Often, when private alternatives spring up in health care, it is because the government has starved the public system in an ideological way to privatize it.
If it weren’t for universal health care, I most likely would be dying now. I received immediate care when I was diagnosed with cancer – I had my surgery within weeks and radiation as soon as I was healthy enough to have it. I had a team of doctors: radiologist, oncologist and several nurses I still consult. My dad had the same experience with his cancer. I was able to continue working through my treatment but when I was diagnosed, I was unemployed and if the system had been private, I would have been uninsured too.
If it weren’t for affordable education with grants and loans, I also would not have been able to be educated while those with less intellectual ability would have been….to me, this is very wasteful.
Canada has some private care but I believe we are mostly public. It’s something even Conservative politicians know not to touch without a major backlash.
Though I agree with this even if only due to ethical considerations, the real knock out is that even if you only admit pragmatic considerations it is still the way to go. Investing in the individuals that make up your society in such a way that they are freer to achieve the highest education they are capable of & interested in, and the security that good health free of the risk of financial hardship or ruin provides, enables those individuals to contribute more to society. Society gets the investment back and then some. The data is pretty damn clear on this.
In the US we are stunting our own growth because so many people just can’t stand the thought that some dirtbag freeloader might get a few cents of their money. Those are typically the same people that believe that the US is the greatest nation on Earth and that how they do things in other countries is, by definition, not as good.
I know a couple of otherwise normal-seeming actual human females who argue that it’s better for 10 qualified individuals be denied food stamps (for instance) than to have 1 unqualified individual receive them.
They say this out loud with no trace of shame.
Yes, I agree completely and often US companies complain that they need to compete with Canadian branches that have lower costs because they don’t have to pay expensive insurance for everyone, so even companies benefit.
Before reading anyone else’s opinion, I will state mine.
I do not feel that privatization is better. Private colleges versus public colleges there is a huge difference in price and quite often not that much of a difference in value received.
In healthcare, I see so much expense for paperwork and for marketing etc. and I feel that government could do better. Also, when one is in need of urgent care, one can not shop around.
As far as transportation, I see the airlines nickel and diming us to death with charge for bags and there some airlines that even charge for a bottle of water. Contrast that with public transportation which governments tried to keep at a reasonable cost.
I believe that scientific research is best left to be in funded by both public and private. I fear that if it is only private funded then those funds sources will direct things only in the directions that they want and there will be many many areas left unfunded. For example, most of the funding for NASA does not go to achieving the common person being able to travel in space. Much of physics funding and cosmological funding would not exist in my Opinion.
AGAINST privatization, as now configured. But government run agencies, institutions are often overly bureaucratic, ponderous, unwieldy, user Unfriendly, wasteful. Solution? I dunno. Close ’em all down every 10 years and start over??
In general, I’m for public control of / payment for basic services.
Private schools in the US can seem to have better results than public ones, but that’s because (1) private schools can expel students who disrupt classes or can’t learn and (2) people who pay for private schools are invested in having their kids learn and have all the advantages that go with having disposable income. Fracturing education into private schools avoids giving each student a common background, too. (Think racial segregation, creationism, etc.)
I’ve read that when you account for the background of incoming students, public schools do at least as well as any other sort of educational institution, including private, parochial, and charter schools.
The half-truth of the pro-privatization folks is that when a government program isn’t working, it is very difficult to change, getting bogged down in bureaucracy. (In libertarian terms, they don’t respond dynamically to changes in the market.) But it is false that government programs are always bad.
(Furthermore, a bungled private enterprise is sometimes potentially more damaging to the public, especially in an unregulated field.)
Here in the San Francisco Bay Area we have three fully private public transit options (covering only limited areas), Amtrak, Greyhound, and (counting as 3rd) dozens of airport shuttles. They are always twice as expensive as public transit, and the public transit here is very effective. The only compelling reason to take an airport shuttle is faster transit from selected locations, and the only reason to take Amtrak or Greyhound is to get to somewhere outside the Bay Area, say from San Jose to Sacramento. (However, the public transit in Los Angeles is an awful nightmare.)
Public schools in parts of the Bay Area are terrific, but not in all parts (notably not in Oakland).
Science research can be a great area where the government can jump start a field of inquiry that later gets taken over effectively by the private sector, the obvious case in point being the Internet. The ultimate management of the Internet is still by a volunteer non-profit (Internet Engineering Task Force), although final say over some things is still maintained by Feds in the form of National Telecommunications and Information Administration.
The basic technology to make the Internet work at all was a government research project (due to legislation partly initiated by Al Gore), but the technology that makes the Internet work really really FAST was developed by a private company, Cisco systems!!!
I’ve been employed as a software engineer by 7 private companies and twice by NASA. NASA was one of my two best employers.
Well NASA is definitely not your average government employer, so I wouldn’t be going by that as an estimate. It typically ranks first amongst all USG departments and agencies in terms of employee satisfaction.
Thanks. I didn’t know that. I assumed it was relatively high, along with National Endowment for the Humanities, etc. but son of a gun, it’s #1
http://bestplacestowork.org/BPTW/rankings/overall/large
Privatization, right now, is probably not a good thing especially in science. Science can always be helped by private means, but it is in the government’s interest to keep science and much of the infrastructure: transportation, education, health care.
Private supplementation is probably a good start for everyone but strong federal support. I, for example, do not mind paying >$150k to government agencies in my short time on this planet for other people’s health problems. I have probably used about 0.1% of the health insurance I have ever paid. It is better for society that I pay this money even if many Americans tend to be lazy and could get immense health benefits just by taking a long walk everyday.
Market forces do not apply in healthcare. You can crank up the price to unimaginable levels. What are your customers going to do, walk away and die?
The government has to interfere to ensure cheap medicine and protect the right to live.
Another point that should be made here is the answer does not always need to be either/or. There are times when private run with government oversight will work and does work. I worked for a company that was an example of this type system.
The Army & Air Force Exchange System (AAFES) is still working well today and has been for more than 100 years. It is an instrumentality of the department of defense and is Non-Appropriated Funding. That means the tax payers do not pay for this system. This company provides the retail stores, gas stations, movie theaters, class six, food facilities and other things to the Army and Air force and much of the Marines, around the world.
So you see, sometimes the answer can be a combination of both and actually work very well. Surprise, surprise
For health care, I’m all for a single-payer (government payer) system paid for by taxes. It seems that such a system can be based on privately run hospitals, clinics, and doctor’s offices, or by nationalizing those services. I would think that there are advantages to the private system (innovation?) but I don’t care about that so much as universal access to health care that we don’t pay for as individuals but as a society.
No I don’t agree, and the privatization of the prison system is a good example of why not. Rehabilitation, which should be our goal, is not a profitable strategy. Likewise it seems to me that preventative medicine is less profitable than caring for sick people. The more sick people the better, and the sicker the better. Prevent people from getting sick, and you’re out of business.
Rehabilitation may not be profitable, but I would optimistically think that it could pay for itself. Consider the number of trained councilors specifically trained/educated in rehab. And the benefit of police and security forces being trained to identify traits in people who need immediate help. On a large scale the benefit to society is a better educated police and prison system.
From my Econ 101 course, I seem to recall that there are several conditions necessary for a market to work well:
1) Perfect information
2) No barriers to entry
3) Indistinguishable products
I know there are more and could Google them, but this is sufficient. Even these three conditions are violated by healthcare and education.
Empirical evidence agrees. Medicare and Medicaid control costs better than private insurers, and single payer systems do even better internationally. For-profit universities seemed borderline-fraudulent organizations.
As for funding of research, private industry doesn’t do that well. Its time horizon is too short and it’s risk averse.
I have lived in both the US and the UK.
Privatisation of rail transport, which happened n the UK in the 1990s, is absurd, since there is no real way you could have competition. Nor is it more efficient. In the UK, the privatised East Coast Line needed to be rescued with public money (and the Cameron government is now selling it off again). Besides, how do you work such a system when the major beneficiaries include non-users; drivers on less cluttered roads, all of us benefiting from less CO2 when people travel by train.
Privatised health, which you are plagued with in the US, does not and should not obey market economics because of wide-spread if not universal insurance. The result is a proliferation of paperwork, which costs almost as much as the service itself, and the overwhelming of A&E centres by patients who should have been seen earlier and more cheaply by the family physician that they can’t afford. You end up spending ore and getting less than any other advanced country. There is nothing to be said for it.
Government-run is nearly always better, and government regulation of the private sector is required.
Two ice cream vendors are in business on a mile-long beach. For optimum customer convenience, one should be a quarter-mile from either end, so the walk to a vendor is a quarter-mile or less. In fact, both vendors end up at the center of the beach, because it is not customer convenience that is maximized, but profit, and each vendor has just a bit more profit at every incremental move toward the center.
Sic semper mercatus. Always remember that fire protection used to be private in this country, which led, among other abuses, to one fire company sabotaging another’s efforts to put out fires in order to increase their own market share.
Remember too that governments *create* businesses and regulate them to promote the common good. As creatures of government, corporations should obey the rules and make money for their investors, but profit is truly, and by law, their only motive. The public can, and does, require government to meet other goals and enforce other values.
I’ve worked under both private and government science grants. The government ones take a longer view toward developing solid science, but corporations want immediate and marketable results.
Tend to agree with most of your comments but you might be surprised how many fire department’s manpower is totally volunteer.
I understand there are some privatized fire departments. Home owners within range pay an annual fee, a sort of fire insurance, to be covered by these. So, if a fire breaks out in the house next door to one that subscribes to that fire department, the fire fighters will come out to protect the subscriber’s property but will do nothing to save lives or protect property burning down next door.
Volunteer is better, but those heroes deserve to be paid, and well paid, at that.
In thousands of small towns around the country they simply cannot afford to pay. They have a hard enough time paying the police. So traditionally, the fire departments have always been volunteer. And when you get down to the smaller towns, say 600 or less, they cannot afford police either, so they simply pay the county sheriff to cover them.
Yes. I have lived in such small towns and currently live in one, now, too. I just know those volunteers deserve better. I appreciate what they do for us.
“I understand there are some privatized fire departments.”
Are there still? I thought that went out with the 18th century.
(In NZ we have a mix of paid and volunteer fire departments. Obviously in country districts, where there might be just one or two fires a week, nobody can afford to have paid firemen sitting around waiting for 90% of the time).
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And scientific research? You jest, surely. Corporations are there to make money. They do their own research and keep it in house or patent it in order to gain a competitive advantage; a good thing as far as it goes.
But why should we even expect private firms to finance research for the public domain?
Will there come a day when the minds of scientists working for corporations can be read, and corporations will be able to determine without a doubt that scientists are thinking about innovative ideas while on the corporate clock, and will be able to claim ownership of scientists’ ideas? Right now, corporate tyrants can only suspect that scientists are thinking/innovating on corporate time.
I’m for public funding of basic research and some applied research, too.
Consider the tests done at Iowa State University comparing herbicides, tractors, techniques for growing crops, etc. The publicly funded university provides farmers with objective information about these products and processes. (Farmers like my late husband really read this stuff!) The university also researches things like Integrated Pest Management that can actually reduce herbicide use, a goal unlikely be funded by a herbicide company.
For any good or service there is a point at which the cost to deliver it exceeds the profit potential for making the delivery. For any good or service you believe ought to be universally provided, government is the only means to achieve this. Even if you have some objective standard by which private delivery is “better” for some percentage of the market, the “better” private good or service will not be universally delivered. This is why rural communities had to wait until the late 1930’s to begin receiving electricity (part of FDR’s “New Deal”).
So the question of whether private or public delivery of healthcare, education, transportation and scientific research is “better” depends on the question of whether you think these things “ought” to be universally provided or not (in the case of research universal provision would mean funded without regard to potential monetary profit).
It is a question of whether a poorly run system that serves everyone is “better” than a well run system that serves only a portion of the pubic. One cannot answer the question without asking, “better for who, and in what regard?”
I do not mean to imply that government run equates to poorly run, and there is no end of how poorly run programs can be improved and no reason why government run programs cannot outperform private ones (unless you restrict your analysis to certain measures that inherently favor businesses, such as minimizing labor costs). I merely wish to point out that if one of your criteria is universal coverage, you will never achieve that through private investment in a “free” market.
“This is why rural communities had to wait until the late 1930’s to begin receiving electricity (part of FDR’s “New Deal”).”
IIRC, that was No. 20 of the “Twenty Top Engineering Achievements of the 20th Century” remarks given by Neil Armstrong some years ago at a National Academies meeting. (Space Travel was no. 12, which not a few found surprising; some thought that ought to have been rated higher.)
Why are these all or nothing questions?
That really annoys me.
sub
I used to be libertarian and extreme free-marketist, but I found quite a lot arguments against.
First, the quality of healthcare in Sweden fallen down, it could be argued, due to rapid increase of population (7.7% increase within a decade) and shifting resources to newcoming citizens.
Second, It seems that cost of healthcare in Sweden, and pretty much everywhere in Europe is cheaper than in US and the result (measured in things like child mortality, longevity etc) is better.
Third, a selfish argument which I found compelling: public healthcare prevents epidemics. It trains large crowd of professionals and it identifies potential sources of a disease. In case of total free market, there could be poor people who would literally die on the streets, which would (notwithstanding moral arguments) be potential source of diseases.
The basic research also should be found by the government. It seems that most of breakthroughs in recent century was because of research sponsored directly or indirectly by governments. OTOH, it were private companies which then implemented the results of this research and made those results available to the public. SO there is definetely role for both.
References, references, references. Without references anything can be argued.
According to this there hasn’t been any measurable differences between the two methods of health care: http://www.dn.se/debatt/privatiseringar-i-valfarden-har-inte-okat-effektiviteten/ ]
It is harder to tell about the overall quality of health care, but according to the statistical summary that is made each year the death rates is a good proxy. With or without health care, Swedish citizens longevity increases; deaths related to health care is decreasing. [ http://webbutik.skl.se/sv/artiklar/halso-och-sjukvard/oppna-jamforelser-halso-och-sjukvard-2014-del-1-och-del-2.html ]
Based on those statistics, a tentative but fair evaluation is that quality of health care in Sweden is increasing, quite substantially every year at that. And it has done so, without any huge fluctuations, since the 90’s, all the while the numbers of newcomers have both increased and fluctuated.
Also, why would any change in overall quality, if it exists, be tied to “shifting resources to newcoming citizens”? According to OECD Europe on average – 22 out of 27 nations – makes an extra 1-3 % of GDP from employer exchange. [ http://www.dn.se/ekonomi/invandrare-betalar-mer-till-samhallet-an-de-far-tillbaka/ ]
The group that cost extra – refugees that have little to no capital – is a minute fraction of newcoming citizens. Each employed person in Sweden supports 2-3 youth/retirees/unemployed. The refugees number ~ 1 in 1000, or ~ 2 o/oo increase in tax burden assuming constant turnover. (That is one unemployed extra per 10 city blocks.) That is far less than we pay in world wide support or ~ 1 % of BNP (~ 2 % of taxes at a tax pressure of ~ 40 %).
I can’t say without references, but a priori your claim seems unlikely. Frankly, and I could easily be wrong, it looks more like the usual unsupported phobia against new people that litters so many web places.
(1) You of course may be right that I have a “phobia” against the newcomers, though I am from Poland, not Sweden.
(2) However, I wonder why Swedes I’ve read were constantly complaining about quality of service going down, if in reality it is going up? THis is not a rhetorical question, I am genuinely interested.
I think you are putting your finger on a very important observation in (2).
To my mind there exist a growing body of evidence that suggests an increase in disconnect between the experience of ordinary citizen and the aggregated official statistics, due to problems with:
*Which data are being collected, and on what
*How that data is then being processed and presented to the public
i.e. are the data that is being collected relevant, does it really capture societal changes and represent an accurate representation of the situation and the reality that citizen face, and, is the data presented in an honest way.
To exemplify. The official Swedish narrative concerning crime and violence is that crime rates are declining, and that Sweden today is much safer than previously in history. This is based primarily on a slight historical decline in the number of people killed.
But, over the past 40 years advances in medical procedures have dramatically increased survival rates for severe trauma, which indicates, that the number of instances must correspondingly have increased, not decreased, all else being equal.
Another aspect is the form the violence take, if previously the majority of people killed, were due to affective aggression, i.e. the proverbial quarrel in a bar a late Friday night that escalates, today, people are shot down on the street in broad daylight, or gunned down with machine guns in a cafe, or blown up by a car bomb, things completely unheard of 30y ago.
Some aspects are not even officially measured, like for example the number of bombings, things that simply didn’t happen before, but only Malmoe, has seen around 30 over the last year, including one that destroyed the entrance to the prosecutors office in the central of the city, and blew out windows in a wide area around it.
Changes in behavior. 40y ago, people in rural Sweden still left their houses unlocked, today, they do not only lock their houses, but have alarms and cameras connected to security services, (and still break-ins are up if I remember correctly).
Time spans. Often in official statistics, the time spans or comparisons are only made to the previous year, or at most a number of years backward. This often fail to capture long term trends. Compared to Sweden in the 1970s, crime and violence/100 000 in 2015 are dramatically higher in almost all categories, often more than 100%.
These patterns can be observed across the board, from education to health care, and are, I believe, part of the explanation, to your point (2).
Se also my comment on the Swedish School system below (#78)
For a fascinating treatment of the subject, try Michael Huemer’s “The Problem of Political Authority”. Huemer is a anarcho-capitalist with some clear biases, but he starts off from uncontroversial ethical premises and applies them to state activities. The result is a dismissal of practically all the things states do. A consequentialist treatment of a fully privatized society is David Friedman’s “The Machinery of Freedom”.
Lots of people tend to favor privitization of stuff because it solves public good problems.
For example, air is clearly a public good (there are technical definitions of that means if you want to look it up); the main reason behind excessive air pollution is that people get to pollute the air and shift the pollution costs onto other people. If people felt all the costs of their pollution, they have an incentive to pollute less. Privitization solves this because people are enjoy BOTH the benefits and the shouldering the costs of their behavior. Clearly privitizating the air is, at present, impossible, but the idea holds up in things that are easier to privatize.
Well, one might be able to force humans to pay a fee for clean(er) breathing air, but wouldn’t be able to charge other organisms.
I gather that holy capitalism holds that anything that can be privatized – and exploited for sufficient profit – ought to be so privatized and exploited.
Will it be a good thing if it becomes possible for capitalists to control our breathing air? (It will no longer be what economists presume to label an “externality,” eh?)
I think Jerry is trying to determine how pinko his readers are. 🙂
From a quick scan, refreshingly pinko, on the whole!
🙂
I only had a chance to watch the first bit of the Debating Democrats last night but I found Anderson Cooper really annoying in the way he dared Hillary and Bernie ( and perhaps others) to say they weren’t capitalists. I think that H and B acquitted themselves fairly well. All this black-and-white labelling does no one any good.
Btw, as a U.S. citizen residing in Canukistan, I am all for single-payer healthcare. I am happy to pay the extra taxes it takes.
I loved how Bernie described capitalism.
“Pinko” always remind me of a hilarious scene from MASH, between Colonel Flagg and Hawkeye…
That’s Pretty Pinko
Ha ha! I loved MASH.
Me too 🙂
I think buying the whole series on DVD, was a really good investment. It has really aged with grace.
But I have of late found myself sympathizing more and more with Charles Emerson Winchester III… I wonder what Dr Freedman would have said about that 😉
Favorite M*A*S*H episode: 5 O’Clock Charlie
“Right and left face!”
“Cut that out face!”
That’s so funny – me too! I also identify more with George Costanza of Seinfeld & I think Moe from the Three Stooges is justified in slapping around the other guys.
Oh bugger, Now I probably have to revise my hypothesis, that it was due to loss of hair and increase in “circumference” 😉
But good to know I am not alone…
Privatization can refer to service administration, where private entities compete for public funds, or it can mean “free market solutions” where the government doesn’t actually acknowledge problems, assess situations or attempt solutions. Ignoring the latter (which is just ideological anarchocapitalism), private service administration can be great, so long as the participants are held to high standards of transparency and public accountability.
I’ve found http://www.demos.org and http://www.propublica.org useful for understanding public policy issues and http://www.au.org “Americans United For Separation of Church and State” useful for commentary on, for example, how school vouchers are used as a Trojan Horse to privatize public education and fund religious education programs in direct violation of our first amendment.
The Enlightenment managed to cast out many superstitions. The Invisible Hand was not once of them. That superstition persists.
My country was ruined by socialism. Looking from it, societies allowing the Invisible Hand were like fairy tales incarnated. When we got completely bankrupt, we returned to the Invisible Hand and are now slowly improving. The Invisible Hand is real. Adam Smith, Ludwig von Mises, Henry Hazlitt, Friedrich von Heyek are right.
Chomsky relays in his lectures the following capitalist maxim:
“Getting wealth,
Forgetting all but self.”
Do you subscribe to that?
I know little of Chomsky and his works, and what I know makes me happy that I don’t know more. His verse, while literally correct, carries an unwelcome (to me) undercurrent: it implies that there is an alternative to capitalism, institutions staffed by selfless, devoted and over-competent individuals who think of your well-being day and night and will serve you perfectly for no money. So I like more the same thought as expressed by Henry Ford:
“People work for money.”
Ford tried to pay his workers a little more/enough that they would stay put for at least a little while and thereby minimize his “human resource/capital” turnover costs. He viewed it as a reasonable business decision; it did not come from some altruistic impulse. But certain investors – specifically the Dodge brothers – were not pleased and filed a lawsuit which, IIRC, eventually landed in the U.S. Supreme Court, which ruled that corporations had a legal duty to maximize investor return. I gather that capitalist types consider this is one of those vaunted “American Values” which make Amuricuh great, and are worthy of preserving, protecting and defending by sending the flower of our youth in harm’s way to be killed or maimed for life. (I wonder if the Dodge bros. ever served in the military.)
I was always under the impression that Ford increased wages so his workers could afford his cars. No altruism need be attributed to Ford’s decision, since he gain$ through increased sale$. The money payed out comes right back.
If so, I stand corrected. But that apparently was also not satisfying to the Dodge brothers.
It is unusual to see Henry Ford quoted as an example of, shall we say, enlightened self-interest. But apparently, so far as the evil side of capitalism goes, others were much worse.
The phrase “invisible hand” only appears once in that important Enlightnment work of Smith’s. And it isn’t at all what it is portrayed to be. I encourage folks to actually *read* WoN – it was quite an eye opener. IMO, Smith sounds like a contemporary Canadian Liberal, e.g., former prime minster Chretien.
Adam Smith, poster boy for the Business Round Table. Who, manifestly, have never read him. 😉
Only anarchists (and perhaps Randians), of which there are very few, make arguments anywhere near the idea that private is “always” better or that markets always do better. Even libertarians often tend to be of the consequentialist type. When privatization promotes the better (however defined) consequence, privatize. When central control results in better outcomes, make it public. Both systems should be allowed to flourish and the results measured, case by case. When one is demonstrated to outperform the other in accordance with community values, people ought to have the opportunity to adopt the better strategy (special interests be damned).
As an aside, anybody who thinks that healthcare in the U.S. is a “free-market” system is seriously misguided. Corporatism isn’t free market capitalism.
Maintaining that privatization is always better is an ideological position – an ideology that is not supported by the facts and easily debunked with many examples (but unfortunately I’m not going to be able to cite research here).
The truth in my opinion is that it is sometimes better and sometimes worse and the reasons are different depending on the particulars of the industry, the goals of society, and many other factors. In other words – it’s complicated, and “it’s complicated” does not fit into a simple ideology very well.
For example, it is easy to show that the single payer system in my homeland, Canada, is far more efficient at distributing health care insurance than the private insurance of the USA. Insurance companies spends money on advertising, money which saved in Canada or directed to benefitting the sick. Each private insurance company maintains a duplicated financial infrastructure and paper trail for each billable transaction. The list of inefficiencies goes on. Readily available statistics bear this out. Additionally, preventive care tends to be avoided by the uninsured, and many resort to expensive measures such as the use of emergency rooms as unpaid doctors offices.
Aside from business inefficiencies, with health care, there is a moral issue. Each citizen by definition is the owner of a body, flawed and prone to break-downs. Everybody needs health care. It is easy to appreciate the importance of health to proper functioning and contribution to the economy when something as trivial as the common cold knocks you on your ass for a few days.
The goals of for-profit health insurance are immoral: to maximize profit by collecting the most premiums and paying the least benefits to sick people. Most countries with private health care seek to mitigate by legally limiting the ways in which benefits can be denied, and Obamacare was many steps in that direction.
As with fire protection, ambulance, national defence, major infrastructure, education, some things are so universal, we unthinkingly accept them as “single payer”.
I’d agree that private enterprise is the best way to make cars and do many other things like, say, space exploration in the 21st century, (but not the 20th).
Unfortunately the ideology behind the answer to “is privatization always better?” is at the crux of political disagreement, especially in the United States. The answer the right seems to be giving is “yes, always”, while the left seems to be giving is “yes sometimes, definitely not other times; it’s complicated, let’s try to find the right mix”.
A final thought is that in my casual observation as a foreigner, the United States seems to have an extreme cultural bias against public enterprise It is expected to fail, and that almost acts like a curse. Of course no magic is necessary – if public workers and management have low standards and expectations culturally ingrained, then the idea that government is inefficient and incompetent can become self-fulfilling.
I agree.
Sometimes it’s better and sometimes it isn’t. Or in other words: it’s complicated.
The key is to maintain accountability. We have people in government trying to avoid responsibility, and they do that by ‘privatizing’ so that someone else can be blamed.
In markets where there are clear choices, such as where we buy our food, then the ‘marketplace’, literally, provides the accountability. Don’t like the cost or selection? Choose another vendor.
Where we have the most problems, IMHO, is when we take a local monopoly and privatize it, then there is no feedback for correction. In such instances we need government to step in and make it right. Government is more accountable to the public than is private business, and we need to value that.
The supposed justification for privatization was that competition would lower the ultimate cost, but it hasn’t turned out that way.
Privatization of prisons has resulted in kick-backs and incentivization to incarcerate people who do not deserve it. This raises the ultimate cost to the government and to society as a whole.
There’s no real incentive to keep prices low, and companies on the teat will contribute to lawmakers’ coffers to keep the milk & honey running.
So… the potential for corruption is even higher in privatization than in government run services. And that raises the cost.
Where I think privatization is useful is when a service is already provided by the marketplace and the government is duplicating it. I think that the VA should not be providing health care to vets for conditions that are not related to their tour of duty. They are the experts in head injury, amputation, PTSD, etc. but not in colonoscopies or cataract surgery.
I do believe in both government & private industry conducting research. The drug industry justifies high prices as a way to cover the cost of drugs that didn’t turn out to be useful. If the government absorbed the cost of basic research, Big Pharma could be compelled to keep prices low.
Deregulation has also decreased competition among air carriers and in the telecommunications industry. Since the passage of the Telecommunications act of 1996, which paved the way for consolidation and the few huge conglomerates that dominate the media, prices have increased at a higher rate than before the passage of the act. Ironically, lower consumer cost was the selling point of the bill to the public.
…and then there’s the deregulation of the banking industry, which was regulated after the 1929 collapse destroyed the economy. What could go wrong?
And deregulation precipitated the 2008 collapse as well.
I cannot think of one instance where monetizing what is in the public’s best interest has led to improved performance. Unlike Gordon Gecko, I don’t think that greed is good.
Dentistry in my country (Bulgaria). When it was public, it was hardly accessible.
So now it’s accessible to all?
A part of it is, particularly some services concerning children. But if you have (say) more than 2 carieses per year… you are on your own.
It could be that part of the difficulty with socialism in Eastern block countries is that the history of communism created a psychological barrier. Communism is so heavy handed it would discourage just about everyone. When Western democracies add socialism there may be some built-in immunity based on more optimistic expectations.
And totalitarianism and corruption.
The German health system is a hybrid. We have a multiple payer public system, run by heavily regulated companies. These companies whine a lot, but do a halfway decent job. If you want more you can switch over to private issurance, but these get very expensive over time.
There is optimization potential in that system, but a completely private health system? No!
Education in Germany is mostly public, schools and universities are funded by the state and almost free. We’re talking about 300€ per semester at many universities and that gives you free public transportation.
IMO education should be free or really, really low cost. Educated people are one of the most valuable resources a country can have. And that’s not just college/university education, but vocational training as well. I like our German dual system. Apprentices are employed by companies, they go to trade schools (funded by the state) to learn the theoretical parts and get their practical education from the company, and after 2 to 3.5 years they take a formal state regulated exam. And they earn a small salary during that time.
I always liked the German education system.
I am Canadian, where we have a single-payer, state system for hospitals and doctors. Basically, we love it. Sometimes, there have be waiting times that have been longer than we might like for elective surgery, but that situation seems to have been mostly ironed out lately. Basically, we can’t figure out why any country would choose a different option.
I know many Canadian colleagues and they generally keep their citizenship — so they can access Canada’s Medicare!
One thing you reminded me of in this comment is no one gets to jump the queue. It doesn’t matter how much money you have or who you are (if it looks like someone is getting to queue jump, a big scandal breaks out).
My optometrist was telling me about how someone who is filthy rich and well connected with hospital administration fell ill. He tried to call in some favours but the most he could get was the promise of maybe, if they could swing it, a private room. They didn’t fly in the best doctors or bump the priority of others.
1. No.
2. No.
1: Medicare in the US. No insurance company in their right mind would cover Medicare people. Or at least not at a price that anyone who is currently dependent on Medicare could afford to pay.
Universal public education: The best social investment ever made; the best social program ever made. In the district where my wife teaches, the private schools get to send their special ed kids to the public schools for all their special ed services. (The whole thing about public education is easily summarized: Most public school teachers are unionized; very few private school teachers are. GOP logic: Kill public schools and kill the last bastion of unionism in the US.)
Britrail.
In my neighborhood, now, there is “choice” of garbage haulers. With the result that 6 X as many trucks are rumbling through the neighborhood — for no tangible gain anywhere. I have no issue with private haulers; but dammit, city, pick just one!
2: Research would no longer be pursued with the goal of just finding out. It would have to pay its way. (I know, I see this every day at my work place.) Research will be hurt and would be skewed. Corporate management cannot see the (whole) future.
Philanthropy pays for a lot of ground based astronomy with no direct benefit to the customer except knowledge and maybe the occasional names building. Of course, this is a byproduct of capitalism and not directly a privatization issue.
Yes to everything you said. It should come to no surprise that I am all in favour of purely theoretical research with no practical, foreseen benefits.
Reblogged this on Nina's Soap Bubble Box and commented:
The Private Sector chases profits and server stockholders.
The Government has to serve everyone, including where it’s not profitable, and is accountable to the public.
I have no idea how the private argument ever took hold, but it is wrong, the private sectors does not and never has served the public interest.
You may remember in the early stages of debate on Obamacare that conservatives rejected the idea of Medicare for everyone because no private sector firm could match the efficiency of the government bureaucracy. Medicare has an overhead rate around 3%, while before Obamacare, overhead rates for the private sector frequently exceeded 30%.
Um. I am Canadian and we did Universal Health care in the late 1960s, so frankly, the American idea that you can pursuit happyiness when Health care costs are the leading cause of personal bankruptcy is bizarre. I mean – have you seen that meme of “Breaking Bad the canada edition” You have cancer and treatment starts next week.
America is the only G20 nation that does not have a national health care and allows companies to focus on profitables diseases and copy-trademark nonsense on nature. worse inventing illnesses to sell snake oil cures.
No to both, but there is a vast amount of territory between such either/or extreme alternatives.
1. All systems have their detractors, who should be accommodated.
2. There is room for both gov’t & privately funded research.
There are some unstated assumptions in this whole discussion.
1. The number of people and the available resources in countries are not equal; they are vastly different.
2. The population-environment balance (or imbalance)affects which is the better system for maximizing average well-being.
3. A homogenous and stable population is another variable, with commonality of values making national systems more workable.
It’s only better if it’s done in a way that means the private schools, hospitals, transport providers, etc., have to compete directly against one another on price and service, and customers have access to reliable information that enables them to compare the competing services providers. Very often, (nearly always) this does not happen. Governments are very good at screwing up privatisation processes so that monopolies are created, or so that middlemen capture all the benefits.
“It’s only better if it’s done in a way that means the private schools . . . have to compete directly against one another on price and service, and customers have access to reliable information that enables them to compare the competing services providers.”
As a matter of principle, would you say that a public school ought have the same right as a private school to decline to accept a disruptive, oppositionally-defiant student? Such student misbehavior would seem to affect the quality of the service provided.
Schools should specialise. Some should teach the academically gifted, some the average, some the below average, and some the children with behavioural problems.
That may be advisable, reasonable. But it goes against the current view of “inclusion.” In the U.S., a student’s cussing out a teacher is much more tolerated nowadays (a “garden variety” infraction per the NY Times editorial board).
The policy of inclusion is a very harmful fad, meant to symbolize equality, but it actually undermines equality. The problem children disrupt the education of the rest, so those who can afford to take their children out of the public school system. It’s a left-wing policy that works against left-wing ideals.
I’m not convinced that problem children choose be problems, nor that they’re born that way, nor that the parents are to blame. Hunger, alone, is a physiologic stressor capable of raising adrenalin levels, and adrenalin has cognitive effects, pro or con, depending on circumstances. Prolonged high levels of adrenalin, due to unsafe housing, frequent hunger, financial constraints, etc., can also affect parents first and their children secondarily.
Regardless of what causes problem children to be problem children, they’re probably best managed by specialists.
I know this isn’t exactly an answer to the question, but here’s my two cents. None of these are easy calls either way, but they all have one thing in common. The benefits of all four are to some extent both public and private. So a pure market is not, at least in many cases, the most efficient.
One thing the government does better than the private sector is collect debt. No bankruptcy for debt when the government is involved.
I’m 70 years old and will be working another six years to pay back obligations to Uncle Sam.
No, I don’t support hospitals being completely private.
I don’t know if anyone else has made this point – I don’t have the time to read 160+ comments – but Australia has a parallel private health system in addition to the government owned one. Some of the private hospitals are very good, but generally anything complicated (and expensive) is hived off to the government hospitals.
And the private health system gets a lot of financial support from the government – read taxpayers.
So no, I don’t support healthcare being entirely private. It would also be very expensive. Australia spends around 9% of GDP on healthcare for a result which is better than America’s, which spends around 16%.
Waiting lists are a problem to some extent. Recently there’s been a little storm in a teacup about men with prostatic cancer having to wait 3 months for a radical prostatectomy in a public hospital, whereas they’d have to find $10000 plus to have it done immediately in a private hospital.
Urologists have noted that prostatic cancer is usually very slowly growing, and a 3 month wait usually wouldn’t cause any harm. If it was me, I would welcome the delay as giving me a chance to get 2nd opinions as to whether radical surgery was necessary.
I’m speaking from a Swedish perspective. Here healthcare is organised on a regional level with a varying amount of private health care providers as a complement. The same model, more or less, goes for schooling. Most schools are run by the municipalities with some 25% of the students enrolled i private schools (mainly high schools). Since the privatization, there has been an improvement of customer satisfaction of both the governmental as private schools and health care centers. Quality is improving, waiting lists are shorter and the variation in education programmes is higher.
However, we have maintained a tax based financing system for both health care and schools. Regardless of who I as a customer choose as my health care provider och which school I send my kids to the payment is the same. In a way this combines two good ideas, 1. payment for common goods through taxation, higher income earner pay more as an act of solidarity, and 2 market forces influences the supply side though mine and others right to choose the health care or school that best serve our preferences and needs.
I think you would need to torture the concept of “improving” beyond any sane reason, to be able to claim that the quality of the Swedish School system has in any way, shape or form (objectively) improved.
Quite to the contrary, the evidence seem to indicate a dramatic decline in performance that seem to be quite unique. No other industrialized country has fallen so far, so fast.
From being ranked among the best School system in the world 1995, in the latest PISA study, Swedish 15y olds performed among the worst of all industrialized countries, way behind for example the USA.
But the PISA result is just one data point among many that show an alarming trend, spanning almost every aspect of the School system. The same overall trend can also be seen in other international studies like TIMSS and PIRLS, studies of teacher satisfaction, rate of teachers leaving the profession, recruitment for teacher education, rising inequalities within and between Schools, and so on.
What this amounts to in practice is, (some examples),
*Approx 15% leave basic compulsory education without complete grades
*60% of 15y olds for example report that they have never heard of quadratic functions
*Approx 20% of Swedish male 16y olds leave 9th Grade as functional illiterates (they can not read and understand a normal morning newspaper)
*6th Grade pupils today are on average 2-3y behind compared to pupils 30y ago in basic skills like reading and math
*The acceptance test score results to teacher training are so low that a regular chimpanzee would get admitted (the test score required are regularly below what you would achieve through simply guessing answers!)
To this should be added that Sweden is investing more per student per year over the first nine years than almost any other country in the world, 20-50% more than for example Finland, Germany, Japan and Korea, and has smaller class sizes and more teachers/per student.
In May this year, OECD published a truly scathing report regarding the Swedish School system from an investigation that was specially requested by the Swedish Government back in 2013,
“Sweden should urgently reform its school system to improve quality and equity”
https://www.oecd.org/edu/school/improving-schools-in-sweden-an-oecd-perspective.htm
The privatization did not in itself cause this, but it has in all probability in many ways exacerbated an already deteriorating situation, which is discussed extensively in OECDs report, and you can not discuss one without the other.
If the costs of various healthcare systems around the world are anything to go by (and their quality of outcome as health systems is taken in) then the privatisation of health is a bad outcome economically. Same for private schools.
What I really don’t get about advocates of privatisation is that some of the savings through competition are offset by the massive wastes and expenditures that capitalism entails.
“do you agree with the privatization of healthcare, education, and transportation are almost invariably better than government-regulated or government-run entities?”
Maybe privatization could be proven to be better in the long term. Research here in Sweden on the first 2 decades said it didn’t bear out the prediction that it would be cheaper or higher quality due to increased efficiency (competition). [ http://www.dn.se/debatt/privatiseringar-i-valfarden-har-inte-okat-effektiviteten/ ]
Based on that result – if it is valid – you can have either or both without neither increased harm nor increased benefit.
But there are other nations that can be used to make larger comparisons, I’m sure. Just adding that piece FWIW. [I can’t vouch for the quality of the study.]
“What about funding for science research: should it also be taken out of the hands of the state and left to the private sector?”
Ooh, hard. I have no data and can’t come up with anything to make an armchair analysis with. Can we use dice? 😉
Also, see Rudi’s comment above. It is possible that _satisfaction_ has increased despite no other measurable differences. I can’t tell without having access to the study.
Sweden also has an enviable pharmacare as well I think.
Disagree. The problem with privatization, I think, would be, that the private provider is going to aim services at those customers most likely to pay the most and promote profit. The poor and unemployed would be priced out of the market. Only a government service can be fair to all.
I am a UK citizen, and would not presume to comment on other nations’ systems. But the basic premise is surely that competition between private sector providers is expected to get better outcomes than the public sector option.
For what it’s worth:
Transport (can’t bring myself to use the word ‘transportation’): fail. The UK rail companies do not compete with each other, do not take acceptable business risks to gain market share, and require as much (or more) taxpayer subsidy as British Rail did. The privatised bus companies will not serve unprofitable routes (eg small towns and villages) without public subsidy.
Utilities: also (so far) fail. Vertically-integrated cartels, with huge barriers to competition, which have been known to use taxpayer subsidies to boost shareholder dividends.
Health: as has been pointed out, the NHS is an untouchable institution for most in the UK. There is a parallel private and insurance-based system for those who want (and can afford) to use it. The NHS was never designed to do everything, and these days it can’t afford to. But it remains one of the most cost-effective health systems in the world. To continue to be so it may have to withdraw from an increasing number of elective procedures, such as cosmetic surgery, IVF treatment, etc. The private sector operators, who continue to circle the pool, will cherry-pick the procedures they can make profits out of, as ever.
Education: Both. We have had a mixed system for 150 years. International conventions all agree that privately-paid education is parents’ right. In theory, the resources follow the money, and indeed the ‘public’ schools have huge advantages in facilities and staffing ratios; in practice, the public sector does a fantastic job (disclosure: I chair a primary school governing body), although we are pestered with changing Govt policies on academies, ‘free’ schools, etc. The total privatisation of education is, thank goodness, currently a very minority position.
Research: the easiest one. Both. But publicly-funded research must absolutely not be driven by supposedly desired outcomes. The UK’s research assessment system seems to me (although I have not been part of academia for a long time) to be deeply flawed.
Please clarify what you mean by ‘public’ schools. In the U.S. that means government run schools. Are you using that meaning here?
No, UK “public” schools are what we in the US would call private boarding schools or prep schools.
It’s now an obsolescent and confusing term, but it has its origins in history.
Wikipedia: “Public schools emerged from charity schools established to educate poor scholars, the term “public” being used to indicate that access to them was not restricted on the basis of religion, occupation, or home location, and that they were subject to public management or control, in contrast to private schools which were run for the personal profit of the proprietors.”
They were ‘public’ in the same sense as a cinema screening is ‘public’ – anyone can see it on payment of the admission fee.
cr
Sorry to be so late in clarifying: Gregory has it right. Confusing, yes, but not obsolescent: there are still dozens of public schools, fee-paying, socially exclusive, and a disproportionate supplier of members of Parliament, the law, and these days even the acting profession.
Sure for a bona fide scientist there can only be one answer to the dogma that privatisation is always better, no empirical testing required.
For what it is worth, I consider the privatisation of natural monopolies (e.g. power grid, roads, train tracks, water supply) to be a self-evidently bad idea because it comes without any of the presumed advantages of the free market and competition anyway. It merely constitutes giving somebody the opportunity to extract a rent.
In other cases it depends on situation. Surely it is demonstrably not a good idea to nationalise every corner store or family farm; but conversely, history shows that it is suicidal for a nation to privatise the armed forces.
Finally, the question may not be easy to answer even with case by case evidence before one has an agreement on what ‘better’ means. What is better for the investor may not be better for the employees; what is better for the customer/user in the short term may not be better for them in the long term if the investor achieves savings by reducing investment in infrastructure maintenance.
When an issue such as this comes up, I try to imagine what a privatized, libertarian interstate highway system would look like. It would no doubt be less boring that the endless series of identical plazas we have now. But a cross-country trip across its patchwork system would likely take as long as it used to on old Route 66 (but with Stuckey’s substituting for the plazas).
There are some projects that are inconsistent with the corporate goal of maximizing profit for the shareholders (and, nowadays, remunerating top corporate officers like sultans and pashas). For example, regional experiments with privatized utility companies have been notoriously unsuccessful.
On the other hand, there are many products and services (including ones that are essential to citizens’ wellbeing) that are best (and most efficiently) served by the free-enterprise marketplace. I wouldn’t want to live in a land with government-run grocery stores.
Would the Stuckey’s have nut logs? How about the foot-high cream pies?
Social functions and ‘natural monopolies’ (healthcare, law enforcement, transport) should absolutely NOT be privatised.
The ‘private’ model works fine where there is room for competition – selling digital cameras or motor cars, selling bread or paint, etc. But even there regulation is needed to prevent harmful additives and to ensure that competition is maintained and no big player or cartel establishes a monopoly. (And ‘intellectual property’ – that is, patents – are a menace in that respect, a tool of megabusiness, lawyers and patent trolls).
You can have competing airlines flying out of the same airport but the airport itself is infrastructure and a local monopoly and should be under community control. And the airlines have to be regulated, not only to enforce sometimes expensive safety measures, but also to preserve competition.
Healthcare, now, MUST be provided to a reasonable standard by the state. There’s room for private providers on top of that (this is the New Zealand practice), but the existence of the state system is what keeps healthcare costs, even from private providers, to a reasonable level. Two other major factors operate in NZ to keep costs under control – the Accident Compensation Act which provides no-fault payment in the event of an accident and prohibits private lawsuits for compensation. Yes, it specifically bans ambulance-chasing lawyers. That keeps insurance (including medical practitioners’ insurance) to a realistic level. ACC is funded by a levy on all insurance policies, on income tax, and on car registration. And the other factor is Pharmac, the government drug purchasing agency, which buys all the drugs that are dispensed free under prescription. This gives it huge buying power and it can negotiate with drug companies to keep prices down. It also buys ‘generics’ where possible. The drug companies absolutely hate Pharmac.
cr
I think the idea of the “official privator sector” against the upstart privator regulation avoiding and undercuting market is an interesting topic too
https://dykewriter.wordpress.com/2015/10/12/an-industry-vs-a-business-from-taxis-to-uber/
I am a Bulgarian. My country has suffered classic socialism for decades, until it bankrupted spectacularly and had to be abandoned. After freedom and capitalism returned in 1989, my country is slowly improving.
Education is largely public, and likely to remain this way, because it was largely public even in the pre-socialist era. Nevertheless, when private schooling is better for a particular child (due to disability for example), it is annoying that the already overstrained parents cannot get a voucher.
Health care is now mixed, in my opinion a reasonably good system. Why? Because a universal private system is unlikely to cover everybody, and a universal public system, in our experience, degenerates into something where low costs trump all. After all, letting a patient to Nature is also free, isn’t it? And the public health care tends to come dangerously close to this.
In the socialist era, expensive treatments and drugs were unavailable (except for the lucky few allowed to travel abroad), and government used its control over the information to prevent patients from even knowing that their conditions were in principle treatable. Dentists were surprised when a patient would come for a prophylactic examination; on the other hand, when patients listened to them and sought dental care only when in pain, there were weeks-long waiting lists. Dentistry in Bulgaria is now mostly private.
Medicine has more public share; immunizations are entirely public. Nevertheless, patients often supplement it by privately seeking a treatment or even by giving under-the-table money to doctors in public hospitals. It is cultural. We value our health and think that the patient “should care for his own skin”.
I have never been to Britain, but every single emigrant there whom I know tells some horror story about the health care system that is worse than our local horror stories. If it were only the Bulgarians, I’d think that they are screwed up because they are disliked as Eastern European immigrants. However, I know from other sources that NHS pursues low costs at all costs, particularly by denying women C-sections, pain relief during birth and even access to an obstetrician-gynecologist, preferring midwives and homebirth as a “cheaper” option. When I discussed the case of Joshua Titcombe with my British students, they told me that the British defend NHS even from legitimate criticism because they fear privatization. Which makes me think that approval for the NHS is evidence-resistant, for cultural reasons.
The public goverment services tend to attract incompetent burocrats, but it does have the long term health of the people near the top of their objectives. Private health care is open to cut throat business so that everyone suffers except the share holders. It boils down the motivation of the people who run the organisation. On the whole for the big services with long term interests, public services are best. for short term, private may be better. There is no reason why a country cannot have both. A big national service, with minor contracts given out to private firms.
Many governments use these national public services as political largesse, bloating the employee roles as a form of patronage or reward for political support. This bankrupts a country. On the other hand, in theory at least, a for-profit entity MUST charge more than a non-profit entity for the same service. I think the solution is an autonomous (non-political) public entity whose budget, and the tenure of its leaders, depend on customer satisfaction.
I don’t approve of privatization of ‘Critical National Structures’ such as Rail, Education and Health. I am a product of the British NHS and have worked in Aviation Security for the last 40 years. I would make two general points here; privatization of a public service is usually done after that service has been made unusable by government cuts disguised as efficiency measures. There are horror stories of poor standards etc. published in the press and the public view that service through dark glasses so that when the call comes for privatization there’s very little resistance. The problem is that privatization leads to a race for the bottom as competition drives prices and standards down while increasing company profits. Of course, it’s often the very legislators who benefit from this as company shareholders. In my own industry, whenever there is a private company involved I can be sure that I will observe poor standards, low morale and high staff turnover. Personally I’d rather pay tax to ensure a good national service than pay fees to an unregulated private service for the same or lower standards. T.
That’s two questions. For the short term for both, I don’t know but tend towards no for both. For the long term, i.e. when we finally figure out that we’re a social species that requires social, not monetary, solutions to problems, definitely no for both.
“Do you agree with the privatization of healthcare, education, and transportation are almost invariably better than government-regulated or government-run entities?”
I will only speak to healthcare insurance, as I have (some) professional expertise here (I work in a large CPA firm and have audited companies in that industry). My answer would be that there are certain populations of people that are uninsurable, in the sense that the premiums charged would have to be exorbitant in order to cover the risk and associated cost. Therefore, you end up with large segments of the population, such as the elderly, that are underserved by a market-based insurance model. Yet the need for health insurance for those people exists nonetheless.
While the market can be very efficient at providing needed goods and services to folks at reasonable prices, I don’t think it holds for health insurance. If we cancelled Medicare tomorrow, it would leave a vacuum that would not be readily filled by the insurance industry.
Another area that is problematic for a pure market approach is the Pharma industry and the development of novel therapies and treatments. The process of developing a drug and getting it through FDA approval is risky, onerous, and costly (this would be the case even without the (necessary) regulations). Yet drug companies have the same responsibilities to maximize shareholder value as does Apple. Therefore, the therapies and compounds that are chosen for development are usually the ones that have the most potential for profit, but those may not match up with the actual treatment needs of the population at large. For instance, think of the allocation of resources to develop drugs for erectile dysfunction, or cosmetic treatments, as opposed to chronic diseases (stroke, heart disease, etc.).
I have read but can not confirm that most drug research is public, done in universities and such places. Certainly, the fundamental part is. I wonder if any private companies are doing research for an Alzheimer’s cure. At what point in the process fundamental research -> private research -> marketing -> product do they come in?
Private corporations will only compete to the benefit of the general population when they have to, i.e., when the government sets the standard. Remove that government standard, and the private corporations are free to focus purely on profit.
Government support is also required for basic research, as corporations won’t put money into anything that doesn’t pay out before their CEOs can retire and take those profits with them.
Exceptions to these rules exists. They are scarce and/or small in comparison. Were they the standard, these rules wouldn’t be needed.
I leave out the Bill and Melinda Gates Foundation for the same reason: It is one of a kind, and even if it is not small, it is also not unlimited.
I can only speak from my own experience.
I’m a researcher at a government lab. The work we do for Federal agencies is technical and specialized, but not outside the realm of work that any number of private firms could do if they wanted to. However, we’ve tried to outsource it numerous times since the early 1990s, but we do it at a rate that is less than 20% of what the lowest bidder has offered to do it for in the private sector. [And our overhead rate on fully-burdened labor is 52.4% this year, and we’re paid on the S&T scale, so it’s not like we work cheap.]
In addition, the work product of our research is licensed to CRADA partners who sell our deliverables to private customers, which goes back into the Treasury.
FWIW, many Federal employees are in situations similar to ours, where we aren’t paid by a line item in the budget, but have to hustle customers in the public and private sector. Most of my budget comes from non-appropriated funds (Postal Service, Amtrak, CRADA partners, etc.).
On a different note, I’ve found that the idea that private is always better than public, ceteris paribus, is nonsense. What private does that public doesn’t is generate bribes and kickbacks. Consider the Postal Service: No private firm can even approach their low-cost for last-mile delivery (which is why so many private sector delivery services outsource final delivery to USPS). But is the Postal Service generating profits for Wall Street, or donations/bribes to political campaigns? Even worse, the workers are paid decent wages and may live to enjoy retirement!, not something the private sector is advertising these days.
Your comments on the Post Service are very good. An institution that use to be public but then became private, more or less. The problem with the system is that Congress still acts as the board of directors and that is bad. The management knows what needs to be done to break even but the congress says no. Who knows less about any budget than congress?
Pays a living wage and some good benefits that you do not see in the private sector anymore.
I acknowledge that it is possible to have a total hash-up in either in a privatized or a governmentally run systems if implemented poorly. I do believe that a MIXED system is the best sort of solution. I live in the UK and get both NHS and Bupa healthcare. The sum is certainly better than the separate parts.
Competition is key to improving service levels and efficiency. We are Darwinians aren’t we – how can anything evolve and adapt without competition?
Any product or service that can be easily switched between providers (food, clothing, cars, taxi rides, haircuts, etc.) where competition actually works more or less according to the free market model are best left to private business. But in some services competition is naturally inefficient (like gas and electric utilities, city public transit system, military), or the profit motive provides strong incentive to make more money that can run contrary to the objective of providing of service to the public (for example, prisons, education, or health care, which may seem like they allow competition, but for a customer they are effectively a monopoly, because a customer cannot walk out in the middle of operation or change a college on a whim). The second and third group can be private only if they are tightly regulated and limited to certain profit margin, like some utilities, or should be public.
As for scientific research, i think that anything that has no practical monetizeable value within 5-10 years will not look appealing to private funding (except charities which often have their own narrow agendas – Templeton, anyone?) and has to be funded by the government.
One more example in the transportation category: ferries. Some years back, when I was a daily ferry commuter, there was a proposal to privatize the money-losing Washington State Ferry system, so that “market forces” could increase efficiency, drive down prices, and stanch the hemorrhage of public dollars.
This struck me as completely nuts. Where was this competition supposed to come from? Even assuming an aspiring ferry entrepreneur was willing to put up money for a fleet of boats, where would he dock them? Where would his customers queue up in their cars at rush hour? How would they get from the freeway to the boat in orderly fashion without the use of city streets and the cooperation of city police? And now we’re supposed to imagine several such entrepreneurs in competition on the same stretch of waterfront? It would be a logistical nightmare.
The whole idea was simply knee-jerk ideology without a shred of practical thought behind it. Fortunately, saner heads prevailed and the ferry system remains a government monopoly, subsidized by gas taxes.
Now I’m thinking about Tinker Bell as a “Fairy Entrepreneur”. 🙂
Somehow they didn’t seem to be aware of what happened in New York about a century ago, from what I understand. I understand that the current transit authority was founded because of the “anarchy” of competing transit companies!
(Can you imagine what Manhattan, say, would be like today if there were more *subway* companies?)
“do you agree with the privatization of healthcare, education, and transportation are almost invariably better than government-regulated or government-run entities?” No.
“What about funding for science research: should it also be taken out of the hands of the state and left to the private sector?” No.
My reasoning (consistent with my observations) is that private markets constantly strive to extract wealth to the benefit of their owners/shareholders. That’s not something they try to hide, it’s their entire motivation for participation in the market.
For these specific enterprises (healthcare, education, transportation, and scientific research), I define “better” as producing the most beneficial results in the interests of current and future citizenry and our species, which is in direct opposition to the goal of extraction of personal gains from the system (since those gains would otherwise be reinvested to produce further gains).
I haven’t read all the comments, so at the risk of repeating something already written…
I heard recently that in Australia, 95 cents in the dollar collected by Medicare goes to medical treatment, whereas only 85 cents in the dollar that is collected by private health insurers goes to health care.
That means that private health insurance costs three time as much to run as the gummint alternative. Note thought that this is for health insurance, not actually health care.
With discussions such as this I always remember the US health system, which consistently ranks as about the second most expensive in the world, but about 45th for overall health outcomes. I am certain you can get the best health care available anywhere in the world in the USA, if you can pay for it, but many citizens have no insurance and get little or poor health care.
Personally I feel uncomfortable about the notion of someone making profit from someone’s poor health.