If privatization of government programs and services is such a good idea, why is there so much resistance?
"Privatization -- transferring government services to private companies to improve quality and lower costs -- has the potential to put a huge dent in big government and save taxpayers billions of dollars each year," reports Ronald Utt of the Heritage Foundation. Nevertheless, support for privatization plans is far from universal. That's because certain people have a vested interest in maintaining the status quo.
Utt argues that "the relatively small number of people or institutions that benefit from a program -- including federal employees and their unions, businesses that supply the program, and the communities in which facilities are located -- always fight to preserve it, since they believe their livelihood is on the line. By contrast," he points out, "the cost of any one program typically is of little concern to most taxpayers, since it amounts to just a tiny fraction -- perhaps pennies -- of their annual tax bill. This makes it very difficult to arouse the public to fight the special interests opposed to privatization."
The trick is to overcome this opposition. "Experience has shown that successful privatization programs accommodate the concerns of those who want to maintain the status quo," says Utt. "For example, opposition to privatization could be significantly reduced by providing government workers and managers with shares of stock in the new private enterprise, either at a discounted price or at no cost at all. Generous severance packages and no-layoff policies also can diminish opposition among employees whose programs are privatization targets."
There's no shortage of targets, that's for sure. "Over the past several decades," Utt observes, "the U.S. government has created many large, inefficient commercial enterprises like the U.S. Postal Service, Amtrak, the U.S. Government Printing Office, and the Corporation for Public Broadcasting." Why not privatize them all? Let them sink or swim. If they manage to turn a profit, so much the better. If they fail, so be it. But why stop there? "The federal government," Utt points out, "also owns a staggering 700 million acres of land that could be far more productive and better managed if privately owned." The government would profit not only from the sale of these lands, but also from tax revenue generated by their commercial use.
Ronald Utt suggests that as much as "70 percent of the federal civilian workforce performs routine administrative and service functions that could be done by private companies, saving taxpayers billions of dollars. The Department of Defense has been doing this for years," he observes, "but other agencies, like the National Park Service, have fought the idea." Maybe it's time to remind the directors of these agencies that they are working for us, not vice versa. Maybe a healthy dose of free enterprise is just the medicine they need to convince them that the customer -- i.e., the U.S. taxpayer -- is always right.
