Noam Chomsky on Privatization

[_honorentheos]

There's a real story of, "Hell must be empty because all the devils are here" aspect to the history. One can pick one's demon and find them in the middle of that story. Focusing on one like government behavior is more of a Rorschach test result than anything.

Whether it was farmers, mines, development or what other broad demand sector one can think of, each was and still is pushing back against the realities of living in a desert environment attempting to get their share of the water supply while blaming everyone else for their abuses of it.

The law was enacted to force a sort of accountability that still gets abused, and one shouldn't look at any level of government as the adult in the room per se. But when it came to putting up barriers and resolving the problems of the time, it was the kind of problem that took something on the scale of the Federal government to rein it in and set rules for management going forward.

[Guest]

You're faulting me for not writing a post that talks about what you want to talk about rather than the perfectly fine point I wished to bring up.

Which is?

I'm fairly sure I set my parameters in that first post around issues of utility and infrastructure where control of access to a good or service being controlled by price alone deserves much more serious consideration than so-called commodities. To commodify just about anything that we might consider to be essential to our way of life - be it water, transportation or a voice in our government - has a bad history of resulting in disenfranchisement of the less wealthy. Price is a blunt instrument that leverages different people in different ways based on their income status. The idea that regulations or setting basic levels of guaranteed service helps offset the motive a company may have to focus on profit alone does damage to the idea that markets are best able to solve problems if the regulation has to be part of the solution space for this reason. I personally don't have a problem with seeing public-private partnerships in most cases you've brought up. What I don't see is the case made that resistance to this arises from a lack of familiarity with how markets lead to successful outcomes. And frankly, it seems like this may be due to it not being an easy case to make in most cases where someone may have concern over what guarantees fair prices without competition? Yet if there is competition, there is risk of failure of at least some providers involved. And where there is risk of failure in providing a service, the consequences of disruption of that service can be worse in some cases than no being able to buy the hottest Christmas gift. So, there are reasons to be cautious. You want to make a fine point that overcomes those concerns? The floor is yours.

[_EAllusion]

Scarcity of a resource is not a self-evident argument for why its distribution should be socialized.

You saying so isn't an argument for it being privatized.

Fortunately, I didn't make this argument. You, on the other hand, have implied a few times now that scarcity of a needed resource itself is an argument for public ownership. You seem to take it as self-evident when it is anything but.

You seem to keep wanting people to forget which direction this issue is starting from and moving toward. You claimed a better understanding of how markets would operate would reduce opposition to moving to privatization and yet it seems your point is just that privatization is better and socialism is bad.

Then I suggest you read what I said again? But yes, I think that people have a hard time understanding how markets distribute resources and when they are used to a sector of the economy being socialized, they are resistant to privatizing it because they have a hard time conceptualizing how markets will meet demand. I think if bread were made in government bakeries, there would be staunch opposition to the privatizing of bread out of fear that bread wouldn't make it to people's bellies. One bit of evidence for this idea I marshaled in favor of this idea is people's relationship with socialized sectors in different societies where different sectors are socialized. We're gifted this natural experiment and it conforms to this notion.

I have left plenty of nuance on the table for when privatization is better or not and gave some conditions where public ownership can be justified. At no point did I argue that privatization is always better and almost no one thinks that. Even your hardcore nightwatchman state libertarians believe in the socialization of defense forces.

Make a positive argument for why you believe water services should be privatized.

You certainly want to have this argument rather than address what I've actually said. That theme has come up several times now.

[_EAllusion]

You're faulting me for not writing a post that talks about what you want to talk about rather than the perfectly fine point I wished to bring up.

Which is?

The one I stated in that quote and restated when I quoted that quote? That public ownership of a sector needs to be justified and one step in that process of justification is that public ownership must achieve its aim, already established as necessary, better than a private counterpart. I am setting up a burden here. It's a achievable burden, but it's one that people sometimes forget when arguing for what they are used to. I think that it's not enough to point out the USPS is able to maintain a mail system. I think you have to reasonably believe that it does so better than what the private sector would provide as part of your basis for thinking the USPS should exist.

[_honorentheos]

I am setting up a burden here. It's a achievable burden, but it's one that people sometimes forget when arguing for what they are used to. I think that it's not enough to point out the USPS is able to maintain a mail system. I think you have to reasonably believe that it does so better than what the private sector would provide as part of your basis for thinking the USPS should exist.

I really don't think you are following the burden of the argument here at all. On a libertarian board maybe this is how this argument plays out. You entered this thread making a case you are saying is the default position and the burden is on others to move the argument off of your claim. The argument didn't start on the position you are claiming, so...

Anyway, I'm fairly sure I set my parameters in that first post around issues of utility and infrastructure where control of access to a good or service being controlled by price alone deserves much more serious consideration than so-called commodities. To commodify just about anything that we might consider to be essential to our way of life - be it water, transportation or a voice in our government - has a bad history of resulting in disenfranchisement of the less wealthy. Price is a blunt instrument that leverages different people in different ways based on their income status. The idea that regulations or setting basic levels of guaranteed service helps offset the motive a company may have to focus on profit alone does damage to the idea that markets are best able to solve problems if the regulation has to be part of the solution space for this reason. I personally don't have a problem with seeing public-private partnerships in most cases you've brought up. What I don't see is the case made that resistance to this arises from a lack of familiarity with how markets lead to successful outcomes. And frankly, it seems like this may be due to it not being an easy case to make in most cases where someone may have concern over what guarantees fair prices without competition? Yet if there is competition, there is risk of failure of at least some providers involved. And where there is risk of failure in providing a service, the consequences of disruption of that service can be worse in some cases than not being able to buy the hottest Christmas gift. So, there are reasons to be cautious. You want to make a fine point that overcomes those concerns? The floor is yours.

[_EAllusion]

I really don't think you are following the burden of the argument here at all. On a libertarian board maybe this is how this argument plays out. You entered this thread making a case you are saying is the default position and the burden is on others to move the argument off of your claim. The argument didn't start on the position you are claiming, so...

I stated a position. If you disagree with it, it's not clear why. Or, more accurately, when you disagreed with it, your criticism of it was an oversimplification that argued that a lot goes into deciding whether governments are obligated to ensure certain outcomes, whether something is cost/benefit justified, etc. Duh. That's a proposed outline of the terms of disagreement, not an explanation of what a cost/benefit analysis looks like in every sector of the economy. It would be insane to expect the latter. The former, however, is a perfectly fine point in addressing the OP's topic.

To commodify just about anything that we might consider to be essential to our way of life - be it water, transportation or a voice in our government - has a bad history of resulting in disenfranchisement of the less wealthy. Price is a blunt instrument that leverages different people in different ways based on their income status.

This seems to be arguing that markets can price people out of access to goods/services they ought to have, therefore, the public should instead own the production of those good/services and provide them affordably. This is a classic Marxist argument for socialization, and anticipating that you might want to make this point, already contended, at least in the case of water management, that to the extent this is a concern I believe that social safety nets are better suited. Welfare state liberalism obviates socialism in the case of this argument, in other words. We'd have to go sector by sector here, though, as I'm not making a case to privatize everything.

In the form of the argument you are disagreeing with, what you are saying is that the government is obligated to ensure access to clean water to everyone and private ownership of water management fails to accomplish this because it prices out a portion of the population. If you think this, this isn't an objection to my point. It's an argument easily articulated in the form of argument I said should be made when making a case for socialization.

This one seems fairly obvious to me as water management services typically come with an end-user fee that not everyone can afford and we fix that by making it so people can afford it and/or funding free access to water in public locations that the public pays the utility for. If we are talking about a set of circumstances where the management of water was so expensive that it became a luxury of the relatively well off, then unfortunately I think economic pressure on people to move is ultimately a good thing and I'd probably prefer assistance with moving over making water cheaply available if those conditions prevailed. For the same reason why it is a terrible idea for the government to give people cheap home insurance to facilitate building homes on the beach in hurricane zones, it's a bad idea to subsidize people's water consumption when they are opting to live where there is no water. Distorting the true cost of water access by hiding it in a general tax burden will lead to resource mismanagement if only in population distribution.

What I don't see is the case made that resistance to this arises from a lack of familiarity with how markets lead to successful outcomes.

That's an assertion I made based on lots of experience hearing and reading people's objections to privatizing various things coupled with observing how this plays out with various sectors of economies in different countries. Kevin felt that in America people want to privatize everything. Quite the contrary, public sectors in America tend to enjoy highly entrenched support. And when you confront that support, skepticism that the private sector even could do the same thing is frequently cited as a principle objection. Don't believe me? Ask some random people if air traffic control should be handed over to private air travel control companies. See what they say and ask them why. I predict you'll get a lot of 1) hell no and 2) fear that air travel safety would take a nosedive because that's not something a private company can be trusted to provide.

[_Kevin Graham]

Kevin felt that in America people want to privatize everything.

No I'm not saying they want to privatize everything. People in America are against things like the privatization of roads. What I'm saying is that they're against government intervention in things it isn't already involved in. Americans are dumb in many ways because they don't understand how much government already is involved. Think of voters during the 2008 election holding signs saying "Government, get your hands off my Medicare!"

Quite the contrary, public sectors in America tend to enjoy highly entrenched support. And when you confront that support, skepticism that the private sector even could do the same thing is frequently cited as a principle objection. Don't believe me? Ask some random people if air traffic control should be handed over to private air travel control companies. See what they say and ask them why. I predict you'll get a lot of 1) hell no and 2) fear that air travel safety would take a nosedive because that's not something a private company can be trusted to provide.

Again, I doubt most Americans even know or care that air traffic control is handled by the government. But if it isn't broken, don't fix it.

I was providing a counterweight to your claim about other countries being so used to government services that they wouldn't approve of privatizing them and they would do so irrationally. People here are the same way about things where the private sector has a foothold, such as healthcare and education. All you have to do is look at the hysteria about "Socialism" and "They want to turn us into Venezuela" rhetoric from simple measures like funding mass transit.

[_Kevin Graham]

The arguments for socializing a sector of the economy usually involve the idea that the private sector can't (efficiently) or should't produce some important public good. So the idea for socialized roads is that no investor(s) can provide the upfront investment necessary to turn a profit from a functioning road system, so it doesn't happen privately.

I don't think that is an argument presented here nor is it what Chomsky said. He in fact said markets are efficient if you're looking strictly at it on paper in terms of how much money they're making. But who benefits? The problem is there are other things not considered, and for people like me I don't ask myself whether something should be socialized based on the private sector handling it "efficiently." I don't think other Democratic Socialists do either. I think efficiency is a way people who push for privatization choose to frame it because it works to their benefit.

I ask myself who benefits the most and at what cost to whom? I started a thread a few weeks ago about this topic but no one was interested in discussing it. But the example I provided at the time was the internet. Perhaps the greatest technological achievement in recent memory, it literally put us in a completely different age in terms of economic advancement. It was developed and funded by the government. It was the fruit of all of our collective labor. And instead of getting that service for free at much higher quality as is the case in other countries (Nordic countries enjoy average internet speeds nearly twice as fast and it is free or nearly free) it is handed over to private entities who then compete for our business. The same is true for life-saving drugs developed at public universities. Because the government isn't in the business of making money, and the general belief is that government sucks at controlling the means of production of all goods and services, those priceless resources are handed over to private corporations for pennies on the dollar so they can in turn jack up prices and sell it back to the taxpayers who were originally responsible for its development in the first place.

Also, if something is a necessity of life, it is immoral to turn it into a commodity. Water and healthcare for example. Because people can be easily held hostage and forced to pay whatever the asking price is. Because it is better to pay outrageous prices and live, as opposed to not paying and die.

[_Kevin Graham]

A classic example of what Chomsky described is in education. Republicans absolutely hate public education because they generally hate education that isn't geared towards Conservative/Religious thinking. There isn't enough of that in Public institutions so they do what all ignorant religious people do: they demonize the system entirely as being from the devil. "They teach Socialism and Liberalism!" Learning about science, evolution, climate change, etc. It just drives them nuts because they prefer a 4000 year old text written by a few dozen anonymous scribes.

There is a move in Republican politics to gradually defund public education. So the idea is to make it so bad that everything falls apart and then they get to say "See we told you government sucks!" And then "let's privatize it"! This is the same thing being done to Obamacare even though it isn't government run healthcare.

But failures of any public school isn't because these schools are run by the government, it is the fact that they're underfunded or just mismanaged. I argued years ago that much of this "my school is better than yours" is all nonsense because the greatest factor in determining the quality of a public school is the affluence of the school district. A district with zero apartment complexes and an average home of $500,000 is going to have much better test scores than a district with two apartment complexes and an average home value of $280,000. This is going to be the case wherever you look across the country. Why? Because schools are funded primarily via property taxes and wealthier people tend to produce environments more conducive to education. This is why charter schools don't provide any measurable benefit over public schools when all is said and done.

[_EAllusion]

Kevin felt that in America people want to privatize everything.

What I'm saying is that they're against government intervention in things it isn't already involved in.

Here's what I said:

Social needs can typically be met through market action with government regulation where needed. It usually takes some work for people to get this in an area where they are used to government control. This is one of the reasons why opposition to government control over a new sector of the economy is so intense. Once it is locked in, it's difficult to muster political will to dismantle it because people can't envision another way.

In response you said:

You're talking about other countries, but here in the USA we're used to so much privatization we have the opposite problem. Insane opposition to anything government related because, you know, any kid of regulation means socialism, and any kind of socialism means we're one step from becoming Venezuela.

I read "the opposite problem" as the opposite of what I said. The opposite problem of wanting to keep an industry socialized is wanting to privatize it. My point was that one of the reasons why there is intense opposition to socializing an industry is the belief that once it is socialized, it is hard to reverse course because political will entrenches on behalf of government control. This is an argument made by both proponents and opponents typically. If you look at people who argue for the socialization of health care, they frequently argue that once Americans have it they'll never let go in the same way that social security is entrenched. Opponents believe this too, which is why the political conflict can take on a do or die feeling.

I think that's usually correct, but a notable part of why that is correct is that private sector allocation is mysterious to people and they are inherently wary of it when the government is providing something.

I was providing a counterweight to your claim about other countries being so used to government services that they wouldn't approve of privatizing them and they would do so irrationally. People here are the same way about things where the private sector has a foothold, such as healthcare and education. All you have to do is look at the hysteria about "Socialism" and "They want to turn us into Venezuela" rhetoric from simple measures like funding mass transit.

I think very recent "Venezuala!" arguments are causing you to conflate what's going on in right-wing propagandistic media with the various reasons why there is traditional conservative opposition to socialization in various industries. That's much more complex. If you want to reduce the Venezuela argument into the view that government will result in relative mismanagement, that is a common criticism, yes. Not necessarily inaccurate either depending on what you are talking about. If you respond to that like you do in a later post by arguing the solution is make sure the government doesn't mismanage it, I think you are missing that the case is typically that this is hard to avoid. Evaluate government programs not how you'd like to see them run ideally, but how they are likely to run in actuality.

That said, you know one of the main reasons America has a relative dearth of mass transit and so much energy inefficient sprawl is because of government construction of highways ahead of demand...

There might be important reasons to construct a highway system like America's, but one of the costs of doing this as opposed to just building roads where it would be profitable to do so is that it reduced incentive for high-density movement of people.