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rivatization is one of the most significant and pervasive politico-economic trends in the United States in the last half century. It now touches virtually ever part of American society. Privatization - contracting government out to private corporations - is there in force everywhere government touches the lives of citizens, ranging from war-fighting, incarceration and policing to schools, the management of urban water supplies to roads and bridges and much more.
Some privatization involves private contractors providing discrete services like cleaning laundry in state prisons or food provision in public schools. But in an expanding number of cases, privatization has moved toward private corporations running public services themselves, operations like the ownership and management of prisons and schools and other essential public services that were once viewed as only properly managed by government.
Some simple statistics capture the scope of the change. In 2007, contractors outnumbered US military personnel in Iraq. In 2009, contractors made up 57% of the Pentagon’s forces in Afghanistan. The 1996 Welfare Reform Law, in addition to its manifold policy changes, ushered in a wholesale privatization of the provision of services for the very needy, with vast contracts going to EDS, IBM, Lockheed and others.
Where did this movement come from and what has driven it forward? Does privatization really save government’s money and reduce the tax burden on the public? Or does it mainly enrich private interests, often without public sector accountability or oversight?
In recent decades, entire industries have grown up around privatized government services - the so-called “corrections industry” being one of the most conspicuous. To what extent have these multi-billion dollar industries sufficiently entrenched themselves and ‘captured’ the departments and governments they work for that they are all but impossible to fire? The privatization of prisons in recent decades is wildly known. Much less well understood is how the corrections industry works at almost every step of the criminal justice process - from arrest, processing, adjudication, incarceration and post-imprisonment confinement and parole.
Finally, particularly in the field of public-private partnerships, how much have cities and other municipalities ceded key governmental decision-making to private corporations for decades into the future?
Today TPM is kicking off a richly reported four part series on privatization and the privatization movement in the United States. We’ll begin later this week with a detailed look at the history of the privatization movement, particularly its ideological origins in post-New Deal America, as intellectuals who feared the growth of government searched for ways to limit its growth. Later, their work combined with that of conservative political strategists who saw privatization as a way to eliminate key political constituencies supporting government spending. By the 1980s and 1990s, these principally ideological and political projects came together with a range of corporations, some new and some old, eager for access to the business opportunities privatization had and would continue to create.
From there we will look at public-private partnerships and particular industries like the corrections industry to see how privatization works in practice. Public debate on the issue often focuses on costs and savings. Does privatization really reduce costs to tax payers or simply enrich private businesses? Our series will look closely at that issue. But we will also focus on the way privatization often limits the scope of democratic government itself - taking key public policy decisions away from democratically elected or accountable authorities and handing them over to private corporations, whose methods and practices are either hidden from public view or are actually trade secrets they own.