THE ETHICS OF PRIVATIZATION: PART 1

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Over the past few decades the cost of public services have found themselves rising at alarming rates across the globe, and surpassing what many governments can afford to spend. Many such governments are running a deficit as a result of these costs, and struggling to operate under their current order. This draws a lot of political attention to publicly funded programs and invites experts to analyze the extent to which governments can reasonably afford to offer these services through traditional means (taxpayer funds). Increasing populations in parts of the world exacerbate these concerns, as they contribute to a greater number of socially, and economically marginalized citizens, which in turn creates greater demand for public assistance from governments. Additionally, the increased costs of modern governments, due to their size, and scope of services offered, spreads government thin, and furthers societies expectations of what governments ought to provide.

Opportunity to remedy this situation by governments also becomes difficult, since there is reluctance by many political constituencies to impose tax increases, for fear of stifling local economies, and losing loyal constituencies. This along with other considerations leads many governments to explore the opportunity of privatizing their public programs, and the relief it may be able to provide. By privatizing public services, these governments effectively give over control of certain industries to privately operated entities. Compelled by the current wisdom and faith in the efficiency of privatization, many governments are implementing these practices in many sectors of society. However the long term effects of these practices are not yet entirely understood, and the debate on the over-all success of this practice is far from settled.

Over the past few decades more and more governments have began looking beyond the public domain, and into the private sector for assistance with their financial shortcomings. As this trend continues, it will be important for governments to assess the positive and negative effects of such strategies, and determine where it is most effective. Considering that the services offered by governments vary considerably, it should be expected that rates of success with privatization will vary from one sector to another. Over the course of the next month or so I will analyze the effects of privatization in a handful of sectors, to help highlight the different shapes it can take, and the contrasting effects it can have in different sectors. As we will see, the goal of private industries supplying the needs of the public, while simultaneously meeting their own needs, can be a difficult objective to achieve. Considering that many people rely on these services for survival (food stamps, Medicare), and the fact that private companies need to make a profit, you can imagine the task of satisfying both needs becomes quite contentious at times.

By governments establishing programs that ensure safety, health and stability, governments act as a caretaker to the needs of its citizens. This allows for society to weather the hardships of economic instability, and any uncertainty that life sometimes offers. Although the stresses of adequately providing assistance to the entirety of the populace may be an unrealistic objective, it is nonetheless pursued by many governments today. However this ability for governments to provide for the needs of its citizens will most likely involve increasing levels of private assistance in the years to come. With the assistance of the private market, governments can aim to achieve these goals by removing certain services from public control, and exposing them to the competitive forces of the private market, in theory maximize their efficiency and functionality. Though there is no easy solution for governments to meet the needs of their populace, the private market certainly offers hope.

Although the privatization of public programs offers potential solutions for public deficits, it will be important for this discussion on whether private institutions have the proper incentives and responsibilities to service the needs of the public? During this study I will investigate the theories and practice of privatizing government services, to further illuminate the effects of such strategies on government budgets, and their long-term implications on society. Through my research I will elaborate on the promising aspects of privatization but also bring attention to the alarmingly transformative effects this has on social services. Though promising, the strategy of privatizing public programs does not warrant unconditional support; the strict monetary incentives undermines ethical considerations, and contributes to a host of perverse effects in many sectors of society. Most notably for this discussion, will be the effects of privatization on the healthcare system, education, military, banking and detention, which highlight an ambiguous relationship between private interests and social services.

Keep checking back for regular updates to The Ethics of Privatization. 

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