When It Comes to Public Services, Government Knows Best

http://www.commondreams.org/view/2014/02/16-0


Minneapolis is considering dropping privatized bus shelters because of public complaints about poor maintainence. (Photo by Mark Jackson under a Creative Commons “license”:http://creativecommons.org/licenses/by-nc/3.0/)

Minneapolis will soon vote to shift nearly 180 privately owned bus shelters to public ownership following numerous complaints about the lack of maintenance and upkeep. When it does it will join the burgeoning ranks of cities who have discovered that when it comes to public services government knows best.


When an article about this appeared in the local Star Tribune newspaper many on-line comments echoed the conventional wisdom circa 2014. “It must be really, really bad if government can do it better.”

In the post-Ronald Reagan era Americans take as indisputable truth the idea that the private sector is more nimble and more innovative and that the profit motive commands efficiency. But a mountain of evidence points in the other direction. The government is highly competitive. Indeed privatized services often come at a higher price and lower quality.

The examples are legion. Medicare boasts a tiny overhead cost compared to that of private insurance companies. Federal unsubsidized student loans are cheaper and more flexible than private bank student loans. Private contractors cost Washington almost twice as much as federal employees for the same tasks.