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pinion Best of 2012: Prison Privatization is Crony Capitalism 101


There is an easy emotional response to tap into via the privatization argument. We all have a certain degree of frustration with government, especially at a time when it is so fractious that even the simplest accomplishments seem impossible. It goes like this: If government and those who run it can't even perform their main function – governing – how on earth can they outperform industries that specialize in particular services? If only it were that simple.

On the surface, it would seem  to make sense. Industries are competitive and the profit motive should lead to innovations and efficiency that can deliver services for the lowest possible cost – or certainly less than public servants with no accountability to the shareholders or even market forces. The problem is that such a framing takes place in theory and under the cover of abstracts, assuming there's a sort of black and white distinction between public and private – or socialist and free market in the parlance of the argument.

In reality, we have a very mixed economy with no such distinctions. There are virtually no commercial enterprises that do not rub up against both public and private funding and market forces, either directly or indirectly. And as industries such as defense contracting clearly indicate, using private companies is not only far short of a guaranteed improvement, but is often the greatest opportunity for back-door boondoggling.

Bringing in a private producer to engage in commerce with a publicly-funded client might give you a free market on the production end, but it lacks the coinciding “free market” buyer on the consumption front. When I make a widget and widgets are made by numerous companies and consumed in large part by regular individuals on a retail market, there's a more distinct free market relationship.

The companies invest their money in producing and marketing their product to me and people like me, who in turn voice our level of satisfaction by deciding or declining to purchase their product. The competition sets a price based on our demand for their supply, which is constantly changing and subject to adjustment. They are motivated to find better ways to deliver a quality widget for a lower cost because of the likelihood that they will increase market share, but are held in check by our ability to punish them through choosing a competitor, should they cut corners on quality or engage in practices that we do not feel are in the best interest of society – like outsourcing their labor and shutting down factories in our towns.

But when we're talking about politicians acting as proxy consumers and negotiating with money that is not their own, and without a clear incentive to get the best deal, with an obvious benefit to securing other compensation for themselves as a result of their choice, these dynamics disappear, and we're quickly talking apples and oranges.

Private management of public services has often been disastrous, from defense to utilities to healthcare centers and assisted living facilities. In this case, a manufactured need is being presented to the public for the sake of a well-connected industry's bottom line. In recent years, sentencing reforms have kept Florida's state prison population at a much lower growth rate, and many state facilities have plenty of vacant space. Closing them to build new private ones would make little sense in a free market.

But by hiding future costs in areas like healthcare, pawning off the most expensive prisoners to house (like the infirm, mentally ill and physically disabled) and cutting corners on things like safe guard to prisoner ratios and employment qualifications to save costs, an industry and its stooges in the legislature have woven a paper-thin argument that such a boondoggle will be a solution to our massive budget shortfall, rather than just a windfall for some of their biggest supporters, courtesy of their constituents.

Closing state prisons will destroy good, middle-class jobs for hard-working professionals whose job skills are narrowly geared toward the important work that they do. Meanwhile, it will replace them with fewer, less-than-living-wage jobs that will do nothing but add to the ranks of the unemployed and working poor, while taking vital money out of the communities where these shuttered facilities lie. History suggests that any savings will quickly evaporate, which translates to more public money traveling upward in the real redistribution of wealth – the one we're not aloud to talk about – where public tax money is given to “private” corporations, free of real competition, regardless of the public's expressed desire that it not be; the one that has created the continuous expansion of the wealth gap and helped to facilitate the erosion of the American middle class.

The theme du jor in politics is that government is going broke doing for its citizens, who must now do for themselves, while the precious services that don't directly benefit their cronies' bottom line – like Social Security – are scaled back and the funding for others such as prisons are turned over to the “efficient” private sector who will supposedly do a better job. They tell us that this will allow for the most efficient flow of capital, that money saved will find its way elsewhere to create employment and that free of regulations and burdensome tax rates, the job producers will finally save us.

We've been following this road for decades – privatization, deregulation, cuts in services, shrinking revenues from massive, unfunded tax cuts – and it has landed us where we currently reside, a time of record unemployment, record deficits, expensive ecological tolls, a disappearing middle-class and a country where things like basic access to preventative medical care is becoming a symbol of wealth and prosperity. Yet we're told that just a bit more will make it a fix rather than a foil. Shame on us if we buy it.

Check out this shocking op/ed by Florida Senator Paula Dockery (R-Lakeland) for more on how the prison privatization efforts in Florida have played out.

Dennis Maley is a featured columnist and editor for The Bradenton Times. His column appears every Thursday and Sunday on our site and in our free Weekly Recap and Sunday Edition (click here to subscribe). An archive of Dennis' columns is available here. He can be reached at dennis.maley@thebradentontimes.com. You can also follow Dennis on Facebook and Twitter by clicking the badges below.

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