Social Democratic America by Kenworthy Lane

Author:Kenworthy, Lane
Language: eng
Format: epub
Publisher: Oxford University Press, USA
Published: 2014-08-26T04:00:00+00:00

Private Provision of Services?

Not so long ago, many political parties on the left believed government should be the producer of key manufactured goods, such as steel, cars, and chemicals. But it’s now widely agreed that private ownership and market competition are more effective at delivering innovation, good quality, and low cost in manufacturing.

Services are different in that we often want not just innovation, quality, and low cost but also universal access. It isn’t necessary that all citizens have a car. But everyone should have physical safety, schooling, healthcare, basic transportation (roads, buses, subways, trains), clean water, sewage, electricity, mail delivery (yes, still), and Internet access.

That doesn’t mean government must be the provider, however. We could rely on private providers, regulating them to ensure that they extend service to all. Broadly speaking, we have three options: monopoly public provision, a mix of public and private provision, and fully private provision with regulation. Which should we choose when universal access to a service is critical? That will depend on particularities of the service and national or local circumstances.114 The world’s rich nations vary widely in provision of education, healthcare, transportation, policing, mail delivery, utilities, and other services. There is no reason to presume that fully public or fully private provision will always be the best option. The choice should be dictated by the goals—universal access, quality of provision, cost control, and innovation.

Service provision tends to be a blind spot for the political left. The public sector is a source of stable, decent-paying jobs, and for some that becomes the goal rather than a side benefit. Where public employees are unionized, concerns about the quality of service provision are often interpreted by the left as veiled attacks on unions.

This is the wrong approach. Our focus should be on the users of services, not the producers. A society isn’t fairer when some people enjoy better job protection or working conditions or pay simply because they happen to be employed by government. Here Tony Blair got it right: “The end is quality services irrespective of wealth. … The end is utterly progressive in its values. But the only progressive means are those that deliver the progressive ends.”115 Or, as Ezekiel Emanuel has said about medical care: “Health care is about keeping people healthy or fixing them up. It is not a jobs program.”116 We should expect public services to perform as well as private-sector counterparts. They ought to be responsive, accountable to consumers, and innovative.

In many instances, this requires embracing competition from private providers. Service users should be allowed to choose among providers, including private ones. That doesn’t mean taxpayers must bear the full cost of a private provider if it exceeds that of a public one. What it means, in most cases, is allowing users to choose between public and private providers.

There are two potential drawbacks. The first is that if enough users switch to private providers, the public provider may no longer be able to offer high quality at low cost. If enough

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