Privatization a tricky but innovative concept

Within a recent time period there has been moderate dialogue for privatization or partial privatization of certain aspects of America’s regulated industries.

Privatization is the transfer of ownership of an entity, such as Houston’s Department of Transportation, from the public sector to the private sector.

Our country has been playing with the idea of partial privatization for some time now. For example, school voucher systems have been placed on many ballots throughout the nation. Some economists favor partial privatization of government-run organizations, such as public housing and education, for the incentive of better quality living conditions or education since the recipient has the option to choose providers.

Also, some factions believe a larger step toward privatization of government-run organizations is necessary for our country to develop a more balanced economy and income distribution. Their reasons for this conceptual integration into our economic and political institutions are many.

The foremost purpose of privatization is the expectation of higher quality. Again, this is based on the notion of choice creating competition. The privatization of an airport, for example, could greatly reduce the burden on taxpayers. The city of Chicago is in the process of selling Chicago Midway Airport, an airport comparable to Hobby Airport. Supporters say this will create extra revenue for Chicago that would have other wise been lacking. This transaction will, on the other hand, degrade the overall wealth of Chicago by stripping it of an asset.

In the United Kingdom, under the Margaret Thatcher administration, the Regional Water Authorities were sold to private companies to increase efficiency and quality; however, this transaction created a self-monopolized market commodity that had been thought of as a public good, which resulted in public outcry.

A monopoly resulting from privatization is not far-fetched. That being stated, America is not an ordinary country. The United States has a vast amount of firms that are more than willing to venture into the business of education or transportation. This American attribute could create an environment that is resistant to monopolies.

How can we create the perfect economic and political system with regards to American principles?

Let’s privatize every industry in America except the government itself, defense from the state level onwards and a national disaster unit. Some economists have said this scenario will create a more exaggerated version of what we have now; quality will skyrocket but access will plummet.

In other words, the rich communities will have access to the best education, transportation and security money can buy whereas the lower-income areas might receive lesser quality services than they receive now. However, this scenario will most likely allow a surplus of funds in the wealthier communities. Would a nationwide Robin Hood Plan be sufficient to assist the poorer communities? Will this situation satisfy all obstacles and ideologies?

It remains to be seen, but we should open our eyes to new methods of government management that could potentially improve our overall welfare.

Tarver, a political science sophomore, can be reached via [email protected]

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