Follow the Money: “Privatization”

“Privatization” means converting publicly owned and managed resources to privately owned and managed resources.

Resources that have been targeted for privatized include schools, water systems, sewer systems, trash disposal, Social Security and Medicare, parks and recreation, transportation, military operations, and even the legislative process itself, that is, drafting laws that govern our states and local governments (see footnote at bottom).

Privatization is done in the name of efficiency, and there are some cases where it can be useful.

There are also many cases where the major effect of privatization has been to enrich private companies at public (taxpayer) expense.

Why would any democratically elected legislator transfer an important public resource to private companies? 

To answer this question, here is where “follow the money” comes into play.  It’s important to find out: ‘Who is profiting from the privatization?’

Do legislators who vote for a privatization bill get re-election funding (and other perks) from the companies or individuals who profit from the legislation?

Does the privatization create higher value and efficiencies with an important overall benefit for the public?   Or does it create higher costs to the public and/or lower value delivered by those who operate the privatized resource?

Footnote – ALEC’s nationwide agenda to privatize public services and resources:

ALEC (the American Legislative Exchange Council) is a private association, that drafts legislation that is then introduced into state legislatures all across the country.  Many of these bills have been enacted into law.

Privatization of public services and resources is a major focus of legislation drafted and promoted by ALEC.  ALEC is funded primarily by corporate sponsors.

It is accurate to say that state legislatures that introduce bills drafted by ALEC are outsourcing a crucial part of the legislative process to the private companies who sponsor ALEC and take a lead in proposing, pitching, and drafting legislation.

More information about ALEC can be found on this post by the Center for Media and Democracy.  A great deal of valuable research has been done to “follow the money” that flows through ALEC and ALEC’s private sector sponsors.

This is the second part in a series about principles for restoring democracy.   The first part can be found here.