By Tom Kando
The current debate about health care makes me think: Which services belong in the public realm and which ones should remain private? In other words, which ones are government responsibilities, and which ones are not? Many goods and services are produced and delivered for profit. Homo Economicus. But there are also services which can never be profitable, and therefore must be provided at a loss, i.e. at the taxpayer’s expense. Homo Publicus. Here is a list of services, with notes on how they are usually delivered - in the US and elsewhere:
1. Education: There are public schools and private schools, both in the US and overseas.
2. Health: Medical insurance, medical services and hospitals are largely private in the US, more public but sometimes private overseas.
3. Public Safety: Law enforcement, the correctional system and the courts are almost always public, both in the US and overseas, although America has privatized some of its prisons and some of its juvenile correctional facilities, which are run for profit. Fire protection is usually a public service everywhere.
4. Defense: Almost always a public service, both here and overseas, although in the past, mercenaries for hire played a big role in wars, and even today the US uses some private "security" personnel in Iraq.
5. Welfare: This is the "total loss" segment of the economy: welfare, AFDC, unemployment and disability benefits, etc. In past ages, charity was largely private, and religious and other private charities continue to exist, especially in the US. However, modern societies provide most of these benefits at the public’s expense. They are the most resented government expenses because they are so totally born by the taxpayers.
6. Child services, receiving homes, orphanages, group homes, and convalescent homes.: In the US, many of these facilities are private for-profit businesses. Elsewhere much less so.
7. Transportation: In the US, passenger trains are run by a semi-private-public corporation (Amtrak), while freight trains are fully private. Elsewhere railways are largely public. Municipal bus systems are almost always public, both in the US and overseas, while the US has one major private national bus company - Greyhound. Other urban mass transit systems - trams, subways, etc. - are public, both in the US and elsewhere. Of course, Americans use private cars more than anyone else. Road construction and maintenance are a public responsibility everywhere. Airports are largely public in most countries, at least the major international ones. Airlines are private in the US, public and private elsewhere.
8. Communication: Postal service in the US is both public and private (UPS, FedEx). Elsewhere it is largely public. Telephone service is entirely private in the US, but public and private elsewhere.
9.Housing: mostly private everywhere, although there is some public housing in the US and in other countries.
10. Recreation: largely private everywhere, except for local, state and national parks.
11. Consumer goods and food. This is the 800 pound gorilla in the economy. It is overwhelmingly the realm of the private economy in most countries. The notable exception is the defunct Soviet Union.
Any conclusions? Well, (1) for one thing, the US is much more private than most others. (2) What is best? Should products and services be part of the private or the public economy? This depends on what items we are talking about. (3) In general, services which are inherently more costly than profitable MUST be public (i.e paid for with taxes). In this regard, the US errs on the private side, as Communism erred in the opposite direction. (4) This raises the fundamental question as to what the good society is. A society which fails to provide services that are inherently unprofitable, yet essential to human well-being, is not a good society.
Thursday, October 15, 2009
By Tom Kando