Verkuil and Klein on Privatization

Philip Dynia at the Law & Politics Book Review has commented on Paul Verkuil’s Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do about It. Dynia characterizes the book as a sober and penetrating analysis of two disturbing trends:

Who is really in charge of government policy making? Verkuil sets himself the task of demonstrating two points: (1) that important work both significant to and often inherent in the concept of government is being contracted out to the detriment of democratic policy making, and (2) that the trend can (and though he does not say so directly must) be moderated, if not reversed, by changes in the way government operates.

Dynia calls Verkuil’s “command of the relevant literature . . . prodigious,” and notes his skill at “incorporat[ing] constitutional, statutory, administrative, and contractual sources.” Here are some of the conclusions that Dynia draws from Verkuil’s book:

[T]he ratio of political appointees to the number of senior career managers must change. Verkuil cites a report by the National Commission on the Public Service (the Volcker Commission) which notes that President Kennedy had 286 political leadership positions to fill, President Clinton 914, and President George W. Bush 3,361. Such a large number of political appointees paralyzes government . . . . Moreover, studies have shown that politically appointed bureau chiefs get systematically lower management grades than bureau chiefs drawn from the civil service . . . . In short, FEMA’s Michael Brown . . . is just the pathetically obvious tip of [an iceberg of] cronies.

I look forward to comparing Verkuil’s book to Naomi Klein’s The Shock Doctrine, a polemical take on privatization.

Writing in Harper’s, Klein makes the following observations about two potential responses to increasing risks in society:

There will be more Katrinas. The bones of our states–so frail and aging–will keep getting buffeted by storms both climatic and political. And as key pieces of the infrastructure are knocked out, there is no guarantee that they will be repaired or rebuilt, at least not as they were before. More likely, they will be left to rot, with the well-off withdrawing into gated communities, their needs met by private suppliers.

Not so long ago, disasters were periods of social leveling, rare moments when atomized communities put divisions aside and pulled together. Today they are moments when we are hurled further apart, when we lurch into a radically segregated future where some of us will fall off the map and others ascend to a parallel privatized state, one equipped with well-paved highways and skyways, safe bridges, boutique charter schools, fast-lane airport terminals, and deluxe subways.

Klein worries that excess privatization creates a self-reinforcing dynamic, whereby firms enriched by one set of contracts attempt to leverage those gains into the future:

When the disaster bubble bursts, firms such as Bechtel, Fluor, and Blackwater will lose much of their primary revenue streams. They will still have all the high-tech equipment bought at taxpayer expense, but they will need to find a new business model, a new way to cover their high costs. The next phase of the disaster-capitalism complex is all too clear: with emergencies on the rise, government no longer able to foot the bill, and citizens stranded by their hollow state, the parallel corporate state will rent back its disaster infrastructure to whoever can afford it, at whatever price the market will bear. For sale will be everything from helicopter rides off rooftops to drinking water to beds in shelters.

This is a troubling vision, and I have tried to suggest ways to temper it even before reading Klein’s book (in response to this problem). Though some have criticized Klein for accentuating the negative side of capitalism, those seeking to understand the larger context of long-term shifts in power and influence can do worse than reading a partisan take.

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