Reason Writers Around Town: Big City Democrats Embrace Privatization

Reason Foundation policy analysts Leonard Gilroy and Harris Kenny have a column in The Wall Street Journal examining the growing trend of local Democrats turning to privatization and public-private partnerships to cope with budget deficits:

We often hear that America's infrastructure is crumbling, but did you know that tens and possibly hundreds of billions of dollars in private infrastructure funds are waiting to be spent? It's money that Chicago Mayor—and Democratic Party powerhouse—Rahm Emanuel has spotted, rightly calling it "a tool here that takes some of the pressure off taxpayers."

In April, the Chicago City Council overwhelmingly approved Mr. Emanuel's $7 billion program to "rebuild Chicago" by constructing two new runways at O'Hare Airport; replacing 900 miles of water pipes and 750 miles of the sewer system; creating special routes for rapid bus transit; modernizing schools, transit stations and city buildings; and building 12 new parks and 20 playgrounds.

To pay for these projects, Mr. Emanuel is turning in part to private firms including Citibank and Citi Infrastructure Investors, Macquarie Infrastructure and Real Assets Inc., J.P. Morgan Asset Management Infrastructure Investment Group, and union-held Ullico. These firms say they are ready to provide at least $1.7 billion to help build the "new Chicago." (Though the details are not yet set, the likely arrangement would have the private firms putting up capital and then recouping their investments through user fees over a set period of years or decades.)

"This model of private financing for public infrastructure is happening all over the world, but not here in America," said Mr. Emanuel, who served from 2009-10 as President Obama's chief of staff. "I can't get from here to there on the old model—it's broken."

There are decades of major public-private partnership success stories in the United Kingdom, France, Italy, Spain and elsewhere. The Reason Foundation's Annual Privatization Report finds that partly or fully privatized airports—such as Heathrow and Stansted in London, and Leonardo da Vinci-Fiumicino Airport in Rome, which make money from airlines and especially from passengers in stores, parking lots and the like—handled 48% of European air travel passengers in 2011. That's one reason Chicago is considering privatization plans for Midway Airport (which would ultimately require approval from the Federal Aviation Administration).

Mr. Emanuel's new infrastructure plan is bolstered by the privatization success he's already experienced in Chicago. Last summer he launched a large-scale competitive bidding process in which two companies compete with each other—and head-to-head with city workers—to provide cheaper curbside recycling for Chicagoans.

The competition forced government workers to find better ways to do their jobs, and Chicago reported reducing costs by $2 million in the first six months alone. "The City's crews have worked to close the gap between the private haulers' $2.70 price per cart by reducing their costs by 35 percent from $4.77 to $3.28 per cart," the city government reported in April.

Read the full column here

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  • Suki||

    "public-private partnerships" is the long way of saying fascism and Democrats have never been shy with it. Republicans do it too, but they act shy about it sometimes.

  • Fernando||

    That's the whole deal with most PPPs. They aren't about reducing total costs, they're about getting the cost off the books today.

  • ant1sthenes||

    Totally agree. The public benefit of capitalism isn't really the private profit (though that does eliminate some principle-agent issues), it's the competition, the direct accountability to the beneficiaries of the service rather than a cadre of (in all likelihood, bought off) technocrats.

    Republicans can do what they want, but libertarians should push for marketization, not a stronger marriage between business and state that taints terminology we might feel tempted to use.

  • Brian Defferding||

    Of course, the reason why they embrace any relaxed version of government involvement is because they were "blocked" trying to tax the rich by Republicans/Libertarians.

  • Mr. FIFY||

    Unpossible. Privatization goes against every leftist tenet.

  • Rich||

    two companies compete with each other—and head-to-head hand-to-hand with city workers

    FTFY

  • Mr. FIFY||

    Ewwwwwwww.

  • Keith3D||

    Social democracy - the modern variation on socialism wherein a degree of free enterprise is tolerated so that the state may leech off of it. The result being massive corruption and eventually state bankruptcy, i.e., the same as the old socialism.

  • Mr. FIFY||

    And people will still vote Democrat, despite all of those facts.

  • wareagle||

    come on, now; people who vote Dem have no interest in facts.

  • Fernando||

    Public private partnerships are a way to take what is public and make it very private as Government does not want the public to become clued in to what is actually happening with their tax dollars and assets as its all top secret.

  • Fernando||

    quote:Libertarian socialist Noam Chomsky: “a consistent libertarian must oppose private ownership of the means of production and the wage slavery which is a component of this system, as incompatible with the principle that labor must be freely undertaken and under the control of the producer”.
    Is Chomsky correct? Are right wing libertarians sellouts of true libertarianism?

  • ||

    No, Chomsky is just retarded.

  • Mr. FIFY||

    There is no such thing as a "libertarian socialist". The two terms cannot coexist in real life.

  • Fernando||

  • Mr. FIFY||

    Read it before. It was hogwash then, and it's hogwash forevermore.

  • Fernando||

    because you say it is.

  • Mr. FIFY||

    No, because it *is*.

    You may think you've rediscovered plutonium, but all you've unearthed is a polished turd.

    Sorry, that's the facts, Fernando.

  • Mr. FIFY||

    What is the alternative to "private ownership of the means of production"?

    Hint: It always ends badly. Ask a former resident of the Soviet Union.

  • Libertarius||

    Amen. Libertarianism qua Libertarianism got it's start with a bunch of Objectivists and Austrian Schoolers and whatever was left of classical liberalism at the time. We are the last defenders of the kind of ideas that founded this country, not another fucking flavor of socialism.

    Chomsky is a leprous bum and, like all leftists, a parasite who leeches off the virtue of others. You cannot be a libertarian and a collectivist at the same time, no buts about it.

  • Mr. FIFY||

    Oh, it gets better... see his post down thataway. He gets even crazier.

  • Sevo||

    A contradiction. Carry on.

  • Fernando||

    Um. Why

  • Mr. FIFY||

    If you can't see the contradiction, you can't be helped.

  • Fernando||

    so you're just saying it.

  • Mr. FIFY||

    No, and I'll amend my previous statement to include "if you're taking socialism seriously, you can't be helped".

  • Generic Stranger||

    Because socialism is nothing much more than slavery if it isn't voluntary, and if it's voluntary the vast majority of people will not be socialist. Therefor, it's a contradiction because it will either not be a "free" society or it will simply collapse as people do the more efficient thing and go back to capitalism.

  • Mr. FIFY||

    Who does your jib-cutting, Stranger? That's right spiffy.

    Now, watch Fernando say "nuh-uh" or some other pithy pro-socialism commentary.

  • Generic Stranger||

    Assuming he replies, anyway, and simply doesn't disappear into the aether to return again only once this thread has been forgotten.

  • Mr. FIFY||

    I've seen the name before, I'm pretty certain.

  • Mr. FIFY||

    He's back. I was afraid it wasn't temporary.

  • Generic Stranger||

    Notice how he didn't address anything I said, though, and instead went into a rant straight out of his Marxism 101 textbook.

  • Mr. FIFY||

    Yep. I predict he'll follow the pattern most of these yahoos use:

    More postings about the wonders of socialism

    Angrier postings about same

    Eventual degradation into name-calling possibly including false accusations of racism

    Let's watch!

  • ant1sthenes||

    "a consistent libertarian must oppose private ownership of the means of production"

    Why? Someone must exert control of the means of production, if they are to be productive. Better a large and diverse class of citizens than an aristocracy invoking The People like the old aristocracy invoked God.

  • Mr. FIFY||

    Why do you hate brown children, ant1sthenes?

    /leftist snark

  • Killazontherun||

    Not as tasty as the white ones?

  • Mr. FIFY||

    A liberal saucing with Sweet Baby Ray's will take care of that.

  • Killazontherun||

    'Means of production'? Someone has the tools and resources to create something? THAT'S what they have been complaining about all of these years? No wonder I've never spent two seconds of my life parsing this phrase. My God, that is the epitome of stupidity.

  • Killazontherun||

    Glib phrases like 'wage slave' are a callous insult to the real slaves, house wives. Now, go make me a goddamn sandwich.

    You're a fucking 90's rock ballad cliche, cross eyed crazy bitch, Mary.

  • Archduke PantsFan||

  • Mr. FIFY||

    Internal-combustion engines are racist, AP. Of course F1 lost out as an Olympic sport.

  • ant1sthenes||

    On the one hand, I want to agree, but then I remember how much emphasis teams place on shit like high-tech swimming gear. Obviously, human skill will play a huge role in a any competition (otherwise, any asshole could feasibly compete). But unless some egalitarian regime of training and gear is enforced, technology is going to be a factor.

  • Fernando||

    the word libertarian has been used by anarchists for far longer than the pro-free market right have been using it. In fact, anarchists have been using it as a synonym for anarchist for over 150 years, since 1858. In comparison, widespread use of the term by the so-called "libertarian" right dates from the 1970s in America
    The history of the socialist movement indicates that the identification of socialism with state ownership and control is not common. For example, Anarchists, many Guild Socialists, council communists (and other libertarian Marxists), as well as followers of Robert Owen, all rejected state ownership

  • Mr. FIFY||

    "libertarian Marxists"

    My God, now you've gone off the deeper end.

  • Fernando||

    Therefore, anarchists argue, real libertarian ideas must be based on workers self-management, i.e. workers must control and manage the work they do, determining where and how they do it and what happens to the fruit of their labour, which in turn means the elimination of wage labour.

  • ant1sthenes||

    But why exactly does that conflict with private property? Voluntary communal organizations are a subset of private organizations, not a separate and opposing class. Consider, as an analogy, that copyleft's legal protections are rooted in copyright law. Technically, copyleft is just a form of copyright guided by anarchosocialist ideals.

    Contrariwise, if such organizations are not voluntary, then they will act through coercion and (by necessity, in most cases) outright violence, and will strive to attain a monopoly on same in their sphere of industry or territory. A group so rooted in violence will need to establish a strong command hierarchy to ensure that those tendencies are focused outward rather than inward; otherwise, it will rip itself to pieces in internecine struggles over power and ideological trivia (viz. the Libertarian Party). Any surviving organization will have all of the core attributes of a state, which is to say, it will be a state.

  • Fernando||

    Attempts to associate socialism with the state misunderstands the nature of socialism.

  • Mr. FIFY||

    Keep dishing it out, dude, but it's not going to be eaten.

  • Fernando||

    To be a true libertarian requires you to support workers' control otherwise you support authoritarian social relationships. To support workers' control, by necessity, means that you must ensure that the producers own (and so control) the means of producing and distributing the goods they create. Without ownership, they cannot truly control their own activity or the product of their labour. The situation where workers possess the means of producing and distributing goods is socialism. Thus to be a true libertarian requires you to be a socialist.

  • Mr. FIFY||

    The hell you say.

  • ||

    Not allowing workers to sell their labor is authoritarian control, not the other way around, you dimwit.

  • ant1sthenes||

    Maybe you should try explaining as clearly and concisely as possible what you actually mean, then; rather than tossing out a term that has strong historical associations with relatively nasty states and expecting us both to intuit that you mean something entirely different from that usage and to fully comprehend which specific definition of "socialism" you are using.

  • Mr. FIFY||

    All that's missing is "eviscerating the proletariat"; he's already brought up all the other tired crap about workers owning the means of production and other specious bullshit.

  • Fernando||

    LIBERTARIAN SOCIALISM: a social system which believes in freedom of action and thought and free will, in which the producers possess both political power and the means of producing and distributing goods.

  • Mr. FIFY||

    It's a made-up term. The two systems of thought cannot coexist.

  • Fernando||

    Under capitalism, workers do not govern themselves during the production process nor have control over the product of their labour. Such a situation is hardly based on equal freedom for all, nor can it be non-exploitative, and is so opposed by anarchists.

  • Mr. FIFY||

    It's the word "labour", isn't it? That's what makes you wet!

    Dude, go peddle your nonsense somewhere else. What few people on here MIGHT buy your shoddy wares, are firm socialists of the worst stripe.

    Hint.

  • ||

    So workers don't choose to sell their labor?

    I suspect only people who have never had a real job think this way...

  • Mr. FIFY||

    Unless it was a brief stint "behind enemy lines", like a certain high-level politician we all know...

  • ant1sthenes||

    freedom of action

    Impossible. Every action will affect other actions. If one worker decides to throw a wrench into the machine, the workers who want to use it to produce things will not be able to act in accordance with their desires. Every system must provide some means for reconciling these sorts of differences (and, ideally, to minimize them, as they represent a sort of social friction).

    freedom of thought and free will are well and fine (and difficult to directly attack at any rate), although actual, functional political systems that that refer to themselves as socialist seem to take a very narrow view of freedom of thought that roughly translates to "freedom to think acceptable thoughts". Certainly no group, no matter how authoritarian, is opposed to the freedom of people to agree with them.

  • ant1sthenes||

    in which the producers possess both political power and the means of producing and distributing goods.

    Capitalists are producers, as much so as laborers. Goods do not possess innate value irrelevant to their context. The role of the capitalist is one of logistics; in economics as in war, logistics is key to judging an asset's value.

    Even in the most indirect and degraded forms of capitalism, people sacrifice some portion of their socially-granted right to consume (e.g., "money") in order to fund a specific expansion of the means of production -- one that they anticipate will be rewarding for society and (as a result) for themselves. The notion that those consume as much as possible should treated the same as those who sacrifice in the short term for society's long-term well-being is laughable.

  • Paul.||

    Beware of newly minted friends who appear only when times are darkest.

  • Fernando||

    If you're absent during my struggle, don't expect to be present during my success.- Will Smith

  • Mr. FIFY||

    Dude, you're still not making the sale. Hit it or quit it. Get it?

  • Fernando||

    Good, let the hate flow through you.

  • Mr. FIFY||

    It isn't hate... it's watching someone make a pathetic ass of themselves.

  • Generic Stranger||

    In west Philadelphia born and raised
    On the playground where I spent most of my days
    Chilling out, maxing, relaxing all cool
    And all shooting some b-ball outside of the school
    When a couple of guys, they were up to no good
    Started making trouble in my neighbourhood
    I got in one little fight and my mom got scared
    And said "You're moving with your auntie and uncle in Bel-air."
    - Will Smith

  • ||

    That's it, I'm whistling for a cab...

  • Archduke PantsFan||

  • ||

    Hint: posting a bunch of shit without replying to responses is the sign of an idiot troll.

  • ||

    Fernando, this shit is getting so old.

  • ||

    Get some new material already.

  • Archduke PantsFan||

    Can you hear the drums Fernando?

  • Mr. FIFY||

    Only if the workers are pounding them.

  • Gladstone||

    Fernando sounds like one of those left-libertarians.
    They make some good points about how "libertarian" originally meant something different and how the current status quo is not the result of a free market but there are little in the way of solutions.

    Oh and they often end up appealing to some mythical 19th century past that never really existed.

    I mean yeah libertarians were originally on the left but the left isn't very libertarian anymore and the original Radical Left were responsible for the Reign of Terror and supported conscription and military expansionism.

  • Mr. FIFY||

    That's just it... left-libertarians cannot really exist, either.

    Oh, a leftist may have some of the basic tenets down, but there's no way they can embrace most of it and still consider themselves true leftists.

    Same goes for far-rightwingers.

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