In the 1980’s, the term public-private partnership started to gain
currency, as reformers tried to remedy the twin problems of spiraling public
debt and dwindling public investment in infrastructure. Governments were too
strapped to do things like build roads and schools, so they would alter the tax
and regulatory system to encourage private enterprise to provide the necessary
financing and expertise. A simple example is a city condemning a slum and then
giving it over to a private developer, who would build new housing.
There is a formal
definition of the concept. “A public-private partnership
involves a private entity financing, constructing, or managing a project in
return for a stream of payments directly from government or indirectly from
users over the life of the project or some other specified period of time.” The
laying down of cable and then fiber to provide broadband access is a great
example of such an arrangement. The cable company or TelCo was granted a
monopoly and they built out the infrastructure and charged subscriptions.
In theory, it sounds like a winning formula. Government has no
incentive to be efficient, as government has no competition. Inevitably, this
means government projects become slush funds for the connected and dumping
grounds for the otherwise unemployable. The contractors bidding on government
work or providing a service on behalf of government have an incentive to keep
costs low. Given that future contracts will depend on performance of current
contracts, they have an incentive to hit the performance goals.
It’s not without its obvious
problems. Efforts to reform public education through public-private
partnerships are the obvious example. The primary reason schools fail is they
have poor students. The second most common reason is they have poor teachers.
No amount of private provision can address the former and public sector unions
will never permit reforming the latter. It’s why people move to good
neighborhoods and send their kids to private schools. It’s a private solution
to a private problem.
Of course, public-private partnerships are an effort to address a
symptom of a problem, but not the source of the problem.
Democratic government has no incentive to increase the capital of society,
because office holders are just hired hands. For office holders, government is
like a rental car. The renter does not wash the rental car and get the oil
changed before returning it. Similarly, the office holder would have no reason
to improve his office or the part of government he controls, before handing it
over to the next guy.
The key to personal success in public life is quickly turning public
goods into money and benefits that can be used to buy votes. It’s
why state and municipal politicians are fond of increasing public sector
benefits. They get the votes and support for their campaigns, while some
unknown person downstream get the cost. In a democracy, government becomes a
liquor warehouse during an urban riot. Everyone, even the naturally honest, has
an incentive to rush in and carry off as much as they can as quickly as they
can.
This is fairly obvious, but there are other problems. For
example, getting and keeping office is difficult. Humans in all endeavors seek
to prevent competition either through cooperation or domination. Constitutions
and courts are intended to keep the competition for public offices open and
reasonably fair. To the office holder, this is naturally viewed as a defect
that needs to be remedied. That’s where the public-private partnership comes
into the mix. Private firms can do things office holders are prevented from
doing.
This is what we see with the efforts
by the Democrats to rig the last presidential election and then
set Trump up for removal. Team Obama could not simply have the FBI arrest him
and Team Clinton could not provide electronic surveillance. They formed a
public-private partnership, along with Glenn Simpson to get around both
problems. The private entities would manufacture evidence that the public
entity would use to get warrants, which would result in information they would
give to Clinton and later the FISA court.
One of the worst kept secrets
in Washington right now is that elements inside the Obama administration
conspired with the Clinton campaign to rig the last election. It’s becoming
increasingly clear they also conspired with foreign agents.
The Mueller probe is just an elaborate ruse to shield this truth from the
public, in an effort to preserve the reputation of the institutions and keep people
out of prison. It is the thing everyone knows, because it is manifestly
obvious. What no one knows is what to do about it.
Then we have the ongoing
efforts to shut down political dissent. The law prohibits politicians from
having critics arrested or from shuttering their publications. The law does not
prevent private platforms from controlling content, thus we get the match made
in heaven, from the perspective of the internet giants and the ruling class.
The private firms get their monopolies protected by the state, while the office
holders get their critics silenced by the internet giants. Outsourcing the
public space gets around the law.
It’s not just the first amendment. Gun grabbers have failed for
years to rally public support for gun grabbing. In fact, their efforts to push
through gun bans and confiscation have resulted in booming gun sales and
support for gun liberalization. To address this defect in government, public
officials are now reaching out their their partners in the private sector
to bankrupt
the gun industry and the NRA. It will not be long before owning a
firearm could result in you losing your insurance or being denied a bank
account.
The defect of public ownership of government, what we call
democracy, is that there are no incentives for office holders to invest in
society. They are short term office holders, looking to get what they can while
they can. This is the advantage of the monarchical system, where the aristocratic
class has an incentive to build up the value of the society over which it
rules. The down side is the risk of tyranny or gross ineptitude. This king may
be just and wise, but his son could be an idiot or a fanatical lunatic.
The funny thing that is
happening to our constitutional order is that the political class seems to
understand the defects inherent in the system, but is choosing to make it worse
by enlisting private interests to magnify the defects. They are accelerationists.
America is just one giant bust out, where global companies, with the help of
our government, are systematically looting the country, while undermining the
legitimacy of our system of governance. The public-private partnership has
quickly become a public-private tyranny.