LIBERTARIANplace

Privatization
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How Much are all Government Owned Assets & Infrastructure Worth?
Wouldn't You Like to Find Out?

Remember that old bumper sticker, "What if the Schools had all the money they need and the Government had to hold a bake sale to buy a bomber?" We think it might not be a bad idea to hold more than just a bake sale, and that there are private solutions to funding schools and bombers (if we decide we continue to have a need for bombers) that are better than the current system. 

In our "A Libertarian Political Program" we spend significant time and space on the issue of privatization. Privatization is the key to downsizing and decentralizing government. It is also the key to reducing the cost and increasing the efficiency of services and functions now controlled by government (at all levels). Here is the entire section from our overall program.
 
Privatize:

• Require all federal functions, programs, and services, including the Military, law enforcement, and the justice system, to compete with private providers in a free market. As a result only the functions, programs and services of government that are most effectively and efficiently delivered by government will survive.
• The assets and infrastructure of all government departments, agencies, programs and services that are eliminated through competition should be sold to the winning competitors or auctioned off. The proceeds from this divestiture will be sufficient to retire the National Debt and to create an endowment to fund surviving government operations in perpetuity.
• End all Federal authority to regulate free enterprise. Any regulation or vetting desired by consumers can be executed more fairly and efficiently in the private sector by professional and trade organizations as well as consumer groups.
• The end of taxation and regulation would mean an end to government subsidies for particular modes of transportation or forms of energy. With a level playing field, the market would quickly demand more efficient and renewable energy sources and systems which would in turn create more efficient modes and methods of transportation.
• A privatized infrastructure would add democracy to creativity in the race to address climate change and sustainability.Solar, wind, nuclear, battery,and kinetic energy would soon dominate. Our rallying cry could be: A solar panel on every roof, a wind farm in every field, a reactor in every region.

How would it work?

Lets use transportation infrastructure as a starting point. This is already being done piecemeal in some areas, for example the City of Chicago is leasing the Chicago Skyway to a foreign company for 100 years.  There has been discussion about selling the Indiana Tollroad to private interests.  So what if we did this correctly and comprehensively. We hold an auction and every expressway, highway, country road and city street are purchased by private enterprise. 

Electronic transponders would be used by all vehicles to pay a user fee for  each portion of any route taken, which would go through an electronic clearinghouse to the owner of the applicable section of roadway.  Fees could be charged by distance, or there could be a flat rate monthly subscription fee for a particular route, road or for all roads.

Sound complicated? Not really. Think of your highway system in terms of your phone system. You pay the provider of your choice for service, for access to call anyone in the country anywhere regardless of which phone company they use. Your call may be routed over land lines or cell towers that are owned by various providers, but you pay your provider, who in turn pays their competitors for the use of the competitor's assets in order to create a network that is fast and reliable for customers of all phone companies.

But what about libraries, schools, police and fire, the military? Would we privatize those things too?

It would depend on their ability to compete with private competitors. We would begin by ending government funding of existing government services. We would open these services to potential competitors. Consumers would be free to pay government agencies for services, or pay competitors instead. In markets or sectors where government controlled services and agencies are able to maintain profitability they could conceivably continue to function. It is more likely however that any profitable government services would be attractive targets for acquisition by private investors. Services and agencies that could not compete would quickly die on the vine or be purchased (for much less) by competitors. The government would also have the option to just to sell out and not try to compete.

It is not unthinkable that we could pay private security companies to protect our property, private fire companies to put out our fires, and even private armies to protect our homeland and/or our assets in foreign countries. Some people would draw the line on privatizing some or all of public safety and national security operations, but not all. Courts and the Justice system would be another example of government operations that some would privatize and others would not. This could vary by jurisdiction, according to the will of local voters. 

We would do some or all of this because we believe that government is almost always if not always less efficient, effective, and corrupt than private enterprise. Because government monopolies do not have to worry about competition or even about being paid (as long as taxes are compulsory) there is no incentive other than a very highly evolved human commitment to excellence in all things (which is not extremely abundant in government, generally speaking) to provide services or fulfill functions as inexpensively, efficiently, fairly and with to the best of one's ability at all times. 

As long as there is taxation and regulation there is a built in incentive for corruption since those who can afford to pay for special treatment (tax loopholes and regulation exceptions) will attempt to do so and those in government, who are not paid on any type of market based incentives, will be tempted to accept payment for such favors. Therefore, even in matters of education, public safety, and national security, it is not only possible but likely that work can be done better and more cheaply if subject to market conditions. It would be challenging to find a way to bill for military protection, but everything else wouldn't be difficult to finance privately, with subscription fees.

What would happen to the Money Received by the Government for the Sale of Its Assets?

Can you spell debt elimination? How about a surplus to invest in an endowment to fund essential services remaining in the government purview, in perpetuity?

For a brief, basic summary of why this position or policy benefits you, take this link.