OS LIMITES À PRIVATIZAÇÃO

«Another reason for preferring public provision is where ‘external’ costs or benefits exist. A contemporary example of such an externality is where an industry damages the environment. A private company might want to cut down swathes of forest to grow crops for biofuel, disregarding the long term environmental impact. Such companies typically have short time horizons—they must make profits for shareholders next year, not next century. Government needs to step in to take the long-tern environmental effect—or any other form of market failure—into account.

The notion that competition always makes the private sector more efficient than the public sector is therefore quite unjustified. Markets are not perfect, the future is uncertain, externalities are important and some goods and services by their very nature must be publically provided. What politicians typically mean when they speak of ‘greater efficiency’ is lower costs, typically achieved by employing cheap, non-unionised labour. This is the real reason so many public services are outsourced.

In short, arguments favouring private over public provision are not just theoretically flawed, but typically favour the few at the expense of the many. We may choose commodities at the supermarket, but public goods require collective choices; ie, choices made as citizens at the ballot box. Abolish well-informed collective choice and one abolishes democracy—little wonder Margaret Thatcher argued there was ‘no such thing as society’.»