David Goldstein:

Hey, Pitchfork listeners, we’re working on another Ask Me Anything episode and we need your questions for Nick and the team. What do you want to know? Call us at (731) 388-9334. Leave us a voicemail asking your question and we might just answer it on our next AMA episode of Pitchfork Economics. Again, that’s (731) 388-9334. Looking forward to hearing your questions.

Nick Hanauer:

We’ve privatized a crapload of stuff, and I think it’s safe to say that the quality of life in the country certainly has not improved.

Donald Cohen:

Privatization is one of the key strategic approaches to dismantle government, to make government a cash cow for the private sector and corporate interests.

David Goldstein:

If there’s one thing I’ve learned from the COVID-19 pandemic is that we live in the best of all possible worlds, right?

Nick Hanauer:

That’s right.

David Goldstein:

The market has totally fixed it.

Speaker 4:

From the home offices Civic Ventures in Downtown Seattle, this is Pitchfork Economics, with Nick Hanauer. The best place to get the truth about who gets what and why.

Nick Hanauer:

I’m Nick Hanauer, founder of Civic Ventures.

David Goldstein:

I’m David Goldstein, senior fellow at Civic Ventures.

Nick Hanauer:

In today’s episode, we get to talk about privatization of public goods with our old friend, Donald Cohen. It’s a really interesting subject area and has been one of the main thrusts of the neoliberal takeover of government and policy. This idea that the market is always right, that market solutions are always superior to public solutions, they’re always more efficient, the quality of the service is always better, blah, blah, blah, blah, blah.

David Goldstein:

And the pursuit of private profit always serves the public good.

Nick Hanauer:

The public good, the public interest.

David Goldstein:

The invisible hand and all.

Nick Hanauer:

Exactly. Exactly.

David Goldstein:

If there’s one thing I’ve learned from the COVID-19 pandemic is that we live in the best of all possible worlds, right?

Nick Hanauer:

That’s right.

David Goldstein:

The market has totally fixed it.

Nick Hanauer:

Exactly. We’ve privatized a crapload of stuff and I think it’s safe to say that the quality of life in the country certainly has not improved. I think the other thing that’s really interesting about this subject area is that the effects of privatization extend far beyond merely the quality of price of the goods and services that you’re trying to provide. 

It has, I think in my opinion, had a really big effect on how we feel collectively about government and how we operate as citizens, or don’t, as the case may be.

David Goldstein:

One of the reasons why I brought up the COVID pandemic at the start is because I think there’s a stark example of this conflict between our perception of the market and market efficiency and how it really works in the real world.

When you get to things like healthcare, how unprepared we were, how decades of privatization, the fact that we are the only major industrialized nation without a national public health system, and how decades of privatization left our healthcare system, leaving it with so little resiliency when this pandemic hit that, yes, it was efficient to shut down all those rural hospitals. 

It was definitely efficient because you had less overhead, you had less excess capacity. Because let’s be honest, a hospital, many of those beds are going to be unfilled most days and there’s a cost that comes with that. Until, until you have this Omicron surge where even in Seattle, which is packed with hospitals, they’re lining people up on cots in the hallway because there isn’t enough space to deal with what we all knew was inevitable.

Nick Hanauer:

Right. Here we are. Anyway, I think nobody thought about this subject more than our guest, Donald, who we know well, and who’s been thinking about these things carefully. It’ll be really fun to hear him elaborate on the challenges of privatization and what we should all do about it.

Donald Cohen:

My name is Donald Cohen. I’m the executive director of In the Public Interest. We’re a national strategy and research and policy center around public goods and services. I just published a book entitled, The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back.

Nick Hanauer:

Give us a little context about your organization and about your book and what brought you to the subject.

Donald Cohen:

The organization that I created and lead is … We’re kind of a think and act tank that supports policymakers, unions, community groups around the country that are trying to fight bad privatization deals of their public goods and services and increase public revenues to sort of make government better, function better. We do that in a lot of sectors, infrastructure, education, social services, as the title of the book says, The Privatization of Everything. 

We deal with pretty much everything that’s a public thing and a public service. The reason that I got into the work and the reason we wrote the book is that I’ve long believed, as an older person, I’ve long believed in the value and the importance of both public ideals and public services and have seen over the last several decades assault on both the idea and the institution of government.

Privatization is one of the key strategic approaches to dismantle government and to make government a cash cow for the private sector and corporate interests. We publish a lot of research, do a lot of trainings and support, work with policymakers on crafting policy and analyzing policy. We do it primarily around the country at cities and states.

David Goldstein:

Let’s get some definitional issues out of the way. When you say privatization, you’re using that term of bit more broadly than the way an economist might, aren’t you?

Donald Cohen:

Yes. I mean, most people think of privatization, they’ll remember George W. Bush’s efforts to privatize social security, they’ll think of a private prison or maybe school vouchers depending on where they are. All those things are true, but my definition is as follows. It’s private control over public goods. We distinguish … And we can get into it. 

We distinguish a little bit how we define public goods even from the economics textbooks, but it’s essentially the things that we all need and we need everyone to have. That’s the most colloquial definition of public goods. Education, knowledge, health, clean air, and water, community, parks, libraries, I mean, at all levels of our economy and our society. 

The distinction on public goods I’ll make is if you look in the economics textbooks, public goods has a very narrow definition and we reject that definition. The definition being it’s non-exclusive and non-rivalrous. These are things that fundamentally you can exclude someone from having it and that’s the non-exclusive and the non-rivalrous is somebody using it doesn’t prevent somebody else from using it. 

That’s their definition of a public good, simply just that. In my view is let the market decide what we get and what we don’t get. Now, take healthcare. In that definition healthcare is a private good, not a public good. Can we exclude people? Yeah, we sure do, lots of people. In fact, there are only so many hospitals and doctors and nurses, we’re learning now, so there’s limited supply. 

The definition we use for public goods is we should be able to decide through democratic processes that healthcare and other things are things that we should all have, regardless of whether you have the money to pay for it, regardless of how much money you have. That’s what democracy is about, is living your aspirational values.

Nick Hanauer:

So Don, this is obvious, but I do think it’s worth teasing out. What has been the main thrust of the privatization argument over the last 45 or 50 years?

Donald Cohen:

Of the advocates for privatization?

Nick Hanauer:

Yeah. Yeah.

Donald Cohen:

I’d say it’s a couple of things. I mean, the fundamentals are … I think there’s some level of propaganda successes and some level of good opportunism and political strategy. Government fails us, right? It’s wasteful, it’s inefficient, it’s bureaucratic. 

Number one. Number two is, and the private sector is inherently more efficient, market competition and the profit motive are inherently better mechanisms to deliver for the most, to deliver goods and services to all. Those are the arguments we deal with at day-to-day basis. Oh you know, private sector’s always more efficient than government. It turns out not to be true, but there’s also more to interrogate there. 

Why do governments privatize? There’s a set of reasons. Depends on who. First off, governing is hard. If you are a mayor, I like to think at that level, and you’ve got a lot of problems and a major global corporation comes to you with pretty pictures and they say cheaper and better and faster, one less … and no new taxes, again, not true, yeah, take this off my hands, right? 

It happens all the time. It happens because of desperation, right? And just the challenges of running a city say, but it also happens because of the sea we’re living in that we’ve been talking about. Sort of the basic belief, yeah, market, good, government, bad. Market, efficient, government, inefficient. We’re swimming in that sea. The other piece of this of course is ideological and political.

There are massive amount of money spent by ideologs and conservative think tanks and corporate front groups and others to sell the ideas of privatization.

But all of these are sort of at play and in an environment of austerity where you don’t have a lot of resources, but when a government’s desperate because they don’t have the resources to give things, and by the way, everybody believes the market’s better anyway, and they have relationships with those companies as well, I think that’s less important than people think it is, but it’s real, people outsource things. 

I mean, in red states they do it as a matter of they get elected to do that, because they could bust unions, they could downsize government. They don’t downsize government. They just make it a Leviathan. They just make it something else and they can put it where they can get their hands on it.

Nick Hanauer:

I think what’s really important is to tease out the fundamental thrust of the privatization argument because it’s plausible, it’s just not true generally. The plausible part of the argument is that markets are more efficient and just are better at providing goods and services than government is. 

There is some truth to the way in which markets effectively solve different kinds of problems, right? The market is better at evolving, better cell phone designs than a giant government bureaucracy is likely to.

Donald Cohen:

That’s correct.

Nick Hanauer:

Which is why it’s great to have a robust technology sector competing to try to find better and better solutions to these kinds of problems. That is true. There are some circumstances within which the private markets do really deliver as you know … not to pun, but deliver the goods. The truth is that they’re actually not more efficient or effective at a variety of tasks, including things like healthcare. 

This is probably the canonical example in the United States where we spend in the range of twice as much per citizen, per year for healthcare outcomes that are worse than our rival developed nations do using non-market mechanisms-

Donald Cohen:

That’s right.

Nick Hanauer:

… for better outcomes. To make it really, really super simple I mean, I’m not sure about these numbers, but generally private insurers in the United States take a 15% cut on every healthcare dollar, but in a reasonably well-run public system like Canada or Taiwan or whatever it is, that cut is 2% or something like that.

Donald Cohen:

Yeah. 3%. 3%. [crosstalk 00:13:36]-

Nick Hanauer:

Is it three?

Donald Cohen:

I mean, well, yes. These are a little bit old numbers, but Medicare typically was administering at about 3% overhead and remember the 15% overhead in the private sector includes other things. It includes profits, it includes debt service for mergers and acquisitions. The thing, what you said about markets is both really true. It’s not that it’s true, is that there are truths, right? Because the profit motive drives innovation. Now, that’s not universally true.

Nick Hanauer:

No. You can have innovation lots of places.

Donald Cohen:

[crosstalk 00:14:12].

David Goldstein:

Or no innovation-

Donald Cohen:

Exactly.

David Goldstein:

… in the case of monopolies.

Donald Cohen:

Well, and also the … I mean the profit motive created the opioid crisis, am I right?

Nick Hanauer:

Correct.

Donald Cohen:

People … Right?

Nick Hanauer:

A hundred percent.

Donald Cohen:

It’s sort of in each of these things the laws of supply and demand are real, but sometimes they have counter public purpose effects.

Nick Hanauer:

That’s right.

Donald Cohen:

Right? I think that there’s … One of the things I say a lot is there’s different thing … Market things and public things are different, right? If you want to give … It’s not a question … Even in a single payer healthcare system there’s private facilities, right?

Nick Hanauer:

Yeah.

Donald Cohen:

The question is, is in a public thing you want to make sure that the public means all, everybody gets, and market things don’t do that. What I say over and over again, it’s like using a hammer to cook your eggs, they’re just different things.

Nick Hanauer:

Right.

David Goldstein:

I did want to drill down a little bit because you did title the book, The Privatization of Everything. That would suggest there’s a lot of things that have been privatized. Can you give us some examples and some of the most egregious cases of privatization?

Donald Cohen:

We don’t know what the scope is numerically. There’s no data at the state and local level in particular. What we do know is that there are in the federal level … because Paul Light’s done research, is that there are three times as many people who do public things, who provide services that the government pay for, that don’t work for government. Three to one. 

There’s a massive amount. The other thing we know is virtually every sector and we look everything we do. Roads and bridges and water and schools and parks and libraries. I mean, you could literally go down the list and not find anything where there’s not a private corporation thinking about how to get a piece of it. We look at investor calls and we look at the marketing, the strategic plans, discussions of private industries and corporations. 

There’s trillions of dollars spent every year by governments. If you’re the head of a private prison company, there’s a hundred to $200 billion, you could get your hands on. We know with 7 to 8 to $9 trillion being spent every year, everything is at stake. I’ll give a few examples that illustrate the larger problematic dynamics. Chicago in 2008 or early ‘9, city’s bleeding red ink, privatized its parking meters for 75 years.

There was a proposal made by a consortium of Morgan Stanley, a sovereign wealth firm from the Middle East, international parking company and said, “We’ll give the city $1.1 billion upfront in exchange for control of the parking meters for 75 years.” That’s till 2083, and then vote. They voted on Tuesday. Desperate government is a good place to market your wares.

Two things became true after that fact, when it was analyzed by the inspector general and others. Two things, one more important than the other, even if it … It’s incredibly a stupid way to borrow on your future revenues. Just who knows if we’re going to be driving in 2083? But even than if they did, they got hosed. They sold a billion dollars too cheap. That’s one.

But here’s more important. Now, for the life of the contract, the remaining 60 some odd years of the contract, that if the city wants to eliminate parking spots permanently for bus rapid transit, for bike lanes, for pedestrian malls, because land use patterns change, because housing patterns change, they have to buy the spots back, okay? What does that mean? You have to keep the interest of the … And contracts as you well know, are very rigid documents.

You have to keep the interest of the private party whole, and that fundamentally ties the hands of democratically elected alderman and the mayor of Chicago from dealing with fundamental things, land use, housing, transportation, climate. All of their basic responsibilities. We see that over and over again. Another example I’ll give, I’ll go to charter schools because that’s an interesting one. There’s good charters and bad charters. That’s not the issue.

The original idea was laboratories of innovation and then share the ideas so that all schools could benefit. There are charter schools around the country that make their teachers sign NDAs, nondisclosure agreements, to prevent them from sharing the school ‘trade secrets.’ What are those trade secrets? Lesson plans, teaching methodology, right? 

The exact thing that … what we should be sharing if the purpose of our public dollars, because they’re all publicly funded, is to [crosstalk 00:19:05].

Nick Hanauer:

Improve education.

Donald Cohen:

Improve education. Then let me give an example about this idea about the market, what’s in the market. It’s a crazy one. I’m going to read something. All the data for our weather apps is public data from the National Weather Service, all of it. There are companies, AccuWeather, weather, all of the ones that we look at on our phones and Google and on the TV, package that data in different ways. 

Some it’s nonsense. It’s just better graphics. Some specialized stuff for businesses. AccuWeather is one of the biggest companies. Trump did try to appoint the head of it to run the weather service, but fortunately failed. They had a contract with Union Pacific, train company. 

There was a tornado in Oklahoma and I’m going to read you what the CEO said after the fact about his service, “Two trains stopped two miles apart. They watched the tornado go between them. Unfortunately it went into a town that didn’t have our service and a couple of dozen people were killed, but the railroad did not lose anything.”

David Goldstein:

Oh, well, there’s the market.

Donald Cohen:

There’s the market. Okay. The market excludes the markets for some. The market is for those that have resources. Public goods, as we’re defining them, public things need to be for all. Now, one last just to give it taste. Medicaid was privatized in a couple of states, Iowa, Kansas, and it’s pretty simple so I won’t dwell on it. Big public corporations took over big pieces of it. What happened?

Services went down because here’s why, because when they talk about efficiency, they really mean they’ll do it for less, right? They’ll do as good or better for less. When you take profit out, you take exec comp out, you take debt service for mergers and acquisition. That money’s got to come from somewhere.

There’s a very finite list of places that comes from. Workers’ wages, the number of workers, the level of service, the quality of the equipment.

David Goldstein:

As we learned during the pandemic, an efficient healthcare system is far less resilient because one of the things that makes it efficient is to have less capacity, less redundancy.

Donald Cohen:

That’s exactly right.

Nick Hanauer:

Yeah. The other thrust of the argument, I think that’s very, very important is that destroying our capacity to provide public goods also is highly detrimental to our conceptions of social cohesion and democracy and the rest of it, right?

Donald Cohen:

That’s right. Yep. Yep. Yep.

Nick Hanauer:

This is the … I think obviously the more serious threat today, is the fact that so many Americans don’t really believe in the country anymore, right?

Donald Cohen:

That’s right. That’s right.

Nick Hanauer:

They don’t believe they live in a country and that they benefit from it or that they should contribute to it. That’s a very, very serious problem.

Donald Cohen:

I couldn’t agree more. I think it is at the core of much of a lot. Of a lot. Because one thing, if we’re not solving the same problems, we’re not going to get to the big ones, right?

Nick Hanauer:

Right.

Donald Cohen:

We’re certainly not going to get to the big ones to the extent that we are … Markets segregate and stratify and segment and so to the extent that we move in that direction either there by commodifying existing public goods and services or by voucher schools and a whole other set of things, we’re not experiencing the same thing. We’re not in the same community. 

If we don’t understand each other, if we can’t appreciate the experience of the other, the problems we solve are just for us. One of the ideas we talk about in the book … Because one of the shifts has been philosophically, Michael Sandel’s written about it and others. There’s a shift from our identity, from citizens to consumers.

A consumer, we all consume. You buy something and all you really care about is whether you get what you want, whether it’s good enough. But as citizens have a different both set of values and a purpose, you want to get good stuff. You want the quality of the service to be quality, but you also understand our interdependence. 

You also understand that it’s in our social interest, democratic interest, economic interest for every kid to be educated, not just mine, for everyone to have good healthcare and not just me. I think it’s crucially. I mean, we talk in the book, there’s a section of the book … The book’s broken into sections called community, which I have my favorite. We talk about parks.

We talk about libraries. We talk about increasing segregation in education, through both charters and vouchers. We’re seeing that. That the less we share public things together, how that weakens democracy, as you say. Then the last section is about social security because that’s the community of the whole. Notice how resilient it is politically.

David Goldstein:

Okay. We’ve talked about all the privatization that has happened and both the specific and broader political sociological impacts. What’s the alternative? What’s the opposite of privatization? Is there a set of rules for what government should be handling?

Donald Cohen:

Yes. What’s the alternative? Let me start there. The alternative of private control over public goods is public control over public goods. I’m using the word control very specifically. It’s not public delivery. We’re not talking about a nationalization of all goods and services. That’s what we’re not talking about. There’s public and private in everything. 

The question on the public goods is, who’s in charge? How do you get in charge? You might deliver it yourself. Like public schools, you might deliver directly, but you also set standards. I mean, you set standard for private and public. You set standards, both in performance, in outcomes, but also in process and also in procedures, how things are done. You set standards that think forward.

Like in Chicago, they just didn’t think forward, right? What’s going to happen later? You have to set standards, but secondarily you need cops on the beat, right? It’s one thing to have standards. It’s one thing … And we have lots of food safety standards that are quite good, but we’ve increasingly both cut the funding for FSI, the Food Inspection Service, and now allow companies to self-inspect. If you don’t have cops on the beat, we-

Nick Hanauer:

Boeing 737 being a marvelous example of what happens when companies self-inspect.

Donald Cohen:

Well, and not just self-inspect and that’s about a … They use a contracting model, right? I mean, here’s the one thing that’s really true. Everybody gets the following thing, that if we all contract for things, paint a house or whatever, right? We all know something, if you don’t watch, bad things happen, right? We never increase … When governments outsource something, say, we never increase the bureaucratic staff to oversee the contracts. What do you thinks going to happen?

Nick Hanauer:

Yeah. You’re going to get screwed.

Donald Cohen:

Yeah. Whether it’s either corruption or incompetence or what have you. Exactly right. The other part of the answer to your question, Goldie is … And it’s not a … Well, I’ll take your question to another place, is we have lots of power to set those standards and make sure they’re lived up to that we don’t use. The government has police power, regulatory power. We can use that and we should use it.

We have procurement power. Governments in America, the data we’ve seen, spend $2 trillion a year. That’s statistically significant in terms of what could have an impact on inequality if we established job standards, which we should. We create social insurance. We could take things into the social wage, like childcare and other things that are now market goods. What I believed, that there was one … If I was God or the president or some combination thereof-

David Goldstein:

You’re getting to our benevolent dictator question.

Donald Cohen:

What I would say is every public decision, whether it’s a land use decision at a city, or whether it’s buying airplanes or whether it’s running prisons or whatever, but every public decision should be oriented towards solving the big ones. What are the big ones? I think you all agree, inequality, climate, racism, and democracy, so everything should be oriented towards that. 

I mean, we can come up with a list of specifics, make sure it’s transparent and there’s standards and good living wages and all that. But I think the guidance needs to start with use every decision to solve our problems today and make sure we’re doing no harm at the minimum, but at the maximum and more appropriately, we should be actually making progress on those things.

David Goldstein:

We have the right to be aspirational instead of just leaving it up to the market.

Donald Cohen:

Yeah, we sure do. I mean, and this is part of the propaganda success of the 30 last 40 years is market fundamentalism and the inherent superiority of the market. Like I said earlier, there’s market things and there’s public things. They’re different things and the market is nowhere near … It’s not even not superior. It’s not appropriate for public things.

Nick Hanauer:

In terms of practical solutions, what should we be doing in the world today?

Donald Cohen:

Well, I’d say two things. One of which I sort of mentioned. One is to be aware of the public things around us and the public decisions around us. It sounds silly to say, but it’s important. Because we also … One thing I say about public services is that they’re both invisible and ubiquitous. I think-

Nick Hanauer:

Yeah. We take them for granted.

Donald Cohen:

We completely take … You turn on the tap and it’s a miracle. The water comes out. We don’t think about where it goes or where it comes from.

Nick Hanauer:

Yeah. It’s an even bigger miracle is when we go to the bathroom and we flush, it just goes away.

Donald Cohen:

Exactly.

Nick Hanauer:

It does not stay in our house.

Donald Cohen:

It probably goes a fairly long distance to get somewhere, like [crosstalk 00:29:06].

Nick Hanauer:

Yeah. Yeah. Exactly.

Donald Cohen:

One is to be aware. The other is to so interrogate the decisions that are being made in your community about those things. Understand what’s public, what’s private and all that. Then also when you hear when there’s an effort to looking to privatize a big thing, interrogate those core ideas and arguments that they use, like you were talking about earlier. What do they mean by efficiency? 

They say they’re going to do it cheaper. What do they mean? What power or authority might we lose? What’s their interest? Water companies, if you look at their 10Ks and their risk factor sections, water conservation is a risk factor, is a risk to them. It’s really important to understand that. Then finally, I think setting standards, absolutely crucial. 

One of the things we do in our organization is we … Because we deal with so many things and some of them are fairly complicated. The financing of infrastructure. Most important things is to ask hard questions, like I was saying. What’s going to happen to the jobs? If you’re going to outsource something and the way you’re going to save money is going to turn a $25 an hour job of a bus driver into a $15 an hour job, you shouldn’t do that.

In fact, what you are doing is hurting the economy, increasing inequality. We do this all the time with electeds and policymakers, teaching them how to ask those hard questions.

Nick Hanauer:

Final question. Why do you do this work?

Donald Cohen:

That’s a good question. I decided what’s my politics or what are my beliefs? Real simple. I hate greed and I hate hate. Those are my motivating values. Then the other thing is I think the only way change happens is people making it and those are people who need to have an understanding of the challenges we face, why they are that way and what you can do about them and how to make change happen. Which is how I spend most of my days actually, helping people learn those things and helping them do those things.

Nick Hanauer:

Fabulous. Well, Don, thank you so much for being with us.

Donald Cohen:

Thanks so much.

Nick Hanauer:

Best of luck on the new book.

Donald Cohen:

All right, man.

David Goldstein:

Great.

Donald Cohen:

All right. We’ll talk soon.

David Goldstein:

Talk soon. 

Nick Hanauer:

Okay. Bye.

David Goldstein:

[crosstalk 00:31:08].

Donald Cohen:

Take care.

David Goldstein:

I think, Nick, one takeaway I had from this conversation is one that we’ve discussed previously on the podcast, and that is this idea about how … I guess the word to use is choice. That when it comes to what we consider to be a public good, the economics textbooks would narrowly tell you that this or this is not a public good and it’s this very narrow example of wherein government should step in.

I think what Donald explains very clearly is, uh-uh, we have a choice. We can choose what we consider to be a public good. When people say that healthcare is a right and people dispute that, “No, it’s a right if we say it’s a right.”

Nick Hanauer:

Correct.

David Goldstein:

We can make healthcare a right. When people argue for housing to be a right. Yes. It can be a right. It can be a right if we say it’s a right, because these aren’t natural rights. Those things don’t exist. Rights are things that are granted to you within a functional society.

Nick Hanauer:

That’s right. Whenever I think about these problems, I always want to zoom out to other examples and just where you’d want to live. In places that take the right of healthcare seriously, you have pretty high-functioning societies where people feel pretty good about their healthcare system.

In places that take housing seriously as a right, it turns out everybody can afford to live in a house and you don’t have tens of thousands of homeless people crowded under bridges and begging on streets. It just seems so obvious to me that in the United States we’ve been hoisted on our own petard, right?

David Goldstein:

Right.

Nick Hanauer:

We’ve bought this free market nonsense for generation and are now living with the consequences of the downsides of it all, including ridiculous housing costs for most families, catastrophic levels of homelessness in most cities, a healthcare system that routinely bankrupts middle class families when they have a tiny problem. 

All of this stuff, all of these challenges are a consequence of this dumb neoliberal view that the market will sort all our problems out if you just let people make profits doing it. It just has not turned out to be true, that there’s a ton of stuff that doesn’t work that way.

David Goldstein:

This is the brilliance of course, of the Grover Norquist, drown government in a bathtub campaign. That the more you succeed at doing that, the worse it makes government look to everybody and it makes it easier to drown the government in a bathtub. It’s this vicious circle where eventually yeah, it is going to circle the drain. And so-

Nick Hanauer:

Yeah. Right. Yeah. The worse you make it the less good it is to have around. Yeah.

David Goldstein:

Yeah. It’s a self-fulfilling prophesy. It’s like the Republicans run on the message that government is bad at doing things, put us in charge of this thing that we don’t believe in. Then they go about making government less effective.

Nick Hanauer:

Yeah. Exactly.

David Goldstein:

Which brings up another thing I think just important takeaway and something we’ve talked about a lot on the podcast. That is that word effective. This difference between efficiency and effectiveness. You can make something cheaper, that doesn’t make it better. You can make something more efficient, that doesn’t make it more effective. If we define efficiency totally in terms of costs, the market may be better than that. 

Private companies may often be better than that because cost is their bottom line and they don’t care how much they screw the community or screw their workers or screw their customers if they can increase profits. Whereas in a democracy, the government has to answer to voters.

You end up with public construction projects being more expensive than private construction projects because public projects have to pay the prevailing wage, whereas private developers can go and hire non-union labor forces at below prevailing wage. Those are choices we make as a society. There’s benefits often to spending more money.

Nick Hanauer:

Yeah. Like a high-functioning society. For sure, everybody, buy our friend, Don Cohen’s new book. I think it makes a really, really important argument. The title again is The Privatization of Everything: How the Plunder of Public Goods Transformed America and How We Can Fight Back.

Speaker 4:

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