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Say 'Corporatization,' Not 'Privatization'

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We should retire the word "privatization" in favor of its Big Brother, "corporatization." "Privatization" can sound pretty good to conservative ears. To them, it means getting things out of government hands, away from the control (and assumed mismanagement and inefficiency) of bureaucrats. In the best case, the market will work its magic, efficiency will go up and costs will go down. Rewards will go to individuals. The role of the individual will be enhanced, and the control of "faceless government bureaucrats" over individuals' lives will be reduced.

Application of the word "privatization," however, is almost always a misuse of the English language, albeit one that has become so common that it falls automatically off the tongue and flows unchecked past the ear. In fact, what happens in what we inaccurately call "privatization" usually has little or nothing to do with private individuals. Common usage is to say that functions are moved to the "private sector," but they are almost invariably taken over by corporations. It is not truly a "private sector" to which they are moved, but the corporate sector. The functions are corporatized, not privatized.

The distinction is important. Disagreements about the utility of "privatization" animate many controversies in our society, but corporatization and its accompaniment, corporatism (an excess of corporate influence on governments), should be widely recognized as one of the great dangers of our era. When they are properly understood, a wide array of interests, from progressives to Tea Partiers, may agree upon the need to limit corporatization and corporatism. Tea Partiers draw their very name from a revolt against a cozy arrangement between Britain, the most dominant government of the day, and a massive, powerful, global corporation, the East India Company. British law granted the East India Corporation tax advantages oppressive to colonial society and helped fuel the American Revolution. Progressives, on the other hand, need to recognize that it will be virtually impossible to make meaningful progress on most issues important to them, even existential ones, without weakening corporatism

Human beings, whom we only seem to be talking about when we say something is "privatized," have complex moralities and emotions with which we can empathize. No one, however, can empathize with a corporation, which is not a human being (even if it is legally treated as a "person"), cannot have emotions, and has only a very simple ethic calculated to maximize profit. The simplicity of that ethic makes corporations into shallow and unreliable tools, and sometimes treacherous masters, of representative democracy. Our language should reflect what we are actually doing when we turn our government over to them.

The first purpose and motive force of the publicly traded corporation is profit. If a corporation is to take over some function of government, the function must, directly or indirectly, contribute to profit. The way in which the function is performed will tend to be that which maximizes profit. The individuals who do the work required by the function are still bureaucrats. They are just corporate bureaucrats instead of government bureaucrats. Functions may be performed more "efficiently," but that usually means little more than that the individuals who directly perform them will receive lower pay and fewer benefits. Corporate managers, in contrast, will typically receive much higher compensation than is available for managers in the public sector. In today's society, that usually means less money goes to middle- and working-class people and more goes to corporations and corporate elites. When that happens, inequality increases, and a sufficient degree of inequality of income and wealth threatens the survival of the American experiment.

On some occasions, the cost to a government of a corporatized function may be less than when the function was performed directly by the government, but the total cost to most taxpayers (who are also consumers) can at the same time be more, because the corporation must drain off money to make its profit and pay high executive salaries. The quality of the work will be that which produces the most profit, constrained primarily by whatever regulation is put in place by governments, not so laudably relieving themselves of responsibility for direct performance of the corporatized function and the of blame for it. Thus, corporatizing typically reduces the accountability of governments and, paradoxically enough, requires greater regulation, exercised through contracts and regulatory agencies.

There are clearly functions that are effectively and preferably carried out by corporations, but there are others that corporations carry out only poorly, so corporatizing indiscriminately can lead to great ineffectiveness and inefficiency from a society-wide perspective.

There is a peculiarity of the English language that helps lead to approval of corporatization disguised as privatization. It is a great mistake to believe or to wallow in rhetoric that implies that only the entities we call "governments" govern. We are governed by all those things that restrict and channel our action. That includes things as diverse as family and friends, cultural norms, beliefs and religion, and, with ever-increasing prominence and intrusiveness, corporations. Most insidiously, corporations increasingly control our economies and the entities we call governments, thus governing us indirectly when they are not governing us directly. What Tea Partiers are revolting against is not just "government" but corporately controlled government -- what we may call corporatism.

Unfortunately, because most Tea Partiers (like most individuals generally) don't recognize the nature or character of the controls operative upon them, what their flailing about frequently attains is not decreased governance but increased direct corporate governance, accompanied by increased corporate dominance of governments. Whereas the effects on the populace of corporate control of a government (exercised for the purpose of attaining profit) may be mitigated to some extent even by a government highly subservient to such control, direct corporate control is subject to no such humanizing mediation. The most frightening and destructive circumstances of all arise, however, when corporate power can be magnified by corporate recruitment of the coercive power of governments -- when corporations can preempt that monopoly on the legitimate use of force that Max Weber once told us was the preserve of viable governments.

Progressives are subject to their own illusions -- distinctly different illusions. In their recognition of the need for government action to alleviate social and economic inequities and dysfunctionalities, they too often excuse or are blind to the existence of corporatism or to violations of economic rationality, individual rights and human needs that corporatism promulgates.

If corporatism is to be defeated, a wide array of interests in our society, from progressives to Tea Partiers, despite serious disagreements about many things, must find common ground to work together against it. Policy proposals must be examined anew to discover whether they further a corporatist agenda. Corporatist politicians, whether they present themselves as liberals or conservatives, must be exposed and defeated.

The dysfunctionality widely lamented in American government today is a symptom of political decay -- the decreasing ability of American governments to cope with problems in today's political, cultural, technological and physical environments. We must arrest that decay, but the first step to arresting it is to understand it. The terminology we have used in our past political conflicts can impede our understanding. Corporatization is only one element, although an important element, of the decay, but for decades, in the name of "privatization," we have been removing impediments not to the exercise of individual free will, but to corporate control. If we can correct our misleading use of the language, it will go part of the way toward uniting us in pursuit of the immense and difficult tasks before us.