Related topics: homes, home safety, bills, politics, spending
By now, you've probably heard the story about the Tennessee man whose house was allowed to burn down because he hadn't paid a $75 fire-protection fee.
The heart-rending image -- firefighters standing by as a family's home is reduced to ashes and four pets die -- became instant fodder for a fierce election-year debate over what the government should and shouldn't be doing with public dollars.
With the midterm elections looming and Tea Party candidates stumping for drastic cuts in government spending, their foes held out the Tennessee fire as a glaring example of the perils of privatization.
"This is essentially the same as denying someone essential medical care because he doesn't have insurance," economist Paul Krugman blogged for The New York Times. "So the question is, do you want to live in the kind of society in which this happens?"
On the other side, most of the logic went this way: If the firefighters had saved the home anyway, who'd ever pay the fee again?
"I know that if I opted out of the program before, I would be more likely to opt-in now," Jonah Goldberg wrote on National Review Online.
It's not as if people aren't aware of the potential problems of privatization. After 9/11, the nation decided airport security couldn't be left in the hands of poorly paid private screeners. The high cost -- in dollars and human life -- of outsourcing operations to contractors in Iraq and Afghanistan has been painfully clear for years.
But as the recession drags on and governments sink deeper into the red, it's easy to be swept up in the call for government to do less. That's until a picture of what that might look like emerges: public firefighters, in uniform and with hoses in hand, doing nothing.
The public-private debate
Privatization, broadly defined as any transfer of a government service to a private company, is used at every level of government and often with positive results. It can involve work contracted out but paid with city dollars, or fees paid by the users of, say, a service or a roadway.
In the Tennessee fire, a city department responded to the call. But the home was outside the city, where residents were required to pay a fee for service -- akin to a privatized model.
Privatization is almost as old as cities themselves. The ancient Greeks and Romans raised funds by auctioning off the right to serve the public for a profit. Privatization in the U.S. is nothing new either, but it had been largely abandoned by the mid-20th century in favor of a growing public sector.
"In the 19th century, New York City used to experiment with privatizing street cleanup. It was always cheaper to privatize, but the streets didn't get clean," says Elliott D. Sclar, a professor of urban planning at Columbia University and the author of "You Don't Always Get What You Pay For: The Economics of Privatization." "Finally, by the 1890s, they had thrown up their hands."
The history of fire protection is similar. "In the 19th century, cities used to burn down with private fire companies," Sclar says, so they went public.
The basic concept -- protecting the common good by protecting each individual -- has been applied to schools, libraries, fire and police service, trash collection, transportation, infrastructure, health care, social services and more. The success of these services is credited with laying the foundation for a prosperous American middle class with an innovative industrial base.
But as the backlash against "big government" grew in the 1970s and '80s, privatization re-emerged. By 2007, half of all local governments said they had considered privatizing some services, with nearly 90% citing cost-cutting as the reason, according to the International City/County Management Association.
Name a public service today, and somewhere a private CEO is running it: prisons, schools, parks, trash collection, welfare centers, mass transit.
Proponents say the profit motive inspires companies to innovate, streamline and cut costs. The Reason Foundation, a libertarian think tank, says privatization typically reduces costs between 5% and 20%.
