In July of 2012, the NHPR program The Exchange hosted a discussion of prison privatization which featured, among other guests, Eric Lotke of the SEIU (the union which represents prison guards in NH) and Harris Kenny, then of the Reason Foundation. I had no strong opinion on whether or not prisons should be privatized — I can appreciate both sides of the argument — but part of the discussion featured a largely unchallenged assertion that people in “public service” are — pretty much as a definition — vastly more virtuous and beneficent than anyone in the “private sector”, an assertion I find not only noxious but wholly mistaken. I sent this to Laura Knoy, host of The Exchange, to request that such assertions not remain unchallenged in the future.
I also sent this directly to Harris Kenny at Reason.org. I never heard from Ms. Knoy, but I got an enthusiastic thank-you from Mr. Kenny.
28 July 2012
Ms. Knoy:
I listened to your program on prison privatization in the car on the way to meet a client in MA (as the signal faded on my radio), so I did not have the opportunity to call in or send a note at the time. However, I found myself disappointed in one aspect of the conversation, an aspect which recurs throughout many of the topics you cover and which, therefore, I think deserves some commentary independent of the specific subject of prison privatization. I would request that you keep this general question in mind for future program discussions.
Regarding the question of private vs. public agency/employee performance and, specifically, the question of “conflicts of interest” when private entities are doing public work: Why does everyone seem to assume — and why do you and most of those you invite to speak on your program grant — that “public servants” are immune to the lure of self-interest and conflicts-of-interest that are presumed to be the hallmark of “private enterprise”?
In your prison program, the SEIU representative, Mr. Lotke, and many of your correspondents asserted that was the case; and, for the most part, the assertion was accepted at face-value. Mr. Kenny, of Reason, did try to point out that the broader public agency infrastructure — he was particularly pointing to politicians — had vested interests in the overall system of “justice” that were independent of the prison system, per se, and independent of the well-being of prisoners and of the optimal functioning of the prison system. But his points were allowed to fade immediately into the background of the discussion and never actually addressed the specific point of individual and organizational incentives within the public prison management system and aside from the explicitly political realm.
I have worked in large bureaucracies both within and without government. I spent four years in the Air Force managing projects in the American space program, interacting not only with the military bureaucracy but a great deal with the NASA bureaucracy and with the bureaucracies of various aerospace contractors building space systems and operating the Air Force and NASA facilities on government contracts. I then spent seven years working as an engineer for a Fortune 100 developer and manufacturer of medical products. In both cases, these were organizations that you might expect, at least as much if not more so than other governmental and private entities, would be full of people dedicated to the nominal organizational mission and less prone than others to corruption by self-interest. After all, for many people military service, especially within the all-volunteer force, is about fulfilling a duty to your country as much as it is about personal goals; space exploration in general and the space program in particular are considered by many a calling in the service of the pursuit of knowledge and/or preservation of the human species more than they are a job; and developing medical products to help the sick is the morally satisfying alternative to developing and peddling “me-too” glitz technologies or plebian commodities or the tools of war and oppression within the product economy, or to serving the self-indulgence of the masses within the service economy. The point being, if any organizations, and if any individuals within organizations, would resist the lure of self-interested and conflicted behavior then those might be the places in which it would happen.
Yet, I assure you it was not so. Of course there were many dedicated people I met within those organizations who were concerned primarily with doing good rather than with doing well. But there were also many who were never so, and many more who had started that way and been beaten down by the overwhelming incentives of bureaucratic systems into a sort of self-interested resignation. People within “public-spirited” organizations — either publicly or privately run — are no less human beings than those in the “for profit sector” and act no less on aspirations for personal success and personal comfort and personal happiness than their private counterparts.
Furthermore, that notion of “public spiritedness” applies primarily to the people actually planning and managing things, those at higher levels of the organization who generate ideas and policies to fulfill the organization’s mission. Those in the trenches, the ones doing the day-to-day grunt work of making things run, are as likely as people in similar positions anywhere else to be working primarily to support themselves, are as likely as people in similar positions anywhere else to be happy and eager to take whatever the system will offer them in the way of creature comforts and personal security. For the most part, they are not people with a vision of service. They are people with a vision of families to support and bills to pay, with a vision of a pleasant house in a welcoming neighborhood to live in and good food on the table and outings with the spouse and play with the children and a boat or football tickets to enjoy on the weekend, with a vision of living a happy and comfortable life in which work is a necessary distraction, not a reason for being.
Why, then, do you allow assertions otherwise to descend on your conversations unchallenged?
Mr. Lotke, who you chose to present as the spokesman for the anti-privatization position, is a representative not of a public agency but of a union, an organization whose charter is to represent the personal interests of government employees rather than the interests of the public. And yet, presumably because — and only because — his organization represents workers in the “public sector”, he was allowed to assert, without any real pushback, that his and his organization’s primary interest is in the public mission of the penal system, in ensuring prisoners’ rehabilitation, in minimizing recidivism, in the ultimate elimination even of the need for a penal system and the elimination, therefore, of the need for any penal system workers — in short, in doing what is right for the public and disregarding its and its members own self-interest.
Set aside the fact that, if that was actually the union position, it would be failing in its fiduciary responsibility to its members — it would, in fact, be acting in contravention of its own articles of incorporation and, therefore, in an illegal manner. The purpose of a union is to represent the interests of its members, not the goals of its member’s employers.
Stepping back, the broader assertion was that the members of the union, the prison guards and other staff of the Department of Corrections that the union represents — and, by extension, the Department of Corrections, itself, as a public-spirited organism — are all selflessly devoted to the idea of their own ultimate redundancy. Unlike, they assert, the motivations of those in the private sphere that would work diligently against such an outcome because they have a “profit motive”.
Let me be explicit:
Prison guards, and others whose employment depends upon a healthy and vital penal system, like being employed and like collecting salaries and benefits. They profit from the existence and operation of a penal system full of prisoners; they have a profit motive in ensuring the continued existence and operation of that system; and they have a profit motive in any move to increase the amount of money spent on that system, regardless of whether that spending has any beneficial public purpose or result.
Managers within the Department of Corrections bureaucracy like having large budgets and staffs to oversee, like the bureaucratic power and organizational prestige those budgets and staffs elicit. They profit from their management of those budgets and staffs; they have a profit motive in ensuring the continued existence of those budgets and staffs; and they have a profit motive in encouraging the expansion of those budgets and staffs, regardless of whether such expansions serve any beneficial public goal.
Politicians who see an advantage in being perceived as “doing something” about crime and criminals like having old policies to criticize and new policies to propose. They like being able to vector public resources (and the more the better) to particular constituencies — like, say, public employee’s unions — who have the power to selectively deliver electoral support or opposition to those who help or hinder their purposes. They profit from having issues like crime and criminality to exploit for electoral purposes and from having authority over the allocation of public monies; they have a profit motive in having crime and criminality be a continuing societal problem for which they can propose “solutions”; they have a profit motive in moving as many resources as possible out of the private economy and into the public economy, the better to assert their own influence over how those resources are allocated and distributed.
And, in all those cases, there is an implicit agreement among the concerned parties that a failure to fulfill the mission constitutes not an actual failure but, rather, an opportunity. If crime gets worse, then politicians have more opportunity to propose solutions that will make them seem decisive and insightful, solutions which generally require a new allocation of money over which the politician can then exercise influence as to how it gets distributed; bureaucrats within the Department of Corrections, protected against unemployment by Civil Service rules and, therefore, left in charge even after failing to meet their moral (as opposed to institutional) goals, receive those funds as an increase to their budgets and use them to increase their staffing, thus improving their standing and influence within the bureaucracy; public employee unions use the increase in spending as an opportunity to increase their membership through new hires and to demand increases in compensation for their current membership as a reward for the added “responsibilities” that the new policies impose or, in the absence of such claims, simply because the budgetary constraints under which they are able to negotiate contracts are suddenly less rigid; and the employees, themselves, support their unions in claiming a larger reward because it makes them better off. Everyone is rewarded for having failed to fulfill their organizational mission.
What is true of public entities, officials, and employees who deal specifically with the penal system is true generally of all such entities and officials and employees: while the formal and explicit goals of such organizations and the people who work within them may be lofty and untainted by “profit”, the actuality of the incentives and motivations and practices through which those organizations and their employees operate are anything but. These are “for profit” organizations that happen to operate in the public sphere. The currency in which “profit” is measured may not be purely monetary, but it is also not the idealized moral good for which the organizations nominally exist.
The primary difference, therefore, between these and actual private “for profit” companies is that the private companies are willing honestly to admit what they are about: they are in the business of doing well by doing good; and they are fairly transparent about where the boundaries lie between those two goals.
Oh, there is one more difference: private entities, if they fail to fulfill the mission they have been assigned, can be fired. When was the last time you heard anyone seriously propose firing the Department of Corrections or the SEIU?
© Copyright 2012, Augustus P. Lowell