In the 1980’s, the term public-private partnership started to gain currency, as reformers tried to remedy the twin problems of spiraling public debt and dwindling public investment in infrastructure. Governments were too strapped to do things like build roads and schools, so they would alter the tax and regulatory system to encourage private enterprise to provide the necessary financing and expertise. A simple example is a city condemning a slum and then giving it over to a private developer, who would build new housing.
There is a formal definition of the concept. “A public-private partnership involves a private entity financing, constructing, or managing a project in return for a stream of payments directly from government or indirectly from users over the life of the project or some other specified period of time.” The laying down of cable and then fiber to provide broadband access is a great example of such an arrangement. The cable company or TelCo was granted a monopoly and they built out the infrastructure and charged subscriptions.
In theory, it sounds like a winning formula. Government has no incentive to be efficient, as government has no competition. Inevitably, this means government projects become slush funds for the connected and dumping grounds for the otherwise unemployable. The contractors bidding on government work or providing a service on behalf of government have an incentive to keep costs low. Given that future contracts will depend on performance of current contracts, they have an incentive to hit the performance goals.
It’s not without its obvious problems. Efforts to reform public education through public-private partnerships are the obvious example. The primary reason schools fail is they have poor students. The second most common reason is they have poor teachers. No amount of private provision can address the former and public sector unions will never permit reforming the latter. It’s why people move to good neighborhoods and send their kids to private schools. It’s a private solution to a private problem.
Of course, public-private partnerships are an effort to address a symptom of a problem, but not the source of the problem. Democratic government has no incentive to increase the capital of society, because office holders are just hired hands. For office holders, government is like a rental car. The renter does not wash the rental car and get the oil changed before returning it. Similarly, the office holder would have no reason to improve his office or the part of government he controls, before handing it over to the next guy.
The key to personal success in public life is quickly turning public goods into money and benefits that can be used to buy votes. It’s why state and municipal politicians are fond of increasing public sector benefits. They get the votes and support for their campaigns, while some unknown person downstream get the cost. In a democracy, government becomes a liquor warehouse during an urban riot. Everyone, even the naturally honest, has an incentive to rush in and carry off as much as they can as quickly as they can.
This is fairly obvious, but there are other problems. For example, getting and keeping office is difficult. Humans in all endeavors seek to prevent competition either through cooperation or domination. Constitutions and courts are intended to keep the competition for public offices open and reasonably fair. To the office holder, this is naturally viewed as a defect that needs to be remedied. That’s where the public-private partnership comes into the mix. Private firms can do things office holders are prevented from doing.
This is what we see with the efforts by the Democrats to rig the last presidential election and then set Trump up for removal. Team Obama could not simply have the FBI arrest him and Team Clinton could not provide electronic surveillance. They formed a public-private partnership, along with Glenn Simpson to get around both problems. The private entities would manufacture evidence that the public entity would use to get warrants, which would result in information they would give to Clinton and later the FISA court.
One of the worst kept secrets in Washington right now is that elements inside the Obama administration conspired with the Clinton campaign to rig the last election. It’s becoming increasingly clear they also conspired with foreign agents.The Mueller probe is just an elaborate ruse to shield this truth from the public, in an effort to preserve the reputation of the institutions and keep people out of prison. It is the thing everyone knows, because it is manifestly obvious. What no one knows is what to do about it.
Then we have the ongoing efforts to shut down political dissent. The law prohibits politicians from having critics arrested or from shuttering their publications. The law does not prevent private platforms from controlling content, thus we get the match made in heaven, from the perspective of the internet giants and the ruling class. The private firms get their monopolies protected by the state, while the office holders get their critics silenced by the internet giants. Outsourcing the public space gets around the law.
It’s not just the first amendment. Gun grabbers have failed for years to rally public support for gun grabbing. In fact, their efforts to push through gun bans and confiscation have resulted in booming gun sales and support for gun liberalization. To address this defect in government, public officials are now reaching out their their partners in the private sector to bankrupt the gun industry and the NRA. It will not be long before owning a firearm could result in you losing your insurance or being denied a bank account.
The defect of public ownership of government, what we call democracy, is that there are no incentives for office holders to invest in society. They are short term office holders, looking to get what they can while they can. This is the advantage of the monarchical system, where the aristocratic class has an incentive to build up the value of the society over which it rules. The down side is the risk of tyranny or gross ineptitude. This king may be just and wise, but his son could be an idiot or a fanatical lunatic.
The funny thing that is happening to our constitutional order is that the political class seems to understand the defects inherent in the system, but is choosing to make it worse by enlisting private interests to magnify the defects. They are accelerationists. America is just one giant bust out, where global companies, with the help of our government, are systematically looting the country, while undermining the legitimacy of our system of governance. The public-private partnership has quickly become a public-private tyranny.