Wednesday, November 20, 2013

Blame Government Incompetence on the Contractors

There is quite simply no advantage to hiring private contractors to do the work of government: nothing but higher costs, worse outcomes and massive corruption. Cancel all the contracts and hire employees directly. That restores full accountability.


Henry Farrell had an interesting post last month over at Crooked Timber about the new book by Colin Crouch called Making Capitalism Fit For Society that's well worth reading.

Otherwise put, it’s a good example of Crouch’s critique of neo-liberal efforts to ‘shrink’ government – that in practice it is less about free markets than the handing over of government functions to well connected businesses.

Outsourcing is … justified on the grounds that private firms bring new expertise, but an examination of the expertise base of the main private contractors shows that the same firms keep appearing in different sectors … The expertise of these corporations, their core business, lies in knowing how to win government contracts, not in the substantive knowledge of the services they provide. … This explains how and why they extend across such a sprawl of activities, the only link among which is the government contract-winning process. Typically, these firms will have former politicians and senior civil servants on their boards of directors, and will often be generous funders of political parties. This, too is part of their core business. It is very difficult to see how ultimate service users gain anything from this kind of managed competition.
This is true of our vaunted, high tech surveillance sector as well.

Farrell observes the parallels between this system and feudalism and what he calls "Old Corruption" and it's worth reading the remainder of his post for that discussion.

To me, it seems obvious that the "contractor state" cannot be defended on democratic or capitalistic grounds. It certainly shows that simply outsourcing various necessary functions inevitably leads to corruption --- as any 7th grader should be able to predict. That this concept of "reinventing government" was pushed by certain New Democrats on the basis of gibberish makes it even more astonishing that it's taken so long to be exposed for what it is: patronage for rich (mostly) white guys who all know each other. How sad that health care reform had to be the ultimate guinea pig.

The good news is that we didn't let these incompetent middle men take over Social Security and Medicare. Yet.

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