About Rationally Speaking

Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.

Thursday, March 02, 2006

Why don't we outsource the military?

Rhetorical question, of course. We don't outsource the military because it is a vital aspect of our national interest (though by far not vital enough to justify the outrageous amount of spending we do on it). But then why do we outsource (to national or foreign companies, it doesn't matter – this isn't about the Dubai Worlds Port affair) so many other services that are equally crucial to our wellbeing?

For example, we put our health care in the hands of for-profit companies that make money when we are healthy, and lose it when we get sick. Is it any wonder that we don't have universal health care coverage, perhaps the single most scandalous aspect of American society?

Or take transportation: so-called “public” transportation is in fact often privately run (for example, in New York City), with the result that it isn't a service to citizens who pay taxes, it is a commodity to be sold to those who can afford it. That's a huge difference, because being able to get to work, or receiving medical attention when one is sick (or education throughout one's development years, or heat and electricity at home, and the list could go on a bit), is something that everyone needs, and that benefits society as a whole. Unlike, say, having a cell phone, or the latest designer jeans (a rare example of fashion oxymoron).

Hold it, I can already hear the libertarians amongst us launching into their mantra that “the market knows best” (who the hell is this market guy, anyway, and how does he know so much?), and that publicly (i.e., government) run enterprises are inefficient and always corrupt. But of course there is no empirical evidence whatsoever to support either claim.

Free markets are a mildly efficient way to achieve economic prosperity – and only if regulated by severe anti-trust and anti-fraud legislation. As for inefficiency and corruption, hmm, does the word “Enron” tell you anything? Inefficiency and corruption may simply be an unavoidable consequence of running a large organization, governmental or not. The difference between public and private large organizations, of course, is that the former are under the indirect control of the public and are supposed to function for the public good; private corporations, on the other hand, have the sole declared scope of enriching a small minority of people, the rest of us be damned.

So, I ask again: if private is always better, what are we waiting for before building an army of foreign mercenaries to go fight in Iraq? Market competition might even make it a financially sound investment...


  1. The US army is already a mercenary one (soldiers are in it for the money). Foreign or national doesn't make any difference.

  2. If the US Army is made up of men (and women) that are in it strictly for the money they certainly aren't too smart. You can make about the same amount of money flipping burgers at a whole lot less risk of life and limb.

  3. With regards to the military question. My guess is that the profit motive (which makes privatization so successful in other areas) takes a back seat to the instinct of self preservation.

    Easier to inspire public troops with nationalism than it is private troops with money. The money probably sounds pretty good when mercenaries are being recruited, but not so good when the bullets start flying people start dying around you.

    More generally -- I try to apply rational thought to economic questions and usually end up leaning towards the efficacy of free markets and privatization . Of course I acknowledge that regulation is required unlike some ideological libertarians.

    The problem with public ownership is that "if everyone owns something, then no one does" -- called by Economists the "Tragedy of the Commons".

    From Wikipedia: "unrestricted access to a resource such as a pasture (or health care) ultimately dooms the resource because of over-exploitation. This occurs because the benefits of exploitation accrue to individuals, while the costs of exploitation are distributed between all those exploiting the resource."

    Of course like everything else, the question of public vs. private is not absolute and is highly dependant on its specific application.

  4. One more comment regarding:

    who the hell is this market guy, anyway, and how does he know so much?

    I know this was comment was mostly in jest, but the irony is delicious. Creationists cannot believe that a decentralized, naturally occurring system of self optimization, i.e. evolution, can result in all the diversity of life.

    You routinely defend and explain that evolution can and does occur without the guidance of an overriding intelligence. Yet in this comment you appear to be playing the role of the "Creationist" by expressing skepticism that random and self optimizing market forces can result in a robust economy.

    Okay, Okay -- before you respond, I'll shoot holes in my own argument.

    Evolutionists don't say that an Intelligent Designer couldn't have done a better job than evolution. In fact that is a criticism of ID, that nature has done (in many cases) a poor job of design.

    Similarly, I can construe your comment to imply that a "market guy" could design a better system for all than the purely random, self-optimizing free market system.

    Still, it was fun to point out the potential dichotomy.

    Lastly, if one believes the conservative stereotype, one could use my argument in reverse to try to convince a free market creationist that what works for an economy can also work for biology.

  5. Nice try Alan. Actually, when I wrote that parenthetical statement (which, as you surmised, was in fact meant in jest), I had in mind the following segment on NPR's Market Place: http://marketplace.publicradio.org/
    shows/2006/02/20/PM200602204.html, which talks about the perils of personifying markets too much.

  6. MP wrote "...with the result that it isn't a service to citizens who pay taxes,..."

    There is no free lunch. In order to provide your style of public transportation, taxes will have to go up. Are the citizens willing to pay an additional $500 a year to have "free" transportation? But then if you tax everybody, the citizens who don't utilize the service are subsidizing those that do. From each according to his means, to each according to his needs. Where have I heard that before?

    You want government to be the "big stick" that can force people to pay for whatever services (universal health care) that you think are important. Once government becomes the "big stick", what makes you think that you will be the one to control it? More likely, someone else will grab the stick and make you pay for services (the war in Iraq) that you are opposed to.

    Eat well, stay fit, Die Anyway.

  7. "Are the citizens willing to pay an additional $500 a year to have 'free' transportation?"

    Better than that: a recent NYT poll has discovered that a majority of Americans is willing -- oh inconceivable thought! -- to pay higher gasoline taxes to develop public transportation and decrease our dependence from foreign oil. The response dependeded, of course, on how one asked the question (straight tax vs. collective effort for a worthy goal). Just as the proper functioning of government depends on the checks and balances that are put in place -- by us.

  8. Dennis, a quick online search shows that the pay for a private, first class, is about $19000/yr. Someone working minimum wage, flipping burgers, will not break $11,000/yr. Note that these numbers are (presumably) gross, and that military servicemen and women enjoy significant advantages above and beyond their salaries. And, of course, it only gets better, since an army private is pretty much the bottom of the barrel, afaict. The military services have much higher-paying jobs, not to mention a clearly defined path towards advancement.

    The military always has been, and probably always will be, a good way for someone with little or no marketable skills or experience to get ahead. McDonalds never has been, and never will be.

  9. Massimo, regarding polls showing popular support for increased gas taxes, I suspect that those polled don't know the implications of higher taxes. I'm sure that many people might (grudgingly) pay $0.05 or $0.10 just for gas, but would revolt if they understood that the taxes would be also be reflected in almost every aspect of their lives: food, housing, recreation, etc. It's one thing to pay a few more dollars at the pump for services you know you need, but quite another to pay higher indirect costs for everything else.

    Not that I disagree with your main points, just that using a gasoline tax as a market force to drive change (viz. a method to decrease dependence on foreign oil) is probably a bad idea. And, I might add, it's a bit amusing that you'd suggest the idea, given your comment about that "market guy" :)

  10. James, it's precisely because I don't trust "the market guy" that I propose a tax on gas, which is a government-based action, not a result of free market forces.

    As for taxes not changing society, I don't know, ask the Canadians. They have dramatically reduced teenage smoking by sharply increasing taxes on cigarettes... It works, when you hit people in the pocketbook.

  11. Point well taken, Massimo. My "market guy" comment was tongue-in-cheek, anyway; you're absolutely right that government can make positive change through such means as well-considered taxes.

    However, I stand by my position that a gas tax is a bad idea, at least at this time. The problem is that it would simply affect the (extensive) american underclass too much - that is why I stated that they would revolt at the idea if they knew all the implications. For many, many people, just living from paycheck to paycheck is already hard enough without the added burden of more direct and indirect costs resulting from an ill-considered tax. My girlfriend, for example, is a second-grade school teacher at the top of her payscale, and yet she struggles to get by, and the higher gas prices from last year put her into debt from which she is only now recovering.

    Until the government of the USA can provide many basic services and controls that these people are paying for out-of-pocket right now (cheap healthcare ring a bell?), a gas tax will just make things worse, not better. I believe that we are serious about ending our dependence upon foreign oil, then we would do better to petition our representatives to take, e.g. $1 billion out of the pentagon's budget and put it towards energy research, rather than placing a new, undue burden on those least able to bear it.


Note: Only a member of this blog may post a comment.