The Argument For Privatization
Can prosperity and "equality" coexist?
This is in response of criticism to our article “Economy of Mass Prosperity,” published by the Washington Times in June, which advocates privatization of the nation’s infrastructure.
It is almost a cliché to suggest America is a divided nation. There is a split among many blacks and whites; rich and poor. But the fundamental difference is between those who have learned from history, convinced that socialism is too extreme for the American psyche, and the other that clandestinely believes that socialism, in fact, has already arrived and is making sure that America can no longer live without it.
he socialists declared three primary points:
a. Capitalism is not capable of mass prosperity.
b. Privatizing infrastructure will make every road/bridge/rail crossing in America a never-ending toll booth.
c. Privatization will further contribute to economic inequality.
The argument that capitalism is not capable of mass prosperity is so ludicrous that even the arch-foe of capitalism, Karl Marx, disagreed. And Marx did not just disagree, he wrote in The Communist Manifesto:
“The bourgeoisie [capitalists] has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, or Gothic cathedrals. The bourgeoisie draws all nations into civilization. It has created enormous cities and thus rescued a considerable part of the population from the idiocy of rural life. The bourgeoisie, during its rule of scarcely one hundred years, has created more massive and more colossal productive forces than have all preceding generations together.”
Since those words were written 150 years ago, free-market capitalism proved to be an endeavor with no end. It has undergone the Second Industrial Revolution and is in the process of a third, the Digital Revolution, which, with the introduction of advanced technologies, computers and the Internet, continues opening up entirely new vistas creating wealth and prosperity for all.
The concern that privatization will make every road/bridge/rail crossing in America a never-ending toll booth ignores the reality. The never-ending toll booth is already here. The infrastructure owners, the state and local governments, have been treating infrastructure as a revenue stream. Being a monopoly, they are in a position to manipulate supply and demand to justify the imperative of constantly raising taxes (property, gasoline and other general local taxes), user fees and tolls, ostensibly for building and maintaining highways while neglecting the assets’ maintenance and repair. The nation’s decaying infrastructure is a direct consequence of the product being sold regardless of quality and costs.
Anyone traveling the New Jersey-Manhattan corridor has experienced the effects of the state monopoly, spending endless hours in traffic and paying exorbitant tolls every few miles.
And there is no greater symbol of government monopolistic power than the Washington Bridge, built in the 1930s with taxpayer money. Its owner, the New York and New Jersey Port Authority, charges $15 for each trip, collecting $1.5 billion annually. In any other circumstance, with this revenue it would be easy to warrant constructing another bridge to relieve transportation congestion.
Unlike private enterprise, governments have neither incentive nor expertise to keep projects on schedule and within budget. Since there is very little risk of borrowers going bankrupt, lenders love it. Whatever is spent will eventually be covered by the taxpayers, with interest. The Central Artery/Tunnel Project in Boston, Massachusetts, known as the Big Dig, is the poster child for government waste and inefficiency. It was eight years behind schedule and the cost ballooned from an estimated $2.6 billion to nearly $15 billion. The whole system is rotten with conflicts of interest, ineptitude and corruption.
The government as law enforcer and protector of consumers from the inherent flaws of the capitalist system should not be allowed to be part of the same system – to own and operate for-profit enterprises. In those mutually exclusive capacities the government is in a position to abuse its power with impunity.
And finally, “inequality,” the argument socialists have never tired of invoking since the dawn of capitalism. Not surprisingly, the illusory ideas of economic equality became the guiding principle of the Democratic Party that during Obama’s tenure transformed itself into the Social Democratic Party. What the followers of Karl Marx and Vladimir Lenin refuse to admit is that equality can exist only in poverty; wealth by its very nature is always unequal. Our free society should celebrate inequality as the greatest and most consequential aspect of the human condition, and the ultimate expression of our freedoms; freedom to innovate, freedom to succeed, freedom to enjoy the fruits of our labor.
Inequality is the locomotive of progress.
Winston Churchill asked, “Is it better to have equality at the price of poverty or well-being at the price of inequality?” At one point Americans rejected the former and embraced the latter recognizing it almost reflexively. Those days are gone as born again socialists pursue quasi Marxist sentiments that are driving America to the phantasmagoria of equality.
Alexander G. Markovsky is the owner and CEO of Litwin Management Services, LLC. He is the author of two politically charged books, “Anatomy of a Bolshevik” and “Liberal Bolshevism: America Did Not Defeat Communism, She Adopted It.”
Herbert London is president of the London Center for Policy Research and author of “Leading From Behind: The Obama Doctrine and The Retreat From International Affairs.”