Paul Krugman lambasted the privatization of government services today and sounded the familiar call to arms to maintain public dispensing of needed services.  In reflecting on the matter I was taken by the parallel phenomenon of growing government contracting out for  its services.  I thought, what is better, contracting out services or turning them over to the private sector all together?  The result is the same, a public service is provided by a private entity. 

Consider Medicare, the joint Federal-State program to provide medical care for those unable to obtain it via insurance or their own pocketbook.  The typical case is for the Feds to give a block grant to a state.  The state then contracts a private health care provider, either an insurance company or a medical service company, to actually provide the service.  In few cases the state actually provides services directly to patients. 

Take a look at another service usually contracted out by the Feds, security for our diplomatic missions abroad.  Sure, embassies have a few token Marines to provide a visible protection for our missions.  But they are too few to actually do the job.  To supplement them we have a large contingent of contract employees who do the actual work of protecting the missions.  The name Black Water will probably ring a bell for many.  It was the group that provided protection for our largest embassy and its staff, the one in Baghdad. 

I recall in the 1970s we started to beef up security for our foreign missions.  The immediate decision was to not do this with direct hire employees but to contact our security services.  Our security people determined that in most places there were no suitable security services to hire.  It was believed that we had to find our own people, but we could not hire them directly.  Answer, we created groups with whom we could contract for security staff that we recruited ourselves.  Believe it or not I served in two embassies where the contract for security services was given to the embassy snack bar association.  Imagine, the snack bar association provided snacks, some meals, and protection.  Sounds like a Mafia front organization. 

Another, more widespread, situation involves education.  We now provide contracts to charter schools to educate youngsters.  Is this a contacted service or privatization of our schools?  The line between the two becomes blurred. 

If we can contract out the security and protection of our diplomatic missions why can’t we contract security and protection provided by our police at home?  And if we can contract for this service, why can’t we just privatize the police? 

Of course the most common complaint about contracting out public services or privatizing them is that the government is no longer in control of the service.  And we fear that those who work for a profit will sacrifice service to increase their bottom line.  The answer here is to have the government, that contracts the service or allows the private sector to take it over all together,  rigorously audit and review the actual performance of the service.  And it takes less man power and resources to audit and review than to actually perform the service.

Whatever one feels about the increasing trend for government to contract out or privatize public services it appears to be a train that has left the station with no hope of coming back.  Rather than fight it, we should seek to control and insure that these services are up to expected standards.