“Privatization” is not necessarily the free market answer

Conservative blogger Communism Kills, remarked that libertarians abuse the word “statist,” using it as a crutch in lieu of genuine argumentation:

It’s similar to when the left uses “racist” and homophobe”. If you cannot prove it, do not use it.

A blogger, who fashions himself a libertarian, just called me a “statist neocon”—who is “ignorant of economics”. I believe that everything—everything—can and should be privatized. Somehow, that translates to being a “statist”.

I am not really familiar with the blogger Communism Kills, but I often see her posts reblogged by young libertarians on Tumblr. I do agree with her that use of labels devolve into mere name-calling when misapplied or misused (I am guilty of this sometimes). What caught my attention, however, is the belief that “privatization” is not statist. “Privatization” is sometimes used interchangeably with the “free market.” This is wrong and in fact tarnishes the great good that does come from truly free markets.

Blackwater, for-profit colleges, Solyndra, and many prisons in Louisiana are private entities, yet their business models are based on extracting as much money as they could from taxpayers. And since their customers are not the taxpayers who are footing the bill, but the politicians who approve the contracts or bills or laws, there is not an incentive for these “private” entities to provide a superior or quality service. The only incentive for them is justify the ever-expanding costs associated with their “services” to the politicians who hold the purse strings. And politicians do not need much convincing, a few tens of thousands would do the trick.

The profit-seeking motive is there without the requisite risks associated if these private firms are actually competing in a free market. There are price-fixing, monopolies, and plunder involved in the privatization scheme, all supported, encouraged, and backed by the full violence of the State.

Replacing government agencies with private firms to provide a government service is not a logical libertarian answer. The only logical libertarian (or non-statist) answer is for the complete abolition of that government-provided service. The free market will take up the slack if, and only if, there is a market for it.

In conclusion, someone could be an avowed proponent of privatization and still be a statist. Privatization without the merciless competition inherent in truly free markets is just another form of statism. We just call it corporatism.

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