Commons vs Private

The Hidden History of Monopolies: How Big Business Destroyed the American Dream

How Big Business conquered America. Over the next few months the entire book will be here, new chapters posted every Sunday, for subscribers to read at no cost. If you want to get a physical book to mark up or share with others, just click on the picture above, visit your local bookstore, or check your favorite online seller.

Commons vs. Private

Reagan’s “starve the beast” strategy has been used for nearly 50 years to shrink government until it no longer works well and then point to that failure to justify privatization.

Trump most recently reduced the workforces of Social Security, the Environmental Protection Agency (EPA), the US Department of Agriculture (USDA), and the Internal Revenue Service (IRA) by tens of thousands as his contribution to starving the “beast” of government: the result is that it can now take two years for Social Security to process a disability claim; the EPA is virtually impotent against corporate polluters; the USDA is letting factory farms “self regulate,” producing a nationwide explosion of food poisoning; and the IRS has largely stopped conducting large, multiyear audits of wealthy people, focusing instead on cheaper and faster audits of average working people—all while private tax-preparing companies’ efforts to prevent the IRS from offering free tax services got a huge boost.

The rationale for “starve the beast” is that when things are done by private industry, they’re “more efficient” and “better done” than when done by government.

I lived in Germany, right near the East-West border, in the 1980s and remember well the Trabbies, these awful little three-cylinder, two-stroke, four-passenger cars that the communist government of East Germany manufactured for its citizens. They were terrible—stinky, unreliable, and dangerous.

I don’t want my car made by the government. Nor my computer, nor my clothes.

On the other hand, when we look at how Enron handled electric service in multiple states, or how Comcast and other big ISPs treat their customers, or the horrors of the private student loan industry, it’s pretty hard to think that we want private industry running anything that includes the commons.

Which raises the core questions in this debate: What is the commons? Where does it begin and end?

The answers to those questions go a long way toward revealing where a person sits on the economic/political spectrum.

Those who think that the commons should be very, very narrowly defined tend to be libertarians and conservative Republicans. It’s fine, in their minds, for government to take care of basic police and army functions, but even the fire department or interstate highway being publicly owned instead of being a profit center for a capitalist is a stretch too far. On the other end of the spectrum are communist governments like those in Vietnam and Cuba, where the government owns or supervises even most manufacturing and retailing (although both countries are experimenting with limited free enterprise). In the middle are most developed countries today, what many of them call democratic socialism.

In this system with both a mixed government and a mixed economy, the commons are broadly defined as those areas of the physical and economic landscape where there’s broad general ownership and a large impact on the quality of life of most citizens.

Thus, a democratic socialist state would argue that water and electric are part of the commons because they’re “natural monopolies,” things that are hard to run competitively. We have only one water line and one electric line coming into our homes, so competition is pretty much out of the picture; turning them both over to local government, accountable to the consumers rather than distant stockholders, only makes sense.

And, indeed, across the nation, utilities that are owned and run by the government generally have a much better record of safety, service, and reasonable pricing than do privately owned utilities.

Democratic socialists extend this logic to health care and, in some cases, banking. If everybody in the country is paying for everybody else’s health care via their taxes, the entire society has an incentive to behave in healthy ways. In Denmark, bicycling is so aggressively encouraged (to reduce the nation’s health care costs) that about half the total traffic in Copenhagen on any given day is made up of individuals on their bikes.

In most European states and in Australia, for example, the social pressures to quit smoking come from people concerned about the public health, but also from people who know that every smoker’s cancer is going to cost their society a half-million dollars, a portion of which will come out of their taxes.

Many of these nations even regulate their food supplies to discourage the consumption of obesogens (compounds contributing to obesity) like high-fructose corn syrup and some of the hormone-interrupting compounds that are used as flame retardants, as liners of tin and aluminum cans, as plasticizers, and to make carryout-food paper trays and coffee cups waterproof.

The problem with these types of democratic socialist systems, from the point of view of libertarians and conservatives, is twofold: First, they don’t philosophically fit in because they’re “big government” solutions, and anything that makes government bigger is, in their minds, an intrinsic evil. Second, no good capitalist is making money on any of the commons, and that’s intolerable because, they say, capitalism when applied to the commons will make the commons function better due to “market forces” and “the invisible hand.”

But comparing the American health care system with that of any other of the 34 OECD “most developed countries” in the world gives the lie to the libertarian line. Every other developed country in the world has some sort of universal health care program, and all of them deliver health care as good as or better than America’s, at anywhere from two-thirds to half the cost of what Americans pay.

When the commons are sliced and diced by private enterprise, the result is almost always a true “tragedy of the commons” (to quote ecologist Garrett Hardin): exploitation, monopoly, and price gouging.

Whether in a nation’s schools, its utilities, its prisons, its public roads, or even its internet access, when these core parts of the commons are privatized and then ring-fenced by private enterprise, somebody is going to get rich, and the majority of the people will be poorer.