The Privatization of Risk
The Hurricane Katrina disaster shocked Americans, at least briefly, into recognizing profound social inequalities. The coincidence of race and poverty was a national embarrassment, yet charitable responses far outstripped any effort to change social structure.
An especially inept government response made clear that though officials had been spending billions on preparedness and homeland security, they had not achieved either. The same officials who said that intelligence was so important that government data collection should override privacy safeguards also ignored the data that clearly predicted a storm disaster and demonstrated the inadequacy of levees and emergency plans alike.
Some analysts of the inept response to the Hurricane Katrina disaster have concentrated on outright corruption, such as preparedness funds allocated on the basis of pork barrel politics rather than actual assessment of risks, or relief efforts designed more to enrich corporations with government connections than to deliver services to the suffering. But beyond the corruption is a much more explicit policy: privatizing risk. This policy makes individuals bear the brunt of hardships that are predictable in the statistical aggregate without creating effective mechanisms to share the burden, let alone reduce the risk.
Failure to respond effectively to Hurricane Katrina shares roots with proposals to privatize Social Security and the substitution of user fees and private purchase regimes for public provision of services. Inadequate public assistance to move the sick and elderly from New Orleans hospitals, like earlier inadequate investment in levee repair, reflects a widespread pattern: the reduction of public provision of public goods in favor of reliance on private markets or just plain tax cuts. Social institutions built over generations are being systematically unfunded and dismantled. In other words, the inadequate government response stemmed not only from incompetence but from policy.
Privatization is policy in a host of other domains:It is no accident that state funding for some of America’s greatest public universities has shrunk to as low as 8 percent of their costs (and no accident that their students increasingly come from wealthy families, forcing ordinary middle-class students to branch campuses).It is no accident that laws have been changed to encourage universities to treat the work of their scientists as private intellectual property rather than public knowledge, even when federal government grants pay for its production (or when the primary beneficiaries of the policy change are a small number of relatively rich universities).It is no accident that the same government that appointed the notoriously incompetent Michael Brown to head the Federal Emergency Management Agency also appointed strikingly ideological Michael Powell to head the Federal Communications Commission. Powell sought to overturn restrictions on concentration of media ownership. But allowing national and international companies to buy up local stations cut the number of reporters available when disaster struck and ruined a federal system that relied on locally operated radio stations to broadcast civil defense warnings.It is no accident that flu vaccine is in short supply or that the U.S. government wants to impose user fees on essential health services, even imagining it can treat epidemic diseases through private fee-for-service (or for drug) medicine.It is no accident that the government avoids dealing with the clearly demonstrable fiscal crisis of Medicare and the collapse of more and more private pension schemes while it promotes what it calls a reform of Social Security. Shifting to personal accounts and individual investment decisions is less a reform, however, than a rollback of a public safety net for old age (and ironically, it comes even when all serious empirical analyses indicate that Social Security does not face the funding crisis that Medicare does).
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