Sunday, September 14, 2008

The Magical Hand of the Free Market at Work

[Data Infrastructure] In an interesting case up north, a telecommunications company is suing a Minnesota town for issuing a bond to install a fiberoptic network--after the telco refused to bid for the job.
Municipality: We want our town to enter the 21st century. Would you mind installing a fiberoptic network here?

Telco: Sorry. Our shareholders wouldn't like it.

Municipality: Pretty please? The townsfolk all want broadband, and we'll give you a shitload of tax breaks.

No, you see ... it's all about market forces, supply/demand, insufficient corporate resources--things you government hacks wouldn't understand.

Municipality: Well, our studies show that it would make the town more competitive by attracting high-tech industry and a well-educated workforce.

Sorry ... computer says "no."

Municipality: Okey-dokey, then. Guess we'll have to build it ourselves.

Say hello to our lawyers.

Municipality: Uff da!
Lest you think this is just another example of corporate greed going against the public interest, keep in mind that the telco is only doing this for the town's own good. (Note that it was only after the bond issue was approved that the telco suddenly discovered that the wayward winds of the market had begun blowing in favor of fiberoptics.)

Now, if there's one thing the '00s have taught us, it's that neocons have an implacable fetish for privatizing governmental functions, including corrections, education and even defense in an age when private security firms like Blackwater seem to get better public funding than our boys and girls in the military.

Supposedly, this is because the private sector is able to deliver services more efficiently and economically than the public sector. This theory has turned out not to be true, but at least the privatization model provides for those desirable multimillion-dollar CEO salaries and shareholder profits that the public-sector model thoughtlessly forgot to include.

All this corporate efficiency and effectiveness was thought to stem from free-market forces. Unfortunately, private corporations like competition even less than the public sector does. So, once they get their fat government contracts, they become deaf to taxpayer demands. (Try this: As an upstanding, concerned taxpayer, try attending a board meeting for a publically funded private corporation. Enjoy getting thrown out on your ear.)

The Minnesota case seems to be the wave of the future: pre-emptive privatization. Now the privateers have stopped even pretending that they are capable of solving problems better than the public sector. They just want to use the courts to ensure that those problems stick around long enough that, in case they ever get around to solving them, some plucky town won't have beaten them to it.

We can only hope that, if successful in fending off the lawsuit, the Minnesota town will learn from past mistakes--as well as past successes.

(Brandon Burt)

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