The words "privatization" and "privatize" seem to be new, but their root is not. Both derive from the old Latin "priuus," meaning "separate", "peculiar;" "of one only;" a root that gives "privy," "privet," and "privation;' as well as the more familiar (and, for our purposes, more important) "private:" Sometimes, to be private is not to have any special responsibilities (as in "private [soldier]" or "private citizen'). Sometimes the private is the opposite of what is (properly) open to public view or use (as in "private parts" or "private house"). Sometimes, however, the private is the opposite of the governmental (as in "private sector").

The privatization with which we shall be concerned here is of this latter sort, a turning over to private business of some activities government formerly performed.

One sign that "privatize" is new is the absence of any obvious term for its opposite. Both "nationalize" and "take for public purposes" refer to property rather than to governmental activity. "Socialize" (as in "socialized medicine") is closer, except that the term seems to have no use apart from that one compound. (What, for example, is "socialized banking"?) Neither "politicize" nor "publicize" is even close. Though "deprivatize" may have a future, it certainly has no past.

That's surprising. After all, "deprivatization" seems to have been the trend in Europe (and its colonies) for a long time. For example, the US Constitution (Art. I, sec. 8, para. 11) empowers Congress to "grant letters of marque or reprisal," that is, licenses allowing an ordinary citizen, a "privateer," to send out his own ships to make war for profit by attacking the commercial vessels of the enemy. Today, we think this a job for publicly owned submarines and surface fleets. Why? Why shouldn't government leave even such activities to the private sector? History suggests some answers.

One reason government may take over what could be a private activity is that the private activity has a history of abuse. Machiavelli devotes Chapter XII of The Prince to explaining why government should not use private armies to make war (as many Italian states did in his time). According to Machiavelli, the profit motive made these armies "disunited, ambitious, without discipline, faithless, bold amongst friends, cowards amongst enemies." States are safer with their own armies, made up predominantly of their own citizens. ("Mercenary;' our term for a privatized soldier, is still not a compliment.)

A second reason government may take over a private activity is necessity (a.k.a. "market failure"). For example, many cities now run a system of public transportation because the private companies that once did it went bankrupt. That too is why the federal government operates much of the country's long distance passenger service (AMTRAK).

A third reason government may take over what could be a private function is that the public believes government can do it better, whether more efficiently (by savings of scale), more fairly (by assuring that money will not be the sole determinate of service), or more honestly (by avoiding the bribery that would accompany giving out contracts to private firms).

Similar reasons once induced many large companies to do as much work as possible in-house. Today, many of these companies are "spinning off" in-house activities, "out-sourcing;' and otherwise "privatizing" what was already (strictly speaking) private. Perhaps "privatization" is not so much an attack on government as an adjustment to new facts making it hard for large organizations to do as much efficiently as they used to.

Whether that is so or not, privatization seems to raise issues of justice and public policy, issues clearly relevant to the professions, especially public administration; hence, this issue of Perspectives.

We begin with a strong, but still modulated, defense of privatization of an activity most of us unthinkingly lump with war as among the activities that surely should remain governmental. John O'Leary argues that prisons can, and should, be privatized. Efficiency is the reason to do it; potential abuses, being preventable, are no reason not to do it.

Inge Fryklund, an official in Harold Washington's administration, reflects on her experience privatizing much of Chicago's parking program. Though her experience concerns a less controversial candidate for privatization, her conclusions are more modest than O'Leary's. Many of the costs of privatization (for example, the costs of preparing contracts) are easily overlooked; some efficiencies of privatization may defeat other policy objectives (for example, paying fair wages). Each proposed privatization should be considered on its own merits.

David Beam, Director of II T's Master of Public Administration Program, raises deep questions about what the "merits" are. While public administration has always sought to bring the efficiency of private business to government, it has always recognized that efficiency is not the primary determinant of what government should do. Government is, and ought to be, a different kind of undertaking from private business. Beam then devotes much of his piece to pointing out some important differences. While some privatization makes sense, he concludes, the trend probably will not stand the test of time.

Martin Malin and Robert Ladenson provide a specific example of what Beam may have in mind. Over the last few decades much litigation has been privatized, that is, turned over to private arbitrators (for example, by contract between an employer and employee). These arbitrators must both find the facts and interpret relevant law. While the Supreme Court recently gave this trend its blessing, noting its considerable efficiency, Malin and Ladenson argue that the Court should only have blessed private fact-finding. Privatized interpretation defeats the law's ability to correct for market failure and to protect certain non-economic goods.

My apologies to CSEP's Director, Vivian Weil, for (once again) denying her space for the once-customary "At the Center."