Privatizing Public Services

July 26, 1985

Report Outline
The Privatization Trend
Options for Government
Points of Opposition
Special Focus

The Privatization Trend

Businesses Filling Government Functions

The word “privatization” may be difficult to find in a dictionary, but it is well known to thousands of public officials. It refers to businesses or individuals doing a job for government that, quite likely, the government itself performed in the past. In keeping with President Reagan's philosophy of reducing “big government,” privatization is being pushed from Washington. It is being touted as efficient and cost-effective, and sometimes assailed as being profit-minded at the expense of people who are being served.

Although the word is of relatively recent coinage, the concept of privatization is not. Some goods and services in such “public” areas as health, human services, public safety and transportation have long been provided by the private sector. The current drive to privatize extends further, however, reversing a trend born in the turn-of-the-century Progressive Era and intensified by the New Deal and Great Society. That trend was the expansion of the public sector in order to professionalize and extend access to public services.

Many conservatives and libertarians say governments at all levels should withdraw totally from areas best left to the private sector. As expressed by a prominent advocate of privatization, Stuart M. Butler: “If you're talking about a private good or service, where there is some direct relationship between the consumer and the provider, and the normal market applies, I don't see why there has to be automatically a public-sector entity involved in this.” Butler is director of domestic policy studies at the Heritage Foundation, a Washington think tank identified with the political right. In a recent book, Butler called for the divestment of federal interests in Amtrak, the national passenger railroad, and several other activities, including housing and air traffic control.

ISSUE TRACKER for Related Reports
Dec. 08, 2017  Privatizing Government Services
Aug. 09, 1996  Privatizing Government Services
Nov. 13, 1992  Privatization
Oct. 07, 1988  Privatization: Third World Moves Slowly
Jul. 26, 1985  Privatizing Public Services
Deficit, Federal Debt, and Balanced Budget
Privatization of Government Functions
Unions and Labor-Management Relations