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'Privatizing' Public Services Would Help

August 31, 1986

Harry Bernstein's Aug. 20 column, " 'Privatizing' Minibuses May Set a Dangerous Precedent," itself sets a dangerous precedent. Bernstein blithely ignores the multitude of scientific studies that almost conclusively demonstrate the superiority of the private sector in providing transit and other public services--both in terms of efficiency and lower costs.

Economists have known for years that competition among private providers tends to lower the cost of service delivery so much that contractors can usually provide the services at considerably less cost than government. And they can still make a profit to boot.

The point that the purchasing power of the local economy suffers because private workers providing public services are paid less (which is not always true) overlooks another principle well known by economists--that reductions in the cost of government actually increase overall purchasing power.

Bernstein's analysis is the logical result of an outdated, redistributionist political philosophy that uncritically presupposes government to be better at providing basic public services or somehow morally superior to the private sector.

He shows little sympathy to the already overburdened taxpayer who will be forced to pay even more if privatization is successfully discouraged.


Director, Local Government Center

The Reason Foundation

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