Eye on the Pie and Opinion and Economy and Government & Economic Development

MARCUS: Changing roles cause conflict

August 17, 2009

“Don’t write that,” a voice said from somewhere in my study.

“Don’t write what?” I asked, looking about.

“Don’t write that the relationship between the public and private sectors changes over time,” said the voice from under the rocking chair.

“But it is true,” I said. “Once the U.S. Postal Service carried almost all messages, love notes and birthday greetings, as well as bills. Today, the Internet increasingly does that work, as do United Parcel Service, FedEx and other private carriers. That doesn’t mean the Postal Service should be abandoned, but it does mean we have to re-examine what it does, how it does it, and how we pay for it.”

“Exactly,” the voice declared from behind the recliner. “It’s just like we are re-examining the relationships between the public and private sectors in both health care and education.”

“Many of the issues are the same,” I agreed. “They apply as well to financial markets, the arts, and ‘public’ radio and TV.”

“But,” said the voice now under my desk, “folks on the left and the right have made up their minds and a reasonable discussion of any sensitive issue will alienate some people.”

“First,” I said, laughing, “both the left and the right are paranoid about government and distrustful of people in general. Second, the majority of folks have not thought seriously about anything since the Cubs last won the World Series.

“The current discussions of all these topics include the same questions. Which aspects of our lives can we trust to the private sector without government regulation? Who should pay for services that we believe should be available to all but which are expensive to provide universally (such as rural electricity or major medical services)? How do we manage and finance services we believe strongly should be used by everyone (such as education and vaccinations)?

“Are we content to provide veterans with high-quality health care at low prices while denying their brothers and sisters the same? If we are going to argue that health care should be provided through the private sector, it still could be financed by the public sector. That’s what people who push for public financing of private education seek. They want to pick the schools their children attend using vouchers from the public treasury. Which is just what Medicare does: finances private-sector consumer choices.”

“Don’t, don’t,” the voice implored. “You are introducing raw, naked reality where so many crave fantasy. We have many examples of mixing the public and private sectors successfully, but that’s not what people want to believe. The left and the right want to hear how government is always bad, always inadequate, always inefficient or corrupt … .”

“Hold it,” I interrupted. “Most people accept things as they are. It’s the idea of change that they resist. Suggest that government take a larger role in financing health care and you loosen the nuts from the trees. Suggest that government take a smaller role in education or postal services and the tears will flow from those who anticipate abandonment.

“We don’t trust the private sector any more than we trust government. We distrust anyone or any institution with power. Big business and big government are both presumed to be bad for the welfare of the ordinary citizen. We like small, powerless businesses and governments.

“We don’t care how inefficient they are. We don’t care how unjust they are. If they are small, they’re OK because whatever they do individually has little bearing on most of us. We believe there is always someplace we can go to escape them, some competitor who will be different. It is that unfounded faith in the existence of a diversity of providers that makes us feel safe.”

“I’m leaving,” the voice said from the doorway. “Now you’re talking about diversity, and that’s dangerous.”•

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Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.

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