Problem: Privatization a Success?

Privatization often brings substantially reduced costs and improved expertise, but sometimes the transition does not work well. Fury might be the best word to describe consumer reaction to the higher rates and poor service that accompanied Chicago's parking meter privatization, but Indiana has used the money from its toll road leases to fund a popular, 10-year highway improvement program.43 Some privatization efforts, such as Florida's plan to lease its "Alligator Alley" toll road, fail because of an absence of private-sector bids.44 Some projects do not generate the anticipated savings. Although more than 30 states contract with private prisons, a 2011 study in Arizona found little or no savings in doing so even though private prisons often "cherry pick" the least expensive prisoners.45

Questions-Part Two

1. From the capitalist viewpoint, why is the private ownership of property necessary to the preservation of freedom?

2. Ayn Rand argued, "Altruism is incompatible with freedom, with capitalism, and with individual rights." a. Define altruism.

b. Explain why Rand rejected altruism.

3. In describing life in aggressively commercialized Hong Kong, Alvin Rabushka praised the "single-minded pursuit of making money" and the "emphasis on the material things in life." Rabushka admitted to finding "Hong Kong's economic hustle and bustle more interesting, entertaining, and liberating than its lack of high opera, music, and drama." See Alvin Rabushka, Hong Kong: A Study in Economic Freedom (Chicago: University of Chicago Press, 1979), pp. 83-86.

a. Although it is often criticized in America, is materialism the most certain and most interesting path to personal happiness? Explain.

b. Would "sophisticated" culture (such as opera and drama) substantially disappear in America without government support? Explain.

c. If so, how may we justify that support? If not, how may we justify that support?

4. Assume the federal government removed itself from the purchase and maintenance of its parks.

a. Left to the private sector, what sorts of parks would develop under the profit incentive?

b. Would Yellowstone, for example, survive in substantially its present state? Explain.

c. Make the argument that the federal parks are an unethical, undemocratic expropriation of private resources.

5. Assume the abolition of the federal Food and Drug Administration. How would the free market protect the citizenry from dangerous food and drug products?

6. Puritan leaders felt concern over the morality of merchants selling goods for "more than their worth." That concern was particularly grave when the goods were scarce or in great demand.

a. Should our society develop an ethic wherein goods are to be sold only "for what they are worth"? Explain.

b. Can a seller make an accurate determination of worth? Explain.

c. Does a product's worth differ from the price that product will bring in the marketplace? Explain.

d. Personalize the inquiry: Assume you seek to sell your Ford car for $10,000. Assume you know of several identical Fords in a similar state of repair that can be purchased for $9,000. Assume you find a buyer at $10,000. Will you unilaterally lower your price or direct the purchaser to the other cars? Explain.

e. If not, have you acted justly? Explain.

7. Critics of our capitalist system contend that ability and effort often are less responsible for one's success than "unearned" factors such as family background, social class, luck, and willingness to cheat. Do you agree? Explain.

8. Gregg Williams, former defensive coordinator for the New Orleans Saints National Football League (NFL) team, was suspended for one year by the League as punishment for his alleged role in establishing a bounty system that paid players for injuring other players. Allegedly many NFL teams had employed similar schemes. Williams has apologized for his "previous actions" and was hired for the 2013/ 2014 season to be a defensive assistant for the Tennessee Titans. In a free market, rewards for performance are helpful as an incentive and just as a measure of contribution. Do you think bonuses for injuring opposing players should be permissible in the NFL? Explain.

9. Professor Robert E. Lane argued that the person who is motivated by needs for affiliation, rather than by needs for achievement, does less well in the market. Such a person is not rewarded so well as autonomous, achievement-oriented people.

a. Is Lane correct? Explain.

b. Is capitalism, in the long run, destructive of societal welfare in that achievement is better rewarded than affiliation? Explain. See generally, Robert E. Lane, The Loss of Happiness in Market Democracies (New Haven: Yale University Press, 2000).

10. How would poor people be cared for in a free market society?

11. Critic William Deresiewicz said, "Wall Street is capitalism in its purest form, and capitalism is predicated on bad behavior." Do you agree that capitalism is built on bad behavior? Explain. See William Deresiewicz, "Capitalist and Other Psychopaths," The New York Times, May 12, 2012.

12. Using private money, New York City experimented from 2007 to 2010, with a program that paid poorer residents for practicing good life habits such as holding a job ($150 per month), going to the dentist ($100), regular school attendance ($25 to $50 per month), and passing certain examinations ($600). The average family received about $3,000. Would you expect this program to be an effective encouragement to improved life habits? Explain. See Associated Press, "N.Y.C. Pays Poor for Good Habits . . .," The Des Moines Register, March 31, 2010, p. 10A.