Friday, April 1, 2011

The Business Model

The fundamental characteristic of the conservative view of government is that it is a business, and therefore must be productive. In this political-business model, the government must produce a marketable good or service that can be traded for revenue or other goods and services. In cases where this marketable outcome is not apparent, such as education and health care, the conservative model dictates that these divisions be made directly profitable by producing capital.

Since the government is not designed to directly profit from these programs, and because conservatives believe in the potential of the free market private sector, these profits have been pushed to privately owned enterprises. Conservatives continually vote to reduce federal budgets for health care and education, relegating those duties to the private sector where such work makes a visible,  tangible profit. Such a mechanism makes more sense to a conservative ascribing to the business model of government because they are able to see and control fiscal outcomes.

It is telling of the nature of this view that conservatives who believe in profit-driven legislation and practice are the first to call for cuts in those areas they see as least profitable: education and entitlements. Thus, congressional conservatives continually reduce budgets as a way to stop what is to them a financial black hole into which millions of dollars disappear annually with no returns on the investment.

The business model encourages and expects short-term, direct, and usable returns. Short-term means that those who invest their time and money see an immediate profit or profit potential. While this might work for private sector business, it is an unfortunate and detrimental outlook for something like health care. This is because those who seek a profit in something like medicare have a vested interest in not providing financial support to their clients as that support would eat away at profits. Similarly, in education, reducing overhead costs at the expense of education value, supplies, pensions, benefits, and salaries for teachers and aides is the chief mindset to the privately run school system and the chief cause of recent failings of public schools to meet ever-increasing standards of excellence.

Direct returns on financial investment refer to returns that come directly to those who invest. In our traditional education system, it is understood that the long-term benefits do not fall to the investor, but the student. In this classical view of education, the student on whom money is spent will eventually become a valuable individual in the community at large, thereby creating returns on their education by providing high quality services and/or goods and stimulating the economy by purchasing goods and services. Unfortunately, this view is not supported by the business model, in which investors seek to have the returns on their investment come back to themselves. In this way, conservatives strive to create an environment in education and health care whereby the private industries that control those services receive direct compensation for their investment that exceeds their investment.  The only way this can occur in education or in health care is if the money of individuals who pay into the system goes directly to the company. Thus, more money would flow into the private sector, bleeding more from the populace and, by extension, the economy at large.

Usable returns refers to compensation that can be turned around and used for future investment or overhead. In something like education, the return of a good, high-paying job for the student is not a usable outcome for the private company that may have provided the education. To follow this thought, it is actually in the best interest of the private company to not educate its students so that they may see greater profits per student than if the child received a valuable education. Usable returns are a staple of private business. If a company receives a good or service as compensation that they cannot use that compensation becomes static and a financial burden. This is why something like money is the most sought-after compensation because it is the easiest to transfer to other investments or projects. Thus, it is money that conservatives of the business model seek as compensation for private educators and the health industry.

In America today, we are beginning to see this model being implemented by our lawmakers. As education budgets are continually reduced at the state and federal levels, teachers' salaries, benefits, and classroom budgets being limited, and standards being raised ever higher, there is the feeling that we are demanding our teachers to do more with less. This is a central philosophy of the private sector, one that has recently led to record profits for corporations that have refused to hire employees because their productivity is at an optimal level with fewer workers. As the budgets for education and health care services are reduced at all levels, those who pay into these programs must take up the extra cost or see their benefits disappear. As our education systems fail us, and our medicare, medicaid, and social security lose money, lawmakers are able to use this as an excuse to further reduce budgets and raise standards in order to "encourage excellence". It is generally ignored that the budget reductions were the cause of the lowering standards of education and health care in the first place, and it is said that by cutting budgets there is an incentive for teachers to work harder.

Because budgets are being reduced and pay and benefits are stagnant for all but the most powerful and wealthy Americans, the money being funneled into programs like medicare and social security is going down, since these are fed by a percentage of income being taken out of American paychecks. As the revenue is reduced, the programs begin to fail, and that failure is used to push for their deconstruction and privatization.

By applying the business model, conservatives continually push for the privatization of our health care services, social security, education, and regulatory control. They even promote views of government that call for a small, unobtrusive body of legislators, one that controls the military, collects taxes, and protects the rights of citizens and corporations from itself. Conservatives of the business model believe that private enterprise can govern itself, that regulation of things like carbon emissions and banking practices is limiting to companies and thus should be removed to allow maximum growth and, by extension, in their minds, maximum competition. But even competition has become a moot point as America's most powerful corporate giants have reached levels at which there is no competition that leads to cheaper and higher quality goods and services, but instead leads to corporate cooperation at the expense of the consumer.

My fear in all of this is that our education will become profit-driven, that our health care will be more concerned with the bottom line than the health of our citizens, and that we will start to see a drop in the quality of these services in order to line the pockets of the private owners who control them. Imagine an education system that exists for the profit of those who run it. The money used to buy books, new teaching tools and technology, and thus better educate our children, would be cut in favor of higher profit. Students would be numbers on financial spreadsheets, their test scores and grades being the foundation for funding for their schools. Teachers would no longer earn the pittance that they do, as their wages would be based on the outcomes of their students , but they would receive less support for teaching. In this outcome, education becomes a commodity, in which those who cannot afford education do not receive one. That, perhaps, is the most dangerous and depressing view of all.

And consider the impact of social security or medicare being privatized completely. Imagine your retirement being traded away for the investor's profit, losing everything when the economy tanks due to poor investment decisions. What would happen if our medicare was run by a private industry? Would citizens be told that their procedures and medications are too costly to cover, and so they must die in order to raise profits? Would the quality of our medicines and procedures be reduced in order to make more money?  We have already seen the debate between generic and name-brand medications, which is evidence of the profiteering that is inherent in the private sector that exercises complete control over entire spheres of society.

And what would happen to the finances of the working and middle class Americans? What about the millions who don't own their own business, that work in the fields, or at a desk, or in a mine, or in any of the thousands of other unseen places? How would they be affected if every cent they paid for education and health care went into the pockets of a corporation? How could a small business compete in such an environment? How could anyone survive when the money they invest in their futures doesn't stay local, but is shipped off to the bank vaults of billionaires? And when you consider that many large corporations do not pay taxes at all, but relegate the tax burden to the lower middle and working class, it is apparent that those at the bottom would only suffer in the privatization of America.

It is a dangerous model for us to pursue, and a dangerous precedent to set in our country. The value of government-controlled sectors of society cannot be overstated. In order to keep a balance of power and influence, in order to hold back the control of the private sector in every aspect of our lives, and in order to ensure increased excellence in our education and health care systems, we must allow the government to exercise control over those systems. The day we allow our private sector to control what we are taught and how we live is the day that we can shut the doors on democracy, individual freedom, and public influence.

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