One of the contradictions built into the American system involves the relationship between the values of the public sector and those of the private sector. This relationship was an important part of the concept of American exceptionalism. The founders of the American democracy were always skeptical of concentrated power in government (such as that which emerged in monarchies, religious orders, or other non-democratic systems).
We know that our complex shared power system was designed to keep any part of the shared power structure from destroying the autonomy of another part. Another important part of that design was an acknowledgment that there is a difference between the values tied to the public role and those tied to the private sector. Public sector values emphasize social justice, fairness, equity, and the quality of public services. Private sector values emerge from a desire to run government like a business, focusing on efficiency and the profit motive. In addition, the public sector operates more openly with unclear boundaries about its participants’ authority.
The appropriate balance between public and private has always been under dispute. Economist Albert Hirschman provided a creative approach to this issue by defining the balance not as a clear sorting out of the roles of the two sectors but as a dynamic process. Calling this process “Shifting Involvements,” he focused on the changes in technological, social, or economic conditions that cause a shift in the balance between public and private. He describes this process as “disappointment”—one that occurs because citizens find that their expectations have not been met and thus they swing from one sector to the other. This dynamic is often caused by external events (such as economic crises, wars, revolutions) and seems to explain the changes that have occurred within the United States. And it explains the contradictions that always seem to be present in the American society.
For more than 25 years, the swing in the United States has been toward a predominance of values that emerge from the private sector. Today—in contrast to the dynamics of the 1930s—economic conditions and fiscal scarcity have pushed efficiency values to the top of the list, overpowering both equity and effectiveness values. The problems created by the Wall Street crash did not generate increased reliance on the public sector. It is assumed—although not always understood—that the experience of the private sector is directly transferable to the public domain.
This pattern is expressed directly in interesting ways. Public sector employees use the term “company” to describe their public sector organizations. Analysts assume that quantitative data that mirrors the concept of profit margins is the way to determine whether public sector policies are effective. And perhaps most importantly, they assume that contracting out formerly public sector–provided services will adequately address public sector roles. Private sector contractors expect that their views about proprietary information carry over to their government contracts. At times, even nonprofit organizations have a hard time competing with for-profit contractors.
We are now in the midst of what is perhaps the strongest belief that the private sector can be the way to deconstruct the public sector. It is time to confront this set of assumptions. Public administration scholars and practitioners owe the public some hard truths about the unfortunate realities of its predilection for excessive reliance on the private sector.
First published in Public Admin Review, Volume 77, Issue 3, May/June 2017, Page 325.