In the Oklahoma Legislature we are increasingly hearing bills promoting public-private business partnerships. Through legislation and executive negotiations, these partnerships are infiltrating many industries such as healthcare, mental health, tourism, agriculture, education, and energy.
Ours is properly designed as a system of free and voluntary exchange. A free market is always the most efficient allocation of resources. The fundamental principle involved is that millions of individual human beings making tens of millions of individual choices each day in their own best interests will always be more efficient than any top-down, directed system of exchange. The reason is obvious: the one person most directly familiar with your own competing needs – is you. Nobody else understands your own subtle, competing requirements better than you.
You can be wrong, of course. Human beings are fallible and often are wrong. If you are wrong in deciding your own best interests, then you bear the consequences of your error. Suffering the consequences of being wrong is an essential disciplining factor in your future decisions. But even more is someone ELSE likely to be wrong in deciding for you, as previously noted. The difference is that someone else deciding wrongly for you does NOT himself suffer the consequences of being wrong, and does not benefit from the essential discipline of suffering the consequences. Your deciding and your bearing the consequences, right or wrong, will always in the aggregate be more efficient than someone else deciding for you and NOT bearing the consequences.
There is, however, a more pressing reason than even efficiency to reject government-private partnerships: morality. When government is the party directing other people’s decisions, the funding of those decisions is accomplished through stolen wealth. This compounds the inefficiency of the wrong choices.
As an example, consider the case of a public-private partnership. Let us say you want to build a rural broadband internet service. You believe the rural community will benefit from this service. In a free market system, you try to attract investors to build the necessary infrastructure. To do so you will need to collect market data, analyze costs, predict numbers and locations of interested customers, develop price structures, and so on. If you are successful in securing enough investment, then you proceed with the project. Only then do you discover whether your analysis was accurate. If reality matches or exceeds your expectation, then your business succeeds. If, on the other hand, people in the rural community are not interested in paying the price you demand for your service, then your business will fail irrespective of how much YOU thought the community would need and want your service.
In the public-private partnership, however, the essential discipline of fear of failure is considerably blunted. Rather than having to convince investors of the probable success of your business idea, now you have to convince a much smaller subset: legislators. The legislators, unlike investors, have no personal risk in the decision. The funds they will invest are not their own; they are yours. They are yours taken from you involuntarily.
In the case of the public-private partnership YOU bear the risk of a project WITHOUT any prospect of return on investment. Furthermore, the wealth risked in the project has been stolen from you without your consent! You underwrite the rural broadband internet project whether or not you think it is a good idea, whether or not you intend to use the service, and without any prospect of return on your investment. If the project fails, you have lost your investment. If the project succeeds, you still have lost your investment. But whether the project fails OR succeeds, the government will always risk more of your wealth in yet more and ever-increasing similar undertakings. But because the essential discipline of fear of failure is missing, those successive projects will always be more inefficient and failure-prone than the last, in a never-ending downward spiral.
And it is still worse than that. If a project fails, government will merely send more of your stolen wealth down the hole in an attempt to prop up the failing business (think of Amtrak). Or government will attempt to mandate by fiat that the people of the rural community MUST purchase the service whether or not they want it (think of COVID “vaccines”). The inefficiency and immorality compound and multiply as an inseparable consequence of government intervention in the marketplace skewing opportunity for the success of voluntary exchange.
If the marketplace seems unlikely to support the introduction of a new business, then the addition of government’s stolen resources (YOUR involuntarily confiscated resources) cannot alter that reality – but can and does expose you to loss of wealth, increased risk, and lost autonomy.
LEGISLATION– a few examples of Public-Private Partnership in current legislation
HB3995– Removes the restrictions on public-private partnership in energy; specifically allows the Oklahoma Municipal Power Authority to enter the nuclear power plant business. (Passed the House 75-4)
HB4354– The measure allows Oklahoma Center for the Advancement of Science and
Technology (OCAST) to award matching funds to eligible businesses which operate in aerospace and autonomous systems, life sciences, or energy diversification to offset a portion of expenses incurred through project engagement with an Oklahoma institution of higher education or nonprofit research institution. (Available to be heard in the House)
HB3647– Develop interagency, intra-agency, and public-private collaborations to help advance the awareness and mission of the
Oklahoma Golf Trail. The mission of the Commission is to increase rounds of golf
played at the Oklahoma Golf Trail Member Courses to stimulate economic development, enhance tourism, attract new residents and retirees to the state, and to elevate the quality of life and experience in Oklahoma. (Passed the House 87-3)
HB4106– Each public school district shall maintain a protocol for responding to students in mental health crisis with the goal of preventing student suicide, self-harm, and harm to others. Any organization certified by the state as a community mental health center or a Certified Community Behavioral Health Clinic(a CMS initiative) shall serve as a school partner if requested by a school district. (Passed the House 88-1)
SB1647– Enables the Oklahoma Tax Commission to contract with a private financial management firm to administer the empowerment of parents. (Available to be heard in the Senate)
Should we consider these proposed bills as opportunities for small businesses and citizens to benefit from state resources, or should we consider public-private partnerships as a socialist agenda to be rejected by freedom-loving, independent individuals? We must always reject the siren call of public-private partnerships.