The purpose of having the government contract out to private firms is that, if the private company performs poorly, the government will fire it and replace it with a better one.

Before 9/11, the federal government already knew about the inadequacies of the airports’ private security company, with this company repeatedly failing the government’s tests. But our government refused to fire it.

Hence, the real failure lies with government overseers. What’s to blame isn’t capitalism, but our system’s socialist element.

And the federalization of airport security will expand this socialist element. When the federal government fails, who’ll fire it?

If it were up to the airlines using the airport to decide on whether the airport’s security company would be fired or not, they would’ve fired it in a heartbeat, as hijackings prove disastrous for business.

Incidentally, Europe had many airplane hijackings from 1981 to 1986, when its airport security was government-controlled. After many European airports privatized airport security in 1986, hijackings decreased.

Likewise, people also believe deregulation caused California’s energy crisis. But what really occurred wasn’t genuine deregulation, as the “deregulation” bill drafted new regulations. Californian engineer David Holcberg calls it “re-regulation.”

The bill included a mandatory “ceiling” on how high electricity retailers could charge consumers. But there wasn’t a “ceiling” on what electricity distributors could charge retailers for that same electricity.

Thus, the distributors ended up charging more for electricity than the retailers did, forcing the retailers to sell at a loss. That’s the real reason why the energy companies went bankrupt, and that’s the regulations’ fault.

In fact, there are 23 cities in the U.S. that have successfully instituted competing electricity companies, which are far more accurately “deregulated” than California’s.

It’s often argued these goods and services -- electricity and airport security -- are “public goods” benefiting everyone. Because everyone benefits from them, it’s said that government should be their sole provider, with all citizens paying for it in taxes.

Economics textbooks cite lighthouses as a perfect example, saying no private organization would ever build a lighthouse without government funding.

However, these textbooks fail to mention that the first lighthouses ever built were privately owned, paid for privately by shippers and insurers. This only changed when the British government forced itself upon the industry, passing laws that the state was to have partial ownership over all lighthouses.

Some fully privately owned lighthouses exist today.

A similar situation occurred with U.S. roads -- even they were once privately funded, until the government usurped them in the 1800s.

Today, California’s 91 Express Lane shows that even roads can be privatized. This road is less congested than others, and it has no tollbooth, as a scaffolding above the road electronically tracks users’ cars and bills them.

Toronto, Canada, has private air-traffic control. Pinellas County, Florida, and Denmark have private ambulance services. Some Pennsylvanian cities have private fire stations.

Jersey City, New Jersey, went from having contaminated water to shockingly clean water, after hiring a private contractor to clean up the city’s pipes -- and for a cheaper price than what the government previously charged, saving taxpayers $35 million.

Privatization beats socialism.

We in Hawaii can look at one of our own socialized government service monopolies -- TheBus, Inc. Its buses often arrive late at stops, and the actual price of its operations is not what it charges up front in ticket prices, but what we pay for it in taxes.

Imagine how busing services would improve if privatization and competition were restored in this industry, as it was in the 1940s, with two competing bus companies, many jitney bus services and cheaper ticket prices.

Contrary to Paul Krugman’s charges, the market does indeed work, as long as the government doesn’t obstruct it, as the government did when it refused to fire that inefficient airport security company.

In fact, the private sector is terrific. And, if the government privatized its own social service agencies, so that it could focus more on protecting the private sector’s life, liberty and property, the market would work even better.

Stuart K. Hayashi is the president of the Reason Club of Honolulu and an undergraduate in Entrepreneurial Studies at Hawaii Pacific University, though his opinions do not necessarily reflect that of either institution. He can be reached at radical_individualist@hotmail.com (If you would like to continue seeing Stuart Hayashi's editorials on this site, please let Hawaii Reporter know at info@hawaiireporter.com)

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