Is the privatization of state functions always,and only intrinsically,wrong? On Chiara Cordelli’s The Privatized State

Abstract

The legitimacy of putting public activities – such as providing education and welfare, but also running prisons or providing military services – into the hands of private companies is hotly contested. In The Privatized State, Chiara Cordelli puts forward an original argument, from a Kantian perspective, for why it is problematic: it replaces the omnilateral will of all citizens, which is realized through public institutions, with the unilateral will of agents to whom these activities have been delegated. While adding an important dimension to the debate, I am not fully convinced that private institutions always fail to realize the omnilateral will, and that this is the only, or always most central, normative problem of privatization. Instead, many concrete cases of privatization seem normatively overdetermined in their wrongness. Nonetheless, Cordelli’s brilliant discussion invites us to rethink these phenomena from an important angle and helps us to better understand what an ideal civil service would look like.

Political philosophy returns to public administration – or, in this case, to its absence, and what is wrong with it. ¹ In The Privatized State, Chiara Cordelli provides rich and detailed arguments, from a Kantian perspective, about what is problematic about the outsourcing of government function to private contractors. Her core thesis is that if states privatize more and more functions, they return to a Kantian state of nature, in which it is not the omnilateral will of all citizens, executed by public institutions, which is imposed on individuals. Instead, it is a unilateral will of private actors, and the imposition therefore lacks legitimacy. In this review, I will summarize Cordelli’s main arguments, and then turn to some concerns and further questions that political philosophers might want to ask about the phenomenon of the ‘privatized’ state.

Cordelli starts off from the fact that in the US, the country she mostly focuses on, there has been a massive outsourcing of government activities in recent years, with private philanthropy playing an important role in filling the gaps. Education, welfare administration, legal adjudication, the military – in all these areas one finds a shift from delivery by public authorities to contracting with private companies, sometimes funded by private foundations or charities (pp. 1–6). Cordelli argues that neither arguments based on outcomes, nor arguments based on the essentially public nature of certain tasks, nor arguments about the corrupting force of profit motives, can explain what is wrong with privatization. Instead, her own arguments focus on legitimacy. She motivates these concerns by asking us to imagine that a random person on the street makes claims on us or forces us into a closed space (pp. 7–8). Obviously, a private person has no right to do so, whereas ‘the state’, in the form of tax authorities or prison guards, can, under certain conditions, legitimately do so. What Cordelli wants to show is that the kind of privatized agents that have taken over important tasks from the governments are like the random private person, not like public authorities.

In the first part, Cordelli sets the stage for this argument. She discusses how to understand the notion of ‘privatization’, arguing for a ‘normative and partly procedural’ (rather than a historical or economic) baseline of what counts as public function (pp. 24–30, quote on p. 30). It is when such functions are privatized that we can speak of ‘privatization’ and engage in its normative evaluation. Cordelli delineates her approach from others also critical of privatization, but which focus on other features: purely instrumental arguments that only ask how certain distributions can be brought about, arguments about the motives of actors, arguments about the social meanings of goods and relationships or essentialist arguments about activities such as punishment being ‘inherently’ public (pp. 31–42). These are interesting discussions, though I did not find all her arguments in which she tries to show deficiencies in these other approaches successful – sometimes, they seem to show the limits of certain arguments but not their invalidity for all possible cases. However, Cordelli wants to focus not so much on the specific wrongness of particular acts of privatization, but rather on privatization as ‘a broader transformation of the way government operates, and of the way we, as citizens, relate to it’ (p. 43), and for that purpose, she takes issues of legitimacy to be central.

To provide a base for this view, Chapter 2 provides an account of political institutions, which explains why the ‘who’ and not only the ‘what’ of public actions matters. Drawing on Kantian political philosophy, Cordelli argues that the existence of a state is ‘necessary, and noninstrumentally so, for justice’ (p. 46). Without the establishment of public institutions, justice can only ever be ‘provisional’ (p. 52), because its rules are unilaterally imposed on others by private actors, instead of being expressed by an omnilateral will, which is the only way in which domination can be avoided (pp. 49–55). What matters is that public institutions have an authority that private enforcers of justice can never have, because the former, but not the latter, can provide interpretations of basic principles of justice that are those not of one particular individual but of the community as a whole, determined through democratic procedures (pp. 56–58, 62–68).

But of course, state action needs to be put into practice, and this happens through the bureaucratic institutions of public administration (Chapter 3). This can lead to the problem of ‘bureaucratic unilateralism’ (p. 83) if the unavoidable discretion of decision-makers in bureaucratic structures is not sufficiently hedged and it is bureaucrats who impose their unilateral will on citizens. To keep bureaucratic action in line with a society’s democratic will, Cordelli suggests integrating three types of measures: top-down control, a bureaucratic ethos, and bottom-up democratic involvement, e.g. through the involvement of citizens’ juries that participate in decision-making in public bureaucracies (pp. 97–113; see also pp. 216–218, 296).

For Cordelli, three conditions need to be fulfilled for government agency through public authorities to be legitimate, and many cases of privatization fail on one or several of these. The first is the ‘authorization condition’ (Chapter 4). Here, the core argument is that a democratic government cannot validly authorize private agents to act in its name if doing so would undermine the capacity for legitimate democratic self-rule. While others have based arguments about ‘non-delegation’ on fiduciary duties, contractual duties, or the separation of powers, Cordelli argues for focusing on ‘collective nonalienation’, i.e. the invalidity of delegation decisions that would undermine the ‘capacity for democratic self-rule’ (p. 141). With many forms of privatization, the government loses both ‘epistemic’ and ‘practical’ control over what is done to citizens; moreover, ‘civic vigilance’ is often weakened (pp. 142–150). This is why the authorization condition might not be fulfilled and the act of delegation might be in fact be invalid.

The second condition concerns the possibility of acting ‘in someone’s name’, which Cordelli calls the ‘representation condition’ (Chapter 5). She develops an ‘internalist’ account of representative agency, which focuses on reasons for action: can private actors ever act ‘in the name of’ the state? Based on the fact that private actors have a different set of reasons, a different organizational culture, and stand in contractual relations with the state, Cordelli argues that they often fail to do so. As she puts it: representation fails ‘when the representative acts for reasons that lack the status of reasons from the perspective of the represented’ (p. 166), such as a profit motive instead of (or in addition to, and hence in tension with) the tasks delegated from the state (pp. 178–183).

The third condition concerns the capacity of agents to act on behalf of the state, which Cordelli describes as the ‘problem of delegated activity’ (Chapter 6). Here, the idea is that lawmaking is an inherently cooperative activity, and that private actors – for reasons that partly run in parallel to those discussed in Chapter 5 – fail to be part of these ‘jointly intentional’ activities (p. 209).

If these conditions are not fulfilled – as is often the case with current practices of privatization – then citizens are unilaterally dominated by those who exercise power over them; it is as if the random person on the street demanded them to do certain things. Cordelli compares this situation to the Kantian ‘state of nature’, before the establishment of a public government, in which there can only ever be ‘provisional justice’ (e.g. p. 9). As she puts it, ‘privatization undoes the very rationale that justifies and compels the existence of political and democratic institutions in the first place’ (p. 10) and leads to a ‘refeudalization of the state itself’ (p. 10).

Cordelli then proceeds to discuss how we should understand the duties of different actors in the current, extremely ‘non-ideal’, situation. First, private donors (Chapter 7): their donations should not be understood as acts of altruism or beneficence, Cordelli argues, but rather as a form of fulfilling the ‘transitional’ and ‘provisional’ duty of reparative justice, because the property holdings of the super-rich cannot be justified on any account of justice and must hence be considered illegitimate. For readers not familiar with theories of justice, the arguments in this chapter might appear quite radical and move rather too quickly – the notion that someone like Bill Gates, for example, does not have a right to his property does not seem widely shared in the US (and Gates may be a more controversial example than other super-rich individuals because he did not inherit his fortune, and he made it in ways that are not obviously harmful to humanity, by trading in software rather than, say, guns). But Cordelli’s conclusion that philanthropists’ personal discretion should be reduced (pp. 253–256) can, arguably, also be reached without endorsing this premise – and many readers, as professional philosophers, will indeed agree with Cordelli’s premise anyway, myself included.

Other questions arise about the duties of private contractors (Chapter 8). Given their role in fulfilling what are in fact public tasks, Cordelli argues that they therefore also inherit certain demands of justice and democratic governance, such as installing mechanisms of bottom-up accountability (pp. 268–275). But this might in turn put the freedom of association of certain private providers (e.g. NGOs) at risk and instrumentalize civil society (pp. 275–281). What is needed, therefore, are structural reforms that reintroduce a clearer division of labour between public and private actors. Therefore, Cordelli lists several strategies for ‘rebuilding the public’ (Chapter 9). She argues for constitutional limits on privatization (pp. 284–287), a renewal of public service through educational strategies that focus on responsiveness to citizens’ needs and concerns (pp. 287–292), and measures for increasing the ability of public authorities to act in democratically legitimate ways, e.g. by including more elements of participatory decision-making (pp. 293–297).

These are rich, and in some parts rather technical, arguments (and I could not do justice to their richness in this brief summary). But thanks to Cordelli’s clear language and frequent use of examples and illustrations, it is possible to follow them without too much difficulty. Cordelli always makes clear where the argument goes and provides helpful intermediate summaries when moving from step to step. I should preface my following more critical questions and reflections by emphasizing that this is an important book, on an important topic, that I highly recommend to political philosophers who are interested not only in defining and defending principles of justice and democracy, but also in understanding the conditions of the possibility of realizing them in practice.

First, I want to raise some questions that remained open, or the answers to which remained vague, in Cordelli’s otherwise very clear account. One concerns the idea that there can be an overall degree of privatization that is problematic. Early in the book, Cordelli says that her focus is on ‘forms of privatization that transfer “quasi-legislative” discretionary powers to private actors’ (p. 12). In one place, she briefly distinguishes these from ‘executive’ and ‘indifferent’ forms of discretionary power (p. 89). In practice, this line may not always be easy to draw (not least because dimensions such as an either bureaucratic or commercial ethos in an organization might touch all of them). And yet, it seems that despite Cordelli’s rejection of ‘essentialist’ arguments, the nature of different activities matters (maybe they should be given different weight in the overall summation?). For example, the private adjudication of legal disputes (pp. 74–78) seems to possess a particular urgency, because, as Cordelli herself writes, it leads to a situation in which ‘citizens lack reasonable assurance that their rights and duties are equally and reciprocally upheld’ (p. 77). However, it remains unclear whether in the consideration of the summative effects of privatization, such ‘executive’ and ‘indifferent’ cases should be counted or not. If, say, a state is close to the point where ‘too much’ privatization happens, doesn’t it then also matter that seemingly trivial tasks are executed by private actors?

More generally speaking, where exactly should this line of ‘too much’ privatization be drawn? Of course, one cannot expect precise percentages (à la ‘70% of the military budget needs to remain in public hands, 30% can be outsourced’), but the statement that ‘An act of delegation becomes invalid, then, at the point at which there are clear initial signs that the capacity for collective self-rule is being put under strains’ (p. 152) is extraordinarily vague – not least because ‘being put under strains’ is itself a vague notion. Being better able to draw this line would be helpful, and is also politically relevant, because the citizens of a country need to be able to understand where their countries stand on privatization. Having read Cordelli’s book, I understand that the US are in the part of the scale where ‘too much’ privatization has been reached, but I would not be able to tell where the countries I live in (Netherlands and Germany) lie on this scale, on her view.

What also remains unclear is what Cordelli wants her readers to think about the concrete and immediate implications of her arguments. If, as she argues, many (or even all, if the summative argument holds?) privatization decisions of the US government lack legitimacy, shouldn’t this lead to rather radical changes in the behaviour of citizens? If ‘many of the rules issued by the privatized state are neither fully legitimate nor worthy of obedience’ (p. 232), should citizens then stop paying taxes to support this system? Should they see it as permission to behave strategically vis-a-vis these agencies by, say, lying to a welfare agency about their financial situation? Maybe Cordelli would respond by pointing to other principles – such as the need to preserve the public order (even though it is not so ‘public’ anymore, but it might still be an ‘order’), or by arguing that the current situation needs to be remedied by public political action, rather than by private strategies that would, again, be unilateral impositions of an agent’s will on others. But what if political action is unsuccessful? Can there be a point, from a normative perspective, where the letter-writing to politicians, and the attempts to get journalists to pay attention to particularly egregious cases, and the protests on social media, should end, and the private guerrilla tactics should begin?

Another question is less about vagueness, and more about demandingness. One strong impression the book leaves one with is a sense of how incredibly difficult it is to create conditions for a public administration to act in ways that avoid all the pitfalls of bureaucratic unilateralism. Cordelli’s ideal bureaucrats are Hegelian heroes, it seems. Some of the conditions she discusses (pp. 103–107), to be sure, are organizational: putting in place offices that are non-contractual in nature, insulating office holders from external pressures by providing tenure and decent salaries, making sure that there are no material conflicts of interest, etc. Taking such steps may be costly, but it seems feasible. But then, there is also the level of motives and reasons (or ‘sociocultural orientation’, in Cordelli’s words, p. 106). For Cordelli, ‘the purposes of an office are dictated exclusively by a public, legislative mandate, which sets the constitutive rules of the office’ (p. 105). So even if the surrounding culture is permeated by neoliberal narratives about profits, and an individual’s worth in society is measured by his or her financial standing, these civil servants need to steadfastly hold onto their mandate, unerringly following the course of the omnilateral democratic will, even while also exercising their unavoidable discretion wisely and in ways that are responsive to citizens’ needs and concerns. There might be civil servants capable of such virtuous behaviour, but they seem rare exceptions.

In Hegel’s account, to be sure, being a civil servant is an all-encompassing identity, probably passed on in families over generations, nurtured in social structures such as the corporations. And Hegel – himself the son of a civil servant – could probably be accused of having idealized this group quite a bit; for him they embodied the ‘reasonableness’ of the state, after all. Cordelli inherits from him the question of what it would actually take – sociologically, psychologically, pedagogically, etc. – to nurture such a Hegelian ‘ethos’ among civil servants. It might here be useful to draw a line to more empirically informed research on cases in which this ideal is (more or less) reached. Albert Dzur’s outstanding research programme on ‘democratic professionalism’, for example, provides an interesting dialogue partner for answering some of these questions about how to run public institutions in a truly democratic spirit (see e.g. Dzur, 2018).

This brings me, finally, to two points of criticism: first, a question about the relation between considerations of democratic legitimacy and other normative considerations about privatization, and second, a question about whether public institutions are as uniquely placed to realize the ‘omnilateral’ will as Cordelli suggests.

Many cases of privatization seem normatively overdetermined, and while Cordelli’s approach is one interesting and important way of looking at them, I would argue that others continue to matter as well. When Cordelli writes, for example, that ‘[t]he fundamental problem with privatization is not, or not necessarily, that private actors, because of their motivational mindset, are more likely to behave in a dehumanizing way or to abuse power’ (p. 286), I would respond that this is also a fundamental problem. In many cases of privatization, e.g. of prisons, the risks of dehumanization and the abuse of power are indeed key considerations for why a democratic society should not go into this direction (even if it is only a risk and not a necessity). What is at stake, after all, are the fundamental moral rights of individuals. Even if one holds, as Cordelli does, that the true realization of justice requires state institution, one can probably admit that there are pre-institutional criteria – the violation of basic rights being one of them – that should matter for all questions of institutional design. Fortunately, they often pull in the same direction as concerns about legitimacy – namely in favour of well-ordered public institutions. But if there were a case in which they did not, it seems not clear that legitimacy always wins (and Cordelli in some places seems to hesitatingly concede that possibility, while still wanting to give legitimacy a special place; see e.g. p. 12). After all, it is often the most vulnerable members of society that suffer most when power is abused, and if, hypothetically, this was more likely in a public than in a private institution, it seems not clear what the overall balance of reasons would result in.

Cordelli’s focus on legitimacy leads to her book being written from the perspective of ‘us, the citizens’, as it were. What is less present is the perspective of victims of the many very real abuses of power through private contractors, which can leave them scarred for life. Another group that is also strangely absent are the workers that do the actual jobs – not in the role as executers of tasks, but as themselves also victims of privatization. Civil servants often had decent (though rarely very generous) salaries and permanent positions, and they hopefully also experienced some meaningfulness in their work, embedded in the ‘Hegelian ethos’ that Cordelli invokes. As a general tendency, the employees of private agencies have worse working conditions, lower job security, and lower salaries (this is one way in which the contractors’ profits are generated, after all). Taking the rights of these workers into account adds yet another normative layer to the evaluation of privatization.

My second critical question, however, is whether we can exclude the possibility that sometimes it is private, rather than public, institutions that better realize the ‘omnilateral’ will of a democratic state. It seems clear that if a private company runs a welfare institution with the dual aim of fulfilling certain goals and making 8% profits (one of Cordelli’s central examples, pp. 171–174), then this introduces reasons into the decision-making processes that should not be there. But take another scenario – e.g. foster care for orphans. For one thing, those who work directly with the children should presumably neither be motivated by financial gains nor by a bureaucratic ethos, but by an ethos of love and care; for another, those who run the foster care institution (‘the managers’) are not identical to those who do the actual work (and it might be understood as part of the tasks of managers to shield those doing the actual work from financial or bureaucratic pressures). It seems imaginable that there could be private institutions (for example set up by former victims of badly run public care institutions who now want to do better) in which what we can assume to be the omnilateral will – that these children are cared for in an atmosphere of love and care – is better fulfilled than in some institutions in which civil servants might, for example, be motivated only by earning a wage. ² It remains true, as Cordelli would probably emphasize, that there needs to be some degree of oversight and integration into public institutions (e.g. to prevent our imagined foster community from turning into some kind of sect that educates children according to ideological principles). But it is not clear that, overall, this situation would be worse – in terms of the underlying reasons that these individuals have in their work with the children and their coherence with the omnilateral will – than in a public institution. Much would depend on context, and on the ability of managers to elicit and sustain work ‘for the right reasons’ in employees in different institutional settings.

This may be an idealized example, and there may not be many such cases. But I see no a priori reason to exclude such possibilities. Maybe one could respond that foster care is a special case – but then all these different examples have their specific features: in prisons, the use of force creates specific challenges; in health care, it is the combination of extreme vulnerability and asymmetric expertise that shapes the relation between patients and health care staff, etc. It seems that a more contextualized, case-specific evaluation would be necessary for coming to normative evaluations, even if one exclusively looks at the normative criterion that Cordelli focuses on, namely democratic legitimacy.

With this focus, Cordelli adds an important, and often overlooked, dimension to the analysis of privatization. But other arguments do not thereby become irrelevant, and sometimes we may have to concede that private institutions may do a better job in realizing the ‘omnilateral will’ than public ones. Nonetheless, the normative case against privatization remains strong, precisely because it can, in many instances, be made from a broad range of normative perspectives. This might make things messier, and there might sometimes be cases in which different normative considerations pull in different directions. But in most cases, they will probably all push in the direction of less privatization. And this is something that is to be welcomed, in the sense that there can be a broad consensus between Kantians and non-Kantians, dignitarians and welfare utilitarians, and many other camps of theorists of justice, on the wrongness of certain existing practices. Politically and strategically, it is of great importance to emphasize that on the phenomenon of ‘the privatized state’, which Cordelli treats with so much nuance and skill, many of those who might disagree with her premises would nonetheless agree with her conclusions.