Creeping Capitalism

Oscar B. Johannsen

[Reprinted from The Gargoyle, October, 1970]

We've all heard the phrase "Creeping Socialism". That's the condition so evident in the United States the past generation as more and more socialistic programs have been adopted. But socialism is so inefficient and causes so many problems that a new phenomenon is slowly appearing in the United States. Forbes Magazine calls it "Creeping Capitalism".

It is the increasing adoption by people of private enterprise to perform functions which the government has been doing. People have turned to the free enterprise system not because they want to spend more money, but because the service rendered by government at all levels is so poor.

The most prominent example of what might be termed a species of creeping capitalism is the recent adoption by Congress of a bill turning the 131 year old Post Office Department over to an independent government agency. The post office is now to be run on principles somewhat similar to those of private businesses.

True creeping capitalism would have been to turn over the post office to private business to run with the government having nothing whatever to do with it.

This is what Forbes is talking about. The tendency to let private business do the job is in some instances being forced on the people. In San Diego, for example, in some areas of that city, garbage pickups had been on a basis of two, three or five times a week. But the city cannot afford such luxury anymore. One pickup a week is all that is now scheduled. The Mayor bluntly stated that anyone who wanted more pickups would have to get private contractors to do the job. Which is what people are doing.

Fire protection is expected increasingly to be performed by private business. The outstanding example of a private fire department is the Rural Metropolitan Fire Department which covers a 400 mile area in Arizona, and is expanding its service. It serves a city as large as Scottsdale with 66,000 population and much more efficiently and cheaper than any municipal fire department.

Protection, which most people believe is the principal reason for government, is increasingly becoming a function of private business. The local and other governmental bodies simply cannot do the job properly. People in high crime areas band together to hire private policemen to patrol their areas. Businesses have long had private police forces if the business was big enough. But now even smaller business firms find the public police force cannot do the job so they band together to hire private concerns to protect them.

People may slowly begin to realize that actually there is no service which the government renders which cannot be done better by private enterprise, except the collection of economic rent. The expensive road system of the U.S. would have been built at a lot less cost if the principle of the old turnpikes of the 15th century had been followed. In the early part of that century over five million miles of private toll roads were constructed. There is no reason why private roads could not be constructed today. Look at the saving to the public if such were done. Maybe they will yet as costs get too great.

Of course, more and more people are sending their children to private schools. Our socialized (public) schools are going from bad to worse. So, people are more and more subjecting themselves to the double cost of education involved (paying for the public schools which they don't use and paying for the private schools which they do use).

The concept of creeping capitalism is a good one and one can hope it will change from a creep to a gallop. However, one flaw in it all is that the tendency to use private services is not based on the conviction that the services should be performed by private enterprise. Rather it is that the public service is so bad that people feel forced to look to private concerns. If the philosophy took hold that these services which many consider the province of government, as education, actually are functions of private enterprise, then we would really see the development of truly remarkable services at low cost. And we would be on the way to the ideal form of government, which is that the best governed are the least governed.