Prisons, Privatization, and the Elusive Employee-Contractor Distinction — Part 6

On Friday, I posted the introduction to my latest paper, Prisons, Privatization, and the Elusive Employee-Contractor Distinction. On Monday, Tuesday, Wednesday, and Thursday, I posted following sections. You can find the whole paper here on SSRN.

Here’s my conclusion. Thanks again to all the commenters, some of whom I’m answered and some of whom I haven’t (hey, I’ve got other papers to work on!). Some of your points will make it into future drafts of the paper.

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Throughout, I’ve focused on private prisons. But these non-empirical arguments are often used to oppose privatization in other areas as well—from the military, policing, and air transport security (which, like prisons, raise “privatization of force” concerns) to social services like water provision, education, health care, and Social Security.The limitation to prisons was useful for illustrative purposes, but the employee-contractor distinction has similar problems in these other areas.

It should be clear, though, that I’m not making a general argument in favor of privatization. I’m only arguing against the use of certain non-empirical arguments related to the employee-contractor distinction. My goal here is merely to clarify the discourse, and clear away arguments that I believe are unproductive.

On empirical grounds alone, there are plenty of possible reasons to oppose privatization. I’ve already mentioned many of them in the Introduction: critiques based on factors like cost, quality, democratic influence, accountability, and penal policy, to name just a few. Privatization critics have been vocal about the “[f]raud and waste,” “[i]nsufficient oversight,” and reductions in “transparency” and “accountability” that, in their view, have accompanied private contracting.One can complain that private firms will use anticompetitive tactics, opportunistically hold out for favorable contract renegotiations when circumstances change,use their position of incumbency to outbid competitors in later bidding (or even avoid later bidding altogether),fail to develop institutional norms of professional service,or go bust and leave an unprepared government holding the bag.

I’m not taking a position here on whether these empirical critiques are justified. I’ve argued, in other work, that at least some of these empirical critiques are overblown. But enough respectable people have made enough respectable empirical arguments strongly opposing privatization that an entirely empirical case against privatization in particular spheres may well be fully adequate.

Moreover, adopting an empirical perspective doesn’t imply any sort of utilitarian law-and-economics efficiency model. Sharon Dolovich, for instance—a strong critic of prison privatization—simultaneously argues, in the Duke Law Journal, both against the efficiency framework and in favor of empirical reasoning (while acknowledging the temptation of non-fact-based arguments):

The insistence of the inherent-public-function approach on the irrelevance of the practical consequences of prison privatization likely stems from the desire of these critics to escape the powerful force field of comparative efficiency, which operates to crowd out all considerations except practical consequences. Yet understandable though this resistance is, to the extent that it denies the moral relevance of actual conditions of confinement, it will necessarily operate with a conception of legitimacy that is only partially satisfying at best. It will, moreover, appear wholly insensitive to the needs and interests of the prisoners themselves and thus be vulnerable to charges of “intellectual indulgence” or “moral or ideological fundamentalism.”

Perhaps non-empirical arguments are correlated with anti-privatization views, but if so, this is only as an empirical (!) matter. The bottom line is that one can be convinced by this Article, abjure non-empirical argumentation on privatization matters, and still be just as anti-privatization as one was before reading it.

In this Article, I also haven’t sought to promote or dispute any substantive theory of punishment. I’ve questioned the distinction between public employees and private contractors, but I haven’t questioned any of the underlying theories that the distinction supposedly served.

Thus: I haven’t questioned that accountability is important, but I have suggested that there’s no necessary connection between public status and accountability. I haven’t questioned that private purposes are undesirable, but I have suggested that there’s no necessary connection between private status and private purposes. I haven’t questioned that institutions should be subjectively legitimate, or that punishment should be communicative, or that people should respect prisoners as real people and care about their well-being, but I have questioned whether people really consider private contractors to be less legitimate, whether privatization makes communicative punishment harder, and whether privatization implies moral distancing.

Perhaps all this is true, but let’s investigate it empirically. Of course, I don’t demand concrete survey data—where real data collection is impossible, theoretical argument as to which way the data might point is acceptable. But we have to start from the premise that the data, if it existed, could go either way. Mere assertion, backed up by essentialist statements about the supposed nature of the public and private sectors, won’t do.

It should therefore be apparent that, though the focus here has been empiricism, I’m not generally arguing for consequentialism. After all, for purposes of this Article, I’ve endorsed all sorts of non-consequential, non-instrumental claims, like the inherent importance of accountability or public purposes or communicative punishment. I’m sympathetic to non-consequentialist arguments generally, but I don’t think those arguments adequately distinguish between employees and contractors.

Finally, this isn’t an argument against the public-private distinction, either in political theory or in constitutional law. I’m fully committed to the idea, basic to modern liberal political philosophy, that there is an important difference between the public and private sectors, even if there are cases that are hard to classify.Locking people up on your own initiative is different from public prisons in a way that private contract prisons aren’t.

And I have no basic problem with the general idea of the state action doctrine, even if one may quarrel with some of the individual cases. The state action doctrine crops up in some areas that have nothing to do with contracting out;the arguments I’ve presented here don’t apply in those cases. Where there is contracting out, sometimes state action does indeed treat employees and contractors identically;in other cases, there are enough empirical differences, as a general matter, between employees and contractors, that treating them differently may make eminent sense.

The same goes for any other doctrine that distinguishes between employees and contractors, like whether an agent can make the principal liable in tort. My argument here should merely be taken as an attack on the non-empirical lines of argument that might support a distinction between employees and contractors.

Contractors, just like employees, are flesh and blood. They’re private people like you and me, who lived a quiet life in the private sector until they felt the call of duty, or were conscripted, or wanted to make money, or any combination of the above, and became, in one way or another, government actors.

They have their own views, their own ideologies, their own agendas. If they work voluntarily, they “profit” from government work, insofar as they’re being paid more than the bare minimum it would take to induce them to do the work. They’re not completely controlled in every single action, so they have some discretion, within limits, to follow their own preferences rather than the voters’ or the legislators’ or their immediate bosses’ commands. And they mostly have contracts. Some of them file W-2s and are called “employees.” Some of them file 1099s and are called “contractors.” But this is an administrative distinction, not necessarily a philosophical one. To limit the state a priori to the “employee” category is to let an HR category channel one’s moral thinking.

Of course employees and contractors differ systematically, because different contracts have different terms and different remedies and encourage different actions. Predictably, employees and contractors will act differently, and so it makes sense for us to be for or against privatization under particular conditions. This is the empirical approach to privatization.

I understand the temptation to seek out non-contingent, non-empirical grounds to favor or oppose privatization, especially when one opposes privatization for reasons that sound like “justice” reasons. Of course, justice and empiricism can live together just fine: one could just say “I predict (possibly based on past experience) that private prisons will violate prisoners’ rights more often, and this is unjust; therefore, we shouldn’t privatize prisons.” But now we’re vulnerable to the vagaries of data and empirical inference. Surely it’s nice to have a more solid, less fact-intensive ground of argument.

I appreciate the impulse in general, and so, as I’ve said, this Article shouldn’t be understood to say that everything is contingent. Nor is the argument here opposed to “soft” concerns like symbolism; nor do I believe, as Richard Harding does, that “the purist moral argument” (which includes accountability concerns) “is something of an intellectual indulgence.”

What I’m essentially attacking is the failure to think clearly about what it means for the state to act. Liberal political philosophy gives us many reasons to think that certain realms—many would include at least the police, prisons, military, and courts in this category—belong exclusively to “the state.” And, colloquially, one often talks about privatization, including contracting out, as being a retreat of “the state.” But this is a sloppiness of terminology. Between favoring state action and opposing contracting out—between recognizing areas of public authority, and insisting that the state be limited to one specific standard-form contract—falls the shadow. Contracting out is merely a retreat of state employment in favor of other forms of state contracting. There are plenty of differences between different kinds of contracting, but they all relate to how these contract forms play out in the real world. The a priori philosophical distinction between public and private provision is tempting but ultimately illusory.