The Daily Parker

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Where private enterprise just completely fails

Governments do much better at providing many services than private companies do, for the simple reason that private companies have incentives incompatible with the services. Bruce Schneier points out a shining example, nuclear security:

We can learn a lot about the potential for safety failures at US nuclear plants from the July 29, 2012, incident in which three religious activists broke into the supposedly impregnable Y-12 facility at Oak Ridge, Tennessee, the Fort Knox of uranium. Once there, they spilled blood and spray painted “work for peace not war” on the walls of a building housing enough uranium to build thousands of nuclear weapons. They began hammering on the building with a sledgehammer, and waited half an hour to be arrested. If an 82-year-old nun with a heart condition and two confederates old enough to be AARP members could do this, imagine what a team of determined terrorists could do.

Instead of having government forces guard the site, the Department of Energy had hired two contractors: Wackenhut and Babcock and Wilcox. Wackenhut is now owned by the British company G4S, which also botched security for the 2012 London Olympics, forcing the British government to send 3,500 troops to provide security that the company had promised but proved unable to deliver. Private companies are, of course, driven primarily by the need to make a profit, but there are surely some operations for which profit should not be the primary consideration.

Corporate structures also contribute to making this kind of operation unprofitable. If someone steals fissile material from Oak Ridge and blows up Toledo with it, the biggest liability Wackenhut or B&W would face is bankruptcy and dissolution. The shareholders won't go to jail; probably not even the managers responsible for putting profit above nuclear security would, either.

But the Army and the Department of Energy have no such profit incentive, and therefore have no incentives to cut corners or rely on broken technology. Instead they have incentives to do their jobs well, and protect Americans.

Government isn't a business. I hope someday more people understand this, and I hope more that it doesn't take a nuclear disaster to prove it.

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