Privatization of Federal powers?, What precisely does the gov't do? Options

[nezumi]

I was reading this bit of speculative fiction:
http://globalguerrillas.typepad.com/global...USA%20Inc_3.pdf

written by John Robb, an author on the change of politics and warfare in the 21st century (his blog is at: http://globalguerrillas.typepad.com/globalguerrillas/ ) and it got me thinking.

Shadowrun is marked by a drastic increase in corporate power at the cost of government and individual powers. The loss of individuals is clear, but I'm curious what power local and federal governments still hold?

Average UCAS local governments would appear to control:
Maintenance of roads
Taxation
Generating and overseeing laws on non-extraterritorial land (but not enforcement)
Overseeing contracts to outside corporations for basic services
Bureaucracy
Public services like schools, hospitals and so on? Anything else?

Related to this, especially for our SR4 crowd, should the local government be responsible for maintaining roads? We've seen so much recently about bridges falling apart and it costs a tremendous amount of money to keep them maintained. Why aren't roads sold off to private companies which are either paid a flat tax for maintenance, or allowed to pay for them with tolls as we see in the article? And since there are no free hospitals or schools in shadowrun (public or otherwise), what else is the government paying for that requires taxes (aside from bureaucracy)?


The federal government is a little easier, since we've seen their big stick.
The UCAS would seem to control:
Taxation
Generating, enforcement and overseeing laws on non-extraterritorial land
Overseeing contracts to outside corporations for basic services
Bureaucracy
Reduced regulatory role (for instance, maintaining basic trade restrictions, especially ones that would harm the global economy, such as preventing the spread of diseases that affect crops or so on)
Identity and licensing services (ex: driver's licenses and SINs)
Maintaining an active military

However, it would seem the federal government no longer provides any form of welfare, subsidies, etc. Am I missing anything? It would seem that the government has lost a good deal of its regulatory abilities. For instance, if Renraku wants to sell below cost of production (currently illegal), I'm assuming they can do so. However, the government still maintains most or all regulations put on individuals. Things like controlling the money flow of money is now solely corporate, I'd assume.

Is there anything else? What sort of government contacts would be useful? What else has been handed over to corporations? What else has been kept? And how do your games differ from what's canon?


I bring this up because ultimately this has a huge effect on a lot of aspects of the game (albeit, ones Shadowrunners don't normally explore). Thoughts?

[Kyoto Kid]

...excellent topic. As my last campaign was set in Europe where some national governments still tended to hold a fair amount of administrative power (The UK for example) I hadn't considered this.

I'll have to give these points some thought. I do have a mini-campaign in which the subject of foreign nationals and crime as a theme. In a segment already run the issue of child welfare also came up. However, as you mentioned there is appears to be little if anything remaining in the sense of a social welfare or legal structure to deal with this in 2070s UCAS as law enforcement is handled by private providers (unlike in parts of Europe where it is an often arm of the national military).

[kzt]

The world as presented doesn't make a lot sense. Corporations are really not interested in running a state, there is a lot of boring and expensive stuff going on there that they are not very good at. That's why the whole outsourcing bit in RL happens. Running, for example, corporate data centers well is hard and it makes sense to many companies to pay someone else big bucks to do it for them.

Plus the whole seretech and Shiawase BS is because whoever wrote that originally was an idiot. It's that is all perfectly legal under current law for a corp to protect its property and its people have the right to use deadly force where the law allows it, which applies to armed assailants attacking them with deadly force.

Corps don't want to have to run a company police force, fire department and jails when there is a perfectly adequate system being run by the local government, and it's cheaper and easier for them to pressure them to work with them than to do it all themselves.

So the local governments outsourcing trash and road maintenance to companies that do it cheaper and better is logical. EMS is doable, as would be fire. You'd need some legislation, but it's doable. I have real doubts about police, as there are the various legal immunities and training requirements in law make it really hard, and it's just stupid to run a police force without that.

If you assume welfare doesn't exist at all, you can also assume that the EMTLA stuff is gone and people without money don't get treated, they just bleed to death in the lobby like the black guy showing up at a white hospital in 1950s Chicago.

[Kagetenshi]

[nezumi]

[Fortune]

[Moon-Hawk]

[Kagetenshi]

[Moon-Hawk]

Thanks for clarifying that, Kagetenshi.

[kzt]

[CircuitBoyBlue]

[hyzmarca]

Privatization makes the most sense in the most unstable of areas. Governments are driven by ideology, not by profit. As such, they often do supreme stupid things which only serve to hurt their economies. In the least stable areas with the least infrastructure and the least tax revenue, this fact can easily overcome the costs associated with corporate takeover.

Lets say I am the CEO of a huge multinational clothing manufacturer. I might decide that it is best to open up a factory in an unnamed African country because they don't have minimum wage or child labor laws and they economy is so fucked up that I can employ 6-year-olds for $.05 an hour and seem absurdly generous doing so. Now, lets say in this unnamed African country there are two tribes, hithertofore known as Tribe A and Tribe B. These tribes don't like each other very much and have been trying to utterly destroy each other for many centuries and with varying levels of success. A rather outspoken member of Tribe B gets elected president by default due to all the other candidates being shot in their faces and he begins to implement policies which will allow him to follow through on his campaign promises to kill every last member of Tribe A.
Now, his military consists of 500 guys with 50-year-old Soviet surplus equipment but he has done a good job of riling up the populous, including my 6-year-old factory workers, and all of them have access to machetes.
I happen to be a equal opportunity employer. So, because of this yahoo, many of my 6-year-old underpaid factory workers are bringing machetes, dividing up into tribal groups, and cutting each-other's fucking arms off. It should be obvious that 6-year-olds without arms can't operate sewing machines. And they're fucking bleeding all over my ultra-high-quality fucking designer wool which comes from the most pampered sheep in the fucking world. A single thread of that wool is worth more than any one of those kid's lives so they could at least fucking bleed to death somewhere else. And I have to hire somebody to clean up the corpses, too. And I can't just fire all the kids from one tribe because they'd come to the factory with machetes anyway because their tribal leaders have told them that it is their holy duty to hack each other to death.
So, really, in that situation it is in my economic interest to just buy some fucking Israeli tanks and hire some fucking Blackwater Mercenaries and kill every motherfucker who dares oppose me so that I can actually get some work done.

The real problem with fully privatized services is the so-called freeloader effect with public goods and services. Everyone who isn't horrifically slaughtered benefits from my peacekeeping efforts and there is nothing that I can do to make them pay for the service, unless I threaten to kill them if they don't pay and then follow through with that threat, which is a common practice called taxes.


The same is true for larger governments, as well. We're in the middle of an economic depression and ideaology has driven our government to blow the shit out of a country that doesn't need to have the shit blown out of it, wasting billions upon billions of dollars just so that a few select Haliburten employees could enjoy the same cheap child prostitution that would have been easier and safer to secure by sending them peacefully into Thailand.

[kzt]

Yeah, but after that would you really want to try to RUN this trash heap? It's a lot easier to just select someone and put them in office and provide security for them than it is to try to run the damn place and keep the peace and collect the taxes and stuff. That's just not something that your average clothing firm has any skill at or interesting gaining. It's just a hole into which they can shovel money. Paying security contractors to keep "your" president alive is something that they understand perfectly how to do and you can evaluate whether you are getting your money's worth easily enough.

[nezumi]

kzt, you're correct about Disneyworld. But the premise of Shadowrun is, there is so much social unrest and the government is so bankrupt that the police force can no longer be depended upon. If Orange county never paid a visit because they haven't been paid in three months, and people keep coming in and beating Mickey Mouse with baseball bats, Disney would be very quick to hire a contractor to fill that role.

Why is this bad? Well look at the situation about a thousand years ago when governments relied primarily on contractors (i.e. mercenaries) rather than dedicated employees for basic things such as defense. Contractors aren't there out of loyalty to the country, they're there for the money to be made. As soon as there's more money to be made somewhere else, they're gone. They don't answer to the king or president or whoever, but to whoever owns the company, and so if the company decides it really wouldn't mind being king, there's not a lot the country can do to stop it.

To put it in more concrete terms, let's imagine I'm a government employee (not hard, since I am, hence why I post so much). Someone gives me the paperwork to do a security audit on a system. My boss is a gov't employee, I signed up to work for the US, I swore I would uphold the constitution, and if I break that oath, I lose my job and go to jail. Everyone around me has done the same. However, I'm not doing this work alone, I hand it over to someone from Company A we've hired to help with the workload. While Bob here has passed the security check (or not, we've had snafus like that before). Bob gets paid by his company whether he's working here or not. He hasn't sworn to uphold the constitution and doesn't work for good ol' George. His co-workers aren't working for the government, and have not made any oaths to the like either. Their boss similarly does not, and may in fact be a foreign national commie spy. If Bob gets fired from here, the company likely will stay pay him (or not). Worse still, Bob may pass the work on to his intern, Charlie, who doesn't even have a background check. Since he does this at his office, we have no idea about it, and who knows WHERE Charlie is from.

Hence, distrust. But the government gets a pretty good deal on the work Bob does, since he's on contract to get a job done while I"m just paid to show up every morning.

Hyzamarca's example is beautiful and an enjoyable read. And yes, some companies would want to run a country. Shell largely does so. If the clothing company is big enough and/or accompanied by enough companies with related problems or just has a high enough profit margin from working here (see again, Shell), they have a definite vested interest in creating or supporting a stable government, reducing terrorism and stopping general machete attacks. Investing money in basic health care may also be worthwhile (Africans on average lose tremendous numbers of productive days due to basic, preventable diseases, including malaria which can be greatly reduced by a $2 net). Plus it wins positive PR.

Again, hyzamarca's example is great. There are companies that do this. Generally they just set up a private compound and all the employees live within the campus, where machetes are not allowed, but security is provided. Companies like Shell really do set up their own governments and provide basic government services, as long as there's oil there.

[Fortune]

[nezumi]

[Fortune]

True. Many cities did follow suit and contract out their police services, but there are still some that did not, which seems to indicate that there might be more than just unrest and bankrupcy factored involved in the decision.

And of course we still have the Federal Police Forces, such as the F.B.I. (among others) still active.

[hyzmarca]

[Kagetenshi]

[Kyoto Kid]

...as to the effect of this in RL, I find Airline Deregulation a good example of how more privatisation can result in a reduction of service and quality.

Before 1978, the commercial airways (not to be confused with ATC which is still under the FAA) in the US were controlled by a government regulatory office known as the Civil Aeronautics Board. To enter a new market, Airlines had to file a case for a certificate of public convenience and necessity with the CAB for review. The board had the final yea or nay on the matter. If rejected, the airline could not operate on the route. Airlines also had to file with the board to eliminate service as well (which also did not come easy). The board even set capacity standards for routes meaning how many airlines could fly the same route, how many flights could be offered, to even how many seats were made available.

Furthermore, in addition to the Justice Dept, airline companies needed CAB approval in all merger and acquisition cases (the most notable of these being United's acquisition of Capital in 1961).

The CAB controlled a number of prime economic facets of the airline industry, outside of direct capital/operational outlays, PR, and personnel, including fares. There were no "fare wars" and tickets were transferable between different carriers serving a given route as fares were standardised. Airlines tended to concentrate more on quality of service both in the air and on the ground, and reliability as a means to attracting passengers rather than slashing each other's (and sometimes their own) throats to maintain the bottom line. Furthermore, airport terminal facilities and runways were funded and maintained by Federal and local port authority concerns. The airlines leased the gates and terminal space and paid landing fees. The only time a major facility outlay was undertaken by the company was for its own maintenance hangars.

After the Deregulation Act was passed by Congress on October of 1978, the individual airline companies were in total control their own economic destinies. The rationale behind the Deregulation Act was to promote more free competition and easier entry into (as well as exit from) new markets. At first it appeared to work as airlines expanded their route systems almost overnight. Small regional and even intra state carriers like Trans Texas, Ozark, and Peidmont (the original before USAir) were now competing on a national and in some cases international (e.g. Piedmont's service to London) scale. "Bumping" was almost a given as airlines frequently overbooked flights. Linear route systems were abandoned for the oft inconvenient (and at times infuriating) hub and spoke system. On paper this looked good but often times (as I pointed out in a comparison study I once did) at least one of the legs on most itineraries was generating little to no, and in some cases, even negative revenue. There was even a running joke that whether you went to Heaven or Hell you first had to change planes in Atlanta.

Fare wars erupted that were so cutthroat even full planes were flying at a loss. At one time, I found it cheaper to fly to the Bay Area from Portland OR, some 700 miles distant (for as low as 29$ US one way on Alaska or Southwest) than the Oregon Coast 73 mi away by shuttle bus (basically an "airporter" service at 31$ US one way)

Then, the bottom began to fall out. All the over expansion, fare wars, and excess fleet growth began to catch up as fuel and labour costs increased. One by one both new and old carriers alike either field chapter 11, were swallowed up by larger airlines, or simply closed up shop. In the 80s & 90s it became a literal feeding frenzy of acquisition and merger which reduced the number of options available to the travelling public. Companies like Delta which once had been an economic "rock" were now running in the red and bankruptcies seemed to generate more "mileage" for news reports and business page columns than frequent flier plans did for passengers (both Continental and TWA have gone through two such reogranisations). By start of the new millennium, the US Flag Carrier to the world, Pan Am, was flying no more so (so much for their commercial in the film 2001 that claimed "At PanAm, the sky's no longer the limit"). In spring of that year, the other US icon, TWA, was gulped down by American. Afterwards TWA's main hub in St Louis (which American promised to maintain) was relegated to just another spoke for it's Dallas and Chicago hubs after a 62% reduction in service. Instead of 747s and larger jets, most of flights are now on cramped regional jets and turboprops. In turn American benefited through acquisition of TWA's extensive Transatlantic route system from Chicago and the East Coast.

In the end, there is actually less competition on the US airways than there was prior to 1978 as there are fewer players. And service quality? Well there's new joke material there somewhere as domestic air service has become little more than a Greyhound bus with wings (actually on a recent trip back from Seattle on Greyhound I found I had more legroom than the last Northworst flight I was on - and that was in a full sized Airbus). Furthermore, the industry has been in a fairly unhealthy economic state that goes back to well before 9-11.

[soapbox]
For some services the private sector just does not have the commitment because profit is required to keep operating. This is why Amatrak and regional/metropolitan public transit districts were formed as the private railroads and transit companies could no longer maintain a profit margin while keeping fares affordable. I shudder to think about essential services such as Fire, Police, Education, and the Postal system being "run for profit" (for example, A UPS 2nd day domestic letter costs about 10$US on the average and that is the lowest rate you can get).

The current administration tried to push privatisation of SSI (and thankfully failed as my generation had the most to lose by the plan), which would have put everyone's future in the hands of speculators (remember Charles Keating and his "Thrift Kicker Five"?).

...oh and don't even get me on deregulation of the banking industry.
[/soapbox]

[kzt]

The current airline management (other then SWA) can't make money flying at 95% load factor. The phrase incompetent doesn't capture the reality. I have no idea how to fix it.

If you wanted to pay $1200 (instead of $250-400) to fly to Chicago the old system would have worked just fine. If you look at First Class rates you'll see some idea of what CAB rates would be. Flying was a lot less common for people who were not traveling on the company dime.

[Kyoto Kid]

...actually there were several tricks you could fly on the cheap back then. I used to fly a lot and I didn't come from a very well to do family either. Back then they had family, and student, and senior fares which were anything from 1/3 to 1/2 the coach fare. You could also travel standby at a reduced rate as well. Because there was no overbooking back then I often could get a seat maybe not on the next flight but the one after that. And it didn't matter on which airline. I could go one way on Braniff and the other on TWA for the same fare.

I remember routinely flying between Milwaukee and New York for around 24$ one way in the late '60s on a student fare. In comparison, Greyhound was somewhere around 30$ OW and the "Pennsy" RR was around 40$ OW (without a berth). Once I ended up on United who only used French built Caravalles on that route which were all First Class. I still paid only 24$ and was given full First Class service (minus the free booze of course as I was still underage).
[/derail]

[hyzmarca]

The problem with the airlines isn't the privatization so much as it is the competition. There are simply some indistries in which monopolies naturally work better. Mass transit, telecommunications, and killing Persians for their oil all work best when administrated by a single central authority. This authority doesn't have to be the government just as long as it has a near-absolute monopoly.

Competitive air travel is like a 50-man heterosexual gangbang. Even if you get creative with the positions and use all of the non-standard orifices, you've still got 41 guys standing around holding their meat at any given time.
Without central control there is simply too much redundancy.

[Kyoto Kid]

...actually there are fewer "full service" (non discount) Majors in the US than there were before Deregulation.

Today you have:

Ameroflot
Delta
Midwest
Northworst
USEless Air
United

Before Deregulation there was:
American
Braniff International
Capital (prior to 1961)
Continental
Delta
Eastern
National
Northeast
Northwest Orient
Pan American (Hawai'i and Alaska the only domestic routes)
Trans World
United
Western

Added to that were a host of regionals that also had fairly comprehensive route systems of their own, 2 class service, and used "real" airliners (including jets) & not private planes on steroids as many of the "so called" regionals use today.

These included:

Alaska
Allegheny (which is flying again as a commuter arm of USAir)
Bonanza
Frontier (which is flying again albeit as a discount carrier)
Mohawk
North Central
Ozark
Piedmont
Southern
Texas International
Wein Air Alaska

[/derail]

[Kagetenshi]

Hyzmarca: I would seriously advise you to consider differentiating between telecommunications infrastructure (physical copper or fiber, run across significant amounts of both public and private property) and telecommunications service when advising for monopoly administration.

~J