Mr. John Deutch, the former director of CIA in 95 to 96, proposes public goods such as intelligence to be produced by the market. He calls it "Market-Based Governance".
In an article by Philip Zelikow, John Deutch and Ashton Carter - "Catastrophic Terrorism: Elements of a National Policy" they explain re-organization of US government in these terms:
- Non-profit and even for-profit entities are taking on tasks once thought of as the sole province of government. Markets are being created and used to produce public as well as private goods.
- Can a system which attempts to meet a variety of social needs through market mechanisms and via non-governmental organizations really guarantee equality of treatment? Can innovative governmental organizations also be accountable to elected officials and to the public?
- These are momentous questions, and they illustrate why large-scale social and governmental change does not happen overnight. Our challenge is to find the value in change, and that will require new visions of governance for the 21st century. ((Foreign Affairs, November/December 1998)
- "Private companies now perform key intelligence-agency functions, to the tune, I'm told, of more than $42 billion a year. Intelligence professionals tell me that more than 50 percent of the National Clandestine Service (NCS) -- the heart, brains and soul of the CIA -- has been outsourced to private firms such as Abraxas, Booz Allen Hamilton, Lockheed Martin and Raytheon." (Who Runs the CIA? Outsiders for Hire. By R.J. Hillhouse Sunday, July 8, 2007)
A public good or service is a public product because it can not be produced as a commodity. The requirement for production of a commodity is to have several different INDEPENDENT producers on the market. The commodity is bought by many INDEPENDENT buyers. The commodity is exchanged or bought in an INDEPENDENT MARKET by the buyers and sellers.
Intelligence produced by a private firm for the government has only one ultimate producer and it is the government. Also the "commodity" intelligence has only one buyer and that is the government. This is true even if several private companies produce intelligence for the government. There are no "INDEPENDENT" producers or "INDEPENDENT" buyers for the GOVERNMENT INTELLIGENCE MARKET.
Why "INTELLIGENCE" produced for the government is not a commodity? Because a commodity requires many buyers who can judge the utility of a product. But this is absent for the government case. The utility of "Intelligence" is judged by only one buyer and that is the government. Therefore this kind of "intelligence" is not a commodity. It is a public good or service.
"Market-Based Governance" is a non-sensical term as public goods such as "Intelligence" does not have market valuation. The government paying a private company to produce intelligence, does not mean that the government is using the market mechanism to produce intelligence or the product "INTELLIGENCE" has become a commodity. Even if the health benefits for the employees of such private firm is cut to save money and produce the product cheaper, it does not mean "intelligence" has become a commodity and is produced in a "economically efficient" way.
Private firms such as "Mini-KGB" run by former KGB agents in US, or "Mini-CIA" run by former CIA agents are producing "Intelligence" commodities with market valuation if only they do assignments for Corporations. It is because there are MANY BUYERS and MANY PRODUCERS. Commodities with a market valuation are produced and exchanged by independent agents in the market such as ordinary people or corporations.
The government which is providing the infrastructure for the market can not produce commodities. The government is outside the context of a market.
So what is then a "Market-Based Governance"? What actually happens is that those "private companies" who are producing intelligence for the government such as Booz Allen and Abraxas, are no longer private companies. Those private companies have actually joined the government and have become part of government!!. Those companies are private in form and public in content. It only means that the power elite has confiscated part of government and made it into his own private property similar to what happened in Russia under privatization. But "Market-Based Governance" goes much beyond that as KGB or FSB has not been "privatized" in Russia yet.
"Market-Based Goverance" means the power elite owns and controls part of the government through property forms and is not dependent on elections anymore. The power elite has taken over the good parts of th government such as intelligence. Other parts such as transporation or education is left with the traditional government.
The power elite has become permanently elected as the "Presidents of the Country" and no elections can change that. Contrary to what the advocates of "Market-based Governance" claim, the "Power Elite" has no more accountability to the voters anymore. Only employees at the bottom of "market-based governance" have accountability to the market. Their health insurance is now part of the market and may be permanently cut!!!!
Mr. Norgesen has defined "Market-Based Governance" in a clearly defined statement. According to Norgesen:
- "The goal is to implement "market-based" governance - which is fascist government to replace the American System of government - effectively dissolving the U.S. government except for the facade."