With all of the talk about private schools, especially in the article about the Swedish company managing its first school in NYC, I find myself conflicted. On one hand, I have no problem with the idea of capitalism. Companies should be able to make money in their businesses.
However, it seems like there are some sectors where the idea of for-profit companies creates a conflict of interest which is too high and the detriment to society too great, namely: education, health care and utilities. We all absolutely need these three things to survive. Since the main goal of a for-profit business is the profit part (especially if it has shareholders), it seems too difficult to juggle that element with the best interest of the "consumer".
I'm not saying that the government should run them, because we can all cite areas of governmental waste and inefficiency. I just think that those who do run them should be not-for-profit. Personally, I do not think that a CEO should ever have to decide between shareholder dividends vs. a better program. As a society what do we value more?
Great point about the public role of these institutions you name. It would seem antithetical for money to leave these systems as profit and not as service.
ReplyDeleteThe question is then raised about salaries and compensation for those working in these. How much is equitable? And how can the public not be offended when salaries seem unreasonable (to someone not in these industries and only looking on as a tax-payer)?
@ Neil - On a side note, I think the private sector has a real problem when it comes to compensation and the concept that a few are draining a lot of wealth out of some companies. (How much value does a ceo add? Does it warrant the rate of some salaries?) The private sector often doesn't have to address this directly, because they only really have to justify it to their boards of directors (many of whom are top execs in other companies).
ReplyDeleteIn this case, there is a real difference between a government run company and a non-profit. Rather than being a result of governmental taxes (thus owned by the public), a non-profit does not fall into the same category. Thus, the non-profit can choose the compensation it gives its employees. The way it would address the question of whether a salary is reasonable would be to justify it. Show the process behind the decision. Transparency in this arena goes a long way with the public.