Libertarians' Increasing Clout
	Localities Often Govern Best by Governing Least

	by Claude R. Marx
	In Washington

	Long consigned to the political wilderness and
	dismissed as a fringe element, libertarians are
	seeing their ideas accepted by state and local
	governments, once the undisputed turf of Democrats.

	Regional governments increasingly are adopting
	free-market policies originally developed by
	libertarian thinkers, making what were once
	considered extreme views part of the mainstream.

	The idea behind libertarianism is simple: give
	individuals maximum control over their own destiny
	with a minimum involvement of government at any
	level.

	The works of English political philosopher John
	Locke and Austrian economists F. A. Hayek and Ludwig
	von Mises server as the intellectual underpinning
	for modern libertarian thought.

	Libertarian scholars attribute the recent growth in
	influence to increasing skepticism about the
	effectiveness of growing government authority.

	"People are turning away from big government and
	centralized solutions because the don't work and
	toward more reliance on free markets and individual
	choice", said David Boaz, executive vice president
	of the Cato Institute, a libertarian think tank in
	Washington.

	As an indication of the growing influence, the Cato
	Institute recently moved its offices from a
	two-story Capitol Hill townhouse to a multilevel
	downtown office building.

	But it is in the trend toward privatization -- the
	idea that government shouldn't do what the private
	sector can do better -- that libertarianism has made
	its mark.

	Robert Poole, president of the Reason Foundation, a
	libertarian think tank in Los Angeles, said there
	is a "very significant trend" toward privatization,
	"the efforts of the Clinton administration
	notwithstanding".

	Largely because of tight budgets, governments see
	privatization as a way to save money on overhead and
	administrative costs while maintaining services.
	This solution has often been implemented after
	considerable political wrangling and over the
	objections of government employee unions.

	In New York, Mayor-el3ect Rudolph Giuliani made
	privatization a centerpiece of his campaign.

	Giuliani, the first Republican elected mayor of New
	York in 28 years, promised to privatize city
	hospitals, waste collection and the operation of
	city buses.  He also plans to eliminate 30,000 jobs
	from the city's 440,000 person work force over four
	years.

	"It's no longer an issue of contention that
	privatization is a solution", said E. S. Savas, a
	management professor at Baruch College in New York
	who advised Giuliani during the campaign.  "You can
	always rely on government to make the right
	decision, but only after it has exhausted every
	other conceivable alternative."

	In Los Angeles, GOP Mayor Richard Riordan has
	proposed leasing Los Angeles International Airport
	to private operators to help finance the hiring of
	additional police.

	Poole, a longtime supporter of airport
	privatization, estimates such a move could raise
	$200 million per year.

	However, others warn that privatization should not
	be seen as a cur-all and its sometimes more
	expensive in the long run.

	"It is often inherently advantageous for government
	to run things.  Governments start with a 22%
	advantage because they don't have the burdens of
	profits and taxes", said Ted Gaebler, a management
	consultant to governments and co-author of the
	best-selling book, "Reinventing Government".

	Gaebler's book, which advocates running government
	programs in a way that is more responsive to their
	tax-paying "customers", was a major source for the
	Clinton administration's National Performance
	Review.

    Privatizing Government

	The review recommended opening some government
	functions, such as air traffic control and printing,
	to private competition.

	Privatization's appeal has increased as many
	governments try to reduce bloated personnel costs,
	the single largest component of most budgets.

	And often these efforts cross ideological lines.

	Take, for example, Philadelphia, which had developed
	a reputation as a city of confiscatory taxes and
	large deficits.  When Democrat Edward Rendell became
	mayor last year, he set out to change that.

	He forced the unions to agree to wage and benefit
	cuts totaling $353 million over four years.  He also
	began privatizing services such as maintenance
	services in municipal buildings and guards at the
	city museums.  At the same time, he ruled out new
	taxes as a means of raising revenues.

	Rendell's chief of staff, David Cohen, estimates
	that these efforts will save $14.5 million next
	year.  Cohen says Rendell is "for injection of
	competition into the providing of city services",
	but doesn't advocate wholesale privatization of
	government.

	These efforts have met with mixed reaction.

	Jeff Brown, president of an American Federation of
	State, County and Municipal Employees local, said
	the contracts will cost the city more in the long
	run.

	"They don't include the costs of contract monitoring
	and administration when they estimate savings",
	Brown said.  "Rather than listen to suggestions from
	workers, they prefer to pay contractors."

    Union Anger

	Polls indicate that the public supports Rendell, but
	the unions have been able to arouse some sympathy
	for their position.

	During a recent City Council hearing to discuss
	selling off Philadelphia's nursing homes, union
	member brought in patients on gurneys to testify
	that the quality of care would decline if the city
	got out of the business.

	However, the Pennsylvania Economy League, a
	government finance monitoring and consulting
	organization, cites Rendell's efforts as a major
	reason the city's finances are improving.

	Privatization isn't only happening in cities.

	When Republican William Weld became Massachusetts'
	governor in 1991, he inherited a government
	universally regarded as too generous and burdened
	with a $1.8 billion deficit.  To turn things around,
	he turned to privatization.

	For example, the state is in the process of closing
	nine health facilities and transferring their
	patients to private organizations.  The transfers
	were recommended by a commission appointed by Weld
	shortly after he took office.

	Administration officials are projecting a savings of
	$60 million in annual operating costs and $140
	million in capital expenditures over the next four
	years.

    Democratic Influence

	"Privatization is the fastest path to changing the
	culture of government", said Department of
	Administration and Finance spokesman Steve Wilson.
	"The governor thinks government can do fewer things
	better."

	Democrats, who controlled the governorship for the
	previous 16 years before Weld won and still have an
	overwhelming majority in the Legislature, are
	critical.

	"Weld has used a lot of the 'reinventing government'
	rhetoric", said state Sen. Marc Pacheco.  "But the
	implementation has been more ideological than
	entrepreneurial.  He has used this approach to
	eliminate government services, which is the opposite
	of entrepreneurial government."

	Pacheco is sponsoring legislation that would
	restrict executive agencies' ability to contract out
	for services.  It would require the state to
	receive a minimum of three bids before issuing a
	contract and require more thorough documentation of
	the projected costs savings.

	But Weld's libertarianism extends further than his
	belief in privatization.

	In addition to his fiscal conservatism, Weld also
	strongly supports abortion right and homosexual
	rights -- ideas often embraced by libertarians but
	opposed by conservatives.  But Weld never describes
	himself as a libertarian.

	In a speech at last year's Republican National
	Convention, he said the government should keep "out
	of your pocketbook and out of your bedroom."

	Another city where libertarian ideas are being tried
	out in Indianapolis, which is also exploring
	privatization.

    Indianapolis Cost-Cutting
	
	When Republican Stephen Goldsmith became mayor last
	year, he made some key changes in how the city is
	run, even though its budget was balanced, its bond
	rating was AAA and its taxes were lower than cities
	of comparable size.

	nevertheless, he found that several departments paid
	too much for products and services and did not know
	what their real costs were.  Goldsmith implemented a
	system that forced city departments to compete with
	private companies to provide services for the city.

	"It drives change within government more quickly
	than anything else we've done.  The quality of
	service delivery has gone up, while prices have gone
	down", Goldsmith said in an interview.  "The goal is
	not necessarily to privatize, but to take as many
	services as possible into the marketplace."

	The city's Transportation Department, which
	Goldsmith said is the "most entrepreneurial", has
	won 60% of the contracts it has bid on.  In
	contrast, the Public Works Department has only won
	33% of the contracts it has bid on.

	"They are moving into their core area of competence
	and away form areas that they cannot effectively
	compete in", added Goldsmith.

	The city also created a committee of business
	leaders to examine the government's operations and
	make specific recommendations about what services
	could be eliminated or placed out for competitive
	bidding.

	Goldsmith said that while he is pleased that the
	changes have saved approximately $20 million, he is
	equally enthusiastic about making government smaller
	so the city can compete for businesses and residence
	by keeping taxes low.

    Running For Office

	Even in their ideas are gaining credence in
	government, some libertarians aren't content with
	the silent influence of intellectual argument.  Some
	are running for office.

	In fact, right now an estimated 100 members of the
	Libertarian Party throughout the country hold
	elected or appointed positions.

	For example, in New Hampshire, there are four
	Libertarians in the 400-member House of
	Representatives and they have forged successful
	coalitions with both parties.

	"We are working to streamline government and
	reinforce the power of people over the government",
	said state Rep. Don Gorman, who chairs the
	Libertarian Caucus.  "We find alliances with those
	who are fiscal conservatives and those who are
	social liberals."

	Boaz and his Cato colleague Edward H. Crane argue
	that Libertarian ideas will gain in popularity
	because they represent the best way to ensure
	prosperity.  And, they say, they are in keeping with
	the country's true political roots.

	"We need to restore in this country the founders'
	understanding of government: a necessary evil,
	created for the sole purpose of securing our rights,
	with a few clearly specified powers", they wrote in
	their recent book, "Market Liberalism".
--
         Between stimulus and response is the will to choose.
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