Privatization, of course, is based on yet another myth: that government-run programs must be inefficient, and privatization accordingly must be better. In fact, as we noted in chapter 6, the transaction costs of Social Security and Medicare are much, much lower than those of private-sector firms providing comparable services. This should not come as a surprise. The objective of the private sector is to make profits-for private companies, transactions costs are a good thing; the difference between what they take in and what they pay out is what they want to maximize.31"
( Joseph E. Stiglitz )
[ The Price of Inequality: How ]
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