The Profit Motive

One of the many troubling features of our current civic landscape is the steady erosion of boundaries between sectors. Thanks to “privatization,” or–more accurately–contracting and outsourcing, the lines between public, private and nonprofit have steadily blurred.

The problem is that different sectors have different purposes/missions. For-profit companies exist to make money; nonprofit organizations are mission-driven, and the public sector is supposed to serve the public and safeguard the common good. These descriptions obviously gloss over the many nuances in each sector, but they are a serviceable shorthand.

When the profit motive characterizes all of the sectors, our society no longer works the way it should.

I get “paper” newspapers on Sunday mornings, and look forward to reading the news old-style. Last Sunday, I opened the Indianapolis Star to discover that it had engaged in actual journalism, in a story about charter schools established by ITT.

The strongest selling point of the Early Career Academy, a tax-funded charter school scheduled to open next year in Indianapolis, is that its high school students will earn an associate degree free of charge.

But the degree comes with a catch: The credits from that degree likely will not transfer to any major university in the state if the students want to pursue four-year degrees.

There is, however, one institution guaranteed to accept the credits — the for-profit college sponsoring the charter school.

ITT, you may recall, is being sued in several states by individuals and the federal government, who allege that it provides an inferior education for which it charges exorbitant tuition, and employs unethical, high-pressure sales techniques to “lock students into an education most are unable to finish and into loans many are unable to pay off.”

When I opened my Sunday New York Times, the front-page story was even worse–the headline was “Energy Firms in Secretive Alliance with Republican Attorneys General” and the article detailed the cozy–and highly unethical–arrangements whereby  state Attorneys General are conspiring with, and carrying the baggage for, fossil fuel companies that have “generously” contributed large sums to their campaigns.  They are suing the EPA and otherwise resisting federal regulations meant to protect air and water quality–purportedly on behalf of their states, but in actuality on behalf of their political patrons.

There are plenty of lessons we can take from these revelations. (I’d probably start with the premise that for-profit educational institutions should automatically be viewed with extreme suspicion.) Certainly, these revelations are more evidence–as if we needed it–that the role of money in politics is toxic and corrupting.

However, I think there is a larger warning lurking in these, and similar examples of venal behavior. When we fail to recognize the different ethical obligations that attach to the different sectors–when every organization and every job is focused on a fiscal bottom line–the structures we have built to be complementary become competitive and corrupt.

We have spent the past thirty-plus years demeaning and “hollowing out” the enterprise we call government, and in the process, we have lost  the very concept of a public. “Public service” is an oxymoron. Well over half of our purportedly nonprofit/voluntary organizations are so totally dependent upon government grants and contracts that they have become unrecognized arms of the state. Meanwhile, we have idealized private enterprise and the private sector beyond recognition, delegitimizing the rules and regulations that are necessary to ensure a level economic playing field and a healthy, sustainable economy.

The result is on the front pages of our newspapers, and it isn’t pretty.


  1. “different sectors have different purposes/missions. For-profit companies exist to make money; nonprofit organizations are mission-driven, and the public sector is supposed to serve the public and safeguard the common good.”
    Those words should be taught to every high school student as part of their civic education. It is probably too late to teach the adults (voters) who have been flim-flammed in the last 30 years into believing that the private sector is so much more capable of delivering public services when profit is the only motive. Indiana has shining examples of the pitfalls of this kind of policy, from failed charter schools to the Toll Road bankruptcy.
    How much are those ITT degrees going to mean in the marketplace when the credits are not transferable and the loans are so burdensome? It is an invitation to debt servitude.

  2. I’m not sure that I can say specifically why Sheila but today’s blog seems especially insightful and well presented. Continuing thanks for your reliable public mission.

    Recently my wife had to put up with an anonymous crank caller who apparently thought that she should know that she was married to a “Communist” probably as a result of a letter that I wrote that was published in the Naples (FL) Daily News. I thought that it was a pretty innocuous letter pointing out that the rant du jour from Republicans, about President Obama’s use of Executive Orders, was hypocritical because of their un-negotiated actions in his first term like shutting down government. He was merely reciprocating their behavior.

    The connection perhaps between that crank and Sheila’s blog is that IMO the Great Oligarchy Plot has been successful in advancing their cause by telling those unable to resist the Republican brand that profit is holy…..the more the holier (than thou). It is the manifestation of all that is good because it redistributes wealth up as God always intended rather than from bazillionairs down to the destitute (fat black loud vulgar ugly women reproducing for fun and profit).

    Their noble solution is of course to replace incompetent elected officials with people who are most capable of wealth redistribution up until taxes are gone and replaced by profit for the few. In other words the bazillionairs being supported by the destitute. Perhaps some of you recognize that by its scientific name. Slavery.

    At one time I would have said that no way would Anericans fall again for slavery. I underestimated the power of big media brand marketing and the depth of truth contained in Lord Acton’s one memorable quote.

    “Power currupts. Absolute power currupts absolutely.”

    A perfect portrait of the Koch Bros/Walton’s gang.

  3. It’s spelled c-o-r-r-u-p-t-s. Otherwise, good comment, Pete.

    Good comment, too. JD.

    And “ITT Tech” (which sounds a bit redundant, like “PIN Number”) should be driven out of business for what they are doing to folks who are trying to further their educations and get somewhere in this life.

  4. Those interested in Sheila’s latest should familiarize themselves with Doug Blackmon and his ‘Slavery by another Name’ This practice did not end with the Civil War and was openly practiced until the early ’60s by most southern states. You will note that the sole purpose of slavery is a profiteering unbridled. Turpentine chain gangs ended in the sixties and and the prison industry began in the 80’s. Still people making money from the misery of others. I don’t see the difference. We still slavery by another name.

  5. This piece on the corruption of public and not-for-profit entities and services next to correct police beatings of peaceful protestors is rather depressing. Who can we turn to, appeal to and how appeal for corrective change?

  6. Typo in the above – should read – This piece on the corruption of public and not-for-profit entities and services next to police beatings of peaceful protestors is rather depressing. Who can we turn to, appeal to and how appeal for corrective change?

  7. While democracy is weakened I refuse to eulogize it yet. We are still influential as voters, consumers, investors, workers, learners and teachers. We just need to work harder than what the oligarchs can hire. Our numbers are more influential than their dollars despite those among us who follow blindly any shiny object.

  8. We have a Super Virus in America, which has managed to attach itself to healthy living cells. This Super Virus had as it’s origin the notion that Business and Free Enterprise were far more efficient and produced a desirable result if left unregulated. The myth of the invisible hand was spread. Bigger is better was a tune that was played. The Myth of the “Market” as self regulating was spread. The idea was taken further that Privatization of Government functions would result even a greater good for all. (We now have a Prison Industry)

    We have the Mega-Non-Profits which spend enormous sums of money on Marketing. Here in Indianapolis and Indiana it would be curious to know how many millions are given to Non-Profits. Does anyone really monitor their results and hold them accountable?? Charter Schools seem to be one of latest Schemes.

    Bottom line you would think that Toxic Waste spills, exploding cars, the boom and bust cycles of Capitalism and Ponzi Games played with people’s savings would be enough to convince people, the Market does not have all the answers. Yet, we still have some in Government and now maybe more after this latest election that think Social Security should be Privatized.

    Private Industry has it’s goal to make a profit. Nothing wrong with that. It is up to Responsible Government to make sure the Whole Economy is not negatively impacted by the Profit taking. We see it over and over again in Indiana where certain Companies connected to the Political System are rewarded with Subsidies and Tax Breaks, at the expense of those who pay their full share of taxes and receive no subsidies.

  9. Please refer those who are willing to combat the creeping oligarchy to movements like common cause that are calling for accountability in our public sector officials.

  10. It’s gone so far that collection agencies are sending out collection letters using the county prosecutor’s address. The only way to tell if the local prosecutor is using a for profit collection agency is to check out the website. The company who runs this is in southern California, ACCS, and they were ‘outed’ by ProPublica. The ACCS websites are all identical, so that a quick check showed that, yes, indeedy, Tippecanoe county’s check collection website is an ACCS affiliate. Go to the prosecutor’s bad check website, which for our county is, but then where you see ‘tippecaoecountyin type in some other address, like ‘alamedacountyca.’ Or how about my old home county, Hendricks: Same website….So ACCS is really who you are talking to when you think you are dealing with the prosecutor’s office. Also, call up the 800 number and insist on talking to the prosecutor. I was told that the prosecutor didn’t meet with the public.

  11. Betty; are you a school teacher or have you been hired to correct spelling and grammar on these blogs? I believe you corrected a misspelling in one of mine recently. You may believe you are helping those less educated than yourself but I personally do not appreciate reading your editing of the comments submitted on this blog.

  12. Rep. Casey Cox is advancing a Bill to allow B Corporations in Indiana. B Corps allow for profit companies to consider society and environment in addition to profit. As you know, case law focuses on requirement to maximize shareholder value (which can be said as a root of our economic woes). B Corps at least give patient investors a choice whether to invest in a hybrid of good and greed.

  13. I have a question after reading Tim Evans article, “Justice Center’s preferred bidder” in the Star this morning. Why is there no American vendor listed? Bad enough that Ballard’s plan is a monumental multi-million dollar privatization/outsourcing, whatever you want to call it but the fact that Canada, France and Australia are the only competitors listed is unAmerican. This use of our local tax dollars goes far beyond the out-of-state workers who replaced roofs primarily but also siding and gutters after the hailstorm in April 2006 which took our homeowner insurance dollars. The severe damage in my small subdivision required extensive renovation to every home; seeking a roofing company I found only Hispanics who spoke no English. Two or three of the last homes to be reroofed were by non-Hispanic workers but I saw no Indiana license plates on the dozens of work trucks. They were from Texas to Connecticut; at least they were from the United States. I am aware I am comparing tax dollars vs. private money but…out of state and out of country receiving local American money should not be happening at the rate we are seeing under the current GOP leadership.

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