This same argument has been used to uphold the ideas of privatization of prisons and the use of contractors in roles that had been the domain of our military. In both of those use cases we can see that the private sector neither saved money nor provided better (frequently worse) service. The reality is that there are a number of things that are critical to the health of our society and way of life that simply aren't now (and may never be) viable for private enterprise to provide. That's not to say that we shouldn't ask the question whether a role or service can be moved from the exclusive domain of government. I firmly believe that government's role should be as limited as possible, but I also know the market is an evolutionary system which means that something that wasn't feasible for private enterprise in the past isn't likely to be without significant changes in technology and/or society. Let me provide a concrete (and personal) example of what I mean. When I was at Fort Gordon with the Army they were doing a pilot study in which chow hall military personnel were replaced by civilian contractors. (They were part of Delta Airlines food services division IIRC.) Up until then the cooking, planning, serving, and all other functions were done by soldiers dedicated to food service. The change to contractors didn't really save money, but it didn't cost more and it did provide (in most cases) a better service to the soldiers. The project was deemed a success and was made branch wide for CONUS stations 2 years later. This was clearly a place where the private sector taking a job from public sector employees made sense, though the public sector remained firmly in control since the civilian contractors all reported to the mess NCO (a food service professional) and officer. Lets contrast that to what has been attempted in Iraq with private "security" contractors taking jobs from soldiers protecting shipping and personnel in the field. The first question is always did we the people save money by using civilians instead of federal employees and in this case it appears we did not. Certainly from a raw salary perspective moving a security detail from being manned by soldiers (mostly privates) making less than $2000 per month(http://www.dfas.mil/militarypay/militarypaytables.html) to contractors making 5-8k per month is a losing proposition. Having said that some of the disparity goes away when we look at long term costs of taking care of veterans, but given the casualty rate it doesn't appear to significantly move the numbers. The second question is whether or not the service was improved by moving to civilians given that we have had problems with soldiers and contractors this isn't as clear cut as I'd like, but given that contractors lack the unit esprit de corps and are in a very murky area from a legal standpoint (not protected nor governed by the Geneva Convention for example) makes it very unlikely that service could improve. Anecdotally I have been told by officers and NCO's that the contractors created many more problems than they solved, but I don't have any statistical evidence to back that up. The biggest issue I see of hand is that when there is abuse, and there will be just as there is police abuse today, that a corporation is much less likely to have good ethical enforcement since it does nothing (in fact hurts) the bottom line. Our law enforcement and military services all have very well defined ethics regulations with generally good enforcement. I have no reason to suspect, in fact quite the opposite, that corporations will do the same.