Market Solutions: Private Security in Detroit

Posted on Posted in All Things Detroit

Private solutions are always the answer. Yesterday I wrote a piece discussing the incredible comeback of one of America’s great cities, Detroit. I discussed a few different aspects of the city’s renaissance but the overall punchline was that it is, and must be, the work off individual entrepreneurs and private businesses. In particular Dan Gilbert, General Motors, and Mike Ilitch. It’s the nature of the incentives and consequences that private entities face which afford their drive and ability to be channeled in such a way as to bring a major city back from destitution.

One of the things I touched on was the fact that downtown Detroit is palpably safer today because of the private security forces employed by Dan Gilbert and his businesses and properties that are spread throughout the city-center. According to the Detroit Free Press, as of last year there were around 500 cameras and nearly 200 security guards contracted to patrol the 80+ businesses and retail properties controlled by Gilbert’s coordinating company, Rock Ventures. They operate alongside security contractors hired by numerous other private businesses.

The result? The downtown area projects a distinct feeling of safety and security that had long eluded Detroit. To be sure, the private security firms like Securitas USA are hired solely to protect the campuses and buildings owned by the company who contracted them, but everyone in downtown benefits as a result. As the historically high crime rates of the city over the past 40 odd years show, the Detroit Police Department has long been overstretched and unable to cope with patrolling a sprawling urban area with less than half of the residents (taxpayers) of the city’s heyday.

So as often occurs, wherever a free market opportunity is allowed to encroach on statist turf, it does so—and flourished at that. But despite what is, by all accounts, a shining example of private entities stepping in to successfully fill the gaps left by government inefficiency, the statist critics aren’t sold. Ever weary of voluntary interactions aimed towards the benefit of all involved, the statists cry out in panic at first site of the word private. To them this word has an ominous ring to it always and forever implies exploitation or some sinister back-door plotting.

In a Free Press article I came across recently from about a year ago titled Who’s Watching The Detroit Watchmen?, the author echoes the concerns often voiced about private entities in general, and private security in particular. Though offering conciliatory statements about how the downtown area does indeed feel safer and companies have a responsibility to protect their workers, the author seemed very concerned about the security contractors not being “publicly accountable.”

The author’s uneasiness, especially with regards to Gilbert’s hired security, arises from the fact that Quicken’s and Rock’s holdings are spread throughout the downtown area and so, in the author’s words, “corporate security is actively patrolling public spaces, using tactics more in line with public police departments than private security guards.” And she claims that, though the private security is increasingly patrolling “public spaces”, they are not as accountable or as forthcoming with information regarding tactics or methods as a public police force.

But like most fears of market solutions, these concerns are unfounded and stem from having an idealized world view based tepidly in reality. Because the truth is public police forces can scarcely be held as accountable. From scandals, to shootings, to corruption cases we historically and presently see that the biggest obstacle police forces have is to reign in the sense of power and unaccountability that many of their departments and officers have. In fact the same liberal progressive statists that cower before the term private are probably the first to join an anti-police protest.

If you contrast the monopoly and endlessly-funded public police forces with the voluntarily-funded and highly competitive market of private security firms, what it means to truly be accountable is starkly clear. Whereas public police are accountable to a few elected officials and maybe an oversight committee, private police are accountable to whoever they are contracted by, the customers of the entity that hired them, and the multitude of rival firms seeking to take over their business.

What keeps private firms of all types honest is their dependency on happy customers to stay in business. If customers consistently encountered the rude, cocky, and power-high attitude so often encountered with public police with private police, that firm will likely keep losing contracts until they are forced to close their doors. The need to earn your funding from voluntarily giving customers is all the accountability needed. No oversight committee required. If a business hires a shoddy, incompetent security service they’ll soon be losing customers and, in turn, soon be looking for new security. Public police have guaranteed funding and so are disconnected from the market—and the need to make their customers happy. It’s that simple.

So the moral of the story and the Detroit example? Celebrate the holes left by the state and allow the market to do what it does best; fulfill the needs and wants of everyone involved. Be excited that entrepreneurs and businesses are making you less dependent on everything from overstretched police forces to unpleasant taxi monopolies to slow mail service. The incentive and consequence structures created spontaneously by the free market make at least one thing clear: private solutions are always the answer.

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