The Milwaukee Public Museum is again on the verge of collapse. Its demise illustrates that privatization is not the panacea that free market ideologues claim.
For generations this community’s world renowned museum, the first to create panoramas and owner of world class collections, was managed and staffed by dedicated public employees. It was owned by the City until 1976 when it was sold to the County.
But in the early 1990’s, during the heyday of free market fundamentalism, the museum was privatized and control ceded to a private, non-profit board of directors. Privatization advocates argued, without any evidence, that: “Donors will give more if it is private.”
By 2005 the museum was millions of dollars in debt. The rescue plan, including laying off one third of the museum’s employees,cutting wages and selling off assets, failed to confront the failure of privatization. museums, schools and airports to name just a few are public goods that require public ownership and support if they are to serve and be accountable to their communities.
Now the museum is considering bankruptcy. The source of the current dilemma, the Journal reports, is that:” … major donors need assurances that the museum has put its financial house in order for the long haul before they'll commit to major gifts to prop up the museum….” Ironically, the donor rational has come full circle!
The museum’s management was privatized because corporate leaders and public officials were unwilling to address the institution’s economic needs. They opted, instead, for a change in governance. Privatization promised to solve the Museum’s financial problems without sacrifice. County officials drank the ideology because it allowed them to avoid making any tough economic choices such as raising taxes or shifting resources with the attendant political consequences.
The volunteer public board, composed of prominent CEO’s from many of the area’s leading corporations and law firms, was asleep at the switch. The Journal’s Whitney Gould called them: “potted plants.” They allowed the finance and audit committees of the museum to merge which is like allowing the fox to guard the chicken coup. They allowed endowment dollars to be used as operating funds. They didn’t hold monthly meetings, frequently missed the meetings that were held and generally failed to provide active leadership or oversight! According to Martin Zuckerman, a certified public accountant who specializes in non-profit organizations: "A lot of people join (non-profit) boards for prestige rather than to work.”
This is a cautionary tale for those like the Milwaukee Metropolitan Chamber of Commerce (MMAC), who think CEOs should be guaranteed seats on the Milwaukee Area Technical College (MATC) board.
Contrast the Museum’s current plight to Milwaukee Public television (MPTV). In the late 1990’s its Executive Director, a handful of County Board members, and some corporate leaders urged the college to transfer control of its licenses to a private, non-profit board just as the Museum had. They argued that it would make it easier to generate funds. Sound familiar?
The MATC district board held public hearings. Frank Zeidler, who had unsuccessfully opposed the museum’s privatization, led the fight. The college decided to maintain ownership and control of the licenses. Today, MPTV, in contrast to the museum, is well managed and financially stable. It led the nation in digitalizing and is recognized for innovative local programming from Black Nouveau and Adelante to the Making of Milwaukee and Tracks Ahead.
The local and national landscape is littered with the carcasses of failed privatization efforts. From Milwaukee’s Public Museum to Walter Reed, where the maintenance had been contracted to a subsidiary of Halliburton, to the failed U.S health system (the only privatized healthcare system among industrial democracies), the failure of privatization is evident.
The museum crashed on the false promises of privatization. That’s a cautionary tale as the County discusses privatizing the airport!