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Cronyism, Not Capitalism, the Real Cause of Olympic Security Mess

The opinions expressed by columnists are their own and do not necessarily represent the views of
It's hip these days for everyone from world leaders to the Occupy Wall Street crowd to attack free-market, limited-government capitalism as wild and in need of control because it's supposedly the cause of the world economic collapse. This is a myth. It's too much government-facilitated cronyism that's causing the mayhem wrongfully attributed to capitalism. This trend now continues in the context of the London Olympics and its private security outsourcing.

Security firm G4S fell drastically short of its contractual commitments to staff the Games with 10,000 security personnel, requiring the military to step in with 3,500 troops to make up the shortfall. British newspaper reports noted that the firm's CEO, Nick Buckles, was initially unsure when asked if all of the temporary security staffers for the Games spoke English, and the Daily Mail sent a reporter undercover to illustrate just how low the hiring bar had been set. "During my day's training I witnessed the absolute administrative chaos and the poor calibre of candidates who could hardly fill out basic forms, let alone stay awake during the day," wrote Daily Mail reporter Ryan Kisiel.

Anyone following the gory details and the subsequent parliamentary grilling of Buckles -- who agreed that it was a "humiliating shambles" -- could easily be left with the impression that, given the low wages offered and the lax scrutiny of new hires, G4S's Olympic "security" squad was designed, at best, for providing merely the first layer of cushioning in the event that, heaven forbid, a bomb were to go off.

Private-sector capitalism is now once again in the firing line. But it was, as usual, precisely the opposite of the free market that created the problem. Somehow, G4S was awarded a sole-source contract by the organizing committee, chaired by a former Goldman Sachs executive, in a process where little transparency exists.

Clint Elliott, chief executive of the U.K.'s National Association of Retired Police Officers, provided some insight into the culture of opacity surrounding these matters, telling the BBC, "G4S claim they contacted us but they never did. What G4S tend to do is rely on the old boys' network and word of mouth to recruit people from our organization ..."

That phrase, "old boys' network," comes up again and again in various permutations in supposedly free-market situations -- and almost always in the context of some kind of massive foul-up. It's difficult not to wonder if perhaps there's a causative link. (If I'm wrong about this, it's yet to be proven.)

Frankly, I've about had it with the "old boys" -- not as a woman, but as a true capitalist and defender of a free, unfettered and genuinely competitive market. How about the old boys getting their hands off each other's backs and behinds and getting onto an even playing field with everyone else? Because the defense of the very principles of capitalism itself is much more important than the defense of wealth -- and G4S has managed to put both at risk.

Free-market capitalism didn't fail the Olympics. Rather, a lack thereof appears to be the real problem. Putting hundreds of millions of dollars in a single contractor's basket without clear and transparent justification for doing so, particularly if the contractor hadn't displayed an overwhelming track record of excellence vis-à-vis its competition -- and G4S hasn't exactly bolstered its case with the current state of affairs -- was a recipe for disaster. Choosing transparency early often keeps it from being imposed later. The law of natural selection will always prevail in the free market. The only real question is how many "old boys" it will eventually take out with it.

And for the many exploiting this window of opportunity by calling for less privatization and more government control over security and other matters, one need only point to the government border officers at Heathrow, who have reportedly let several known terror suspects on the Home Office watch list into the country just in time for the Games.

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