Bruce Schneier wrote a thought provoking piece here Private Police

I don't entirely agree with his conclusions. Law Enforcement has been a government function for quite some time, and has met with some mixed results.

Mr. Schneier groups security guards, police, and private military contractors into the same pool, so for the sake of simplification let us say there are two armed groups, one sponsored by the state and one sponsored by private corporations. Ultimately in many cases the private corporations are hired or sponsored by the state as well.

In his piece, Mr. Schneier identifies some cases of private guards abusing their position. Fair enough. Lets look at the proportion of abuses between state guards and private. I don't know if there are any good statistics on private (or public) security, but the DOJ seem to think the police are doing a pretty good job: 21% of the population had contact with the police, and only 1% of that contact involved the use of force.

There is a lot more private security out there than there is public. If public security abuse was too far out of line with these statistics it would be getting the oversight that law enforcement does (i.e. citizens oversight committees, legislative scrutiny, and the like.)

One major difference between public and private security is the legal process surrounding use of force. The public police have special protections not available to private security or citizens regarding their use of force. If you shoot a criminal in your home you immediately enter the legal system, but a police officer goes through a shooting review board first (sometimes made up entirely of fellow police officers) and may never enter the legal system.

A private security guard is immediately liable to criminal and civil penalties, where a police officer has an extra margin of safety. A private security company that operates outside the law will be at minimum sued out of business, and at a maximum have it's agents and corporate officers jailed.

If you look at the corruption scandals of the New Orleans Police Department, and the Los Angeles Police Department we see that corruption and abuse is a totally different situation when it enjoys state sponsorship.

If you are the security customer, you want your interests protected. Replacing private security with public law enforcement is not feasible. I am not certain that the reverse is true. Any security force exists to protect the interests of their customer. The concern is that they will violate the rights of those who are not their customers without an appropriate set of checks and balances. The public police have greater protection and less accountability than corporations.

I am not anti-police. I think that by far the most common case is that police officers are honest and do a difficult job well. That just doesn't mean that aren't better alternatives.