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Jesse Walker finds that in one Georgia town, "privatization" may just mean changing the logos on the garbage trucks.
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Exactly right on the money regarding "privatization." When people say "privatization," they're not really looking for free enterprise, but a state monopoly, a captive market rounded up and delivered to them at gunpoint by allies in the government.
I am much more impressed with cities that permit more than one cable provider or more than one phone service or, for that matter, in my own town's case, a choice of half-a-dozen garbage haulers. -
Drawing upon my own experience, where I was able to enjoy just such a situation with trash hauling, two comments. First, there was the typical "nosy neighbor" types in the subdivision trying to develop their own version of a monopoly, in that they wanted to bid out based on the entire group. Thankfully that didn't happen, but given the demographic change in the area of late (I moved about 7 years ago, but I have friends who tell me what's going on there now) I would suspect that it's probably now passed, as the people that believe "we're the government, we're here to help" crowd have moved in.
Second issue, more troubling, was the fact that the original trash pickup was paid for out of tax revenues. When it was allowed to go elsewhere, there never was a corresponding decrease for services. I think they used Federal Accounting rules for this, counting a tax "cut" as the lack of an increase. -
So is Sandy Springs making a recipe for disaster?
Or will it will likely become model city for both cost and quality of services? -
Sounds a little like where I live -- Spokane Valley, WA.
- Incorporated within the last five years mainly over concerns about where tax revenue was going.
- All "city" services provided by the county.
- Active code enforcement (Spokane Valley's is actually outsourced to a law firm in Idaho).
I just don't know what to make of this... -
Re: the busybodyism
This is always an interesting question around here, because libertarians seem to be in favor of local over distant government, of voluntarily choosing and forming communities with the level of government wanted, but really, at what level of government is a tyranny of the majority most acceptable? For my taste, none. -
Maybe Sandy Springs has looked at California, the political power its public employee unions wield, the budget-busting long-term benefits required to appease them, and said, "Anything but that."
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CALPERS MILLIONAIRE-
That's a fair point. I think Jesse Walker's point is simply that we should not swoon the way some libertarians do (not accusing you) when hearing the word "privatization." It may be better than California, but that's not necessarily saying much.
In general, I'm wary of any proposal (especially at the local level) that's supposedly going to be capitalism run rampant. Usually it's just the opposite. In Santa Barbara, the unincorporated suburb of Goleta had been trying to incorporate for decades. It had been rejected by the voters in the past, but the movement never died. Finally the gerrymandered some city limits and got it to pass.
In the runup to the vote, a local activist (nice guy, I've hung out with him a couple times) warned in an op-ed that the developers would take control of Goleta and build on every square inch of green space. Although he opposed cityhood for Goleta, he ran for city council anyway so that if it happened the "right people" would be in charge. (The vote for the new city council was held concurrent with the cityhood vote, so that there would be a government in place to watch over the good people of Goleta right away.)
Well, guess what the first action of the Goleta city council was? That's right, they put a moratorium on all new construction. It was eventually lifted, but only grudgingly.
So much for run away capitalism. -
Oh, the guy that I knew wasn't on the city council. The election was won by a slate of cityhood boosters whom he opposed. The alleged boosters of unchecked capitalism were the ones who passed a moratorium on construction.
I didn't live in the proposed city limits, so I couldn't vote on the matter. If I had, I would have voted for the alleged boosters of unlimited development, and then I would have been burned. As a student paying astronomical rents, I was all in favor of anything that would increase the supply of housing and lower the price. -
Market failure! Market failure! You guys see market failure everywhere! There is more than at least two cities and at least two private service providers. Ergo, by definition it is a market on both sides. Maybe you should just get those junker out of your yard, put out your cigarette, pay the traffic camera and quit yer bellyachin'. You're just jealous of the people who live clean healthy and safe.
How'd I do with my learnin' there, J. (not Julian)? -
Jesse,
Excellent article. Not only did you clearly make the point that privatization does not equal free market, but you also showed why, as long as we're going to have to deal with states (an organization with the monopoly on providing government services in a geographic area), the best outcome is one where the state is extremely limited geographically.
It'll be interesting to see if anyone can provide a meaningful critique... -
The critique is that Jesse only seems to see market failure when a government is somehow involved. The types of problems Jesse refer to happen all kinds of places, at the HMO, on the fm radio, on the shelves of Walmart. Jesse is headed in the right direction, but he needs to apprehend that the minor league oppression he perceives here can happen without gov't intervention at all. He is sittin' on teh iceberg's tip, like when Gilbert Gottfried sat on Whoppee in Titey.
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To clarify:
- Not Jennifer was addressing Jennifer (frequent poster here) who is not on this thread yet, but has difficulty acknowledging market failures generally.
- Dave W. was addressing Jesse Walker, who is kinda beginning to get it. -
Dave W.,
Are you reading the actual article or just the article in your head? The piece never mentions market failure. -
...Jennifer (frequent poster here) who is not on this thread yet, but has difficulty acknowledging market failures generally.
Jennifer of "serf" fame? Jennifer who gets attacked in the Walmart threads?
Jennifer may not agree with you on everything, but she's hardly of the "markets can do no wrong" school. That may reflect well on her or poorly on her, depending on one's opinions, but let's at least characterize her honestly. -
T. I know. It was some mild Jennifer baiting. I work on her for largely the same reasons I work on you: (1) because you guys have smart, valuable things to teach me; and (2) obvious open mindedness on y'alls parts.
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Nice work Jesse, I'd say you nailed it on every point. Knowing that when my representatives spend my money it goes into a private citizen's pocket, doesn't make me feel much better. (Perhaps a little better, as the corruption seems more open and honest) It's also true that I get less libertarian as the government in question gets more local (ultimately, my house is ruled by a tyrannical despot). I use to debate this with a fellow Libertarian who said "I'm no less oppressed because the tyranny is local". But I agree with you there is market forces at work in where people choose to live.
I see "privatization" cited more as a fallacious assault on free markets (look! The private sector is even worse!) than embraced by self identified libertarians. Corporate welfare is where I see more libertarians missing the doughnut. The anti-market crowd is so aligned against corporations, especially multi-national corporations, that jumping to their defense is a knee-jerk reaction. However it's important to keep in mind that we are opposed to government expanding its regulatory regime and disrupting the market by picking winners and losers. Big corporations are inevitably the beneficiaries of such expansion and disruption.
I've wandered off topic, but I think I can pull it all together. As libertarians we are champions of free markets. We should remember that beyond the fact that market forces yield superior results, they are to be preferred in any case simply because they are free. We must also remember that private profit does not a free market make. "Privatization", and "deregulation" are too often used as camouflage for "racketeering", and our opponents have made much hay by misidentifying these as "market failures". -
Dave, the only "market failure" I can't recognize is the market failure that deserves sole responsibility for your lack of musical fame.
Back on to the original topic: Jesse's point, about how mere privatization is not an open market, may go a long way toward explaining why water privatization in third world countries (and apparently some American cities) has been such an abysmal failure, with higher prices and lower quality than before--because it's the same monopoly as ever, only a monopoly based on the profit motive rather than based on the idea that a vital service should be affordable and available to all. -
Warren:
do you think there is such a thing as market failure (in the private sector I mean)? If so, how would you recognize such a market failure? -
abysmal failure, with higher prices and lower quality than before--because it's the same monopoly as ever, only a monopoly based on the profit motive rather than based on the idea that a vital service should be affordable and available to all.
I find this to be a compelling explanation of the super successful goth band Evanescence. Make sure to check'em out if ya luv the goth. -
Dave W,
The market is. I guess I think that it can fail in the same way the weather can fail, but it's fundamentally different as it consist entirely of human interaction. One can say it failed when bad things happen, but it is still preferable to the worse things that would have happened otherwise. Furthermore, even if the state could obtain "better results" than the market, I would still prefer a free market for the same reasons I would prefer freedom to slavery even if it came with a better standard of living. -
Jennifer,
Are you familiar with Fredrik Segerfeldt? Are your views in accord with his or do you disagree? -
Warren--I'm not familiar with the man and I can't watch that video right now because I'm at work. (Or rather, "work.") I recall reading about how Bechtel took over the water in some South American country and it was a complete mess--rates soared and many people who previously had water no longer could afford it. And I remember a similar problem in some American city--I want to say "Atlanta" but I'm not positive--in order to maximize profits the newly private water company simply kept rates tha same, fired people and made no upgrades. And since they still had a monopoly, peole couldn't even choose another water company, so they had to deal with things like "brown water days" wherein they couldn't use tap water for drinking, cooking, washing or bathing.
Privatization without competition won't help, and will often make matters worse. -
Jennifer,
I'm at "work" too. The video is months old and I don't remember it so well. The other guy was from Public Citizen, and gave the author a hard time. But I can't remember if he responded with something like "the problems here here and here are because it isn't really a free market" or more like "even there there and there are better off because of private companies". -
The market is. I guess I think that it can fail in the same way the weather can fail, but it's fundamentally different as it consist entirely of human interaction. One can say it failed when bad things happen, but it is still preferable to the worse things that would have happened otherwise. Furthermore, even if the state could obtain "better results" than the market, I would still prefer a free market for the same reasons I would prefer freedom to slavery even if it came with a better standard of living.
So let's say I buy widgets at the store on a regular basis and I spend a lot of money on them because I am fond of widgets and I need them. How do I know if the widget market has failed?
B4 you answer, Warren, let me just pre-empt your first response: in this hypothetical, we first examine the widget market for gov't intervention (eg, taxes on the widget business, frivolous tort suits, osha regs, etc, etc). In this hypothetical we determine that gov't intervention isn't a problem: the regs are minimal and sensible, the tort suits are minimal and non-frivolous, etc., etc. So, if there is indeed market failure in the widget business, that failure would not be the fault of the gov't.
So, to restate the question after this important qualification: how should I recognize market failure (or success!) in the widget business? -
Jennifer: Bolivia. You're thinking of Bolivia, which is in the news recently as the people have rebelled completely against free enterprise, at least partly because they've been sold state capitalism as free enterprise.
In the case you cite, part of Bechtel's contract stated that the city would forbid the people to collect rain water that dripped off the roofs of their corrugated-steel houses. That's right, the city promised Bechtel that they would send jackbooted bully boys into the shanty towns to tip over rain barrels for them. This was the spark that set off weeks of rioting until, by the end of it, the army and the police refused to leave their barracks and the government was forced to tell Bechtel that they were voiding the contract. -
Dave,
I'd have to say, that if there is a free market in widgets then it hasn't failed