Trends

GARBAGE FOR PROFIT

There is a growing realization of the unsuitability of government bureaucracies for performing public service tasks in our cities. Nowhere is the dysfunctional nature of government services more evident than in New York City, which lurches from crisis to crisis with increasing speed. The focus of much recent attention in New York is the problem of garbage collection. A recent front-page article in the NEW YORK TIMES reported the results of a study by the office of Deputy Mayor-City Administrator Timothy Costello analyzing the city's Sanitation Department. The report, noting that private garbage haulers can collect refuse at a total cost of $17.50 a ton—one-third of the Sanitation Department's cost—recommended that at least 10% of the Department's workload be immediately contracted out to private firms. "The Department of Sanitation should gradually be reduced in size and scope, and the private cartage industry be given the opportunity to expand," the report stated.

The TIMES story went on to document the incredible inefficiency built into the way the Sanitation Department functions. When a new line of trucks was phased in, for example, no one considered instituting a preventive maintenance program. As a result, an average of 35 out of every 100 trucks are out of service at any given time. The 35% "down time" compares with 5% for private carting firms, according to the study. "Private carting firms are generally well-managed (with close supervision of operations) unionized and have modern equipment that they maintain in good working order," the study noted.

Since the TIMES story, the call for reprivatizing garbage collection has become a chorus. The respected 89-year-old City Club recently suggested turning over a number of government functions to private enterprise, including "some sanitation services" and much of the city's public works construction. And in July Nick Kazan wrote a brilliant article in NEW YORK magazine describing San Francisco's completely private enterprise garbage collection and disposal system. Kazan pointed out that the total cost to San Francisco residents for removing 2,000 tons of refuse a day is about $20 million annually, including both garbage collection fees and the city's sanitation enforcement costs. If the same type of private operations prevailed in New York, with 8,000 tons per day, the cost would be around $80 million; the Sanitation Department, however, has a budget of $391 million! Not only that, but since many restaurants, hotels, and other businesses cannot put up with the Department's unreliable service, many private firms are also in business, bringing the total cost in New York to an estimated $700 million per year. Kazan summed up his description by noting that "…San Francisco's refuse collection is entirely private. It works like a charm. The lesson should not be lost on New York."

SOURCES:
• "City May Use Private Refuse Haulers," NEW YORK TIMES, 6 April 1971.
• "City Club Calls for Overhauling of Government Here," NEW YORK TIMES, 2 May 1971.
• "Can Free Enterprise Speed Up Our Garbage Collection?" Nick Kazan, NEW YORK, 12 July 1971, pp. 41-43.

SHORT ITEMS

• Ralph Nader strikes again—right on target this time. His Aviation Consumer Action Project is protesting the price-fixing practices of the International Air Transport Association (IATA), the international goverment-backed aviation cartel. As libertarian economists have long maintained [see Rod Manis' article, "Monopoly" in this issue—Editor], cartels are unstable unless backed up by government force. In this regard, it is interesting to note that the CAB is leading the fight to preserve the cartel in the face of the emergence of competition over youth fares. Nader's group is specifically calling the CAB to task for complicity in price-fixing and for acting in secrecy with the IATA and member airlines. (AVIATION WEEK, 7 June 1971, p. 31)

• NSPE breaks ranks—and coercive entry restrictions in engineering receives a setback. For many years the National Society of Professional Engineers has been the leading U.S. advocate of compulsory licensing of engineers. State legislatures complied with this demand early in the century by requiring licensing for much of what constituted engineering at the time (building design, roadways and bridges, etc.). Fortunately, the laws were very narrowly phrased ("concrete-bound") so that the newer engineering fields—electrical, electronic, aeronautic, chemical, automotive, etc.—were not covered when they came into existence, and very few engineers in these fields are licensed. After many years of pushing for universal licensing, NSPE, although not giving up, has opened its membership to non-licensed engineers for the first time. The presence of a large number of non-licensed members may go a long way to change NSPE's character and prevent it from becoming a partner of the State like the AMA. (MECHANICAL ENGINEERING, October 1970, p. 84)

• Walter Heller advocating the free market? Surprisingly enough, yes. The neo-Keynesian former chairman of the Council of Economic Advisors (under LBJ) has taken a strong free-market stand on several recent issues, including his opposition to the SST and the Lockheed loan guarantee. Less well noticed in the controversy surrounding these popular issues was another Heller pronouncement, this time concerning ways to combat pollution. Pointing out that the use of resources is not free, Heller said that the price must be paid for a cleaner environment. The best approach would be to include such a use charge in the existing pricing system, rather than imposing "chaotic governmental regulation," Dr. Heller told a Resources for the Future symposium. Dr. Heller, who has been there, ought to know. (CHEMICAL AND ENGINEERING NEWS, 26 April 1971, p. 11)

• Pennsylvania's new income tax has been declared unconstitutional. In an unprecedented ruling, the Pennsylvania Supreme Court ruled that the graduated feature of the tax, under which those with higher incomes were robbed of a bigger percentage than those with lower incomes, violated a constitutional requirement that violated a constitutional requirement that all taxes be uniform in structure. The Court's decision left the nation's third-largest state literally bankrupt for the second time this year! Not only has the state no money to pay salaries, but also it must pay back the $135 million collected illegally under the income tax law, which it already spent. ("Court Voids New Tax in Pennsylvania," UPI, 25 June 1971)