By now many of you are likely aware of the contaminated water fiasco in Flint, Michigan that has apparently resulted in 77 cases of Legionnaire’s disease (and 10 deaths). It is indeed a tragedy of shattered trust. It is also darkly humorous to witness the acolytes of Statism (i.e. the faith that The State can protect us from all harms and correct all wrongs) are apoplectically flummoxed as to how such a thing could happen: “But, but, the state is supposed to protect us from the depredations of cost cutting profiteers!” The state is supposedly there to protect the weakest among us – so how ironic that those most harmed by this incident is the predominantly poor population of Flint. How could such a thing have happened? The problem is structural. Private ownership weeds out failure; public ownership protects it.
Now one might argue that since there are thousands of municipal water systems across the country that operate without any problems this is simply a fluke, an outlier and is not indicative of any sort of problem with government run water systems. That is a dangerous premise. It’s like arguing that one doesn’t need a seat belt because they’ve never been in an accident. The problem is not that random groups of people do not know how to provide clean water. The problem is that humans are imperfect and eventually a perfect storm of errors will accumulate until a calamity results. This can happen in both public and private entities. It is the response to the calamitous event that distinguishes public from private entities.
First, private entities already have a natural incentive to prevent such events from occurring because the owners and the insurers are financially on the hook for problems. Problems are costly to fix and often results in expensive lawsuits, so prevention is the best medicine. Public entities have no such negative feedback. No one is financially liable. Everybody plays a part in creating the mess, but no one is actually responsible. Worst case someone might lose their job or the town is fined by the EPA (that is, ironically the taxpayers – the customers so harmed – end up being financially on the hook!) Oh well. Losing your job is not nearly the disincentive to preventing harm as would be losing hundreds of thousands if not millions of your own dollars.
Secondly, if something does still occur despite best efforts to prevent it, private entities have a natural incentive to fix it quickly as possible in order to contain the potential financial damage. It is the very greed that so many on the left decry that actually aligns the incentives of the owners with those of the customer. Keeping your customers happy, safe, and healthy is beneficial to the bottom line – otherwise you get sued or lose customers. But as we have seen in the Flint case, the response of the ruling class is more akin to a Three Stooges skit, with each part of that system poking the other one in the blame game – all too busy fighting with each other in order to avoid responsibility than focused on actually fixing the problem.
Lastly, no matter what happens, the public system remains in place. The public can’t “fire” them, they can’t choose another provider. They have no choice but to continue buying a product from a provider that has proven to be unreliable. No is allowed to come in and compete with them (that would be illegal). In many cases you can’t even legally dig your own well – you are obligated to buy from the local utility. With a private system one has options. You can put in your own well. A competitor could come in and “steal” customers – or perhaps the old company is sued into bankruptcy and completely new ownership takes over.
In closing I would ask you to imagine the following: Imagine that the standard in this country was that all water was provided by private entities. Now imagine that the same thing that happened in Flint happened but with a private provider. Would there not be an instant outcry and demand that the government take these systems over, or that they must be regulated for safety? Now realize that the reality today is the exact opposite. And what do we hear? Cries to “privatize” our water systems in order to allow market forces to naturally regulate the delivery safe water? No, instead we get self-righteous politicians (Clinton et.al.) trying to frame this event as some sort of partisan one-ups-man ship that endeavors to prove that the only reason this happened is evil Republicans hate “poor black people”. Well I guess they must hate themselves since it was their own city council (composed of Democrats) who signed off on the plan that ultimately led to the problem.
The closing irony here is that despite long being accused of selfishness and greed, it is the private market that has come (quickly) to the rescue in Flint. Walmart, Coca-Cola, and others have provided (for free) bottled water to the residents. Why are they doing this? Perhaps they genuinely want to help. Or perhaps they see it as a grand PR opportunity to earn some loyal customers. Even if the latter it doesn’t matter – if “greed” compels people to help their fellow man, then I say bring on the greed!