Let’s Salvage Competition
When I was a kid in the late 1970s, we had one telephone in our house. It was a drab green color and had a very long chord to allot the user some freedom to roam into the living room or dining room if they were adventurous. We could only talk to grandparents a state away for just a few seconds because the call was so expensive for a blue-collar family. Our aunt in Montana got to say “hello” once a year. This was life under the regime of a private monopoly mandated and regulated by the government.
Fast forward 40 years when the days of Ma Bell are a distant, not-so-fond memory, when we have a multitude of choices for communications, digital, cell phone, and yes even a home phone. All of that can be delivered by a variety of sources — so many and at prices that people are able to talk for hours to relatives a thousand miles away.
A contributor to this leap into the future was the Reagan Administration’s decision to break up the government-supported monopoly of telephone services.
I bring this market miracle to mind as an example of what can be achieved as the city I serve as a councilman suffers through the horrors of government-planned services through a monopoly provider. Regular followers of Fort Wayne politics may remember a resolution (R-19-07-36) I submitted in mid-2019 that called on the city administration to do away with the ordinance that prohibits single-family residential properties from privately contracting for garbage collection, thus breaking up a monopoly.
This prompted wailing and gnashing of teeth among Democrats and Republicans alike because it threatened to relinquish the control of a particular market. (If there is one thing politicians love, it’s the appearance of control.) There were lots of heckles about the inability of people to handle this mundane task without government assistance. Most politicians believe history started today, thus they didn’t remember that as recently as 2006 when thousands of Aboite Township residents were not annexed into the city yet. The majority of these homeowners had contracted with garbage haulers of their choice through their neighborhood associations.
A feature of the current mess is the contractor was selected by a process dictated by state law that requires municipalities to award the lowest bidder these types of contracts. This ensured that the winner has locked in a rate of revenue that has proven to be insufficient to meet shifting obligations (labor, gas, parts, maintenance) in an environment of shortages and rising prices. Their contract locked in their demise, and to make up for these issues the city has hired additional drivers and rented trucks outside the contract to try to keep the heaps from piling further.
One of the beauties of the natural order (as opposed to arrangements coerced by the state) is the benefits that accrue in the way of “portfolio diversity of the whole orchestrated by the particulars” — in our example, garbage contracts. The city government, however, enters into a single contract with a single provider for all the residents of single-family homes (apartments and commercial properties are free to contract as they like.) A failure of that single contractor affects 80,000 households.
In contrast, in a market-based arrangement there would be many contractors — and if any were to fail, neighborhood leaders could just hire another of among the many. Competition would drive better customer experiences, technological advances and maintain prices that satisfy the customer’s desire for economy and the vendors’ ability to meet their obligations.
As people who claim to live in the Land of the Free, we should be brave enough to allow market forces to work to our advantage, to help pick up the garbage.