Currently in the U.S., municipalities own water and sewer systems.
I was asked how an an-cap society would treat these systems - in other words, how would someone go about privatizing the physical pipes and conduits that run onto private property?
The problem seems to be that you cant currently have competition in the sector as neighbors have to use the same water/sewer systems.
Anyone have this one figured out yet? My answer is that so long as the principals were there, the market would figure it out.
For the sake of argument rule out the possibility of rainwater harvesting.
Privatize the municipalities.
by the way this is the same question as this question asked today, this question asked yesterday, and the same question that gets asked every day.
edit: also this question.
The fallacies of intellectual communism, a compilation - On the nature of power
Edit: Actually I havent found anything that describes how to introduce competition to a single municipality. Yes, you can privatize the municipality but the users are still incumbent upon a single provider. It's not really reasonable to
Also, most of the articles have to do with privatization of current municipalities and new communities rather than existing infrastrucutre.
So I suppose a better question is - how could you introduce specifically water and sewer competition to a place like New York City?
AndrewKemendo: Well, if someone would be so kind as to delete this then it would me much obliged.
Well, if someone would be so kind as to delete this then it would me much obliged.
Personally I think it should be stickied, given that it comes up so often.
Introducing these things into cities, especially enormous ones like NYC, is kind of a difficult subject. You are essentially entering a gunfight, armed only with a knife. The handicap is, that the current infrastructure is due in large part to the existence of the monopolistic suppliers and the State's intervention. It's not somthing I think you could undo very easily, even though the current systems are theoretically suboptimal, they represent an enormous sunk cost.
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David Z
"The issue is always the same, the government or the market. There is no third solution."
AndrewKemendo: Edit: Actually I havent found anything that describes how to introduce competition to a single municipality. Yes, you can privatize the municipality but the users are still incumbent upon a single provider. It's not really reasonable to Also, most of the articles have to do with privatization of current municipalities and new communities rather than existing infrastrucutre. So I suppose a better question is - how could you introduce specifically water and sewer competition to a place like New York City?
The question makes no sense. It's like asking, how do I introduce water and sewer competition in my house?
Exactly.
Makes perfect sense to me - albeit taken to its illgical extent.
So here we are, the state just collapsed and a private person came and bought the wastewater treatment plant. it is in his best interest to keep water flowing and customers happy - of course, we know this. But we also know people don't behave in their best interest. So he can raise prices equal to or just below our marginal benefit and essentially hold the people captive to an unreasonable water price.
Since its not reasonable to run entirely new water lines, how would you introduce competition into this market?
I recognize that water isnt a right, however it is a neccessity and people will demand a reasonable way to get it without going bankrupt.
Why would privitizing the sewers be any more troublesome than privatizing natural gas, electricity or the phonelines?
AndrewKemendo: Exactly. Makes perfect sense to me - albeit taken to its illgical extent. So here we are, the state just collapsed and a private person came and bought the wastewater treatment plant. it is in his best interest to keep water flowing and customers happy - of course, we know this. But we also know people don't behave in their best interest. So he can raise prices equal to or just below our marginal benefit and essentially hold the people captive to an unreasonable water price. Since its not reasonable to run entirely new water lines, how would you introduce competition into this market? I recognize that water isnt a right, however it is a neccessity and people will demand a reasonable way to get it without going bankrupt.
I would just buy him out.
Once again the question makes no sense. What if the state collapses and starts privatizing the windows of public buildings? Do you introduce window competition, or do you just buy back the windows in a manner that causes as little damage as possible?
AndrewKemendo: So here we are, the state just collapsed and a private person came and bought the wastewater treatment plant. it is in his best interest to keep water flowing and customers happy - of course, we know this. But we also know people don't behave in their best interest. So he can raise prices equal to or just below our marginal benefit and essentially hold the people captive to an unreasonable water price.
They move elsewhere, to a place in which the provision of this particular good is better. What you're essentially saying is "what if the state collapsed and people found themselves in an area populated by individuals they didn't like?". Only, the state hasn't concerned itself with the task of protecting people from those they don't like to such a great extent.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
Instead of selling the pipes to Greedy Capitalist Ltd., the tax-paying citizens of a city could also set up a non-profit self-organizing distribution company to make sure that infrastructure built by their tax dollars is used according to their needs and demands.
Let me try to explain my answer to the original post.
You think there is a problem becuase once a single person controls all the water lines, he can overcharge because it would be very difficult for someone else to build new lines?
that is true, partially
You see, what you are forgetting is that each city is different, and woudl be competing for customers. The only way they can get these customers is by offering a better deal then the other city. So, there is competition between cities.
The way i imagine it, is that a company or something would own an entire city or community (land wise). And then he rents out land to people. Now in this system it is only benificial for that company to provide water lines at a cheap cost. Becuase if another company can house you for cheaper he will take all your residents.
So you see, your problem is that you are forgetting that there is not ONE city, but many that create the competition you are looking for.
hope this helps
If the formerly public water company raises its prices enough, it will open the door for another company to get their water into that city in a less expensive manner. There would be a myriad of independetly-owned water transportation companies ready to take water to every neighborhood and price local company down. If that is still very expensive, technology could emerge to help people recycle their water. That's just off the top of my head. I'm no water entrepreneur, but without the monopoly around, hundreds of such entrepreneurs would emerge to solve the problem.
Pro Christo et Libertate integre!
Water and sewer systems are what is commonly known as natural monopolies, that is, competition is extremely difficult due to the nature of the service they provide. They act over a given territory, but people always have the freedom to change the place they live. In fact, when an individual chooses a place to live, he always takes into consideration several aspects of it, like taxes, crime rates, beautifulness of the neighbourhood, and those "public services" prices will also take part in that consideration.It is true he can rise prices below your marginal benefit, but that is the best the market can offer (at least with the available technology). Also consider that Ludwig Von Mises said in Socialism: he stated that natural resources monopolies (like carbon or oil, but water also applies) can raise prices more than they would under a competitive market, but in return they are limiting its consumption, which is beneficial to the whole community, as they are valiable resources whicn are not renewable, or very expensive to renew/recycle.
I recognize that there are alternatives - to include moving. However, I am more apt to believe that before someone moves they will organize to form a coercive state with their fellow citizens. That's my point. The - people will just move - argument isn't satisfying beyond short term.
If we can figure out a way to overcome the problems which occur with natural monopolies such that the general populous doesn't start wanting a state again then we will have achieved our aims.
The question here is not if the market is a perfect solution to the problem. The question here is whether, given the market is not perfect, is it better or worse than other alternatives in their way to get to the expected results. Is justified a government, or its property of the service by it because of the imperfectness of the market?
But even if it were the case that leaving some "natural monopolies" in the hands of private entrepreneurs were suboptimal, it would still not follow that we "need" government. Au contraire, the industries in question could simply have widely dispersed share ownership or something of that nature. Which means the structure of the firm would perhaps need to differ from the usual firm, making it a cooperative or something like that, but that'd undercut any argument from efficiency for government from the get go.
Freedom of markets is positively correlated with the degree of evolution in any society...
AndrewKemendo: I recognize that there are alternatives - to include moving. However, I am more apt to believe that before someone moves they will organize to form a coercive state with their fellow citizens. That's my point. The - people will just move - argument isn't satisfying beyond short term. If we can figure out a way to overcome the problems which occur with natural monopolies such that the general populous doesn't start wanting a state again then we will have achieved our aims.
There is no such thing as a natural monopoly in a free market for land as the size and scale of land property will adjust to solve any of these problems.
As such, if people know that they can buy and sell these "natural monopolies" and merge them into land properties, there will be no need for a government.
The Morning Star: Why would privatizing the sewers be any more troublesome than privatizing natural gas, electricity or the phonelines? I agree. Those things are considered "natural monopolies', too, although it's really just a case of limited imagination. Back when the phone companies were expanding, in the early 1900's, there was also the question of mutiple phone companies and services. Bell Telephone successfully argued that phone service was a "natural monopoly", in spite of the fact that the phone companies were working out practical ways of sharing the phone lines, instead of trying to run multiple phone lines everywhere. And eventually, after decades of the AT&T phone monopoly, technology provided an alternative in the form of the cellular phone, which needs no phone lines. So, a municpality has one set of water pipes and sewer pipes that run to each house and building. Obviously, mutiple pipes could be set up, although just as obviously, it would be expensive and unprofitable unless the owner of the first set was charging ridiculously high prices for service. Another alternative would be bottled water, or better yet, water delivery services, complete with appropriately-sized water tanks in the homes and buildings,, instead of, or complementing, the use of the water being piped to the home. A slight redesign or reimplementation of the plumbing to a house or buidling wouldn't require an excessive expenditure. Take a look at how water purifying systems are added to existing homes, for example. Adding a water pump to recycle used water would be another way to conserve on water usage, a worthwile measure if the price of water gets expensive. At the other end is where the water for the municipal system is coming from. There could easily be competition in supplying the water at that end from multiple sources. The above is just a starting point. Other possibilities will become more apparent if we ever actually get to that point of actually having to worry about where our water is coming from. But the main point remains: this is not an insurmountable problem just because someone lacks imagination, because other people have plenty of imagination, especially where solving that problem means large profits. | Post Points: 5
Why would privatizing the sewers be any more troublesome than privatizing natural gas, electricity or the phonelines?
I agree. Those things are considered "natural monopolies', too, although it's really just a case of limited imagination. Back when the phone companies were expanding, in the early 1900's, there was also the question of mutiple phone companies and services. Bell Telephone successfully argued that phone service was a "natural monopoly", in spite of the fact that the phone companies were working out practical ways of sharing the phone lines, instead of trying to run multiple phone lines everywhere. And eventually, after decades of the AT&T phone monopoly, technology provided an alternative in the form of the cellular phone, which needs no phone lines.
So, a municpality has one set of water pipes and sewer pipes that run to each house and building. Obviously, mutiple pipes could be set up, although just as obviously, it would be expensive and unprofitable unless the owner of the first set was charging ridiculously high prices for service.
Another alternative would be bottled water, or better yet, water delivery services, complete with appropriately-sized water tanks in the homes and buildings,, instead of, or complementing, the use of the water being piped to the home. A slight redesign or reimplementation of the plumbing to a house or buidling wouldn't require an excessive expenditure. Take a look at how water purifying systems are added to existing homes, for example. Adding a water pump to recycle used water would be another way to conserve on water usage, a worthwile measure if the price of water gets expensive.
At the other end is where the water for the municipal system is coming from. There could easily be competition in supplying the water at that end from multiple sources.
The above is just a starting point. Other possibilities will become more apparent if we ever actually get to that point of actually having to worry about where our water is coming from. But the main point remains: this is not an insurmountable problem just because someone lacks imagination, because other people have plenty of imagination, especially where solving that problem means large profits.
The company that provides water and sewer services could become a consumer cooperative.
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krazy kaju: The company that provides water and sewer services could become a consumer cooperative.
Cooperative? Obviously you are some sort of a left-libertartarian, promoting such socialist nonsense.*
*Sarcasm
Business improvement districts, homeowners' associations and the like could purchase a controlling interest in water and other infrastructure to prevent unwanted monopoly pricing.
"As long as there are sovereign nations possessing great power, war is inevitable."
AndrewKemendo: So here we are, the state just collapsed and a private person came and bought the wastewater treatment plant.
So here we are, the state just collapsed and a private person came and bought the wastewater treatment plant.
How did he buy it?
If it is profitable, then some one will compete, and they will figure out how. Entrepenuers are very good at that. Maybe, in the absence of government regulation, above-ground pipes could be used again and would represent an enormous cost savings (enough to make it profitable). It is a hypothetical situation, and there is no way to know what solutions millions of people in NYC (or other city/locale) may or may not come up with. To know this would require omniscience- and not having that, in short, is the main problem with central economic planning.
All of the responses so far essentially say: The market would provide and would provide better than government. Of course it would, there is no doubt about that.
However, the real crux which I regrettably made halfway into the discussion, is larger than that, and perhaps should be a separate thread; and that is:
How can the currently state monopolized services, which the majority of city dwellers rely on, be provided during the transition from a state control to no state such that the people affected, which have no strong feelings toward either state or anti-state policies (which would likely be the majority), would be impacted most minimally in order to prevent a widescale rally and reorganization of a state like monopolizer?
AndrewKemendo: How can the currently state monopolized services, which the majority of city dwellers rely on, be provided during the transition from a state control to no state such that the people affected, which have no strong feelings toward either state or anti-state policies (which would likely be the majority), would be impacted most minimally in order to prevent a widescale rally and reorganization of a state like monopolizer?
Run on much? ;-) The solution to this has been presented several times in this thread. The people could form a cooperative that owns the lines, and they can select a private company to facilitate the service. This invites competition and lower prices. Further, if the private company is not providing the level of service the citizens require, they fire them and hire a new one. Other companies would be allowed to come in and build up their own above-ground lines, or perhaps there would be a leasing arrangement between the citizens (who own the lines) and several different companies (such as with deregulated electricity in places such as Texas). Not a perfect solution, but you cannot ignore that the infrastructure is already built. Might as well use it.
It seems like in order for those solutions to gain momentum they would have to be equal to or superior to the state production for the common man, in that, the effort put forth by the average Joe would have to be about the same (flip a switch, turn a faucet). Do you think that would be the case?
Remember please that I am generally talking about the average joe who doesnt know a utility function from a utility company. Maybe I dont have enough faith in the average person but I can see my current neighbors agreeing to organizing a coercive state over doing a little extra work themselves.
You need only look at the places in the US this has already happened. Water service has been privatized in towns, as has been discussed on this forum before. Average joe doesnt know or care a thing about it, but he notices when the water price goes down, and when the weird taste from the rusty lines goes away because the new private company fixes them w/o raising the rates. Just because you're in a HOA by virtue of living in the neighborhood doesnt mean you have to be involved in its operation. The same could apply to this situation.
See Macfalls answer. There would be no monopoly without the state. All monopolies exist because of the state. People most certainly can dig more holes to divert water.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.