Friday, November 7, 2008

The Utilities part III

So having seen that the cost of services would certainly adjust, in many cases downward, and that the value of your currency would skyrocket, we can now put cost to bed as a concern with regard to public services. We have addressed the role of government in providing public services. Now I will address the viability of private providers.

We've already seen that many of the public services are being provided by private interests now. The few services which are primarily state owned and run are the roads and the postal services. Even in those areas, private providers are already supplying more and more of these services to the public. But they could easily provide the entirety of these services.

The postal service could be easily and effectively provided by private couriers. Fewer and fewer letters are being mailed today because of the increased use of electronic communications. This has led to a shift in the postal services from their traditional role as mail carriers to parcel delivery. This service is already being offered by a number of private couriers, both locally and globally. The response of the USPS has been to increase prices and eliminate jobs, resulting in decreased customer service. These kinds of business practices can only succeed in an industry supported by a coercive monopoly. In the free market, businesses would have to increase customer services and adjust costs to the market in order to compete more effectively with alternative means of communication, or else face irrelevance.

Imagine a system where couriers competed for your package by offering lower prices, convenient locations, fast and accurate delivery, and special services such as package tracking, scheduled on site package pick up, or wireless access to their full suite of shipping services. The simple truth is that it is only through their oppressive violent monopoly that the government can maintain there stranglehold on the postal services. Given a choice, people are choosing alternatives, either electronic, or private, and without the threat of government interference, these alternatives would flourish.

The roads can also be supplied effectively, efficiently, and at a reasonable price to the consumer by the private sector. There could be a variety of methods by which these roads were provided and paid for. In purely residential areas homeowners could share the cost of the roads and pay fees to have companies maintain and improve those roads on a regular basis. Some of these costs could be offset by charging tolls for people moving through the area who did not live there. These fees could contribute to the cost of maintaining the roads. The rest of the cost could be shared by people living in the area, and while any homeowner would certainly have the right not to help pay for the roads, he would then be charged a toll at the higher non-resident rate.

Other roads would probably be wholly owned by private concerns who would set and collect fees for their use. They would of course maintain and improve their roads on a regular basis, or else their customers might choose to take an alternate path to their destination, in effect selecting their competitors roads over their own.

Frequent users of certain roads would probably receive some type of discount. Those who used them for commercial purposes, such as pizza guys and couriers, would probably pass on their cost to the customer, or contract with the owner of the road for passage for all agents of their company over a certain amount of time for a set price. There are many different possibilities, and more than likely, there would be many different practices.

As for the collection of tolls, that would seem relatively simple. Private roads would be monitored by the owner, who would confirm the identity of the people using his roads, contact them, and arrange payment. Most people would probably pay a user fee per a set distance electronically via debit card or EFT. Others might arrange for bulk purchase of rights of passage, and there would probably be some allowance for delayed payment within a reasonable time. Anyone who failed to pay for the use would be subject to higher rates in the future, possible litigation, and probable denial of service. In fact, these kinds of toll collection are already in practice around the world.

Well run privately owned roads would also have a financial incentive to monitor their roads for disabled vehicles, and get a tow or repair truck out to the disabled vehicle as quickly as possible at the vehicle owners expense. A stalled or disabled vehicle would block traffic and discourage people from taking that road to their destination, thereby costing the owner of the road money. Even with todays technology people with GPS systems can receive real time updates on traffic conditions along their route. Almost the instant a vehicle became an obstacle to traffic, the road's owner would begin losing money. It's even possible that some road owners would offer towing as a free service to entice more people to drive on their roads thereby increasing profits.

Some large businesses might also offer roads at a reduced cost, or even free, to customers who purchased their products, or shopped at their stores, or simply to increase their name recognition. Imagine the Philadelphia Steelers Freeway, or the Taco Bell Interstate. In reality, there are a number of ways roads could be provided to the consumer.

In fact, there are so many ways that these services could be provided to end users, that there is simply no way to accurately predict the way the market would look. Unrestrained by government regulation and left to the innovators and the entrepreneurs, public services might be offered in ways which have not even been previously conceptualized. There may even be new services offered for which there is no current recognized demand.

The simple fact is that most public services are already being offered by private companies for a better price, more effectively, and without the use of coercive force. In fact, there are numerous examples of government price controls and government granted monopolies creating shortages, and stifling innovation. Even in those areas where the government maintains its monopoly, private interests have found a variety of ways to meet an increasing customer demand for alternatives and solutions.

But the key problem with this argument is that it presupposes that without government to hold our hand, people are incapable of succeeding in life. We wouldn't be able to find a way to transport goods and people. We wouldn't be able to get water and power. We wouldn't be able to have telecommunications. We'd all be starving to death, freezing in the dark. This is ridiculous. Many services are already offered by non governmental organizations. An estimated 250,000 homes in America are already autonomous and don't rely on public utilities at all. Where governments interfere, you have price controls, bad business, and failure. Even the threat of competition in the marketplace is enough to drive down prices and increase product quality. The arguments in favor of free market utilities are numerous, and the arguments against them are often specious and fear mongering. We have found ways to achieve these things. We just haven't found the best way yet. But we can.

Yes we can.

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