Thursday, November 29, 2007

County Trash Consolidation Intrudes on Individual Choice

Printed in Show-Me Daily at:

I agree that the trash district plan for unincorporated areas of the county demonstrates a collectivist mindset, and that it has been imposed on constituents with a certain degree of arrogance. As I witnessed at a public forum in South County, that attitude has only fueled opposition to the plan.

But it's worse than what some seem to think. The plan has been developed with an overt hostility toward the role of the free market. The July 31 report of the Solid Waste Management Task Force included this statement:

"Allowing the conditions generated by the free market system currently in place in municipal trash services adversely affects the quality of life for all the citizens of the region."

The county's solution to this "problem" is to impose a system of monopolistic supply, with responsibility taken away not only from individual residents, but removed from local control altogether. Problems of cost and accountability seem inevitable.

Under the present system, households and neighborhoods arrange private contracts for services. Prices are kept down and service standards are high because of active competition. The company I hire provides excellent service because the managers know that if I am dissatisfied, I can call the company that picks up my neighbor's trash.

There are, of course, externalities from having multiple trash services visiting the neighborhood. That is a legitimate issue to be addressed. Some subdivisions coordinate through neighborhood associations. To the extent that the economic problem of "coordination failure" prevents mutually beneficial arrangements from being made among neighbors, a proper policy solution should seek to provide a framework for facilitating such arrangements, retaining local control and accountability. (An example can be found in the provisions of Missouri law for forming fire prevention districts.)

But the county's plan takes a centralized approach. A monopoly provider will be chosen for each of eight districts, to be selected by the County Council. The county will take no responsibility for service, requiring only that providers maintain a customer service department. There is no plan for a "single-payer" system: Residents will be responsible for direct payment to the trash company that is selected by the government on their behalf.

This situation is fundamentally different than when a local municipality provides trash service. In the case of a municipality, customers/voters can hold their local elected officials collectively responsible for cost and service. Under the county's plan, the only political recourse lies with a single councilmember — one of seven. The potential for political corruption is evident.

County officials have asserted that this centralized system will provide lower costs to residents. Certainly, there are economies of scale that have the potential to lower costs for the service provider. But whether or not these savings are passed along to consumers also depends on the degree of monopoly pricing power that emerges. Officials concede that some trash collection companies may be driven out of business by this plan. That can only enhance the monopoly position of surviving competitors for county contracts over time.

The imposition of centrally controlled trash districts for outlying unincorporated areas of the county represents an intrusion on individual freedom of choice, a disruption of the efficiency of free markets, and the imposition of a centrally controlled system that is unjustified by the presumed policy problem. It is also likely to result in the typical problems of unintended consequences that follow from the imposition of collectivist solutions to public policy issues.

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