The proper role of government

What should be done by government and what should be done by private enterprise? The Founding Fathers wrestled with this question. Our Declaration of Independence articulates that our Rights “are endowed by (our) Creator” and “That to secure these Rights, Governments are instituted among Men.” The preamble of The Constitution tells us its purpose is to “establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the blessings of Liberty.” These, therefore are the reasons our government should be focused on these tasks.

Private enterprise is motivated by the free market where a willing seller and a willing buyer agree to a trade. Both parties walk away better off than when they met. If I buy food in bulk and make many sandwiches efficiently, I can sell those sandwiches at a lower cost than an individual could make a single sandwich for themselves. The hungry person is happy to buy a sandwich at a lower cost and I am happy to sell it to them at a small profit.

To explore how government and private enterprise apply to practical matters in our community, let’s look at the Jail, the Airport and Sanitation.

There have been discussions over the years about privatizing the Jail. Jails are necessary to insure domestic tranquility as they provide a powerful deterrence against crime. Jails are expensive to build and to operate so it is in the interest of society to have only as much jail as is needed. There is a motivation to keep jails small and to incarcerate as few citizens as necessary.

If the Jail were to be privatized then the Jail becomes a business and while the free market may be able to house prisoners at a lower cost, it would, like all businesses want to grow and house as many prisoners as possible. This can create a financial incentive working against the equal application of justice. Also, a private jail would require the county grant a monopoly to the jail operator. This would limit the county’s options when the time came to renew the contract. Finally, jails are monuments to the moral shortcomings of some residents. Making a profit from this unfortunate reality would itself be immoral.

While there may be some short-term financial gain to jail privatization, over time those could be replaced with losses with no viable alternatives. The moral issue of profiting from punishment and the absolute requirement for the equal application of justice makes privatizing the Jail unwise.

The Airport is a beneficial infrastructure facility. Like a road, it provides a portal to the global aerospace industry, bringing over $140 million of economic activity annually to our county. Arriving aircraft require fuel, maintenance and services which are provided by Fixed Base Operators (FBOs). FBOs are to aircraft what gas stations are to cars. While there are many county owned and maintained roads, there are no county owned gas stations. Clearly, the free market can provide the incentives and competition necessary to provide the best service at the lowest cost. A county owned and operated FBO makes as much sense as a county owned gas station. A county owned FBO would not meet the intent of our Founding Fathers.

Much of what government does is to ensure basic services are provided to the residents. Roads, water, power, sewer and sanitation are all mundane but critical services. Some of these services, like water, are best provided by a single distribution system operated and maintained by the government. It would be impractical for there to be multiple water companies serving the same area with their own distribution piping. In the case of electricity, the government grants a monopoly to a single free market provider and then regulates the fees to prevent price gouging.

For sanitation, ideally the government grants contracts for area wide services and acts as an intermediary between the customer and the contractor. This accomplishes two things. It minimizes the noise and nuisance of big garbage trucks because they have a financial incentive to move through the area as efficiently as practical and it insures that all the garbage is picked up. Garbage cannot be allowed to pile up on the street because one customer doesn’t pay their bill. Sanitation services provide an essential public safety component.

What is actually happening is that Kootenai County has a contract with a garbage collection company to collect trash from homes and various sites and haul it to one of the two county owned and operated transfer stations. At these stations the trash is sorted and processed and then another contractor hauls the trash from the transfer station to the county landfill. The trash changes hands five times, from the customer to the contractor to the county to another contractor and then back to the county.

A far more efficient arrangement would be to have a single contractor responsible for collecting, processing and delivering the waste to the landfill. The county could consider leasing the transfer stations to the contractor and charge the contractor to dump trash at the landfill. It is estimated that this simple change has the potential to save Kootenai County taxpayers about $2 million dollars per year.

When government bureaucracy shrinks the free market expands and the free market is almost always more efficient than a government monopoly. The best outcome occurs when government involvement in providing services is limited and the free market is allowed to flourish. In this way high quality essential services can be provided at the lowest cost to taxpayers.

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Marc Eberlein is chairman of the Kootenai County Board of Commissioners.