Close, but not Quite

James Robbins proposes the privization of Iraqi garbage collection

A job for the free market.

Here's an idea for the new reconstruction team in Iraq: Privatize the trash hauling.

Garbage is a mounting problem in Baghdad. And there are also lots of people with nothing to do who need money. So find several suitable spots on the outskirts of the city and set up rudimentary landfills. Tell citizens that the Coalition will pay money for garbage, so long as they load it up, haul it out to the dump, and dump it. Figure out a reasonable price, a few dollars per pickup truck load, more for larger vehicles. Make sure the ingress/egress is designed for ease of traverse to prevent traffic jams. Keep the whole thing simple, make the transactions easy for everyone to calculate, and keep rules to a minimum. Then see what happens.

My italics to emphasize the author's approach.

Sorry, Mr. Robbins, but this is not a "free market" you are describing.

A free market in trash cleanup would not be dependent upon government payments ("the Coalition will pay money for...") which can only come from taxation or service fees. Capitalism applied to garbage collection would mean those who want the service would pay for the service and those that do the service are paid for it. US taxpayers would be the entities actually paying for the service, further abstracting the market forces from reality. Also keep in mind that the US has no stronger incentive other than good politics to keep the streets clean. I would submit that this is certainly more of a capitalist approach than your average municipal collection service and such an exposure to some watered-down principles of voluntary transactions are themselves worthy incentives to do this, but the overriding concern now is to make the occupation run as smoothly as possible. Keeping streets clean and the residents happy is one way to do this.

Let's not forget that this would amount to a near-monopoly on the "customer" side of the equation. It would collectivize into a single entity what should be hundreds of thousands of individuals making their own choices based on their values.

Next, we have this "figure out a reasonable price" stuff. How? Do you go around asking Baghdadians what they think is reasonable to pay for x units of trash? Do you experiment with prices to see which ones they think are fair? Or, do you take the honest free market approach and let the actual buyers and sellers determine prices through innumberable and unregulated voluntary exchanges?

The rest of his proposal could be described as "statism lite," resting on the hope that regulations (which are antithetical to a free market, and yet he outright assumes they'd have to exist) would be in the hands of those enlightened enough to keep them simple, understandable, and efficient. Needless to say, that doesn't cut it in a real free market, the header Mr. Robbins choose to name his idea under.

The rest of his article flows from the well-known efficiencies freer markets create.

My guess is that Baghdad will have cleaner streets, young men who might otherwise be looting or agitating will be organizing garbage collection -- sub-economies will probably sprout too, territories being claimed and organized by various methods, not all of them savory. But it will get the job done.

But he contradicts himself with the next bit, as I have shown above.

The Coalition does not have the manpower to cope with garbage removal, and trying to establish a centrally controlled system to do it will bring all the benefits of Soviet-style economics to liberated Iraq. If the Coalition just sets the terms for market-based activity, Iraqi entrepreneurs will come out of the woodwork to organize it and get things done. It has to work better than doing nothing.

He explicitly calls for centralized planning (however minimal it may seem) and then denounces such planning as wrong. He takes a "we should do something!" approach and entirely skips the fact that keeping the government out of the market in the first place is what "sets the terms" for a free market, the objective application of the rule of law notwithstanding.

Obviously there are substantial differences between his proposition and what the USSR put into place through a form of Marxism-Leninism. From my perspective, his scheme is far more preferable than anything possible under Ba'athism or Soviet rule.

But he is wrong to say his plan is a free market solution because it is not fundamentally different from other collectivist scenarios.

Posted by Drizzten at May 12, 2003 10:38 AM