No, Flint’s Water Crisis Does Not Prove We Should Privatize Clean Drinking Water

If you knew that one of these three bottles of water wasn’t subject to government regulation, would you drink from any of them? (Image courtesy of nenetus at FreeDigitalPhotos.net.)

Note that I said “pretty much” everyone agrees that clean drinking water is a public good? I had to make that distinction because conservative economists exist. And to conservative economists, basically any so-called “government intervention”—yes, including clean drinking water—is evil. And so our old friend Tim Worstall begins to quibble for Forbes

[A public good] is not something which is good for the public (which clean drinking water definitely is) nor a good that should be supplied to the public (which clean water definitively is). A public good is something that is non-rivalrous and non-excludable. That is, if I’m able to enjoy a supply of something that doesn’t diminish the amount of that same thing that someone else is able to enjoy or consume. And secondly, that there’s no real way to exclude people from being able to enjoy that. Obviously, neither of these are true about the supply of lead free drinking water. Don’t pay your water bills and you’ll quickly find out how quickly your supply can be excluded, and my drinking the water really does mean that you don’t have access to that particular portion of water: not until it’s been back through the treatment plant at least.

Interesting that Worstall bases his complaint on a semantic argument, and interesting that Worstall knows he’s fighting an unpopular battle. He continues:

It probably is true that the absence of pandemic disease through the existence of a decent sanitation system is a public good. But drinking water is not, not by the economists’ definition.

So Worstall is trying mightily to split hairs, here. The water is not a public good, he argues; the fact that the water is clean is a public good. Why does he care about this issue?

If something is a public good then it’s very difficult to make a profit from it. This means that private markets will undersupply it, or at least potentially will. So, intervention to get the amount we think would be societally useful is often a good idea. Please do note that I’m not banging an ideological drum here; this just is the simple economics of the matter. People often say that vaccination is a public good; it isn’t. It’s the end result of a successful vaccination program that is, the herd immunity.

Please note that while Tim Worstall promises that he’s not banging an ideological drum, people in Flint are literally dying from tainted water. He later even tries to clarify that “All of this is not a discussion of the state of the water supply in Flint, Michigan.” Except he wouldn’t be trying to launch this “discussion” if the disaster in Flint hadn’t happened. It’s almost like Worstall’s basic humanity tried (and failed) to intercede with the writing of this blog post; ultimately, as is always the case with Worstall and moral crises, the conservative in him won out.

Read this mincing paragraph and tell me Worstall doesn’t know he’s trying to spin a sweater out of a mound of bullshit:

Please don’t get me wrong here: the provision of clean drinking water is at the heart of civilization itself, and I don’t think anyone should be deprived of it because of poverty, political manipulation nor even bureaucratic incompetence… However, it is not a public good and thus the argument that government must spend more upon it does not apply, nor do any of the other public goods arguments.

So he thinks that water is necessary and should be provided to everyone regardless of their financial status, but he also thinks that it shouldn’t be supplied by the government? Let’s for a moment pretend that Tim Worstall is a real economist. And let’s take his premise seriously: say private business is in charge of all the water supplies in America, with maybe a very small government regulation office in charge of keeping them honest. How long do we wait until someone like Stewart Parnell knowingly endangers his customers by providing tainted product? Or until someone knowingly cheats the regulation system, like Volkwagen? Or until some company repeatedly fails at its attempts to provide a clean product, like Chipotle? Or until someone prices the product out of the hands of the poor, like Martin Shkreli?

We’re big fans of capitalism here at Civic Ventures. But after witnessing the kind of failures we’ve seen in recent years, you’d have to be outright dumb to argue that capitalism is the solution for everything. Government has its place, and one of those primary duties should be to protect and preserve the cornerstones of civilization. If you choose to let the market decide on the profitability of your safety, you’re making a bad bet.