Crowdsourcing Public Services in a Free Market
Written by Winter Trabex
During the time in which I have advocated for a free-market system, the primary objection I have come across has been that government services upon which people rely would disappear. On the surface of it, this appears to make a free-market system a callous, uncaring philosophy designed for hopeful abstractions rather than real-world situations. A free-market system appears to be idealistic, not capable of working within reality. People would suffer. Their needs would go unmet. Poor people would be especially disadvantaged, since they would have no one to turn to for help, no program to help them out of a dire situation.
A statement to the effect of “the free market will let people open up as many businesses as they like and employ as many people as they choose” doesn’t quite seem to be a convincing argument to establish prosperity. People haven’t opened up businesses. Employees aren’t working at places that don’t exist. This is line of reasoning rests on possibility, not reality.
In order to establish that disadvantaged people will still be taken care of in a free market system, a real-world example must be provided in which people cooperate together for the common good (or what may be perceived as such) without any welfare programs.
The best example that comes to my mind is a public library. Though funded by government, libraries (and other such non-profit organizations) rely on private donations to cover part of their operating expenses. This is also true for public broadcasting, public transportation, and toll highways. There is no reason to suppose that any of these services would vanish completely without government funding.
Suppose, for example, that a library has an operating budget of one million dollars. Two-thirds of that is given to it by government mandate. It then has to find 333,333.33 dollars from private donations. This essentially means panhandling around well-to-do people, holding fundraisers, selling used books, asking library patrons for donations. They could, if they were so inclined, even get in the business of accepting used books or DVDs as donations and selling them off. The limitations for a library, public or private, to make money without charging people for their services is only limited by the imaginations of the people in charge.
But if a library wanted to charge people to use it, they could. The library, then forced to provide quality for its books, instead of only having to account for the number of aggregate transactions, would seek to provide greater value in order to get people to pay. However, those who could not pay would not necessarily be locked out of the library altogether. They could, perhaps, access only fiction and non-fiction books. They would not be able to access new books, reference books, internet stations, DVDs, music CDs, audiobooks and printing services. This is but on example of how a library could operate without government funding.
Another example is the more common one of privately-paid firefighters refusing to save someone’s home because that person is not a customer of the company. This too appears to be a demonstration of the callous nature of any free-market system. If you don’t pay for it, you don’t get it. That’s a hard thing to deal with, especially when one happens to be poor.
However, there is nothing to suggest that a fire company is restricted to this private model alone. They could open up their services to the township, borough, city or county. They could collect money from everyone in the county, which would include business owners as well as individual citizens. As long as the fire department’s operating budget is met, they can cover everyone in the area, no matter if that person has paid for the service or not. The fire department can offer special incentives to those who do pay, such as allowing a child of a paying family to go along for a ride one day or allowing a citizen to become a volunteer firefighter for a day.
The incentives for the fire department would work both ways. Those who don’t wish to see their houses burn down could pay the company as much as they liked. The more they pay, the more bonuses the fire company provides. The fire company, now completely dependent for its operations upon consumer income, would have more incentive to provide good, timely service to people. In addition to be actuated by a concern for the general welfare, firefighters would, in addition, have a profit motive in mind.
In the case where one region is unable to fund the company’s operations there, the company may choose to co-join two regions with the same deal, allowing one wealthy region to subsidize one poor region.
This model can also be applied to police departments, ambulance services, park inspectors, and any other public service people might wish to have. The benefit of free choice allows for people to choose that which they want in their areas. If they don’t want police officers, they don’t have to pay for them. If they want to have seven parks in a town of three thousand people, they can pay for such parks to come into being.
In the case of food stamps and food relief services, an abolishing of all laws prohibiting the establishment of any business without government approval would lead to more non-profit thrift stores. This would especially be the case in areas of abundance where people have more possessions than they know what to do with. More non-profit stores would mean more donations to food banks. The food banks, cut free from the tether of the USDA or any other regulatory agency, would be able to follow the path that they think is best to service the people who come for food. They could even open their own business, such as as a family-owned restaurant, which would give all of its profits to the food bank. This manner of operating is already proven in the real world by how the Salvation Army thrift stores distributes its profits to its homeless shelters and soup kitchens.
There is, in fact, no reason to suppose that a free market would create a world in which disadvantaged people remain disadvantaged forever. Instead, the opposite seems likely to occur. A free market economy, let loose from all government restraint, could advance to the point where one person working at a job is enough to support a family of four. This appears to have been the case in America in the 1950′s when wages were high and a married couple were not both compelled to work in order to make ends meet. The 1950′s wife was a disadvantaged person. She had no income, no way to support herself. She relied entirely on the production of her husband.
It appears this system, operating contrary to all reason, worked very well. There is no reason to suppose that it cannot work again. The only explanation to believe that government has a monopoly on beneficence lays only in a misunderstanding or ignorance of natural market forces. The free market, left to do what it will on its own, provides extraordinary abundance for everyone. Even today, this can be seen by the large amount of food people buy but do not consume. People purchase more than they eat, which is a sign of a healthy, active economy. The opposite, a society where people eat less than what they want, is more often than not created by short-sighted government programs brought into being by bureaucrats who, though well-meaning, nevertheless presume the impertinence of managing that which cannot be managed: the individual’s choice to buy one product and not another.
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