Utilities and the Free Market

[revolutionist]

How would that work?

 

[Acala]

How about

How about the government stays out of it entirely? I have the highest level of confidence that the market can easily surmount any obstacles to providing consumers with water, electric, gas, and phone service without having special powers to invade property rights or government-granted monopolies.

 

[revolutionist]

How would there be competition if one water company owned all of the city water pipes? If a company came along to try and compete, how would it be able to get any water to anyone? How would they be able to build a second water system to provide competition to water?

 

[Acala]

Competition

First, you assume they own all the water pipes. That is a model based on what we have now that is a result of municipal ownership of all rights of way and the bestower of monopolies. A truly free market could produce all kinds of alternatives.

If rights of way were privately owned, they could make agreements with whomever they wanted including more than one water company installing more than one set of pipes. Or maybe the road builder would put in his own pipes and lease them to water companies. You also might have land develpment where the rights to the water pipes in a residential development would belong to the home owners jointly and they can then contract among water companies that compete to make the connection. Or you might have water service that doesn't use pipes at all but trucks it all in. Or has a well and pump in each neighborhood so it doesn't need a large distribution network. And you ultimately might have various water companies agreeing to go in on a larger distribution network and run their (fungible) water through the pipes together and just reconcile things on paper.

Really, it isn't that hard to solve.

 

[Zippyjuan]

That would give a monopoly on the distribution though. Even if it was a municipality.

 

[danberkeley]

How would there be competition if one water company owned all of the city water pipes? If a company came along to try and compete, how would it be able to get any water to anyone? How would they be able to build a second water system to provide competition to water?

Here's a YouTube video with Dr. Ron Paul and Dr. Dominick Armentano talking about utilities and monopolies.

 

[revolutionist]

Here's a YouTube video with Dr. Ron Paul and Dr. Dominick Armentano talking about utilities and monopolies.

Linky?

 

[Fox McCloud]

http://www.youtube.com/watch?v=8C4gRRk2i-M&fmt=18 it's one of my favorite videos

 

[danberkeley]

Linky?

oopsy on the linky! there is it ^^^^^^^

 

[scholarpreneur]

How would infrastructure work? That's one sticking point I've had that I've never seen sufficiently explained.

I'm for property rights but I rather like the interstate highways.

 

[Acala]

Private roads

How would infrastructure work? That's one sticking point I've had that I've never seen sufficiently explained.

I'm for property rights but I rather like the interstate highways.

Before government took over roads in this country, there were hundreds of private turnpikes in the east. People took it upon themselves to buy land, build useful roads, and then charge people to use them. No reason why that can't continue. And it is likely that the roads would be dramatically better than they are now.

 

[Zippyjuan]

One major difference today is that most land is privately owned within the cities. How do you gain access rights to make a new road or run a new utility pipeline through? It only takes one property owner to not allow you through to stop a route. It is extremely hard to buy the needed continuous land yourself to build a new road.

 

[Acala]

Holdout problem

One major difference today is that most land is privately owned within the cities. How do you gain access rights to make a new road or run a new utility pipeline through? It only takes one property owner to not allow you through to stop a route. It is extremely hard to buy the needed continuous land yourself to build a new road.

Yes, that is the classic holdout problem that is used to justify eminent domain powers.

But that is really not much of a problem with things like pipelines - you can easily zig zag around the holdouts. And BECAUSE you can zigzag around the holdouts, they don't have much incentive to hold out. If they hold out they get cut out.

Large highways are a bigger problem because you can't zig zag so easily. But you CAN negotiate with all the property owners at once and negotiate more than one alternate route at the same time with different property owners. Whichever group of property owners inks the deal first gets the money. This puts pressure on the holdouts because they once again can be cut out.

It's do-able.

 

[danberkeley]

One major difference today is that most land is privately owned within the cities. How do you gain access rights to make a new road or run a new utility pipeline through? It only takes one property owner to not allow you through to stop a route. It is extremely hard to buy the needed continuous land yourself to build a new road.

How to home in remote areas get their utilities? They have propane tanks on their lawn, water collection tanks, nowadays you have solar or wind power, satelite phones, satelite TV, satelite radio. The free market will solve the problem.