I’m sure it’s obvious to anybody who’s read this site for any length of time that I believe in privatizing everything. As you’re likely away I’m also fairly vocal about my beliefs, Hell I have a shirt that says this. Being vocal about one’s beliefs leads to discussions and many of those discussions are with people who don’t agree with you. I greatly enjoy civil discussions with those who don’t agree with myself because it forces me to look at my beliefs and hopefully forces the other person to look at their beliefs.
When talking about privatization the first argument always made against it relates to logistics. I’m going to use the example of city water. Many cities, including Minneapolis, require people living within it’s territory to purchase water from a monopoly source. No competition exists in Minneapolis, or most other cities, for water provision because these cities often grant a legal monopoly to a single company or themselves. I would love to eliminate these monopolies and allow for competition in this era to flourish.
This counter argument to this is that you can only lay so much pipe and thus it’s impossible for any competition to crop up. Those claiming that competition in this arena is impossible usually spout something about “natural monopolies.” The inability to see a possibility for competition is actually an inability to think outside of currently established norms. When a free market is allowed to exist competition is guaranteed because there is always money to be made when a monopoly exists. Monopolies are generally large and inflexible beasts which opens the market for more efficient operators. This means new solutions will come up that few have likely even thought about.
There are several options available in the market of providing water. Let’s first discuss pipes. As it stands cities usually claim ownership on all water pipes running through its territory (even the water pipes on your own property although they often make you pay for them outside of just taxation). In a free market either the property owners would own the pipes crossing their territory or there would be several companies that owned spans of pipes. This is similar to Internet cabling, a handful of companies own the main cables. The thing is the companies that own the cables also want to make money off of those cables. The motive of profit leads them to license the usage of those cables to other companies withing to provide Internet services to their customers.
One possibility in the free market of providing water would be pipe owners making money by licensing the usage of their pipes to water providers. That way one company can spend its time creating pipe infrastructure while another can worry about the logistics of providing clean drinking water to customers. Such a scenario would be a great example of division of labor which is ultimately the whole point behind economics.
The building and licensing of pipes isn’t the only option to get water from one location to customer homes. It’s very likely that many peoples’ homes would sit above a well and thus those people would simply pay to have a well drilled and plumbing hooked up (this is what most people in rural areas do). But let us assume a piece of property was sitting over an area with no well access and no pipe infrastructure. If you live in a rural area you’ve likely noticed that many homes are heated using furnace fuel. Long pipes aren’t running through rural areas that get furnace fuel from one location to the farmers’ homes, the fuel is delivered by trucks.
There is no logistical reason why those living in areas that lack a well and have no piping infrastructure can’t use trucks (or trains, or any other means of transportation) to move water from a source to a holding tank. This option would actually be easier in many cases then running endless miles of pipes from a reservoir to rural areas. Such an option would also likely involve people catching rainwater to store in their water tank which would be another aspect to take into consideration.
These are two potential solutions to a problem that likely has many more. The beauty of the free market is that it allows for experimentation to find the most efficient solutions to various problems. The government seems to believe only in one size fits all solutions which is a symptom of being a monopoly. We can’t even imagine some of the innovative way services would be provided in a market free of government tyranny. A statist can argue that a natural monopoly exists in the provisions of certain services, but only if you are unwilling to realize other solutions exist to providing those services. Just a little thinking outside of the box will allow you to realize natural monopolies don’t exist. People are innovative and using that innovation to provide services better than a current provider is likely to lead to profits which is as noble a motivator as any.