Julian Sanchez header image 2

photos by Lara Shipley

But… But… PROFIT! (fnord)

March 19th, 2007 · 7 Comments

Ruth Rosen at TPMCafe (why is that name familiar? Ah yes!) is gushing about some anti–water privatization documentary she’s just seen. And what’s notable, given that there are surely cases of privatization-gone-wrong to focus on if you’re cherry picking for a polemical film, is how light on actual arguments this rather long post is. Rosen does mention that water prices on private networks often rise—which is true enough, but since the primary problem with water in the developing world is the far higher prices paid by people who lack access to inadequate existing networks, this isn’t really to the point. The real question is whether privatization ameliorates the access problem, and as Fredrik Segerfeldt argues in Water for Sale, it often does, making it a success by maximin standards even if it imposes some costs on the better-off people who already had a spot at the faucet. She also points out that local populations often protest privatization, which isn’t especially interesting unless we know whether they have good reasons to do so.

No, the core of Rosen’s opposition seems to be simply a visceral horror at the very idea of filthy, filthy companies making money:

Water, they argue, should not be sold as a product for profit because it is necessary to survival. Why, they ask, should a corporation make a profit from what we all view as a basic necessity?

This is, of course, just a non sequitur. Why should they make a profit? Well, why shouldn’t they? I guess because if we’ve learned anything from the last few decades, it’s that everyone’s better off when government takes charge of the production and distribution of “basic necessities” like food and clothing.

Seriously, though, this is telling: If water privatization generally raised prices without improving either quality or access, that would really be all the argument needed against it—the extent to which this or that corporation benefited from the arrangement would be beside the point. And given that there certainly are successful cases of privatization, you’d expect people primarily concerned with this to be calling attention to those cases, how to emulate them, and how to avoid the pitfalls of the less successful cases. Instead, we’re simply asked to share Rosen’s aesthetic horror at the motives of the water companies, who only care about a quick buck. Whether they do a better job of getting water to more people in the course of making their quick buck—not in this or that instance, but in general—seems almost secondary.

Tags: Stupid Shit



7 responses so far ↓

  • 1 Consumatopia // Mar 19, 2007 at 10:00 pm

    I see two reasons for the visceral reaction. One is a vague notion that the water table and the rain should be communal. I’d be pretty pissed off if someone bought the atmosphere–even though air is just a necessity like food and clothing.

    The other is that although food and clothing are necessities, they’re usually consumed for pleasure, taste, and fashion rather than necessity. There’s infinite room for private markets to compete on the basis of quality. Water is different though–I don’t drink water because it tastes good, I drink water so I don’t die. There’s a basic, gut level intuition that thirst should trump property rights–at least, in emergencies. (And if it’s not an emergency, I’m probably not thinking about water anyway.)

    It might be that privatizing water saves lives, in which case go for it. But in developed countries in which access to water doesn’t seem to be an issue in normal times, I’m against it.

  • 2 laurex // Mar 20, 2007 at 12:16 am

    This isn’t really an argument but the nationalist in me does slightly shudder at the inevitable “plunder” of water resources but for the good of the world I guess it’s time to (further) become America’s bitch.

  • 3 Kevin Carson // Mar 20, 2007 at 2:21 am

    It seems to me that water is an ideal candidate for Rothbard’s preferred method of “privatizing” state services: turn the water utility into a consumer co-op owned by the ratepayers.

    Of course, in many cases raising rates would be a very good thing. One of the chief subsidies to big agribusiness in the Third World is the subsidized irrigation water it currently gets from the government. We often find that the biggest beneficiaries of subsidized “public” services that “Progressives” are so enamored of, turn out to be the corporate hogs at the trough.

  • 4 micahd // Mar 20, 2007 at 9:20 am

    This actually leads me to a question that I have been wondering for a while about you, Julian.

    Are you a pragmatic libertarian (i.e., the market could deliver in a more just manner many goods that are currently publicly provided and the U.S. is drowning in entitlements therefore it makes sense to advocate on behalf of less government) or an ideological libertarian (i.e., government should be used as sparingly as possible in almost all contexts because it is inherently inefficient, taxes violate individual liberty, etc.)

    I realize that I am setting up a false dichotomy here so I don’t need you to pick one or the other. For that matter, I don’t even know whether you are a card carrying libertarian in spite of your former employ at Cato and writing for Reason.

    But is “maximin” a concept frequently referenced in libertarian writings?

    Does the distinction I reference above mirror a meaningful divide within the libertarian community (such as it is)?

  • 5 Julian Sanchez // Mar 20, 2007 at 12:52 pm

    Well, my invocation of maximin here shouldn’t be taken as an endorsement of it as a general standard economic distributions must meet, but I am one of a tiny handful (it may just be me and Will Wilkinson, actually) of Rawlsian libertarians–that is, the Rawls of Political Liberalism, not so much Theory of Justice.

    I suppose you can talk in a loose way of consequentialist vs. deontic or “ideological” or “rights” libertarians, and that is one way of carving up the movement, though there’s sufficient internal variety in the camps that the dichotomy may obscure more than it illuminates. The divide is a little artificial, since for all but the hardline anarchist, how a theory of rights or political morality translates into policy judgments will often depend on empirical predictions about their effects.

    This is probably not the place to lay out my political philosophy in any detail, but I guess as a short version: I’m an “ideological” libertarian in the sense that I would regard state coercion as a moral bad even when it has good consequences, and agree with Rawls that taking the separateness of persons seriously means acknowledging that they have “an inviolability founded on justice that even the welfare of society as a whole cannot override.” But my view’s also somewhat more convoluted than the sort of caricaturish “all taxation is theft, all regulation is slavery” one so that, for instance, the position I take on the provision of some broad public good will often depend on considerations about the probable efficacy of government in supplying it.

  • 6 micahd // Mar 20, 2007 at 1:16 pm

    Thanks for the clarification, Julian. (Though the clarification may have obscured more than it clarified … *grin*)

    It may very well be that the views of many libertarians are “somewhat more convoluted than the sort of caricaturish ‘all taxation is theft, all regulation is slavery'” position. But I’m afraid that you do not have non-libertarians to blame for this caricature. (I’ll hold you and Will blameless, though.)

    I guess my personal opinion on libertarianism has grown out of extensive exposure to this particular cariacturish brand from people, most of whom subsequently grew out of it (and libertarianism generally) after high school or college.

    I won’t paint with too broad a brush here for many of the Hit and Run posts I’ve read seem eminently reasonable. But the people I have known who interned or worked for work for Cato (even those beyond their high school and college years) exhibit a pretty movement-style commitment to libertarian ideology isn’t always, let’s say, empirically driven.

    And the proposition that only hardcore anarchists are more interested in theory than in empirical effects may be a bit of an overreach. Just because people use predictions about empirical effects to buttress their predetermined ideological viewpoints (this is certainly true of the well-funded mainstream Heritage Foundation and arguably true of most think tanks regardless of their ideological orientation) does not mean that they are committed to empiricism as a practice …

  • 7 William Newman // Mar 20, 2007 at 3:07 pm

    One of the harder-core anarchists (in some senses, anyway) is David Friedman, and he seems to mostly support arriving at one’s position pragmatically rather than by invoking moral absolutes.

    Note, though, that he and other pragmatists do seem to have a sort of moral absolute, or perhaps moral anti-absolute: “what’s up with this implicit axiom that government is special?” And perhaps it’s not a *moral* absolute, just a moral-and-pragmatic absolute, since it’s not hard to find in pragmatic arguments in the DC-area blogosphere. It sorta straddles the moral/pragmatic divide by tearing down some classes of moral arguments so you can get down to the pragmatic arguments.

    For example, look at the first response to this post: “I’d be pretty pissed if someone bought the atmosphere…thirst should trump property rights.” This seems like a particular case of a very powerful general argument against individual property rights. How *can* individual people legitimately have control over such vital resources? Good question! Moral theories of earliest genesis of private property rights, especially, tend to be quite unsatisfactory. But if you think about it, it’s very strange to worry deeply about this question for private property and then consider the question answered by assigning the right to nations. How *can* a group of people legitimately have control over such vital resources? In fact, as far as I can tell, moral theories of origin of national sovereignty and boundaries tend to be quite unsatisfactory even compared to the comparable theories for individual rights.

    (When Adam delved and Eve span, who then was the Englishman?:-)