Why defunding a mismanaged system is wrong

 

So whether or not you believe that transit is too expensive or should be free, the story of the group in Stockholm using collective fare dodging as a way to save money and inspire change is an interesting one.

(On a different note, why is this acceptable and not, say, people creating collectives based on stealing gasoline from service stations?)

There is a lot of ire and distrust of transit agencies. High visibility projects that cost lots of money seem to take priority over basic system maintenance. In my town, the invective of over the construction of the new Orange Line light rail line (or “loot rail” as the trolls call it) shows an anger at a system that is failing in its basic duty to its riders.

And in the court of public opinion, the sentence is clear: if the agency is mismanaging its funds, give the agency less funds.

Once again, the court of public opinion is wrong.

Starving to eat better

Let’s start with the basic premise: if you feel that an agency is mismanaging its funds, then they have shown that they don’t deserve what they have been given.

With people, I think this makes sense. If you keep crashing cars, you should probably lose your license until you can be trusted to drive better. And with private companies, this also makes sense. If you put out a terrible product or service, then you don’t get any of my money until you put out a better product.

But with public services, especially ones that offer necessary monopolies like transit service, this logic breaks down.

First of all, I disagree that starving an agency of funds is going to do anything about mismanagement. This is easy to see. Let’s say that Agency X is operating with a budget where 30% is mismanaged via corruption or waste. Now, to teach that agency a lesson, I slash the funding by 25%. What do you think is likely to happen?

  • Will everything get slashed equally? (Unlikely.)
  • Will only the mismanaged funds get slashed? (Very unlikely.)
  • Or will the legitimate operating funds be the victim? (My money is on this one.)

Especially where corruption is concerned, it is likely to be the last thing to go. So how will defunding help?

I believe that if you give less money to a transit agency, they are going to offer less/worse service. How would anything else happen? And then, what is my alternative? (Car sharing isn’t an alternative; it’s a different mode entirely.)

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We’ve already seen throughout history that public transit agencies do not function well in the market. Cities started out with private companies, and they all went bankrupt. Public agencies need to be run with different rules, because they are providing a service in a different way from a private company.

The free market isn’t free

Of course, this argument extends to government as well.

Ronald Reagan famously said that “the nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’

Today, I would update that phrase to say that the 12 most terrifying words are actually “I’m from the government and I don’t have the ability to help.

I think government, and its associated regulations, are a vital referee against the unchecked monopolistic tendencies of the free market. And I don’t feel like government is able to do its job currently. The story in my adult life has alway been “government is the problem, so let’s hinder it as much as possible.”

To me that doesn’t make any sense. If you want a fair playing field, you want a strong referee. If you blind the referee, then anyone can get away with whatever they want. While in the short term this means gains for some, over the long term I don’t see how that benefits the majority. A system that only benefits the few is not a successful system. Which is why that I believe that those who advocate for more limited government are either short-sighted or trying to cheat.

Feed the beast

I propose that we finally accept that a certain percentage of graft and mismanagement is intrinsic to any large system, and so we should take it into account. While I’d like to say that there is a way to reduce mismanagement, we haven’t yet found a good way to accomplish this. Defunding isn’t it.

And in the meantime, our institutions are failing us. So why not propose an alternative? Why don’t we provide more funding to these agencies? There will still be a percentage of waste, but we’ll get a corresponding increasing in service as well.

This seems counter-intuitive, obviously. And I admit that this is a tough call, because I believe in fiscal rectitude. But agencies that provide a public service need to be put to different standards, because by definition there is no viable alternative. I would love it if the government were here to help.

But enough about me. Do you think public agencies should be held to a different standard from private companies or people?

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