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Posted by oliveridley at 12:57 am

Murray Langdon and the Role of Government

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Feb 022012
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Murray Langdon of Victoria area radio and news outfit CFAX talks about municipal golf courses and tries to connect the Municipality of Saanich’s role in running a golf course with a much larger question around government, and “money”.

I’ve already been inundated with a ream of people who have stated that rec centres, garbage pick-up, landscaping, etc, has always been done by the municipality. That may be true. What I’m asking is should cities and towns be doing that. For example, we know that rec centres lose money each and every year…

via Murray Langdons Comment

The role of government, whatever level it might be, is to maximise the welfare of the people it serves, not some of its people, but most of them. So, looking at government “costs” alone in deciding the role of government is dangerously incomplete. What you actually have to do is to total up the costs for government and the people being served by the government, and judge whether there is an overall benefit to a municipality providing a service. Trying to be pragmatic about it, here are some of the things I look at:

  1. Is the good/service provided discretionary? Meaning, would I be able to live a reasonably satisfactory life without the service?
  2. If the good/service is non-discretionary ( I need it for a satisfactory life), then does it show characteristics of moral hazard (if some people don’t participate, it affects everyone), and would the provision of the service benefit from risk pooling (it works better if we’re all in it together) and mitigate issues of adverse selection (people who need services most are least able to afford them)?
  3. Is the good/service market amenable? (despite what free market fundamentalists may have you believe, Adam Smith did not think that every good/service could fit into a free market paradigm). If market worthy, is there any additional benefit to having a “public option”?
  4. What parts of a good/service are a natural monopoly, and what parts are amenable to market based competition (highways vs. cars)?
  5. When looking at costs and benefits, it’s not enough just look at direct costs like construction, salaries, etc, but also at more intangible measures like decision fatigue,(after a certain threshold, every decision you take degrades the next one) social capital (community relations, cooperation and confidence), creative capital (the ability to attract people to your community), environmental capital and so much more.

Immediately, dumping golf, recreation, and water and sewage services into the same pot makes no sense.

Let’s look at golf, it’s discretionary, and given the proliferation of golf courses in the area, a reasonably competitive good/service (disclaimer: I don’t golf). If Saanich stopped providing golf services, some people would end up paying more, but this would not affect a vast majority of people in the area. So, I wouldn’t shed a tear if Saanich’s golf course was privatised (I would be happier if it became a park, but that’s a different argument!).

Let’s look at recreation centres – Murray Langdon says this:

For example, we know that rec centres lose money each and every year. But we have examples of private recreation facilities, (in Langford for example) that are not only affordable but actually make money. For some reason, people assume that if it’s not run by a municipality, it will be expensive. Well, I have news for you. It is expensive and it may be because it’s run by a municipality.

I am confused, what Langford recreation centre is he talking about? (I don’t live in Langford, or hardly ever visit) The Westshore Parks and Rec Society runs the recreation centres, and it appears to be a joint effort by Westshore communities.

West Shore Park & Recreation is governed by the West Shore Parks & Recreation Society’s Board of Directors  Each municipalities contribution, through tax requisition, assists in the operation of the parks and recreation facilities.

Putting Langford aside, clearly, the public health benefits of increased physical activity make exercise a non-discretionary item (some may disagree!) Community based (whether run by the municipality or not) recreation centres have many benefits that are not measured just by their profit-loss statements. They are often the only option for family-centric, community centric (as opposed to individual centric) recreation. I can’t go to a private gym with my partner (real) and kids (hypothetical), and have all of us participate in  activities at the same time. My partner and I would have to schedule different workouts, then enrol the progeny in a separate swimming or soccer class, find/take turns in baby sitting, etc. So, not having community based recreation increases costs to society + government, while possibly (and not always) reducing government “costs”. The social capital of having community recreation centres, the public health benefits of encouraging exercise, I could go on, the intangible benefits are high. The YMCA, which I am a member of, is a non-profit community run recreation centre, and this model works as well.

Water and Sewer – These are non-discretionary, monopoly driven services not really market based. Construction, some maintenance, value added services, may be amenable to competition, but not the management, oversight and long-term stewardship. While the BC provincial government and various Federal governments have been trying to privatise various commons resources, third-party evidence points to no cost savings.

Here’s a test: Talk about BC Liquor!

The job of a public policy analyst is to consider the costs/benefits of the society as a whole. One does not read government balance sheets the same way one would read a corporation’s balance sheet.

Photo from GibsonGolfer Flickr photostream used under a Creative Commons License.

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