Free Riders, the United Nations, “Affordable” Water and the Daily Show

18 Nov 2014

waterEt tu, Jon Stewart?  I was dismayed to read of the United Nations’ visit and evaluation of Detroit’s recent, well publicized water shut-off initiative.  I suspect that it’s a waste of time; interesting, but a waste.   First of all, the federal bankruptcy judge supervising the Detroit Bankruptcy refused to rule against the City on its now-revised shut-off program.  I am not certain what authority the UN has in Detroit (I suspect none), it is possible that the UN could assert that the United States has violated some treaty.  It is interesting that the UN human rights declaration does not discuss water.  A commentary to that declaration does state that  “the human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses“ and notes that it can be a violation when arbitrary or unjustified disconnections occur or when there are discriminatory or unaffordable increases in water tariffs.

that the shut-offs fell disproportionately on the poor while ignoring those businesses with the ability to pay seems backward and should have been the protesters’ focus

It is the word “affordable” that is crucial here.  The UN documents do not state that government provided water must be free.  In fact, as I noted in my earlier blog post and as the New York times noted previously, not letting market forces set water prices can lead to, in some cases, dramatically bad outcomes.  Water in Detroit cannot be provided for free without a dramatic shift in how we pay for municipal services (i.e., raising taxes).  At present, a significant segment of the population has been taking water for free and leaving the rest of us to pay for it.  This is a classic “free rider” problem and it has led to exactly the sorts of problems that economists predict – an inability to provide the good (in this case water and sewer service) at a reasonable cost.  The bottom line, getting the water to drinkable state (see this video which estimates that it takes $9 Million/year) isn’t free nor is the cost of maintaining the delivery system. So, if we want to have a world class system (vs this sort of jury-rigging), we need to find a way to pay for it.

It is possible that the UN may recommend a reduced rate schedule based on an ability to pay.  Cleveland and a number of other cities have some sort of discount programs.  This (and the hypocrisy of shutting off the poor but not profitable businesses) was the subject of a piece on last night’s Daily Show.  Calling for a moratorium on shut-offs does seem like a call to simply continue the sins of the past.  However, Jessica Williams’ point that the shut-offs fell disproportionately on the poor while ignoring those businesses with the ability to pay is a point that I made previously.  It seems backward and should have been the protesters’ focus.

I was surprised by how long it took Jon Stewart and his crew to get around to this story – after all, it’s been kicking around for months.  The humor of the expose made an important point – until recently, Detroit’s approach has been laissez faire and failed to distinguish between those who can’t pay and those who won’t pay.  The Great Lakes Water Authority is now beginning to ramp up toward a more robust subsidy program – a point which the Daily Show failed to note.   No one is suggesting that people be denied water or sanitary conditions, but I certainly think that those who can pay should pay and even those who cannot afford the full price should have some obligation to contribute toward the service so that they are not “free riders.”  In short, the status quo simply cannot continue.

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