"If nobody's doing it, why can't I?"--Frankie Van Cleave, one of two Atlanta housewives who run a private garbage collection firm.
Libertarians see local government intervention into provision of solid waste services as producing increased costs and stifling development of recycling alternatives. Municipal garbage collection costs an average of 68% more than even semi-private government contract collection. Substantial local government subsidies to the operation of sanitary landfills reduce the ability of recyclers to compete.As long as solid waste collection and disposal is dominated by the presence of one alternative--a system of collection and dumping at a spot provided by local government--it seems fated to remain a fairly standardized activity. Accordingly, knowledgeable observers perked up their ears when Columbia University researchers claimed to have identified the kind of situation in which garbage collection is most efficiently performed: a market of 50,000 people served by one collector on a contract basis.
The striking fact is that government intervention has rather consistently prevented this ideal from being achieved. Private garbage collection firms are discouraged from organizing in this fashion; and municipalized operations corrupt the ideal with add-o costs peculiar to politically-run organizations.
The Effect of Intervention
Where private garbage collection firms
have been permitted to trade directly with their customers--without benefit
of exclusive franchises or government contract--regulators have taken the
attitude that private firms should be discouraged from setting up the regional
and (in a large city) neighborhood mergers which would serve the consumer
most efficiently. District attorneys crusade against "collusion" little
realizing that they are driving up private garbage collection costs.2
And, of course, where a market of 50,000 can only be reached by crossing
local government jurisdictional lines, the preference which one government
expresses for "its" local collectors often prevents private collectors
in a nearby district from providing the best service to the
area as a whole.3
DIFERENCES BETWEEN MUNICIPAL GARBAGE
COLLECTION AND PRVIATE CONTRACT GARBAGE
COLLECTION IN CITIES OVER 50,000 POPULATION
|Source: Emmanuel S. Sawas, Evaluating the Organization of Service Delivery: Solid Waste Collection and Disposal (New York: Columbia University Graduate School of Business, Center for Government Studies, October 1975), pp. vi-vii.|
| According to Leonard Stefanelli, president
of Sunset Scavenger Corporation, one of two companies under city contract
to pick up San Francisco garbage, "The difference between Civil Service
and our operation is the eight-hour day. Our men are guaranteed eight
hours' pay, but if they can do the job in six hours, they can go home."
Leo Conte, the head of Golden Gate Disposal Company, the other San Francisco
contract hauler, employs the same work-at-your-own-pace setup, and he confirms
that, rather than stretch the job to fill eight hours, his employees actually
run at the job...They have a route to cover, and the faster they can cover
it, the earlier they can quit."6
Similarly, a 1971 New York City study discovered that private collectors could pick up garbage at $17.50 per ton compared with the city's $49 per ton. The City Sanitation Department spent $207 a year to collect garbage twice a week from each household in an area of single family homes in Little Neck and Douglaston, Queens. In Bellerose--a similar neighborhood three miles away over the Nassau County line--a private firm collected residential garbage three times weekly for just $72.7
Local Government and Garbage
These facts, then, stand out about garbage
collection: Though the optimal collection firm may be a regional or (in
large cities) neighborhood "monopoly," garbage collection remains nonetheless
a highly competitive businesses,8 and every established firm would be,
the free market, acutely aware that customers can easily be wooed away
by new entrants. But government regulation and jurisdictional differences
have kept existing private operators from servicing markets of efficient
size, thus raising their costs and blunting their competitive impact.
Where private firms have been allowed to serve larger markets, it has usually
been under government franchise or municipal contract.
Sanitary Landfills: the Only Alternative?
The assumption that garbage collection
is best organized as a neighborhood or regional "monopoly" comes in for
further critical examination once we consider the role of tax-subsidized
municipal "dumps." Though solid waste contains many potential resources
and enjoys many potential markets, it goes to one kind of collection
firm, and the garbage trucks go to one kind of destination: the
city dump. Were taxes to stop subsidizing this setup, we might expect to
see several changes in solid waste economics.
What will Libertarians do about solid waste?
|1.||Evaluating the Organization of Service Delivery: Solid Waste Collection and Disposal, Emmanuel S. Savas, Center for Government Studies, Graduate School of Business, Columbia University, October 1975; pp. v-ix. This study is forthcoming soon in book form. Cf. Robert W. Poole, Jr., Cut Local Taxes (Santa Barbara, CA: Reason Press, 1976) pp. 18-22.|
|2.||"Public vs. Private Collection of Refuse: In Some Cities, It's No Longer a Debate," The New York Times, July 10, 1975.|
|3.||The Savas study found that "...if three adjacent communities of 3,000 people each--with separate collection systems of average cost--are organized into a single refuse collection market of 9,000 population, the cost per household can be expected to decline by 13%. If three communities of 10,000 people each combine to form a unit of 30,000 population for refuse collection purposes, the cost per household can be expected to decline 9.5%." (Savas, p. viii.)|
|4.||Savas, op. cit., p. v.|
|5.||Savas, op. cit., p. vi. It is also noted that the cost which appears in the average municipal budget for municipal garbage collection is, as determined by on-site data collection using a standard cost structure, understated by an average of 18%.|
|6.||"Public vs. Private Collection," New York Times, July 10,1975.|
|8.||Take, for example, Atlanta's Backyard Team, Inc., which was founded
by two housewives with one used compacter truck, a college student driver,
and an office--and now makes $10,000-$20,000 annually by underselling the
city garbage collectors by $50, to 300 customers.
See "Making Garbage Pay Off," Conservative Digest, (June 1976) p. 46.
|9.||Savas, op. cit., pp. xv-xvi.|
|10.||William D. Burt, "Trash for Money," AREA Bulletin (March-April 1977) p. 5.|
|11.||Ibid. See also "Private Hauler Profits from Providing Separate Collection Service to Local Homeowners," Solid Wastes Management (February 1977) p. 14.|