" the majority of men, there is such a love of tried arrangements, and so great a dread of experiments, that they will probably not act upon this right until long after it is safe to do so."--Herbert Spencer, Social Statics

The key concerns in implementing Libertarian programs are
1.) identification of Libertarian issues in local government decisions, 2.) appraisal and prediction of how the local government and economy will react to any proposed change, and 3.) selection of appropriate tactics.  This chapter considers a series of local government administrative issues which indirectly bear upon Libertarian objectives: mandated expenditures, local government dissolution, consolidation, professionalization and unionization, and contracting of public services to private organizations.  It discusses the political and economic nature of local government interventions into provision of community services, emphasizing the tendency towards monopolization caused by local government actions.  It explains why local government interventions are unstable, invariably leading to further expense, "bureaucratization" and interventions. Three levels of intervention-- franchise, contract, and municipal department--are described.  Lastly, the municipal issues of taxation, debt, revenue sharing, and fiscal economy are considered from the standpoint of Libertarian tactics.
     As Libertarians are elected to local office in greater numbers and increasingly have opportunities to influence public policy, it becomes more important that they acquire the ability to translate Libertarian principles into action.  It was for this reason--to show how these principles apply to concrete, present-day community issues--that this book was written.

     The ability to make headway primarily involves:
     * Identification of Libertarian concerns in local government issues
     * Appraisal and prediction of how the local government aitd economy will react to any proposed change, and
     * Choice of appropriate tactics.

Identification of Issues

     Identification of Libertarian concerns underlying complex community issues is crucial because the Libertarian officeholder for the most part confronts issues which are not of his or her own making. Even Libertarians who ride into local office on the strength of popular support for a particular clear-cut Libertarian position soon find themselves mired in a host of governmental controversies which seem to have little to do with the question of expanding liberty. "When are you going to fix Maple Street?"  What offer should the municipality make to its police when the contract is up?  Should planning be contracted out to the regional agency and the city's planning department be abolished?  Should we "buy local" when we buy paper clips?
     Alas, as long as people see local government as something more than a strictly voluntary association for keeping the peace, these will be the issues which Libertarians must tackle in order to enjoy the opportunity to strike a blow or two for freedom.
     The point is that there does exist a Libertarian concern, however subtle, beneath every governmental act.  Coercive government as such is the Libertarian's concern.  He or she occupies governmental office in order to put a stop to the use of force against people who themselves have initiated no aggression against others.  Thus, even if the administrative decisions of local government seem noncontroversial, there are no governmental decisions which are entirely neutral from the standpoint of one’s Libertarianism.  Every choice possesses at least some instrumental value (or disvalue) as a means of attaining ultimate Libertarian goals.  Does a decision, for instance, strengthen the hand of those who support liberty? Of those who work against it?  Does it increase the chance that a countervailing lobby" will develop in opposition to government coercion?  What does it do to affect the scope of free choice in the life of the local community?  Since much of the Libertarians's work necessarily consists of building what is sometimes called "political capital" in order to achieve significant future successes at dismantling coercive government, these are issues which he or she ignores--or scorns--at his or her own peril.
     Before the officeholder can make appropriate tactical choices, it is necessary to relentlessly look out for the Libertarian "angle" in every community issue.  Some of the not-so-irrelevant administrative issues which commonly occur in local government are considered below.
     * Mandated expenditures.  These are the rule, not the exception. Despite the recent popularity of "home rule," municipalities remain essentially creatures of state constitutions, and most states require specific duties to be carried out by incorporated communities.  In order to accomplish anything through the local government (or school boardl) the Libertarian is held hostage to these rules--at least until Libertarians mount the support to change them.
     There exist a variety of expenditures and programs administered at the local level for which the local official bears responsibility without enjoying much control.  School budgets are often dominated by state aid and its concomitant state control over policy.   Local jails and voting places and street lights and water systems must all conform to state and federal standards--and the law leaves little option about offering such services.  Hospitals, which once fell under the jurisdiction of local governments, now are regulated by Health Services Agencies" which answer to the federal government.  State and federal policy also governs welfare programs--while local governments bear the brunt of administration and fiscal support.
     All these are certainly local community issues; but changes must occur at another level of government before local officials can do very much about them, besides lobby at the state and federal capitals.
     * Dissolution.  If the focus of local Libertarian concern is upon mandated expenditures, and attempts at economy prove insufficient, then dissolution of the incorporated municipal government may be a useful way of escaping expenditures and taxes required by the state. Dissolution is a procedure routinely undertaken when small local government units lose population and find that both the local tax base and the rationale for local government services are evaporating.  Some states have ongoing programs aimed at dissolving "unnecessary" local government bodies, but hidden dangers can lurk in such "streamlining." If a dissolving municipality operates a sewage plant or firehouse, state law may require the surrounding township or county to become involved, for the first time, in administering such services.  Elimination of a municipal government may cause a surrounding township or county to incur additional expenditures for police, emergency, and highway (especially, in the northern climes, snowplowing) services. Dissolution may induce a surrounding government to impose regulatory controls upon all in its jurisdiction in order to satisfy the demands of people living in the formerly incorporated populated area--as when  a township enacts town-wide land use control in order to make federally-subsidized flood insurance available in a built-up former "village." While these external consequences do not necessarily compel the Libertarian to reject or favor dissolution, they are worth taking into account. Some of the pitfalls can be avoided by encouraging the formation of private, voluntary service districts as a prelude to dissolution.2
     * Consolidation. Much of what state governments actually seek in their "streamlining" programs is not merely dissolution of local government bodies, but their consolidation into larger, better-financed units. Dissolution eliminates a governmental unit, leaving only whatever other governments previously existed in the area. Consolidation dissolves one or more local government units, but replaces them with a new, larger unit at the same level of government. Consolidation, then, may include either annexation of one area by another existing local government body, or the merging of two or more units into a wholly new local government.
     Consolidation of "overlapping," "duplicative" local governments is the keystone of a long "progressive" reform tradition in community politics. Proponents argue that larger governmental units can take advantage of economies of scale to provide services for a lower per capita cost. They hold that political control over local government should be limited to electing a policy-setting legislative body, while professional city managers and well-equipped administrative staffs conduct the day-in-and- day-out business of local government.
     In recent years, the opposing view--decentralism--has gained a few points in the debate.  For one thing, the actual observed pattern is that per capita local government expenditures rise with increasing city government size, rather than fall.  (Tables 1, 2)  For another, consolidation proponents have failed to explain why "public services"--an arbitrary grouping of activities from the standpoint of individual production functions--should all be expected to exhibit growing efficiency with larger organizational size.  Indeed, some public services such as police apparently operate most economically under relatively decentralized conditions.  In a study of suburban police departments, Ostrom and Parks said that "No one has reported a negative relationship between city size and per capita expenditures on police," and concluded that the more police jurisdictions there were per 100,000 inhabitants, the lower were per capital expenditures for police.3  Werner Hirsch suggests that large governments are probably better at providing air pollution control, water supply, sewage disposal, public transportation, electricity, hospitals, and some other health services, while average costs do not decline with increasing size for cities over 50,000-100,000 population in such services as education, police, fire protection, libraries, public housing, welfare, parks and recreation, refuse collection, and street maintenance.4  The federal Advisory Commission on Intergovernmental Relations summed it up in this way: "Size does not seem to matter in cities of 25,000 to 250,000--neither economies nor diseconomies of scale were of significant number.  But in cities over 250,000 population, size does 



1. In this chapter, the term "local government" includes school boards.
2. The basic problem here is that the surrounding governmental unit continues to provide its services free of direct charge. The Libertarian can use the possibility that dissolution might "victimize" a surrounding governmental unit as an argument why that unit should privatize those services by pricing them and offering tax cuts to those who do not subscribe.
3. E. Ostrom and R. Parks, "Suburban Police Departments: Too Many and Too Small?" in Lewis H. Masotte and Jeffrey K. Hadden, Urban Affairs Annual Reviews: The Urbanization of the Suburbs, vol. 7, (Beverly Hills, CA: Sage Publication, 1973), pp. 367-402, p. 390. Cited in Robert L. Bish and Vincent Ostrom, Understanding Urban Government: Metropolitan Reform Considered (American Enterprise Institute for Public Policy Research, 1973), p. 76, p. 78.
4. Werber Z. Hirsch, "Local Versus Areawide Local Government Services," National Tax Journal, vol. 17 (December 1964); and Hirsch, "The Supply of Public Services," in Harvey S. Perloff and Lowden Wingo, Jr., eds., Issues in Urban Economics (Baltimore: Johns Hopkins Press, 1968).  Cited in Bish and Ostrom, op. cit., p. 78.
5. Advisory Commission on Intergovernmental Relations, Size Can Make a Difference: A Closer Look (Washington, D.C.: ACIR Bulletin No.
70-8, 1970), p. 2. Cited in Bish and Ostrom, op. cit., p. 79.
6. Bish and Ostrom, op. cit., p. 80.
7. Ibid., p. 80. See notes 15-17 there.
8. "Grass-roots Revolt: Soaring Property Taxes Infuriate Homeowners,
Spur Legislative Action," The Wall Street Journal, September 7, 1977, P. 1.
9. Tax Foundation, Unions and Government Employment (New York: Tax Foundation, Inc., 1972), p. 41; citing research by Paul T. Hartman.
10. E. Wright Bakke, "Reflections on the Future of Bargaining in the Public Sector," Monthly Labor Review, Vol. 93, No. 7 (July 1970), p. 24. Cited in Tax Foundation, op. cit., p. 26.
11. The best source of information about contracting is the Local Government Center, 221 West Carrillo St., Santa Barbara, CA 93101.
12. Bish and Ostrom, op. cit., p. 60.
13. Ibid., p. 60.
14. The definition used here assumes that a purely voluntary association for self defense would not be called a government, recognizing that the word is often used to describe such an association.
15.  Both "government" and "revenue" are here defined on an economic
basis: "government" including the actual institution and its supporters, and "revenue" including money, goods, services, and psychic income.
16. And this includes, in the extreme, the right of revolution.
17. Other things being equal.  Federal government policy is such that a municipal service organization can often receive federal funding whereas private counterparts cannot.  While outside the scope of our focus upon the local community, this is still consistent with our thesis that the political monopoly over the service is maintained only by expanding access to new revenue--in this case, the wallets of federal taxpayers.
18. It is, for instance, sometimes claimed that it is easier to avoid sales tax than property tax.
19. Presumably, if Libertarians succeeded in putting a local government on a purely voluntary footing before the loan's maturity, repayment could come from voluntarily-provided local government revenues.
20. Taxes here include all charges levied by organizations possessing government support of wielding a coercive monopoly.  Thus they would include any "user charges" levied by government authority, and the funds which pay off revenue bonds.
21. A detailed analysis would demonstrate that such decisions are unavoidably political rather than "financial."  One borrows when the rate of return achievable by the investment exceeds the market interest rate.  Government has no "rate of return on investment" except a political one; even the income of quasi-independent authorities is a function of their politically-determined monopoly license.
22. The Libertarian objective sought in eliminating a government service or program may not always be the obvious one of saving money.  A tax-subsidized service has the effect of "regulating" private competition--either allowing private operators to charge artificially high prices or making it impossible for them to operate at all.  In such cases the reason for eliminating the service would be to remove the coercive intervention into free market exchanges.
23. This includes the psychic rewards which some politicians derive from "doing a public service," etc.
24. Though in certain cases, "hidden" taxes may also be easier to evade, and thus would produce lower collections.
25. "Soaring Property Taxes," The Wall Street Journal, September 7, 1977; the last statistic is from Tax Foundation, Facts and Figures on Government Finance (New York: Tax Foundation, 1975), p. 243.
26. "Soaring Property Taxes," The Wall Street Journal, September 7, 1977.
27. "Revolt Against Property Taxes," U.S. News and World Report, January 17, 1977, p. 81.

Chapter 7
Table of Contents