Privatize Pools and Golf Courses?
Letter to the Editor
June 25, 2009
Memphis Business Journal
If representatives of the City of Memphis are really looking to save money, they should start by privatizing those municipal luxury services that lack any compelling government function.
Two obvious candidates are swimming pools and golf courses. Subsidizing such recreation can hardly be argued a necessary function of government.
Furthermore, the City of Memphis has hardly proved it has a comparative advantage in the provision of such services. And really, golf courses and swimming pools are private goods—rival and excludable—so there is no “market failure” to justify government provision. If these pools and golf courses cannot survive without government subsidies or ownership, they are a waste of valuable resources.
Since these are municipal operations and therefore not sensitive to profits and losses, we cannot know if they are creating any value. Without profits and losses to guide decision-making, such determinations over resource allocation boil down to competing value judgments and the use of political power.
The net result is an enormous waste of resources expended in a political battle that often triggers subsequent resource waste. Given our state of affairs, Memphis cannot afford this extravagance.
Next steps? The City of Memphis should privatize golf courses and swimming pools. But don’t simply sell them to the highest bidder. Instead issue shares of stock to Memphis taxpayers. We’ve paid for these facilities, so we own them. Ownership shares would make this explicit, and privatization ensures that the resources will be allocated to the use that produces the most value.
My case is straightforward. But a disagreement over these indisputably decadent services indicates a problem with much deeper roots than politics. Instead it is one concerning fundamental philosophies about the appropriate operation of society. As we stand, Peter has the “right” to rob Paul so that he can swim or play golf more cheaply than he would be able to in a free market.
Unfortunately, this view supposes that Memphis can be sustained as a community of thieves in which we live as parasites on the productive labors of others.
Make no mistakes. I’m certainly not against golf. Nor am I against swimming. And I’m definitely not against children. While privatizing golf courses and swimming pools means that some of them might close, they will be replaced with more valuable services that can earn income for their owners—in this case, Memphis residents.
Governments might have a number of legitimate functions, but subsidizing recreation is not one of them. When I was a kid, I learned not to take things that didn’t belong to me. Have our representatives forgotten that lesson?
Art Carden is an Adjunct Fellow at the Independent Institute in Oakland, California, and an assistant professor at Rhodes College (Department of Economics and Business).