Water problems of America
Published 11:55 pm Wednesday, February 24, 2016
Flint, Michigan, recently experienced a highly publicized contamination of the city’s water supply. The incident was the product of numerous poor decisions by city and state officials and illustrates the perils of relying on the government to supply a vital good like water.
The city began using the Flint River instead of Lake Huron as the source for its municipal water in 2014 to save $5 million a year. Officials then chose not to treat the river water, which would have cost perhaps $100 a day. As a result, chemicals in the river water caused metals, including lead, to leach from the city’s old water pipes, sickening residents.
One underlying problem in Flint is lead in the water system’s pipes. Lead was used to seal sections of cast iron pipes before its significant adverse health effects were recognized and its use in water pipes banned in 1986. Only many communities like Flint never replaced their old lead-sealed water pipes.
Imagine a business that knew it was selling a product causing lead exposure and did nothing to correct the problem for thirty years. The CEO would rightly be vilified and possibly jailed, and the company would likely be sued into bankruptcy. But the legal doctrine of sovereign immunity will block lawsuits against Flint and the state of Michigan unless plaintiff’s lawyers can devise an end run.
Lead exposure in city water systems is just one consequence of an aging water infrastructure. Water pipes have a useful life of perhaps 80 to 100 years. The American Water Works Association estimates a $1 trillion cost between now and 2035 nationally to replace aging pipes and avoid deterioration of service (e.g., water main breaks and low pressure problems).
The New York Times recently blamed the decrepit state of many municipal water systems on Americans’ unwillingness to pay taxes to support government. And yet federal, state and local taxes total $6.6 trillion annually, while Americans paid $59 billion in 2013 to governments across the nation for water service. We pay plenty of money to government, only it does not get spent for critical needs like eliminating lead from water systems. The problem stems from the limits of elections and the incentive of government officials to spend our money to win elections.
Consider the ongoing presidential election process. The winner this November will undoubtedly claim a mandate to carry out their policies. Given how the race is shaping up, I suspect that many Americans will likely be voting for the lesser of two evils. In any event, one presidential every four years can be interpreted many different ways.
Elections benefit humankind enormously. Regular, institutionalized elections are the greatest single innovation to ensure that government serves the people. Modern prosperity is possible in large part because elections tamed exploitation by governments, as in the days of kings and emperors. But elections cannot give politicians detailed instructions like, “replace those water pipes!”
People have difficulty observing the quality of many goods, a situation economists call imperfect information. For instance, odor and clarity does not tell us if water is unhealthy. Consumers’ difficulty observing quality creates a temptation for suppliers to reduce quality to cut costs. Obtaining goods of the quality we desire is consequently an enormous challenge, both for markets and government.
Imperfect quality observation combined with the limits of electoral control often results in elected representatives shortchanging us on the quality of government services. Far too many high school graduates are not ready for college, with some lacking basic reading and math skills. Medicaid and the Veterans Administration feature long waits for service, leading to veterans dying while waiting for appointments.
Democracy is government by the people, so we intuitively trust government with important tasks. But in practice democracy means policies that win elections. Flint’s unhealthy water illustrates how officials compromise quality to spend our money on things which help win elections. Our intuition to trust government by the people is faulty, and we need to recognize that some things are too important to trust to the vagaries of elections.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. Respond to him at firstname.lastname@example.org and like the Johnson Center on Facebook.