The best things in life are free. This is what songwriters Buddy DeSylva and Lew Brown told us. And they were right. But economists are also not wrong when they tell us TINSTAAFL! There Is No Such Thing As A Free Lunch!
This week, Nairobi Governor Mike Sonko offered city residents a freebie, where we can carry out our private and undeniably basic human need for free. He told us we do not have to pay to use public toilets, which cartels have been mismanaging and harassing the public. On cue, a notice was issued to the Toilet Operators Association of Kenya to surrender the management of the toilets to the county. The governor reassured us his government would sign a contract to manage all expenses.
There is an African proverb that says: “Beware of the naked man who offers you his shirt”. So why should we be wary of this free offer?
The first is the misnomer to call these toilets public. A public good is a non-rivalrous and non-excludable item or service consumed by society as a whole, and is financed through tax. Non-rivalrous means when one person uses or consumes it, it does not reduce the amount available for others to use or consume. An example is a street light. When one person benefits from its use, it does not diminish its availability for use by the next person. Non-excludability means it is impossible to provide the good or service and exclude others from enjoying it. An example is national defense. When the government defends its citizens, everyone benefits from this protection regardless of whether they pay taxes or not.
In light of this, these toilets are not public goods and should, therefore, not be called ‘public’. They are rivalrous because of their limited quantity and function. They can only be used by one person at a time. For the duration they are in use by one person, they are unavailable for use by others. In the current arrangement, they are also excludable because if you do not pay, then you are barred from their use. These facilities are therefore private goods being consumed by the public.
The second reason we should be wary, is the gratis offer. For toilets to be a restful refuge rather than a last resort, they should have constant flowing water, proper lighting, disinfectants and structural maintenance. We all know that governments do not have money of their own. They rely on our taxes to provide public goods and services. Yet they have assured us they will meet all these expenses. They, therefore, have two choices; either to tax us more, or to divert resources that were earmarked for something else. Either way, we will be paying the full uncounted costs of the very services we imagine to be enjoying on someone else’s sweat.
Thirdly, is what we call the free-rider problem. There will be many who will use these facilities without paying their fair share in taxes. These are the free-riders. The result is that there will be an over use of the facilities, which will cause a strain on the level of taxes collected vis-à-vis the level of services offered by the service provider. Free riding will lead us to our fourth reason.
The Tragedy of the Commons. This is where the well-being of society is overlooked in pursuit of personal gain, as individuals try to reap the greatest benefit from a free common resource in their quest to maximise personal utility. And as the demand for the non-excludable free resource overwhelms the supply, the result is overconsumption which makes everyone worse off in the long run. It is, therefore, highly probable there will be a depletion of water and other consumables in these facilities. Resultantly, they will be extremely filthy, and therefore only usable to the very brave. This is because there will be no profit incentive to motivate the service provider to offer quality services. In the free market, when property is privately owned, the owners set conditions for access and use, and require patrons to bear the costs of their behaviour. They also respond to consumer preferences, thus pricing their goods at an affordable cost.
Additionally, they ensure efficient utilization of resources and innovate in the manner and type of services provided to attract the highest number of clients. On the other hand, public property does not have an owner whose personal fortune depends on successfully attributing costs, or on attracting revenue from individuals who have the freedom to make other choices. Hence people end up imposing costs on others. With a signed, sealed and delivered contract using public resources, there will be no profit incentive for the contractor to ensure efficient resource utilization or value for money.
I submit the county government should embrace the principle of subsidiarity. This tenet holds that nothing should be done by a larger and more complex organization, which can be done more efficiently and effectively by a smaller, simpler and decentralised entity. The county should, therefore, let the free market offer ablution services, while they focus on the larger issues that need fixing.
Finally, my unsolicited advice to Nairobi residents is that we should wake up from the fantasy that our problems are solved once we turn them over to the state. Each time a social need arises, governments, as if on autopilot mode, rise up to fill that need. They do this through coercive redistribution of income and wealth aka taxes. In their guise to help, they keep for themselves a handling charge for the transactions. They are not an unpaid altruist.
In the current arrangement we pay Sh10 for use of these facilities. The questions we should ask are, what will be the new cost? And can we afford it?
How long a minute is, depends on which side of
the toilet door you are on - Anonymous