2008-12-23

Free Market and Snow Plows

Its snowing here in Chicago. I was driving the other day and saw a snow plow driving on the street with it's plow up. It drove for a while like that on the slippery snowy street until it pulled into a strip mall parking lot.

"That's incredibly annoying", I thought.

The businesses payed private plowing companies to plow their parking lots while the city clearly pays plowing companies to plow the streets. So you end up with snow plows that are supposed to plow a parking lot not plow the streets when they go to their destinations.

This may be efficient in terms of speed. Businesses get their lots plowed fast. Often faster than the city can plow the roads. Which is funny because people can't get to those nice clean parking lots.

However this setup is not efficient in terms of resources. In reality the total cost for an area is larger for the community as a whole. The city I live in already employs bus drivers. How hard it be to equip some city trucks with plows. I am sure the bus drivers would love to get some more hours of work in.

I see the snow plows as an example in the inherent inefficiency in the free market. The free market does not consider externalities (Is that a word?). Two parties interacting don't think about the third. Stores don't consider the idea that they might be putting more plows on the road than necessary. To the point of perversion where nobody can get to their clean parking lots.

2 comments:

Anonymous said...

yup it is a sad thing.... but anyways why are you not linking to my comic :P.....do it now ahhhhhhhh, I'll do the same for you

Anonymous said...

yup it is a sad thing.... but anyways why are you not linking to my comic :P.....do it now ahhhhhhhh, I'll do the same for you