Theft at the Public Till
overcrowding. When the city of Oakland, California, eliminated admission charges at two pools serving partly low-income neighborhoods in 1968, attendance soared-by 29% in one case and by 67% in the other. The pools quickly became overcrowded and unpleasant to use. This is an expected consequence of providing a desired service at a price of zero. Prices also serve to measure people's relative demand for various types of services, thereby giving the providers valuable feedback as to the quantity and quality desired. If, for example, small quantities of lawn chairs, umbrel- las, and baby strollers are all made available for rental in a park, their relative popularity-measured by the income received-will tell the park manager which types of equipment are most wanted. They may even experiment with more expensive chairs (at a higher price, of course) to see if there's a demand for such diversity. Were the equipment made available for free, whatever was there would be used, and most likely abused, and such experimentation would most likely never take place. Consequently, the decision not to put prices on public services is an implicit decision to produce them inefficiently. The taxpayers are then dou- bly victimized. They have to pay for services they may not use and they pay more than is necessary to produce the services. If the political process decides that the poor (or the elderly, or any other favored group) must have better access to recreational services, it is far less costly to make this special privilege explicit, by such devices as giving out free or reduced rate passes to persons meeting certain criteria, or relying on income-supplement pro- grams which let the poor make their own expenditure decisions. That way at least all other users will pay a price for the services, and many of the efficiency-promoting benefits of the price system will still be realized. Without price information government programs suffer from knowl- edge problems. An egregious example, in the United States, supposed water shortages are bad economic policy masquerading as an environmental prob- lem. Water shortages exist, primarily in the West, because water is under- priced -- mainly to farmers. Ninety percent of the water in the western U.S. is used by the agriculture industry, which gets the water at giveaway prices. City dwellers generally pay over two hundred dollars per acre foot (enough
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