PUBLIC OWNERSHIP 4 1. Waves of opinion as to public ownership. § 2. Primary of government favoring public ownership. 3. Economic influences oring public ownership. § 4. Forms of municipal ownership. § 5. Local ized production favoring monopoly. I 8. Economies of large produc tion favoring monopoly. § 7. Uniformity of products favoring monopoly. § 8. Franchises favoring monopoly. f 9. Various policies toward local public service industries. § 10. State ownership of various kinds. § 11. National ownership. § 12. Economic basis of public ownership. § 13. Sources of heat, light, and power.
§ 1. Waves of opinion as to public ownership. Opinion and practice in the matter of the public ownership of wealth and the direct management of enterprises has moved in waves. In feudal times, when government was virtually identical with the personal ruler, and the private "domains" of the lord or king were the sole source of his public reve nues,' holdings of this kind were very large. Their public nature came to be more fully recognized, but they did not yield large revenues, and gradually were in large part sold or given away to private owners. This was particularly true in England, and in a less degree on the continent of Europe. The conviction grew that the state, or government, was an in efficient enterpriser, and that the sound public policy was to foster private industry and obtain public revenues by tax ation. The ideal was embodied in the laissez-faire philosophy that government should confine itself exclusively to the most essential political functions, leaving the economic functions absolutely alone. It should keep the peace, prevent men from I See above, ch. 17, § 5.
558 beating and robbing each other, and preserve the personal liberty of the citizen.' Thus, it was believed, all of the eco nomic needs would be provided for by competition, in the best way humanly possible, in the quantities and at the rate needed. This policy attained its maximum influence in the first half of the nineteenth century in England, and in America prob ably just before the Civil War, in the decade of the fifties.
§ 2. Primary functions of government favoring public ownership. Civilized government requires the use of numer out material agents to make possible the exercise even of the primary political functions. The state may either own these agents or hire their use from private citizens who own them. It is now the general policy for government to own and control many of the more essential agencies, especially for the performance of the political functions; but a wide range of choice remains. Buildings for legislative and ex
ecutive officers, customs-houses, post-offices, lighthouses, can be rented from private citizens, as post-offices usually are in small places; but it is obviously economical and convenient in large cities for the government to own the public buildings.
A city may own the machines and wagons for cleaning the streets and for collecting garbage, and may hire day labor directly, or it may have the work done by private con tractors. The more simple political functions shade off into the economic. To coinage usually are added the issue of legal-tender notes and certain banking functions; the post carries packages, transmits money, and in most countries now performs the function of a savings bank for small amounts. The social and industrial functions undertaken by public agencies have steadily increased since the middle of the nine teenth century, and the sphere of the state has been enlarg ing.' The question as to the proper limits to this develop ment is ever open.
§ 3. Economic influences favoring public ownership.
2 See ch. 17, § 2, on the police function.
3 See ch. 17, 13 and § 4.
Iu some cases private ownership is difficult because of the excessive cost of collecting for the service.- The cost of main taining toll-houses on a turnpike sometimes exceeds the amount collected. Collection in other cases, as for the serv ice of lighthouses to passing ships, is impossible. Public in dustry may secure, through the economy of large production, a cheaper and more efficient service, the benefits and costs being diffused throughout the community. A manufacturer able to keep his methods secret, or to retain his advantages for a time, can afford to undertake expensive experiments in his business, but the farmers seldom can. The benefits of the work of experiment stations for agriculture are felt im mediately by the farmers, but are diffused to all citizens. The public ownership of parks for the use of all gives a maximum of economy in the production of the most essential goods,— fresh air, sunshine, natural beauty, and playgrounds in the midst of crowded populations. Municipal ownership of water works is an extension of the same idea. Not only because large amounts of water are used by the public, but because cheap, pure, abundant water is an essential condition to good citi zenship, it is felt that speculation should in every possible way be eliminated from this industry.