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Blizzard Economics

What we can learn about privatization from February's big snow storm.

11:00 PM, Mar 5, 2003 • By CHRISTOPHER CALDWELL
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ON THE FIRST semi-drivable day of the mid-February snowstorm here in Washington, I got a reminder of how membrane-thin can be the line that divides private property from public. My neighbor, Otto Snowden, called to complain that our babysitter was parked in his space. By "his space," Mr. Snowden meant the one on the street right in front of his house. In ordinary weather, one would have told him the street was public property and that he should go find an unfrozen lake to jump in.

But under blizzard conditions, he was in the right. I had seen Mr. Snowden clearing that space from under 27 inches of snow, and then attacking with a pick-axe the frozen-over four-foot-high snow-battlement the plows had left. It had taken him six hours. Essentially, what he had done was build an emergency egress from the house in which he was trapped, in the only way possible and at great expense. (Only a half-dozen houses made the effort; we paid $60 to get a gang of teenagers to clear out one of our cars.) Anyone with the tiniest scrap of fairness would recognize that, for the time being, Mr. Snowden had a legitimate property claim to his parking space, even if it was on the street. In blithely parking there, our babysitter had committed an act of theft as surely as if she'd loaded all his silverware into a laundry bag and stashed it in her trunk.

Over the next few days, shoveled-out neighbors began placing chairs and vases on their parking spots, to mark them as private. There was no dissent on our street to the idea that the six spaces dug out belonged to the diggers, not to the public. The same consensus prevailed around town. The Washington Post published an e-mail from a young woman claiming that Texas senator Kay Bailey Hutchison's chief of staff had plopped her Mercedes--with its telltale "SENATE 1-A" plates--into a space that the e-mail writer and her roommates had spent three-and-a-half hours excavating.

This spate of ad hoc privatizations seemed to confirm why privatization works: Had it not been possible to declare our public street "private" on an emergency basis, there would have been no incentives to dig it out at all.

But then the snow began to melt. Parking spaces opened up here and there, cleared by the mere rushing of water through gutters. And the diggers did a strange thing: nothing. They left the vases and chairs out when they left for work in the morning, to "save" the spaces they'd dug out a week before. The street was a regular public street again, but they insisted on keeping 15-foot stretches of it as their own.

This attempt to hold onto the benefits of ad hoc privatization seemed to confirm why privatization does not work--or, at best, "works" the way it did in Mexico under the PRI kleptocracy, or in post-Soviet Russia under the Mafiosi. What had looked one short week ago like a just reward to labor now looked, in a different context, like usurpation. The object in question--about 90 square feet of asphalt--was unchanged. But the consensus on how much of the fruits of his labor a "digger" was entitled to claim for private use varied from 100 percent (in mid-storm) to zero (in a time of clear streets).

It may be foolish to draw macroeconomic lessons from this episode, but let's do it anyway. The amount of property that it is proper for government to claim from its citizens depends almost wholly on the situation. This means the principle that the president has been enunciating since the 2000 debates ("The federal government should not take more than one-third for income taxes") is common sense in some contexts and arrant nonsense in others (like wartime). When workers are producing things that would not otherwise be there--parking spaces in the case of our recent blizzard, technological gadgetry in the case of a high-tech boom--society is strongly inclined to let them keep the whole of the reward. But when society gets less out of private incentives--when parking spaces don't need to be created, say, or when innovation levels off--then society is considerably more inclined to take what it needs.

Christopher Caldwell is a senior editor at The Weekly Standard.