Home
/
RELIGION & LIBERTY ONLINE
/
Who Pays for Detroit’s Water?
Who Pays for Detroit’s Water?
Jan 26, 2026 10:00 AM

As I was poring over the morning news the other day, it seemed to me that every few days there is another water crisis somewhere; whether it’s California’s drought, or more recently the controversial decision in which the Detroit panies shut off the water supply to over 15,000 customers. But are we really looking at water regulation, appropriation, and the morality of shutting water off in the correct light?

Let’s start with some of the basics: Water is essential for survival. Water needs to be purified. But, how is this done? In most cities panies or public utilities offer the service of collecting the water, filtering the water, and pumping it to our homes. How should a service like this be supported in a market? It should be supported by rewarding the provider of that service with a profit, so that they have an incentive to efficiently use their resources, and make it available to the widest range of people possible. To not pay, would be stealing from the panies.

When one looks at Detroit’s predicament, which is that too many residents are not paying for their water, the residents state that they cannot afford the water bills. However, studies found that about 75 percent of residents are able to pay for things such as cable television or cell phone usage, and only 50 percent are willing to pay for water. Does this deserve an appeal to the U.N. for human rights violation? Is this a grave moral predicament? This past weekend, Detroit News-columnist Nolan Finley mentioned in an opinion piece on the subject:

This is not a humanitarian crisis, as the Netroots entitlement nation proclaims. It’s a necessary forced reordering of priorities. Water, food, clothing, shelter were never bestowed on us because we exist. It costs money to purify water and deliver it to homes. That’s why early on people began munities to share the cost of meeting mon need, and others. Charitable minded citizens have never objected to helping care for neighbors who are unable to care for themselves. But they understandably don’t have much appetite for carrying on their backs those who choose to indulge their wants before their needs.

Finley points out that as a result of people not paying, there have been increases in the water bills in an attempt to cover the higher costs of providing water to the free riders.

There is no way that the people can realistically claim that the DWSD (Detroit Water and Sewerage Department) is being unfair. It is clear that there are payment assistance options, and other options. It seems that most people are able to pay their bill; however, others believe that water is an entitlement that they should not pay for. The water shut-offs are not permanent, they are suspending the shut-offs for about 2 weeks. This is simply an attempt of the DWSD to provide incentive for the violators to resume the payments of the overdue bills and keep their filtered water services viable.

However, Michigan statute requires that all water providers are to be not-for-profit entities. This represents a misallocation of the resources. By ruling out privatization the state rules out a means for a more efficient water system. Privatization is a system that will provide incentive for pany to eliminate rent-seeking (rather than relying on government grants and regulations), maximize efficiency (in order to be rewarded by profit), and promote stewardship (by being efficient with the resources).

The renowned economist Henry Hazlitt touches on this in an article on the subject of water pricing:

None of these problems would arise under a metering system, in which the individual or family user pays for each gallon he uses, and saves on each gallon he doesn’t use. Then each family has a clear and direct incentive to economize. And in a serious water shortage, a city could raise the price it charged per gallon.

This is what the Detroit water suppliers are beginning to try to do. They realize that they need to provide incentive for people to use the water in a reasonable non-wasteful way. As it is, the residents are facing large price increases as a result of the expensive free-rider problem. Most panies have done this as well. They charge by the amount of electricity that one uses, which tends to minimize wasteful applications.

In one of the Acton Institutes publications on this subject: Environmental Stewardship in the Judeo-Christian Tradition the subject of incentives is highlighted:

The fact that property rights are sometimes not well defined and enforced is at the heart of environmental despoilment. The lack of a full rights structure means decision makers do not have appropriate incentives and information. Therefore, it is not surprising that resource misuse occurs when property rights are plete. Of course, simply pointing out the lack of adequate property rights is not a solution to the environmental problem, but it provides some general guidance. (Pg. 102-103)

What this excerpt is pointing to is that it is virtuous to do things that preserve natural resources, and it is a step in the right direction for organizations similar to the DWSD to e more efficient. It is in the public interest to operate with profit as an economic indicator of efficiency, optimal allocation, as well as reducing rent-seeking activities.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Re: Die Hard — The Welfare State
News reports today on the Greek debt crisis are packed with scary terms like “implosion” and “financial doomsday” and “ebola” and “contagion.” The anxiety has ratcheted up considerably this week, and not just for EU heads of state but also for President Obama. He should be worried. As I pointed out in a previous post, “Die Hard — The Welfare State,” the United States awaits its own day of reckoning for the sins of mounting government debt, a bloated public...
Editorial: Where’s the morality?
Acton Research Director Samuel Gregg is quoted in yesterday’s Pittsburgh Tribune-Review editorial on Goldman Sachs: The most shocking moment in Tuesday’s Senate hearing on Goldman Sachs wasn’t Sen. Carl Levin’s repeated use of the big investment house’s scatological description of its own dubious offerings. No, it was when one of Goldman’s high cluckety-clucks actually said that it has no ethical responsibility to tell clients that it is betting against the same investments it mends. That really is (expletive deleted). Samuel...
Samuel Gregg’s New Book: Wilhelm Röpke’s Political Economy
Over at Econlog, one of the best economics blogs around, Arnold Kling has been reading Acton Research Director Samuel Gregg’s latest and recently released book, Wilhelm Röpke’s Political Economy (Edward Elgar, 2010). Kling underlines how Röpke used ethical analysis to distinguish between the three ways of allocating resources: altruism, coercion, and what Röpke called “the business principle.” For Kling’s take on this subject, see Econlog. The book is available on the Elgar site and Amazon. ...
Last Exit To Utopia
U·to·pi·a [yoo-toh-pee-uh]- noun – an imagined place or state of things in which everything is perfect. The word was first used in the book Utopia (1516) by Sir Thomas More. The opposite of dystopia. ORIGIN based on Greek ou not + tóp(os) a place Last Exit to Utopia by Jean-François Revel Note, dear reader, the origin of the term “utopia”: the Greek root indicates that utopia is, literally, nowhere. It is not a place. It does not exist. Sir Thomas...
Prophet Jim Wallis Explains the Doctrine of Coercive Repentance
In a new column on Sojourners, Prophet Jim Wallis reveals that Wall Street financiers ing to him for confession, sometimes skulking along darkened streets to hide their shame: e like Nicodemus – a religious leader who came to talk to Jesus in private – at night. Many have felt remorseful about what happened on Wall Street and how it has hurt so many people. They describe the behavior in their profession with words such as “greedy,” “risky,” or “reckless.” These...
Top 10 Reasons to Rely on Private Sector Markets
This week’s Acton Commentary from Baylor University economics professor John Pisciotta: Americans have less confidence and trust in government today than at any time since the 1950s. This is the conclusion of the Pew Research Center survey released in mid-April. Just 22 percent expressed trust in government to deliver effective policies almost always or most of the time. With the robust expansion of the economic role of the federal government under George W. Bush and Barack Obama, the Pew poll...
Will Tea Parties Awaken America’s Moral Culture?
This mentary developed out of my remarks at Acton on Tap. My years of studying and reading about the civil rights movement at Ole Miss and seminary aided in the writing of this piece: Will Tea Parties Awaken America’s Moral Culture? Tea parties are changing the face of political participation, but critics of the tea party movement point to these grassroots upstarts as “extreme,” “angry,” “racist” and even “seditious.” Yet The Christian Science Monitor reported that tea party rallies are...
The Birth of Freedom Documentary Airs Sunday on Detroit Public TV
Acton Media’s second documentary makes its public television debut Sunday, May 2, with a 3-4 p.m. airing on Detroit Public Television (HD channel 56.1). The film trailer is here. Update: Michigan PBS stations WCMU and WFUM have scheduled the documentary for broadcast on Thursday, June 17, from 10-11 p.m. ...
Free Range Markets
Here is an question: Where do a lot of socially liberal, anti-capitalists,left-leaning, organic, environmentalist, vegan, social democrat types who enthusiastically support government regulation and nationalized health care go to find a sense munity? Answer: Free Markets To be more precise: Farmer’s Markets. Spring is in the air and so I headed off to the first official day of the farmer’s market in Grand Rapids on Saturday. As you can imagine farmer’s markets not only have an abundant supply of fresh...
Remembering Ernie Harwell
We of course have a ton of content in our blog archives at the Acton Institute. Radio legend and former Detroit Tigers broadcaster Ernie Harwell passed away yesterday. The infectious joy and moral quality he exuded was so grand it is worth pointing you to a post I wrote in 2008. It has a good deal of information on Harwell, including these lines: Harwell has many thrilling encounters and prestigious awards in his long life, but his most important encounter...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved