Arnold Kling  

My Tax Dollars at Work

My Morning's Web Reading... GSE Reform and Tail Risk...

Crime in the work place is a problem, whether it takes place in the public sector or the private sector. But one advantage of having goods and services provided by private firms rather than by government is that you put the liability closer to where it belongs.

That is, if a private-sector worker commits a crime, then the liability for the lawsuits falls on the private firm, not on the taxpayer. The costs of the new training and procedures needed to prevent a recurrence of the crime are borne by the private firm, not by the taxpayer.

I realize that there are other aspects of this (alleged) crime that are much more awful than the issue of who pays. But I was struck by the fact, given that it is my tax dollars involved, that I will be sharing in the costs of dealing with it.

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COMMENTS (7 to date)
matt writes:

You are going to pay either way. If a private company is responsible for providing the service they are going to increase prices to account for liability issues. So the only question is do you use the service, if so you pay. If the government contracts for the service you pay.

I am not seeing your point.

J Hall writes:

@ Matt,

The amount of the price increase depends on the elasticity with respect to other substitutes. So it seems to me that the distinction here is that it is more costly for Arnold to avoid the burden of the school lawsuit because he'd have to move than if it were a private school that he sent his kid to.

William Barghest writes:

The tax dollars, one collected, are not yours. The government is not you. You only pay them for the privilege of living in their jurisdiction. If you think you are paying to much, take your business elsewhere.

Nathan Benedict writes:

Private businesses, motivated by profit, have every incentive to reduce torts committed by their employees, since it ends up costing them money. If they have to raise their prices higher to compensate, they'll lose customers. Government monopolies have no such worries. If a school district or police department has to pay out a million dollar settlement, those in charge just shrug and write a check and pass the bill on to the hapless taxpayer.

Silas Barta writes:
A man who picked up the phone listed to Burke's father declined to discuss the matter.

"I have no comments. Thank you," he said before hanging up. [bold added]

Wow. It takes a special kind of jerk to print that in the story.

Jaap writes:

guilty until proven innocent?

anyway, at first I thought this story referred to the guys at Fannie and Freddie, who racked up several millions of costs defending themselves.

smartalek writes:

Apologies for the off-topic -- I'm definitely not attempting thread-jack here -- but I can't help but wonder if the detectives performing the investigation, involving asking children of 6-7 years of age questions about the behaviors of their teacher, had received the highly specific training necessary to decrease the likelihood of getting misinformation?
A very significant likelihood, as we learned the yard way (or, perhaps, didn't learn) from the horror-stories of the 1980s?

You might wish to Google® "Fells Acres Day Care," "McMartin PreSchool," or "Satanic ritual abuse," for some instructive cautionary tales.

Here's one recent sample to get you started:

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