§ 1. Waves of opinion as to public ownership. § 2. Primary functions of government favoring public ownership. § 3. Economic influences favoring public ownership. § 4. Forms of municipal ownership. § 5. Localized production favoring monopoly § 6. Economies of large production favoring monopoly. § 7. Uniformity of products favoring monopoly. § 8. Franchises favoring monopoly. § 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 revenues,1 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 inefficient enterpriser, and that the sound public policy was to foster private industry and obtain public revenues by taxation. 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 beating and robbing each other, and preserve the personal liberty of the citizen.2 Thus, it was believed, all of the economic 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 probably just before the Civil War, in the decade of the fifties.

1 See above, ch. 17, § 5.

§ 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 executive 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 contractors. 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 nineteenth century, and the sphere of the state has been enlarging.8 The question as to the proper limits to this development is ever open.

§ 3. Economic influences favoring public ownership.

2 See ch. 17, § 2, on the police function. 3 See ch. 17, § 3 and § 4.

In some cases private ownership is difficult because of the excessive cost of collecting for the service. The cost of maintaining toll-houses on a turnpike sometimes exceeds the amount collected. Collection in other cases, as for the service of lighthouses to passing ships, is impossible. Public industry 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 immediately 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 waterworks 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 citizenship, it is felt that speculation should in every possible way be eliminated from this industry.

The assumption is made in the laissez-faire doctrine that the interest of the public harmonizes with that of the individual. But this proves often not to be the case. For example, the forest has an immediate value to its owners and to the consumers of lumber, and it has also a diffused utility in its influence on industry, on climate, on navigation, on water-power, and on floods. Yet, as the private owner, unless a great land monopolist, does not control enough of the forest appreciably to affect any of these things, and could rarely sell them even if he could affect them, he will cut down the tree whenever he can gain by doing so. In this situation either governmental control or governmental ownership of forests is essential.

Each kind of political unit, or subdivision of government, develops characteristic kinds of public ownership and industry. Federal states consist of three main groups of political units; national, provincial, and local. Provincial units are the largest subdivisions, as the American "states," or commonwealths, the German states, and the provinces in other countries. The term local political unit is more complex, and may mean county, township, village, city, or school or sanitary district; but most of what is to be said of local ownership refers to cities or to incorporated villages.

§ 4. Forms of municipal ownership. Local political units acquire ownership only in local industries and in wealth used locally by the citizens. Nearly all parks and recreation-grounds are owned by cities. As population has become more dense, private yards of any extent have become impossible, in cities, for all but the wealthy. Public ownership of parks insures a "breathing-place" and recreation-grounds to the common man in the most economical way. Of late the movement for large and small public parks and playgrounds has gone on rapidly in American cities. Related to parks are public baths, public libraries, art collections, museums, zoological gardens, etc. Some have seen danger in this policy of "giving something for nothing," but the public sees no such danger as long as the things supplied gratify the higher tastes - as art, music, literature, and social recreation. These give no encouragement to the increase of improvident families and to the breaking down of independent character.

Streets, roads, and bridges were once owned largely by private citizens. Here and there still are found toll roads and toll bridges built under charters granted a century ago, but tolls on public thoroughfares are for the most part abolished. Public markets, where the producer from the farm and the city consumer can meet, are old institutions. About two thirds of the cities of 30,000 population or more have public markets or scales, and fully one third have public markets of importance. New York city has six large retail and wholesale markets for selling meat and farm produce, in which rents or fees are charged, and several open markets. There has recently been a large movement in this direction.

The providing of apparatus for extinguishing fires is always a public duty; the conveyance of waste water is increasingly a public function. The supply of pure water for domestic and business uses, for fire protection, and for street cleaning, while often a private enterprise in villages and sometimes in large cities, is increasingly undertaken by public agencies. Most of the larger cities now own their own water-supply systems. Public ownership of gas and electric lighting is less common, as the utility supplied is not so essential and the industry is somewhat less subject to monopoly; but the difference is one of degree only. Street railroads are often under public ownership in Europe; but there have thus far been few cases of the kind in the United States and Canada.4