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Private Public Matters

Appeared originally in National Review Online

The past two weeks have seen two near-disasters: an unsuccessful automobile attack on the Glasgow airport in Scotland and a blackout that stopped New York's busiest subway lines for an hour. While both events could have caused devastation, both passed without loss of life. The New York City Police Department, and the British Transport Police, and the U.K.'s MI5 — all government agencies — maintained order through all of the potential chaos. But one wonders why these events seemed so scary in the first place. The answer, as we argue in a new report, is government and, in particular, its own lack of flexibility.

Let's begin with New York and the subway blackout. As befits a high density world city, New York relies on rail transportation. Almost all high-frequency rail service in New York City, furthermore, operates under the Metropolitan Transit Authority. Likewise, only one company — heavily regulated Consolidated Edison — supplies and delivers power for the subway. And MTA, itself, relies on the New York City Police for security on the entire subway system.

It doesn't need to be that way. London has at least five different companies providing high frequency rail service and Tokyo has over a dozen. Residents and businesses in the U.K, the District of Columbia, Pennsylvania, Maryland, and dozens of other places likewise have the ability to select their power suppliers. Even MTA relies on two other police agencies — its own and the Port Authority Police — for rail security elsewhere in the vast network of trains it controls.

Whether or not the services themselves actually performed better (we believe they would), a world where these services were private or semi-private, would also be safer from catastrophic blackouts.

Multiple power suppliers and delivery systems for New York City's subway would reduce the chances of a catastrophic power failure to about zero: even if one failed, the others would still work. Private companies built the bulk of New York's subway lines and efforts to wean the system from the current MTA monopoly —even if it remained in the hands of new quasi-public companies — would have the side benefit of decreasing the chances that one outage could shut the whole system.

While the New York City Police Department has successfully transformed the New York subway system into one of the safest places in what's already the safest Western city of its size, not even it should have a monopoly on security. If it falls down, New York City should have a way of reviving the once-separate transit police force or even hiring some other force to patrol the subway.

A similar logic applies to the car-bomb attack against the Glasgow airport although, admittedly, a blueprint for a more flexible solution seems a little far off. The attack, of course, happened in an atmosphere where people knew it was coming: London Metropolitan Police had defused two potential car bombs the day of the attack and the entire U.K. had gone on heightened alert. British stock markets nonetheless fell in its wake because of uncertainty and fear.

The attack proved scary, in part, because it appeared to reveal weaknesses in the all important air transportation system. While most developed countries have freed airlines to determine schedules, fares, and most routes, everything else remains under strict political control. Aircraft makers need to run every design change past United States and European Union Authorities and nearly all of the world's significant passenger airports exist under government or quasi-government ownership. Following 9/11, nearly all countries placed air transportation security under the control of government agencies. Some government security may work better than what the private sector provided (there's no evidence that contractors working to Transportation Security Administration standards have done any better — or worse—than the TSA) but, by bringing all security under one umbrella, government-run airline security more or less guarantees that vulnerabilities will be similar elsewhere. High levels of regulation of airports and aircraft design, furthermore, limits the number of airports and types of aircraft that fly. The resulting outcome simply makes the whole system less resilient than a more market-oriented one.

There's no magic bullet for making systems like subways, power grids, and airports more secure. Governments will always have a role to play in providing security. But the private sector can often do it better — not because it's more powerful but because it's more flexible.