This is a response to the article posted by Dr. Ryan Maue here titled: CEI misses the boat on the need for the National Weather Service. Ryan’s response is in the comments, and here is the key clause:
…The CEI should think about their statement about the “private collection” and ownership of weather data. How did that work for the UK Met-Office + Hadley Center with Phil Jones’ climate data? (climate data is weather data, btw)
By Iain Murray and David Bier
The most difficult task free-market advocates often face is in addressing the duties the government has already assumed. Who will provide education? Who will deliver the mail? Who will coordinate airline flights? The knee-jerk reaction is generally that it is too difficult for the private sector to provide these services. Our recent op-ed [“Do We Really Need a National Weather Service?”], in which we argued that the private sector could provide the services provided by the National Weather Service (NWS), met precisely that reaction.
Each response seemed to conclude that we wanted the NWS’ services to disappear. That is analogous to saying that advocates of privatizing the U.S. Postal Service want to end mail delivery. Or that proponents (like CEI) of Federal Aviation Administration privatization want to end air traffic control. Such a suggestion would indeed be “laughable,” as some critics put it, but we never suggested that.
Therefore, most of the responses simply attacked a straw man. On reflection, we should have been more explicit that we were calling for the privatization of the government’s civilian weather services, not their outright abolition. Our piece was too easy to misinterpret.
Nearly all the responses dismissed the notion that the services of the NWS could be provided privately. Yet Britain’s Meteorological Office is already a self-funding, commercial entity, and the British government is now considering selling it to a private corporation, much as the Canadian government sold its air traffic control (ATC) service to the now award-winning NavCanada.
Private weather services often rely on NWS data. But we repeat that no one (to our knowledge) wants to shut down NWS services. The existence of many private weather agencies demonstrates a significant demand for this information, and the fact that they do more with the data and provide even more accurate forecasts strongly suggests that private entities would improve on the data collection functions the NWS currently provides. There is no intrinsic reason why the infrastructure for this data collection function should be publicly owned. Our critics have advanced none, other than the fact that it is currently publicly owned.
Historically, privatization has led to more investment in a service or industry, not less. For example, the privatization of water utilities in Britain almost doubled investment in that vital service — and increased quality, as well. The UK Laboratory of the Government Chemist has seen a fivefold increase in its number of staff since privatization.
Some responses discussed NOAA, the agency that oversees the NWS, and other government agencies which were not referenced in our piece. To be clear, we do not envision private planes replacing all military reconnaissance flights, as some (including Dr. Maue) suggested, but military data collection is not incompatible with a NWS privatization plan. The private sector owners could – and perhaps should – pay the military for the information.
Some have argued that the private sector could not afford to purchase the assets of the NWS. If that is the case(and we doubt it is), then the NWS can be sold as either one or a number of companies via IPO.
Either way, the sale of the NWS would bring in substantial revenue for the government at a time we are told it needs it most. At the very least, the NWS should begin to operate as a Performance-Based Organization, charging for its services. That will allow private companies to decide whether or not they are receiving value for money. If they are not, we will see more competition, and therefore increased accuracy, in data collection.
Even when the government stands in the way by means of regulation, that is advanced as justification for more government. Accuweather’s Mike Smith argues that, “[C]urrent federal policy (set by the FCC) will not allow private sector companies to run 10cm weather radars. For technical reasons, 10cm are vital in measuring precipitation. We must have a federal entity for that.” Why? The reason for the ban is unclear, but if the NWS already gets an exception to FCC rules, a private competitor could be granted one as well. If there are genuine national security or interference issues, then a rigorous licensing procedure respecting those concerns should suffice.
It may surprise some to learn that privatization is not new to the NWS. Over the years, the Service has divested such programs as direct commercial radio and television broadcasts, newspaper weather page preparation, agricultural forecasts, and the fire weather service. The latter two were privatized as recently as the mid-1990s. In each case, government officials simply decided that government had no real business providing the service. Our suggestion simply follows that logic.
The arguments against privatization focus on the role the government already plays, as if the service would disappear otherwise. This flawed logic is trotted whenever government monopolies are criticized. The National Weather Service is not exceptional. If people demand weather forecasts and advisories, and government gets out of the business, the market will provide.
Iain Murray is Vice President at the Competitive Enterprise Institute with considerable experience in privatization. David Bier is a Research Associate at CEI.
The overall idea is to cut the overall size of the federal government. This is just one area of many, and since this is a climate/weather site, the NWS is the natural focus for such a debate.
Mr. Maue brought up the issue with bad forecasts and being sued, wouldn’t one simply extending a good samaritan-type rule take care of the threat of lawsuit? Also, we don’t sue the Weather Channel, AccuWeather or any other private entity over bad forecasts, do we?
My mistake, it was Kevin Kilty who brought up the issue of lawsuits. Sorry.
So far as I can determine, the interest in privatization arises in reaction to political influence and perceived inefficiencies at NWS. I find it doubtful monetizing the weather services represents anything other than exchanging one set of problems for a fresh, even less tractable set.
All monopolies are bad. Where a monopoly is unavoidable in the nature of things, then Government tends to perform less badly than private enterprise. The postal system is a good example of this. Fannie Mae might be the best example of all. It came into being as a Federal agency to do a job that was quite undo-able. As a concept it was great, but totally without feasibility in the real world. The extraordinary thing was that it worked and (eventually) paid for itself. It was the envy of bankers around the world. It became so successful in the ‘sixties that the investing public wanted part of the action and consequently it was privatised. (The process was done badly by Government which was left with an implied guarantee) Fannie went bust (effectively) and the Fed picked up the tab. Investors laboured under the misapprehension that the business ‘model’ was sound and did not appreciate that the key factor was that of a continuously rising property market.Those don’t exist outside the imagination (excluding hyperinflation which busts everybody) and thus dear old Fannie Mae remains as undo-able today as the day it was first conceived. Undo-able monopolies are best in the hands of government because only they can afford them..
Many of the private weather forecasters do a great job and no doubt their clients value their services. But my belief is that they rely to some large extent on data provided by various government agencies and I doubt that private enterprise could collect its own data at a sensible cost except on a very localised basis. Take away government’s job of interpreting the data and one could expect to see the charge for data rise steeply. Government won’t fire all those people left without a working purpose, it will put up the taxes. Governments around the world do the same thing. It is as certain as the first law of thermodynamics.
As I see it, the status quo is fine. Those who are heavily weather dependent can buy good forecasts from private enterprise – thanks to government. Government will waste money in the collection process but wasting money is what governments do.
It is my understanding that services such as cleaning city hall have been provided by companies in Chicago, and also by government. When the companies got too cozy and corrupt, it was switched to government, and when government got too cozy and corrupt it was switched to private. Some folks here suggest that corruption or imperfect service is possible with companies. Of course it is possible; and when that happens we deal with it. That is no reason to reject the idea out of hand.
Maybe a dumb question, but would private entities be subject to FOIA standards/requirements?
I ignored this subject of the previous thread, But:
What CEI, and all those other lobbyists, describe as “privatization” sometimes goes by a much uglier name, “profiteering.” Were these services and products they propose to “privatize” economically possible without huge taxpayer subsidies, an enterprising entrepreneur would already be doing them.
I suspect whatever “savings” these lobbyists can show on paper would be eaten up by government inspectors, contract lawyers, and lawsuits. Too many “private contracts” have been fulfilled by maggot ridden meat, sawdust flour, faulty aircraft parts, climate models, etc., to doubt otherwise.
I would suggest that government savings can only come from deciding whether or not the citizens have a need for the service or products that private business do not already provide directly to the consumer. And not give businesses or citizens other people’s hard-earned income for stuff they want but do not want to work for. And for the Federal government, those things assigned to them as the Federal government’s responsibility.
My opinion, of course. Subject to change at my own whim.
I participated in and led a number of privatizations in Hungary in the 1990s. Based on this experience, the consequences of an NWS privatization might be expected to include:
– increased productivity per employee — almost certainly
– more efficient processes — almost certainly
– substantially greater innovation — almost certainly
– greater pay and job satisfaction for NWS employees — most likely
– fewer employees – quite possibly
– substantially greater focus on delivering timely and accurate information to paying customers
– greater investment, but only where returns are appropriable, ie, for paying customers
– provision of service primarily to paying customers
– tendency not provide services not related to revenue streams
Thus, how much and whether to privatize depends on the specific business model in question. To the extent that weather information is a public good, a private business will tend to provide less of it. However, if you watch the Weather Channel or weather on local TV, then in fact that is a business model, with a paying customer (rather, the product is the viewer, the paying customer is the advertiser). So that’s not a public good and can be safely privatized.
Ordinarily, a privatization initiative would be preceded by a privatization plan which would consider these factors, assess which mattered most, consider mitigants (certain conditions as part of any sale), and then make a recommendation on whether privatization made sense on the whole and, if so, the structure which should be employed.
While I agree completely with those who say that privatization of the NWS is WAY down the list of priorities, it remains that the US federal government has no constitutional authority to provide this service.
Remember folks, the federal government is taking in (other people’s money) about $2.4 trillion per year, and spending almost $4 trillion per year. Thanks to the gutless raising of the debt ceiling, we now have almost $17 trillion in debt obligations. This exceeds the annual GDP. This is generational theft, and an immoral burden upon our children and grandchildren.
For those who whine on and on about defense spending, there is clear constitutional authority for the federal government to allocate resources in this area. Conversely, there is absolutely none for the NWS, and a LONG list of other “niceties.”
Laurie Bowen, et el.,
Laurie,
The origin of the Signal Corps reporting local station weather conditions
began as a subfunction of the Army under the United States War Department.
See their Annunal Reports, 1861 – 1942, in PDF format at:
http://docs.lib.noaa/rescue/cso/data_rescue_signal_corps_annual_reports.html
The station reports were forwarded by mail and by telegraph as the wires were set
to many fort and outposts or the nearby towns.
IN GENERAL:
Many readers here, at Climate Audit, Bishops Hill, etc., including Dr. Ryan Maue,
have watched with astonishment at Britain’s Met Office gathering meteorlogical
data from public sources around the world and claiming it’s exclusively
“Mine ! Mine ! Mine !”. They are forced to share the basic raw or
partially summarized data with interested folks through FOI requests and
sometimes through the court system.
The UAE/CRU folks who get the data also claim it to be “Mine ! Mine ! Mine !”,
and are equally reluctant to share it with the other kids, unless they’re “best
friends”.
Here in the U.S. it’s tough to get the raw data that’s used for GISS reports at it
is now. Public institutions and their employees consider the publically paid
for information is again “Mine ! Mine ! Mine !” and the public can whistle if
they want to see what the researchers started with as the basis for their studies
or models.
As with any form of “contracting out” of an existing public service, the contractor
is always less responsive to public input or public oversight. How will “privatization”
of NWS functions improve on this ? It won’t. Much of what’s now “public information”
will become “proprietary information” not subject to public scrutiny or auditing.
“Privatization” or “contracting out” gerenally results in lower quality services, and
$$$ profits for somebody’s friends.
Every economic study ever conducted has found that private enterprise is more efficient the Government at everything.
Except when it fails, goes bankrupt and has to be rescued by the government! Ask the British how efficient their banks have been lately!
The problem is the emphasis on efficiency. It is not the only basis for a decision. I do not own a large flat screen TV because it is efficient. I own it because I like the luxury.
If you want a really good weather service you have to pay extra. Private enterprise will deliver a cheap service, but not necessarily a complete one. For that you need state ownership.
If you really think private enterprise is better at everything, why not suggest privatising the biggest use of public money in the US — the military? Perhaps that might be a bad idea? Some things are better run by the state, even if they might appear cheaper on the surface as private enterprises. The hidden costs of private enterprises are when they fail.
I don’t know the status of lawsuits vis-a-vis TWC or Accuweather, but if private entities were providing the only weather forecasts, I imagine behavior would then change.
Nuts ! I still can’t use “paste” to lay in web addresses.
One more try for the rescued Signal Corps annual reports:
http://www.docs.lib.noaa.gov/rescue/cso/data_rescue_signal_corps_annual_reports.html
Many thanks for your patience.
R.S.Brown says:
August 31, 2011 at 1:21 pm
Mr. Brown: I think you take me wrong . . . .“”The Service’s national security function has long since disappeared, .”” SINCE the information and methods “disclosed” thus far belong to all the citizens of this country . . .
THUS, avoiding the MINE, MINE, MINE by the “private interests” . . . . through the passage of time.
We have in our basic principles & law that which ASSUMES we have “enemies” both foreign AND domestic.
But, thank-you for adding that information that clarifies why this issue is here once again . . .
roberto says: “It is my understanding that services such as cleaning city hall have been provided by companies in Chicago, and also by government. When the companies got too cozy and corrupt, it was switched to government, and when government got too cozy and corrupt it was switched to private….”
What is the common factor between crooked private services in Chicago and corrupt governmental services (I’ll make this easy for you) in Chicago? I’m not sure we can generalize based on Chicago, where the choice always has been and always will be between crookedness and corruption. [I’ll not give another Chicago example, though one comes to mind readily.]
“…Britain’s Meteorological Office is already a self-funding, commercial entity…”
During a recent flap regarding MetOff forecast accuracy, it became evident that Madame MetOff was releasing different forecasts to the public (“free”) and to private parties (at a price). The differential value was obviously based on the commercial advantage gained by publishing inferior public forecasts. There exists a substantial conflict of interest as a direct result of MetOff’s quasi-public nature.
ooh boy..
“Therefore, until further research is presented by CEI, their “thought-piece” article should be dismissed wholesale.”
please, do not issue fatwas. your opinion does not matter and you have not made a substantial case to support your argument. indeed, if you can not make a case by reason then snickers, sneers, grunts, groans and rabid disapproval will not win the argument. neither does inability to present a case (perhaps because there is none?) justify the unwholesome techniques of the klimate klan imams.
Mooloo says:
You do realize that the concept of being rescued by the government is not something that should actually exist in a capitalist environment, correct? That concept is entirely why all these problems exist. In a truly capitalist environment, if a company fails, it fails. Period. No rescue. No salvation. That sort of puts an onus on business owners to do things right else face the most dire of consequences: the loss of their money. I mean, really, that’s what people like you think private business is all about, money, greed, so how better to force them to function properly then threaten the very thing they desire most? As it stands, big business knows without a doubt that the government will come to their rescue in times of crisis. How risky does that investment look now? Moronic ideas like these are the foundations of the problems with our society. Thanks for the example.
Except that your simply wrong. Efficieny is simply a result of competition. You really don’t understand this at all, do you?
You’re mixing analogies here. What you own or choose to own has nothing to do with how efficiently a company functions.
How do you know this? If there is demand for a complete service, that is what you will get. Period.
Oh my gawd! Are you kidding? Do you have any idea what “the law of supply and demand” means? Get an education.
The role of government in a capitalist society is to protect its citizens’ rights. That necessarily includes a military in the presence of (potentially) hostile foreign entities.
Things that are required to protect our rights, nothing more, nothing less.
They fail because a) sometimes mistakes are simply made, this is true of any system, be it private or government, b) sometimes there simply is not sufficient demand to make a market viable, and c) government interference. Of course, in the latter it is no longer private, is it?
Wow.
Mark
Ya know, I argued with some idiot from one of the former Soviet bloc nations once. He went on about how brainwashed I was from my greedy capitalist education in the West. Then he informed me that by the age of 8 he was capable of citing all of the virtues of communism over capitalism. I mentioned that US schools don’t actually teach “capitalism” except in a historic context and that we really don’t get any treatment of economic theory until college, and even then, it is an elective. I’m not sure he understood the irony of his claim that I was the one that was brainwashed.
Mooloo, if you are from one of the evil western nations brainwashing our children, you are a perfect example of my primary point: our children simply are not taught about capitalism. If you are from one of those virtuous eastern nations that grew up learning about the virtues of communism, you are a perfect example of the irony.
Mark
I am conflicted on this as there is no constitutional reason for national government to do this unless it is part of the defense establishment, and the defense department (particularly the Air Force) runs a parallel system. As a separate entity the NWS has no remit. I believe CEI is being consistent in this stance as they have asserted that many of the tasks done by the federal government should be done privately.
Re Mooloo
The defense department may be the single largest line item, but it is not the bulk of the expenditures (about 1/4 of the spending). It also has the advantage of being one of the few things the constitution actually lays on the federal government’s shoulders. Most of the unfunded liabilities of the US government lie in social programs that are actually warned against in the writings of the founders. Those 18th century dudes knew a thing or two about human nature and realized that taking money from one citizen to give to another was habit forming and politicians would not be able to resist taking ever more to buy ever more votes.
Healthcare and welfare both are nearly as large as defense, and without the war spending would be larger or equal (baseline defense spending is about $500b while Healthcare is $900b and welfare is $500b). The claims that the “general welfare” clause covers this spending is contradicted by the federalist papers as well as the private writings of several of the founders. Of course the courts either have not ruled on this or ruled out of fear of the Roosevelt administration and thus set an incorrect precedence that later courts have been loath to overturn (they hate upsetting prior settled law – even when it is demonstrably wrong.)
Friends:
There seems to be an inappropriate right-left divide in this debate.
There are some over-riding effects which derive from public ownership or private ownership, and Steven Kopits outlines them in his excellent post at August 31, 2011 at 12:50 pm. Some things are best done by private enterprise (e.g. retail distribution) and others are best done by government (e.g. national security).
Cultures differ between countries so the precise activities which are best done by government vary from country to country. So, for example, the UK’s Royal National Lifeboat Institution (RNLI) is a charity that is completely funded by public donations and is operated by voluntary workers to provide a rescue service in the UK, but in the US a similar rescue service is one function of the US government’s Coastguard service.
In the case of a weather service there are some functions which are best done by government because meteorology has military importance. Indeed, the UK Met. Office was part of the War Office (later the Ministry of Defence, MOD) for most of its existence. And there are other weather service functions which can reasonably be ‘privatised’. The benefits of privatisation listed by Steven Kopits are important when evaluating what should – or should not – be privatised but, as jorgekafkazar points out at August 31, 2011 at 2:07 pm, UK experience shows privatisation of weather forecasting has had a severe downside: it is value judgement as to whether the benefits outweigh the problems of privatising weather forecasting.
In several coultries, including in the US, some activities of national weather services are conducted by voluntary workers. These workers may decide they want payment if their effort adds to the profits of a privatised company and, therefore, the benefits of privatisation may not be as clear as would seem to be the case on face value.
Hence, the parts of a national weather service that are best privatised will depend on the culture of the country considering the privatisation. Thus, a blanket assertion that a national weather service should or should not be privatised is probably wrong: some parts are best run by government, some parts best run by private enterprise, and some parts by voluntary workers. The optimum balance between these ‘ownerships’ of the work will depend on the culture of the country whose national weather service is being considered.
In summation, I think it may be beneficial to privatise some parts of the US national weather service but determintion of those parts requires considerable analysis. Hence, I think the Competitive Enterprise Institute is wrong in its desire for complete privatisation of the US weather service and those who completely reject the idea of privatising the US weather service are wrong, too.
Of course, a socialist of the old-fashioned British type such as myself could be expected to argue for a mixed economy and, therefore, my views could be thought to be my political prejudice. But I hope people will recognise that the extreme polarisation of ‘private ownership is always best’ or ‘government ownership is always best’ can lead to much more prejudiced views of the subject.
Richard
I know a guy, Eric Craft, at the University of Richmond. He’s an economic historian and began his career studying the emergence and value of the National Weather Service. He has several papers on the subject, including one in the American Economic Review (which is very hard to get in to…essentially the most competitive journal in the field). Here are gateways to two of his papers:
http://www.jstor.org/pss/116860
http://www.jstor.org/pss/2566688
Eric is a “Chicago Economist” so you certainly can’t accuse him of being congenitally biased against market provision. Still, I think he has a fairly nuanced view of public versus private provision of weather information.
It might be neat if Ryan and/or Anthony invited Eric to write a guest post.
I think it ought to be sold off. Only a big corporation could afford all those radar stations and satellites though. Maybe GE or Unisys, or some such. To get some return on their massive investment, they might want to be pretty stingy with the assets. Maybe enter into an agreement with The Weather Channel or Accuweather to be the sole outlet. Maybe do it themselves, selling data and forecasts, even back to the government and DOD, starting a cable and internet media presence. Eventually, it would become very very profitable.
How interesting to see so many who argue for free access to raw data arguing in favour of a process that would restrict that access.
Privatise the NWS and the data becomes “commercial property” and not subject to FOI or any other sort of free disclosure. Similarly since the American data would become commercial property other nations would be charged for it and those nations would then be charging the Americans.
This would turn English, Australian and other data also into “commercial property” with the obvious ramifications for FOIs in those nations.
In terms of spending, the NWS is way down the list of savings that America can make. The problem isn’t too much taxation, your taxes are quite low compared to other nations. The problem is that you have 50 pissant little state governments who can’t agree on things clearly in the national interest. The way health insurance rules vary from state to state is a good case in point. You spend 3 times as much per capita for health in the US than other nations and get a far inferior result. This isn’t due to some hand waving “government incompetence”, it’s due to trying to make a system work with 50 sets of rules instead of one.
Similarly you waste amazing amounts of money on the “National Guard” with each state having its own little army and airforce. I mean seriously, what are the odds of Idaho invading Texas?
I suppose it all depends on what you mean by “private.” I’m sure the national park system could be privatized, sold off, and the new owners could make a fine living collecting user fees (rent) from campers and day trippers to enjoy Glacier Park and other ecotours to save the planet. I suspect the revenue stream for weather data would not be as broad based as climbing Denali or fly fishing Yellowstone, for instance, unless non-users were forced to pay for their non-use (“free riding”) through consumptions charges on other products, just as the “private” NFL generate revenue from the “private” broadcasting companies that show up in added costs for beer and TP. While we’re at it, privatize the pentagon too, (the military is no longer an adventure for the drafted from the under classes, but a job with affirmative action prerequisites for the fairer sex who don’t have to die for equal pay at the same rate as males; indeed, only the enemy is expected to die in the modern American style of war making). Besides, modern military logistics appear to have been privatized already, though at higher unit costs per case of C-rations delivered–I wonder, does the army even have C-rats anymore? I’m sure we can privatize NASA too, and raise the trillion trillion dollars on the international financial markets so GE can build the Martian infrastructure for the next five hundred years of development–centuries of effort sure would add a whole new dimension of meaning to the “five year plan.” I wonder, are there any private money making going concerns (joint stock or corporate) that have actually existed for five hundred years and are still around, or does that capitalist longevity only apply to states and organized religions?