It is with deep sadness that I share the news of the passing of Joseph Forshaw IV, longtime member of the Show-Me Institute’s Board of Directors, former treasurer, and past chairman of the board.

Joe was more than a board member to us. He was a steadfast champion of the Show-Me Institute’s mission, a source of wisdom and clarity, an incredible mentor, and a man whose integrity and good humor strengthened everyone around him.

A lifelong St. Louisan, Joe brought to our organization the same qualities that defined his life: intellectual curiosity, disciplined thinking, and generosity of spirit. Before joining the Show-Me Institute, he served for 30 years as president of Forshaw of St. Louis, the family business founded in 1871. His deep understanding of entrepreneurship and free enterprise made him an invaluable voice on our board and a trusted adviser to our team.

Joe served with humility and conviction, and he cared deeply about Missouri’s future. He was an extraordinary mentor to many of us, always ready to offer thoughtful counsel, encouragement, and the perspective that comes from a life well lived. Whether asking the question no one else had considered or reminding us to stay focused on the people we serve, he did so with grace, steadiness, and genuine kindness. His presence made our work better, and his passion for ideas strengthened the entire organization.

I extend my heartfelt condolences to his beloved wife, Liza; their children Sr. Maria Battista, Juliet, and J. Alexander; his grandson Aidan; and the entire Forshaw family. Joe’s leadership, generosity, and friendship will be deeply missed.

Details about visitation and services can be found here.

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In this episode, James V. Shuls speaks with Michael Q. McShane, Director of National Research at EdChoice and Senior Fellow of Education Policy at the Show-Me Institute, about his latest paper, ‘Why Markets Matter in Education.’ They explore the growing role of market forces in education, the benefits of choice and competition for schools and students, the impact of educational marketplaces on innovation and quality, the challenges of government intervention in schooling, and the long-term advantages of allowing parents to shape their children’s educational journeys.

Read the essay here.

Listen on Apple Podcasts 

Listen on SoundCloud

Produced by Show-Me Opportunity

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Listen to a podcast about the paper here.

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A few months ago, the Archdiocese of St. Louis announced the closing of two high schools in the fall, citing a lack of funds to remain open. Being very fond of the education these schools provide, students, parents, and alumni rallied together to save their schools and were able to secure the funding needed to remain open, independent of the archdiocese.

The closing of a school is almost always heartbreaking news that nobody wants to hear. However, I do believe that school closures shed light on an important principle that is (in some cases) being enforced: students deserve to go to high-quality schools, and only those schools that offer the best value and fulfill their students’ needs will survive.

Through market forces, this happens organically at a private school—parents will not pay to send their kids to a school that isn’t meeting their academic or social needs. If enrollment declines sufficiently, the school will eventually see no other option but to close. Charter schools also face closures, as schools that aren’t performing well will likely experience declining enrollment and will not continue to receive funding from the state. Because of the possibility of closure, private and charter schools have an incentive to improve academically and fulfill the needs of students.

Traditional public schools, on the other hand, have very little incentive to improve academically. Unless the situation becomes truly dire, public schools continue to receive funding despite their failures, and many students are left behind in the process.

Show-Me Institute analysts recently developed a piece of model legislation that would help address the incentive problem for public schools by allowing parents to send their kids to any public school in the state. Creating a true marketplace in education is one of the best ways to ensure our schools improve and kids in Missouri get the best education possible.

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Most who fight to limit opportunities for food trucks are afraid that food trucks will compete with, and potentially harm, existing brick-and-mortar businesses. My family owns restaurants, so I’m supportive of brick-and-mortar restaurants and I’m sympathetic to this line of thinking. The reality is that food trucks will definitely increase competition, but that is not something that should be feared. Competition among businesses should be expected and encouraged. In the same way that brick-and-mortar businesses compete with one another, food trucks should compete with existing businesses—and may the best food and dining experience win!

Market competition encourages entrepreneurship and leads to the best options for consumers. Food trucks will only do “harm” if consumers overwhelmingly decide that they prefer the food trucks over the existing businesses. And harm is in quotation marks because creative destruction is how we make progress. If food trucks were to overtake brick-and-mortar restaurants in the market (which I think is unlikely), it would mean we are moving forward in a direction chosen by consumers.

Misplaced fear of this process often leads to unnecessary and burdensome regulations. For example, many cities have extremely strict regulations that hinder their operations—and some cities simply don’t allow them at all. (These are, of course, different from regulations that reasonably deal with traffic and public safety concerns.) In cases of overregulation, lawmakers are picking the winners (brick-and-mortar restaurants) and losers (food trucks) instead of allowing consumers to decide. We need to stop being afraid of food trucks (and competition) and give them the freedom to operate.

The post A Policy Scare Story: Don’t Be Afraid of Food Trucks (or Competition) appeared first on Show-Me Institute.

Well, the cap was enacted and consumers can already see the difference it’s making. I was considering an order on DoorDash and I noticed a new fee included during checkout. As shown below, I saw a “Regulatory Response Fee” included with the other taxes and fees.

When I clicked on the symbol for more information, the below image appeared:

And there it is. The new fee on customers in St. Louis City is a direct response to the regulatory cap that the St. Louis Board of Aldermen passed.

I don’t revel in this “I told you so” moment. Lawmakers thought they were protecting small businesses, but instead they are hurting consumers by increasing the prices of delivery services. If consumers respond to this by using delivery services less, the small businesses this move was designed to protect will be the ones that end up getting hurt.

Previous fees were mutually agreed upon in the market and neither party was forced to partner with the other. Consumers may have paid a portion of the higher fees before the cap, but they are certainly paying this fee now. This $1 fee may not be budget-breaking, but consumers are only subject to it because lawmakers interfered. Lawmakers should let the market work to avoid unintended though predictable consequences.

The post We’re Already Seeing the Effects of Delivery Fee Regulation appeared first on Show-Me Institute.

Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man’s human existence.

This quote by Ludwig von Mises in his magnum opus, Human Action, is a plea to the common citizen to learn economics. At first glance, it might seem exaggerated. Is economics really relevant to everybody and everything? And is it really the essence of civilization?

In fact, it is. As Mises argues elsewhere in the book, society is simply the cooperative interaction of different individuals. But how does this cooperative interaction come to be? Human nature is selfish, so why don’t we just fight each other to get the things we want?

The answer, according to Mises, is the division of labor. By specializing in tasks and exchanging goods, each individual actually benefits more in the long run than if they were to fight each other. Division of labor is cooperation. This is the foundation of economics. It’s also the foundation of civilization.

However, the fact that the division of labor is more productive is not, in itself, sufficient for cooperation to take place. Each individual must also recognize this fact. Without understanding the benefits of cooperation, individuals would give in to their short-term instinct of plunder. Thankfully, humans are rational beings and eventually realized that cooperation and exchange are better than barbarism.

However, cooperation through the division of labor—the foundation of civilization—is constantly under attack by socialists who want to dismantle the market system. This market system based on property rights is nothing but the extension of the division of labor and exchange.

This is why Mises makes his plea for everyone to learn economics. If people lose this insight about the benefits of cooperation and give into short-term instincts for plunder and control, our society would suffer greatly.

Mises summed it up nicely in Human Action:

Everybody thinks of economics whether he is aware of it or not. In joining a political party and in casting his ballot, the citizen implicitly takes a stand upon essential economic theories.” Giving into rhetoric without examining economics yourself is “tantamount to the abandonment of self-determination and to yielding to other people’s domination.

Don’t let the political winds sway you. Don’t let ideas go unchallenged. Learn economics yourself. The teachings of Ludwig von Mises are a great place to start.

The post Why Everyone Should Care About Economics appeared first on Show-Me Institute.

The government overreach here is clear: Lawmakers want to change the market and pick the winners (restaurants) and losers (food delivery services) themselves. Businesses and food delivery services have been operating with mutually agreed upon rates for years. Restaurants aren’t being duped here; they’re not forced to work with delivery services, but agree to do so in order to serve more customers. There is really no reason for the government to get involved at all.

How could this bill effect those of us using food delivery services?

If delivery fee caps are implemented, who would make up the monetary difference between the previously agreed upon service rate (which reportedly is often 25 to 50 percent) and the cap of 5 percent? It seems unlikely that food delivery services would continue business as usual after this huge hit. It’s much more likely that delivery services would increase fees for consumers (since they can’t increase fees for businesses) or reduce their now-unprofitable business dealings in St. Louis City.

We could also see less pay and fewer job opportunities for delivery drivers as food delivery services try to make up for lost earnings. This could hurt restaurants as well. If there are fewer delivery options or fees get too high, customers may simply stop ordering delivery from local restaurants.

Though intended to help small businesses, this bill could ultimately hurt consumers, delivery drivers, and restaurants in St. Louis City. I realize that we are living in unprecedented times, but we don’t want to fall into the bad habit of allowing lawmakers to control our markets. Prices should be set in the market by supply and demand and consumer preferences; lawmakers do not belong in business and market decisions.

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This is a tired tale here in St. Louis; developers say they have a great idea and a great plan, and then turn to the government instead of the market to finance their idea. Government officials pick winners and losers by offering advantages to some and not others.

We can point fingers at the developers and say they should seek private investors, but they aren’t the only ones to blame. The various incentive and subsidy programs in St. Louis have created a situation where bargaining for handouts during the development process is the norm. You can’t blame developers for seeking the best deal they can get. It might be too much to ask developers not to reach for the millions of dollars offered to them; we need to get the government to stop offering!

In this particular case, there may actually be good news. Though the St. Louis City TIF Commission approved a motion for a public hearing for this project, there was some resistance from commissioners, and that’s what we need to see more of at the hearing. Good projects shouldn’t need to rely on handouts to be successful, and developers certainly shouldn’t assume taxpayer money will be gifted for private projects. Developers and government officials should allow projects to face market forces on equal footing to see which projects are truly demanded in the St. Louis market.

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In one of the more memorable exchanges of the interview, Donahue asks Friedman a question many are still asking today:

When you see around the globe, the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries. When you see so few “haves” and so many “have-nots.” When you see the greed and the concentration of power. Did you ever have a moment of doubt about capitalism and whether greed is a good idea to run on?

Friedman’s reply has become standard among capitalists like me. “Is there some society you know that doesn’t run on greed?”

Friedman continued:

You think China doesn’t run on greed? What is greed? Of course, none of us are greedy, it’s only the other fellow who is greedy. The world runs on individuals pursuing their separate interests.

The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way.

In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade.

If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

In the years since the Donahue interview, the free enterprise system has continued to improve the lot of ordinary people. Yet today, possibly more than in Friedman’s day, Americans are showing support for socialist policies. Shockingly, a 2019 Gallup poll found that four out of ten Americans supported some form of socialism.

What happened? How can socialism be gaining popularity even as confidence in capitalism wanes? The problem is that a defense of capitalism like Friedman’s satisfies the head but not the heart. When people—especially young people—look around the world today, many of them see it as Donahue described it. As a result, they question the morality of capitalism.

Enter Arthur Brooks.

Brooks is the past president of the American Enterprise Institute, a social scientist, a former university professor, and a former professional French horn player. Yes, you read that right. Brooks has written best-selling books such as The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America and Love Your Enemies: How Decent People Can Save America from the Culture of Contempt.

Recently, Brooks released a documentary, The Pursuit, which is now available on Netflix.

In it, he asks, “From 1970 until today, the percentage of the world’s population living at starvation’s door has decreased by 80 percent. Two billion people have been pulled out of starvation level poverty. What did that?”

His answer is the same as Friedman’s—free enterprise. Indeed, the messages of Free to Choose and The Pursuit are essentially the same: No other system has succeeded like free enterprise in allowing people to direct their own destiny and pull themselves out of poverty.

The key difference between the two is that when Brooks discusses how to help the most disadvantaged, it’s clear that he’s making not just an intellectual argument but also an emotional appeal. He cares about human flourishing.  From the very beginning, he frames the argument for capitalism as a moral one, saying “the point of the American experience is basically a moral consensus that our society should push opportunity to the people who need it most. This is our pursuit, and it’s predicated on two fundamental moral principles: human dignity and human potential.” Brooks shows us this as he walks the streets of India, once a scene of abject poverty during the days of democratic socialism. Now, after free enterprise has been released, we see progress. Hindol Sengupta, editor-at-large of Fortune India, says it like this, “Capitalism allows human beings to choose an action to fulfill their own destiny. . . . Forget per-capita GDP—we didn’t even have per-capita hope.”  

None of this is to say Friedman did not care about the poor, but his arguments can come across as those of an academic. They are for the head. Through The Pursuit, Brooks provides the answer for the heart.

Add The Pursuit to your list of required viewing. Go watch it . . . after you watch the Friedman interview.

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Real estate developers are indeed fraught characters in city life. . . . And the history of American development certainly includes shady land speculation schemes, racist intentions and bloated egos. . . . But at its best, development has also meant progress in America. And that possibility has been banished from recent debate.

The worry is that “developer” has become a dirty word, and that our mostly negative perception of developers and development is off-base. While urban politics demonizes developers, we ought to be grateful there are people who work to develop and build our cities, the thinking goes.

This assessment is both right and wrong.

It’s right inasmuch as developers shouldn’t be demonized for providing what consumers demand through market forces. People need housing and space for their businesses, and developers provide just that. Just as we shouldn’t lambast farmers and grocers for “profiting off” our hunger, we shouldn’t bemoan developers for profiting off of our need for homes and office towers. (Indeed, we all profit off of someone else’s needs through the exchange of goods and services for money.) As Adam Smith remarked in his Wealth of Nations, it is incredible that, without any sort of orchestration, the market is full of goods and services we need and want. What Smith said about butchers, bakers, and brewers is equally true of developers.

But the Times article also misses the mark in some ways. While there is nothing wrong with providing housing by chasing profits, there is something wrong with advocating that the public subsidize projects for private gain. Developers don’t invest just their own money; they often invest taxpayer money as well. Through subsidy programs like tax-increment financing, abatements, and special taxing districts, developers reduce their private risk. And since policymakers are often generous with these subsidies, for some developers it pays—and pays very well—to chase down subsidies and ensure they continue to flow for years to come.

The economist William Baumol, in his famous paper “Entrepreneurship: Productive, Unproductive, and Destructive,” argues that market agents are after profit, and they will try to get it through productive means or unproductive means. He thought that when governments have the power to pick winners and losers in the economy, entrepreneurs will chase government favor instead of working to meet consumer demand competitively. Many developers, like many market agents, have become infatuated with government handouts, and that is deserving of criticism.    

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The idea sounded good to me—so off we went to get the ingredients. But to no avail. You see, the North Carolina state government controls the entire liquor industry in the state. Alcohol can only be purchased at the state-run Bureau of Alcoholic Beverage Control (ABC) stores. Their inventory and prices are decided by the state and, not surprisingly, inventory is minimal and prices are high. There’s certainly no Velvet Falernum, and thus no Best Mojitos Ever in North Carolina.

Recently, it seems “privatize” and “for-profit” have become code words for evil and greedy. But the private sector does many things quite well. My daughter’s Denver neighborhood has multiple boutique liquor stores that would absolutely have Velvet Falernum. Consumer demand is met by commercial supply. In North Carolina, purchasing liquor is similar to getting a driver’s license—strictly on the government’s terms. Do we really want more government control and fewer private markets?

Would the Fourth of July have been better with the Best Mojitos Ever? If you spend it in North Carolina, you’ll never know.

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Let’s take a look at a market that has developed in the coral reefs of the Red Sea. Dr. Redouan Bshary, a behavioral ecologist, spent more than a year on an Egyptian beach studying coral reef fish and he made an interesting discovery. Cleaner wrasses—small fish that eat dead skin and parasites off of other fish—set up “cleaning stations” to serve “clients,” who line up for their services. What’s more, not all clients get equal treatment. Some fish don’t roam much; they’re “resident” clients over which cleaner wrasses essentially have a monopoly.  They get the basic package: short cleaning session, no massage, and, occasionally, a bite. “Floaters” migrate over large areas and can shop around for a favorite cleaning station. They get longer cleanings, some massage, and are rarely bitten. Plus, they move to the front of the line over resident clients. And, if a cleaner wrasse senses another fish is watching, they up their game—presumably as a marketing strategy. A fish might have as many as 2,000 transactions per day and yet they’re constantly thinking about their client list.

Cleaner wrasses exhibit completely rational behavior that improves their chances of long-term survival and leads to optimum cleaning for coral reef residents. I imagine that if humans were running the show, we would set up the Bureau of Coral Reef Cleaning and assign each fish to a cleaning station while giving each wrasse their own cleaning district. There would be no incentive to offer anything other than the basic service and, presumably, the coral reef would be less clean.

In a somewhat similar fashion, researchers recently found that schools of choice better match students and schools, leading to higher overall parent satisfaction. Using data from Arkansas conversion charter schools (those that replace a failing school and enroll students only from the same school zone) and open-enrollment charter schools (which parents are free to choose regardless of where they live), the research discovered a positive relationship between open-enrollment schools and parental satisfaction. The implication, according to the researchers, is that increasing the degree of parental choice could increase the quality of schools available.

And yet the status quo, with its irrational assignment of students to schools based on where they live, continues to be fiercely defended. Maybe it’s time to capitalize on a little competitive pressure like our undersea friends. 

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Arthur C. Brooks, president of the American Enterprise Institute, recently argued that significant amounts of such dead capital could be brought to productive life if only local governments would stop protecting vested interests and allow entrepreneurs to invigorate their local economies.

How? There are new, exciting companies that empower individuals to improve their economic condition and, at the same time, improve the productivity of capital. One example is the ridesharing service Uber. Uber brings together those with empty passenger seats and those needing a ride across town. My experience (unfortunately, not in Saint Louis) is that Uber rides showed up faster than traditional taxis and that the drivers were more attentive to my needs. Because Uber drivers are rated by riders even in transit, poor drivers can lose business for inadequate service. Competition drives out poor performers.

Airbnb is a market solution to the problem of underutilized housing capital. With excess bedrooms in the United States, why not allow the owners of those empty rooms to satisfy the needs of individuals seeking a place to stay for a night or two? The needs of those willing and able to pay for a room are served and the owner is rewarded with, especially in these still-difficult times, an extra bit of income.

Unfortunately, a maze of state and local regulations block Uber and Airbnb from operating in many locales. “Governments have their own golden opportunity,” Brooks writes, “to exercise creativity in service of the common good, whether that entails rethinking anachronistic zoning laws or adjusting tax policies that treat someone’s spare bedroom the same as a Marriott suite.”

If bringing dead capital to life is good for the economy, isn’t it time for politicians and regulators to awaken to the potential benefits that such services can provide?

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That story may seem preposterous, but we are dealing with a very similar situation today as Lyft, a new ride-sharing app (smart phone-based application), has upset the highly regulated Saint Louis taxicab market.

Lyft, Uber, and other companies like them allow users to schedule a ride from any registered driver in a geographical area. Lyft drivers need not be full-time cab drivers; they can be anyone with virtually any type of car that passes certain background and safety tests. After using Lyft, riders make an optional donation — not regulated fare — to the driver via electronic payment. No cash is needed. Drivers and riders rate each other, incentivizing both elevated service from drivers and generous rider donations. Lyft and other apps are rapidly expanding across the country and have many happy customers where they exist.

Not everyone is happy, however. Chief among the protestors is the Saint Louis Metropolitan Taxicab Commission (MTC), which regulates all for-hire vehicles in Saint Louis City and County. Under the argument of protecting rider safety and maintaining a balance between cab supply and demand, the MTC controls the number of taxis in Saint Louis, how they can conduct business, and what prices they charge. The MTC has taken legal action against Lyft, successfully pursuing an injunction against the company and directing police to fine drivers.

In the past, one could have argued that potential taxi users had too little information to avoid being ripped off, and no way to know which company was safe, so regulation was necessary. Today, the ease of checking fares and cab company records over the Internet and smart phones has solved those problems, but regulatory bodies such as the MTC have not gotten the memo. The MTC controls fares, requires potential cab owners to maintain a commercial address, and gets to decide — in a strange central planning throwback — if there is enough demand to justify more cabs.

These policies cause a significantly reduced supply of cabs when Saint Louisans need them most, such as on New Year’s Eve. Last year, there were less than 800 on-call cabs in all of Saint Louis City and County, and many decided that the fixed fare they would receive was not worth the hassle of working on New Year’s Eve. With no other options, many would-be customers waited hours for taxis that did not come.

Lyft and other ride-sharing apps can allow for a massive increase in the for-hire vehicle supply in Saint Louis. People in Saint Louis would be able to use some of the excess capacity of the cars we already own to greatly increase mobility in the Saint Louis area.

As for regulation, states such as California have already brought services such as Lyft into an established legal framework, called a Transportation Network Company. Companies such as Lyft can operate as long as they ensure that drivers have adequate insurance, clean records (in driving and otherwise), and safe vehicles. That seems like a fair set of regulations for Lyft’s operations in Saint Louis. In fact, it seems like a fair set of regulations for anyone who wants to give people rides in Saint Louis.

New business models relegate some regulations and regulatory bodies to the dustbin of history. If the MTC cannot change its policies to accommodate innovative companies, the MTC, not Lyft, should cease operating in Saint Louis.

Joseph Miller is a policy researcher at the Show-Me Institute, which promotes market solutions for Missouri public policy.

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Opponents of taxicab regulation argue that regulatory bodies like the St. Louis Taxicab Commission (MTC) stifle innovation, but that does not mean they stamp it out completely. Some St. Louis cab companies have begun using apps and other technology to improve service. But small, bureaucratically approved technological improvements do not make the St. Louis taxicab industry innovation friendly.  The MTC controls how many cabs there are, how they operate, and what they charge. That leaves little room for new business models and little incentive for innovative practices.

The editorial itself talks about how innovative cab companies can be while openly bashing innovative pricing practices, like peak pricing, tacitly supporting regulations to stop them.  The author states:

“Cab fares are public and never change. Cab drivers don’t jack up prices in times of high demand.”

Peak pricing for cabs makes perfect sense for both companies and customers. It incentivizes more cabs to drive during times of peak demand and pushes customers to travel during less busy times. That better matches cab supply with demand. And, as many St. Louisans learned on New Year’s Eve, an expensive cab that will give you a ride is better than a cheap cab that decided to stay home. A shallow understanding of innovation and market forces runs throughout the editorial and likely explains why so few St. Louisans can rely on prompt taxi service.

If we believe the author, taxi regulations are all about safety. Suspending the issuance of new taxi permits? All about safety. Requiring that prospective taxi companies provide proof that there’s enough demand for more taxis? All about safety. Requiring a commercial address with 24/7 operations? All about safety. Set pricing? Safety. Barring airport cabs from serving the city? Safety. Dress code? Of course, safety.

The fact is that most of the MTC’s regulations have nothing to do with safety and everything to do with protecting existing cab companies. And while there’s little doubt that innovative taxi entrepreneurs would be able to compete with Lyft or Uber absent the MTC, why bother when you can keep competition out under the guise of protecting the consumer?

The post St. Louis Taxicab Regulations Needlessly Stifle Innovation appeared first on Show-Me Institute.

When I was growing up, I regularly played golf at the Forest Park municipal golf course in Saint Louis. Later, in my high school and college years, I noticed that the quality of the course was improving, a lot. This happened at the same time (late 1980s) that the city of Saint Louis outsourced the management of the golf course to a private company. As that outsourcing, or privatization, of the golf course has continued, the quality of the course has continued to improve. I doubt you would find one golfer familiar with the course before and after who thinks the outsourcing of its management and operations did not significantly enhance it.

That same type of story is repeated throughout Missouri. Good government need not be big government and the public sector does not have to provide public services in every case. There is a role for private delivery, often regulated, of public services in Missouri. In many cases, the private sector can deliver those services more affordably and at a higher quality than the government.

In fact, Southwest Missouri is home to one of America’s most enterprising privatization projects. The Branson Airport is America’s only fully private commercial airport. In a capitalist system, not every business attempt succeeds, and the Branson Airport may yet fail. (I hope not.) But if it fails, private investors will be out their own money, unlike Mid-America Airport in southern Illinois, where local governments have had to continually fund that little-used white elephant.

On the other end of the spectrum is City Utilities (CU), Springfield’s municipal behemoth. Missouri’s other large cities are primarily served by private utilities. Those private utilities pay taxes, face more regulations, earn a return on investment, and still charge comparable rates to CU. Springfield needs to consider following the example of Florissant, Mo., a decade ago, and divest itself of its public utilities.

Research has shown that privatization works best when the driving force is pragmatism, not ideology. Politicians and voters can still debate about what services should be provided as part of the eternal debate over the role of government in our society. But privatization is more about how those services are provided, not whether they should be. Unless you genuinely believe that as many people as possible should be on the public payroll, like the big city political machines of yesteryear, then a government service that you depend upon or care about likely can be addressed with privatization.

There are certain roles that should always belong to the government, such as police powers, and never to the private sector. Furthermore, the role of government regulation in many privatized public services is important, such as regulation of private utilities. Finally, in some instances, such as animal control, private partnerships with non-profit groups may be preferred to for-profit companies. Whatever way you look at it, there are numerous examples, such as Cox Health operating ambulance services in Christian County or the existence of private libraries in Taney County, where privatization can provide better services at lower costs for Missourians. Just play golf at Forest Park to see the evidence.

David Stokes is the director of local government policy at the Show-Me Institute, which promotes market solutions for Missouri public policy.

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“Bass Pro Shops could only have happened in America – the home of the free enterprise system.” Those were the words of Bass Pro founder Johnny Morris in a recent Bloomberg News article.

Bass Pro has become a household name throughout America, synonymous with the great outdoors, and undoubtedly is an exceptional business.

It has completely changed the nature of sporting retail with its Walmart-size stores filled with unimaginable stocks of outdoor equipment, aquariums, wildlife displays and gun libraries.

Morris clearly benefited from a free enterprise system in America. However, one cannot overlook the fact that much of Bass Pro’s success and expansion are due to taxpayer-funded subsidies.

Many of those subsidies are from tax increment financing. TIF districts originally were created to spur economic development in portions of cities deemed economically depressed or blighted. Yet, cities across the country have long used a very loose definition of what constitutes a “blighted” area. The wealthy St. Louis suburb of Des Peres once declared a local shopping mall blighted because it lacked a Nordstrom’s.

Bass Pro has routinely received at least some amount of public assistance with many of its stores. According to the Public Accountability Initiative watchdog group, Bass Pro had received $500 million in taxpayer subsidies as of 2010.

The outdoors megastore sells itself to suburban communities as a destination retail attraction, capable of bringing in customers from hours away and even across state lines. To local leaders, bringing in a store the caliber of Bass Pro seems like a surefire way to increase local property and sales taxes.

However, Bass Pro does not always live up to its promise as an economic kick-starter and job creator. Many of the stores fail to raise the tax revenue that cities imagined, as happened in Mesa, Ariz. Bass Pro projected the Mesa store would produce $5.7 million a year in sales tax revenue for the city; instead, it has only managed an average of $1.7 million in four years.

In Missouri, Independence witnessed a similar result with the TIF it passed for a Bass Pro store.

What city officials fail to realize is that a large, new store does not give people more money to spend on fishing poles or waders.

Often, Bass Pro Shops only consolidates the market of outdoor supplies by killing smaller competitors, which negates the total growth that the development added.

Local leaders across the country are desperate to take credit for creating jobs and bringing a marquee brand to their community. In this desperation, they may dole out overly generous taxpayer subsidies for a few select businesses, which puts local, smaller businesses at an immediate disadvantage.

Big box retailers like Bass Pro often are built in affluent areas that could attract businesses without subsidies. We do not need the government picking winners and losers.

Bass Pro can build its stores on its own, as it did in Columbia, just north of Interstate 70. Instead of conjuring up incentives to bring businesses to their town, local leaders should focus on creating a pro-business atmosphere for all. That means lowering taxes and reducing regulations. If cities create a business-friendly environment, the rest will take care of itself.

Will Reynolds, an Ozark native, is an intern at the Show-Me Institute promoting market solutions for Missouri public policy.

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