Michigan Proposal 6: Sucking and Blowing at the Same Time

It’s a given that the presidential race in the US has big implications for our economic health as Canadians.  But there is another vote going on in Michigan that would also carry significant economic impact if billionaire Matty Maroun, the owner of the 85-year old Ambassador Bridge between Windsor and Detroit, has his way. 

Maroun, whose bridge is the conduit over the Detroit River for billions of dollars in trade between the US and Canada as a result of over 10,000 commercial vehicles a day crossing it, has managed through various machinations to get on the Michigan ballot with Proposal 6, which would if successful kill the plans for a new bridge to be built downstream of his.  The new bridge  would siphon away from his bridge most of the commercial traffic, and thus put quite a dent in his estimated $60-80 million per year revenue stream.

The rub?  The new bridge is going to paid for by the Canadian government.

So for a lot of people this does not sit well.  It could be perceived as government, using our tax money to fund competition for a private enterprise.  That’s not right in their minds, and Maroun and his supporters (and they can be nearly fanatical) do all they can to promote the image of a family-owned business being pitted against big government, whose motivations are malicious and this is just a poorly justified attempt to pry control of the border crossing between Windsor and Detroit away from a private enterprise who has thus far been a good steward of the crossing.

Here’s the thing though, and a reason we find ourselves ironically arguing on behalf of the pro-government bridge; too many on the right confuse the free market with the players in the free market.   They are not one and the same.  Do not confuse capitalism with capitalists.

You can trust the free market.  You cannot trust the players in the market.

Business, entrepreneurs et al are not altruists.  They can’t be trusted to look after the public good, they can only be trusted to look after their own good – which may not be the same as the public good, and very often is not. 

Which is OK in a free market, because the way a free market works is it rewards business proportionately to the value of the service you are providing and the the number of people you are providing it to.  If you are a liar and a cheat, if you are unscrupulous and dishonest, in a truly free market we can trust that you will be found out, exposed and go out of business.   The market works in this regard.  It’s when markets are corrupted and bastardized by government interference and regulations, and they become something far less than “free” and dishonest players in the market are allowed to prosper.   

Look at how many billionaires have come out of the communist Soviet Union in the past 20 years – why?  Because government limited entry into select markets to friends of powerful people, and next thing you know a small group of people had control over oil, gas and mineral rights.  They didn’t get rich being champions of the free market, they were beneficiaries of government interference and regulation of the market.

You need no other example than the banking collapses in 2008 – despite what anyone on the left can argue, the banking industry was not operating freely, there was regular government interference and controlled markets, and as such the room for abuse by “capitalists”

So, we cannot trust Matty Maroun to look after anything but his own interests, and not the public good.  We cannot trust him to rebuild his 85 year old bridge, we cannot trust him to find his own private financing for a new bridge, we cannot trust him to respect the urban development on either side of the border, we cannot trust him.  Period.  And there is certainly plenty of proof and examples of his past behaviour to indicate we are correct in this regard.

But can we trust the market on this issue?  Can we say, as many are trying to argue, that if the government did not build the bridge that the market would come forward and build a new bridge, given proper economic justification?  In this case we would argue, no.  Because there is no free market here.  There is such a mountain of regulations and approvals, the need for billion dollar financing, considerations for the natural and social environments, municipalities, communities and stakeholders on both sides of the border, that it is effectively a closed and regulated market.   So, Matty Maroun having made billions of dollars in toll revenue off of the bridge since he purchased it for $30 million in 1979 has essentially benefitted the same way the Russian billionaires have benefitted from closed markets in their country.  You cannot suck and blow at the same time.  You cannot decry government coming down on your business when in fact you have been the direct beneficiary of government restrictions on the market over the past 30 years.

So, we cannot wait for an 85-year old bridge, that is a vital cog to our international trade, to be replaced by a private interest.  It is too important and needs to be done now.  And as such it is completely appropriate, given the fact that there is no free market here, for the government to step in and build an alternative to the Ambassador Bridge.

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