Ken Blawatt suggests that the decision on Ajax should be based on sound principles (Let’s Be Guided By Principles When Thinking About Ajax, The Daily News, Sept 28). I agree with him and suggest the following:
1. The public is generally better served by private businesses than by government in the production of mining products such as copper and gold.
Although it may not be their intention, a private business in seeking to maximize its own profits by producing the best product it can with minimum costs (in order to sell as much as possible), unwittingly serve the public interest.
By maximizing profits this way, it maximizes public benefits by the creation of good jobs, by providing for the security of employees and by the provision to buyers of good products at low cost.
2. If government attempts to produce products such as copper and gold, the public interest is not best served because of the inefficiency and adverse motivations inevitable in a government-run business.
In a government-run business there is no bottom line to be met so there is too little motivation to run an efficient operation.
Gross inefficiency is most easily met, not by becoming more efficient, but by raising taxes. The politicians’ primary interest is in their own election and neither they nor the public who elects them has the knowledge or the motivation required to know how to run a business well.
3. Government is needed by the public to serve as a regulator of the private sector to ensure that private businesses cannot serve their own interests by exploiting others.
4. In the case of the Ajax mine, what is needed is government regulation to ensure that all costs of the mine (direct and indirect, external and internal) are paid by the mine.
The company should be made to understand that if it wishes to locate the mine close to a city to take advantage of the infrastructure that others have paid for, it is going to be held responsible for all of the costs that it incurs.
That is, it needs to be made clear to the mine by government that it is not going to be allowed to exploit others by imposing external costs (such as pollution) resulting from the mine’s operations.
5. Extreme positions, such as promoting the mine no matter the effects of the resulting pollution problem, or resistance to the mine no matter the regulations clearly stated in advance, are not helpful.