Page:American Journal of Sociology Volume 2.djvu/396

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382
THE AMERICAN JOURNAL OF SOCIOLOGY

whenever after in the course of the study that term is used it should be only with the agreed significance.

The economic productivity of municipal enterprises may be measured only by comparing their efficiency with that of similar private enterprises. But the two have diverse ends in view. The aim of a municipal enterprise is to satisfy the voters; the aim of a private plant is to earn money for the corporation. Hence they are not likely to render the same service except occasionally and by accident. To be sure, one most important means of pleasing the voters is by convincing them that their money is being saved and their taxes reduced. But the facts may readily be so presented as to convey a false impression to the public and perhaps as many voters would be influenced by a policy of generous or lavish display as by a favorable balance sheet. So, too, a most important means of earning money for a corporation is by pleasing not necessarily all the voters, but the patrons and possible patrons. The fact remains, however, that the primary object in the two cases is different and that we cannot compare the economics of the two systems until one or the other of these ends or some intermediate one is made our standard. Perhaps we may say that the primary end is to protect the capital invested, whether private or public, and, if it be private, to secure a reasonable return upon what has been necessarily and legitimately expended, and that the further end is to render a satisfactory service to the consumers, who may often be substantially the entire public. If this be admitted, it follows that the true end is not that of the ordinary corporation or of the ordinary municipal enterprise, and that the former is likely to neglect the interests of the consumers and the latter to risk the capital of the taxpayers.

Furthermore, the consumers may be grouped into two classes, the municipality as a body and the private citizens as individuals, and the balance must be held between these two interests which are often antagonistic. It is not, I believe, uncommon for a private corporation seeking a contract or franchise to offer unduly favorable terms to the municipality