No one washes a rental car, not because the people who rent vehicles are lazy or irresponsible, but because they have no incentive to wash them. (When it comes to economic efficiency, incentive is a function of ownership, or accountability to someone who is an owner.)

In 2000, private garden plots in Russia accounted for only 6% of all agricultural land. Yet the majority of the country’s livestock, milk, vegetables, poultry, and potatoes, came from these household plots—as much as 65-90% of total national output.* How could 6% out produce the big collective state farms that controlled the vast majority of the land?

This same principle is the reason no one washes a rental car. It never happens, not because the people who rent vehicles are lazy or irresponsible, but because they have no incentive to wash them.

The connection between ownership, incentive, and accountability (or lack thereof), can also be seen in Canada’s healthcare system. It explains why Canadian healthcare waiting lists are a fact of life, while countries with private or semi-private healthcare like Switzerland can provide surgeries as quickly as McDonald’s rustles up an Egg McMuffin.

Many politicians mistakenly believe healthcare waiting lists exist only because governments don’t shovel enough money into the healthcare furnace. In Alberta, government spending on healthcare from 2005/2006 to 2013 is projected to nearly double, moving from $9.7 billion to almost $18 billion. Even so, rarely does a month go by when we don’t hear another story of a Canadian heading south for healthcare. This past week, it was a Red Deer man in need of a new knee. Rather than gulping pain meds to spend months on a waiting list, he phoned a US hospital known for joint replacement. The next day he caught a southbound flight to get the needed surgery.

He is not alone. According to a recent survey of doctors in 12 medical specialty fields across all 10 provinces, nearly 900 Canadians leave Canada every week to obtain treatment elsewhere. Last year, the total number exceeded 46,000. (The survey was carried out by the Fraser Institute.)

People have different opinions about, and can argue over, the cause of Canada’s healthcare waiting lists. But the fact remains that any economic monopoly in which the incentives associated with ownership are removed, will never be able to perform well, or even meet the market demands placed upon it. When there is no ownership, the system is a rental car, and people will treat it as such.

Health ministers, and senior bureaucrats pulling down 1/4 million or 1/3 million salaries can insist they care deeply about healthcare efficiency. But the stark reality is that the only way such concerns can be aggressive and vibrant, rather than passive and theoretical, is if the incentives driven by ownership are permitted.

Apart from ownership, anyone drawing big dough will easily talk efficiency, while more carefully keeping an eye on their growing pension numbers, even as they fail to implement or even consider more aggressive and inventive ways to cut costs, while better meeting needs. These individuals are not lazy or irresponsible. It’s just that the way the system is set up, no incentives are present that either allow them, or compel them, to do otherwise. For innovative incentives to be fully present, ownership and competition must also be present.

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* DATA SOURCE: Food and Agricultural Policy in Russia, World Bank Technical Paper #523 by Csaba Csáki, John Nash, Vera Matusevich, and Holger Kray (Page 7). The document states: “Household plots account for 6% of agricultural land…[and produce] over 90% of the potatoes, 2/3 of vegetables, and over 1/2 of milk, livestock, and poultry production…” There are nuances to the numbers that are stated in the World Bank’s Technical paper as quoted in the above article. The reference to 6% of the land making up private gardens plots is accurate. That being said, it is also the case that smaller additional portions are at times accessed.

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