Utils and utility

The Commonwealth Utilities Corp. is certainly enjoying the attention it so sorely deserves. If you were so inclined, and had the light to work with, you could probably fill an entire book with reports of Saipan’s various electrical woes. Forget for now (as if you could) the high price of electricity. The unreliability of it alone fuels horror stories ranging from homeowners suffering in the heat, store owners facing ruination of perishables, the airport unable to fulfill its missions, and even the Department of Public Safety suffering from data processing problems in its detective and motor vehicle operations.

Way to go, CUC!

Indulge a tangent here: There’s no use in pointing out why the CUC failed. We all know why. And we’ve known for quite some time, as in, over a decade. That’s not news. The real news is why very few dare to speak these open secrets in public.

Anyway, the CUC’s extemporaneous electrical disappearing acts are a dandy way to illustrate what we can call the “utility of availability.” “Utility” is a favorite term for economists. It means, basically, something that makes you better off. A Big Mac has utility because I can eat it. My car has utility because I can drive it.

That’s simple enough, but things quickly get more abstract. My car actually has utility even when I’m not driving it. Think about it: How many hours a day do you drive your car? On Saipan, let’s say one hour. That means, of course, that your car is sitting, stone still, for 23 hours a day, or 96 percent of the time.

There is a story an economics professor told us in class, about a Soviet official who visited the United States. Gazing out the window of his landing airliner, the official spied a parking lot full of parked cars. As the story goes, the official remarked on how wasteful capitalism was by allowing these resources to sit unused.

What he didn’t know, but what most of us do know, is that the benefits of car ownership are, largely, those of availability. Being able to travel, on a whim, is not only convenient, but makes us more productive. The U.S.S.R. didn’t have many idle cars, but it had a lot of idle people.

An idle, parked car, then, certainly does have utility to its owner. Of course, it has costs, too, which is why if you lived in New York or Hong Kong, you might just give up and take taxis.

How often do you use your bed? It sits idle 66 percent of the time. How about your telephone? It’s probably idle 98 percent of the time. Your toaster? Idle 99.0 percent of the time. So, would you rather own these, and let them be idle in your absence, or, perhaps, rent them only when you need them from the guy down the street? For most of us, the choice is obvious.

Even things we never use have utility. The local hospital’s emergency room, for example. I’ve never used it. But it has utility to me because I know that if some injury strikes me, I have a place to go. That’s a lot more sensible than trying to build my own hospital after I start bleeding.

Many studies in economics, or explanations of it, use the term “utils” to measure the utility (in other words, value, usefulness, goodness, etc.) of something. Why not use “dollars” instead of “utils”? Well, value is a far more fundamental concept than mere money. Closing down the hospital won’t cost me any money, but it will cost me utility; this is one good way to show, by the way, that accounting (which counts dollars) and economics (which is concerned with theoretical utils) are entirely different fields, and, basically, have nothing to do with each other.

Of course, “utility” in common parlance means, well, just what the CUC sorely lacks, which brings us full circle. Much of the utility of electrical service is that it’s there (in theory) for your use whenever you want it, which is to say, it’s available 24/7. This is why the CUC sucks squared; not only are the prices per kilowatt absurd, but the kilowatts themselves aren’t even available at the beck and call of the customer.

This is why the quality of life in the CNMI is sliding down, even if such invisible things as “utils” can’t really be tallied in dollar terms.