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The City's Real Shareholders

· 6 min read

Why does “trust the voters” only ever get said out loud at the exact moment the vote might go the asker’s way? An elected body that solemnly defers to the electorate’s judgment while a tax measure is on the ballot has a way of forgetting that same judgment the instant it loses, the result quietly reclassified from binding to advisory, the spending it was meant to authorize proceeding anyway on the assumption that the money will turn up somehow. That is not an appeal to democracy. It is an appeal to democracy exactly when democracy might cooperate, and a shrug at it the moment it does not.

A resident caught his own city running exactly that play, and said so out loud. Speaking during public comment at a city council meeting in Fullerton, California, he pointed out that the same council now asking him to trust the voters on a new tax measure was the same council that, in 2020, watched voters reject a sales tax increase and then approved the spending anyway. He was, by his own account, the only person at the microphone who said don’t do that, you can’t afford it. The voters said no. The council spent regardless. Now it wanted his trust again, on a measure it was hoping would pass this time.

Then he reached for a word most people have only heard applied to social media platforms: enshittification. Cory Doctorow coined it in 2022 to describe a specific pattern, one the American Dialect Society liked enough to name its 2023 word of the year. A platform is good to its users first, to build the audience. Then it turns to squeezing the users to please the business customers. Then, once switching costs are high enough that nobody can leave, it turns on the business customers too, and starts clawing back everything for itself. Google is the case study everyone already knows. Search used to surface the answer. Now the answer is item eighteen, underneath five paid placements and a wall of results optimized for someone other than the person who typed the query.

The resident’s insight was to notice that a city government can run the identical playbook, just with different shareholders. Citizens are told, implicitly and constantly, that they are the owners of their government, the way a platform’s users are told the product is built for them. But a shareholder is the party whose interests the organization is actually structured to serve, and by that test, residents are not the shareholders of a city. They are the users. The actual shareholders, he argued, are city hall and the public sector unions that negotiate against it, unions that also fund the campaigns of the council members sitting across the table from them at negotiation. He said he personally knew of a council member who told a union not to negotiate its contract, because an unsettled contract would strengthen the council’s argument for the tax increase on the ballot. If true, that is not two sides bargaining at arm’s length. It is one hand asking the other to hold still so a third party, the taxpayer, can be told the cupboard is bare.

Run the platform metaphor all the way through and it holds uncomfortably well. A city is founded because there are things residents cannot do alone: pave the streets, police the town, staff a fire department. That is the free product citizens signed up for, the reason the institution exists at all. Enshittification sets in when the organization stops optimizing for the thing the users came for and starts optimizing for the insiders who run it, while still describing itself in the original terms. He listed what that had produced where he lives: a budget delivered weeks past its own legal deadline, a city attorney whose decisions had reportedly triggered multi-million dollar lawsuits, a community development department that had reportedly misplaced $2.9 million for years with nobody held responsible. Those specifics are his account from the floor of a public meeting, not independently audited by this site, and readers should weigh them accordingly. But the shape of his complaint does not depend on any single number being exactly right, because the complaint is structural. Reward failure to perform the basic function, and ask, in the very same meeting, for more money.

The justification on offer for all of this is the oldest one in government: pay more or lose the talent. If you don’t pay them more, they’ll go to a different city. If you don’t pay them more, we won’t get the best and brightest. It is worth asking what “the best and brightest” is actually supposed to mean when it arrives bundled with a late budget, an expensive lawsuit, and a multimillion-dollar accounting gap. A private company that shipped that record would not be citing it as proof it needs a raise. It would be looking for a new vendor. A city council facing the same record apparently reaches for the opposite conclusion, because the people asking for the raise and the people deciding whether to grant it are, functionally, on the same side of the table.

None of this requires villains. Nobody has to be lying for the incentive to work exactly this way. A council member who takes a union’s donation, then defers to that union in a negotiation the council is supposed to be adversarial in, is not necessarily corrupt in the criminal sense. He is simply responding, rationally, to who actually shows up to fund and organize around his reelection, which is very rarely the median taxpayer, who has a job and a family and better things to do than attend budget hearings. That asymmetry, a small organized interest beating a large disorganized one every time, is not new to city government. It is the oldest finding in public choice economics, and it is exactly why “trust the voters” keeps getting deployed selectively instead of as a genuine standing principle. The people running the meeting already know which way the organized interest in the room leans. The voters they want you to trust are the ones who show up once, at the ballot box, against people who never leave the building.

The resident closed with the only demand that actually addresses any of this: get the budget in order, do the job the city already collects taxes to do, and then, if there is still a case to be made, ask for more. Not the reverse. A government that has not demonstrated it can competently spend the money it already has is not entitled to a bigger number, no matter how sincerely it invokes the voters, because the voters it wants to invoke are not the shareholders it is actually answering to.

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