BOTTOM LINE:For Christmas this year someone gave me a copy of Joseph Stiglitz's latest book, The Price of Inequality. In it the American economist argues that the level of wealth inequality in the US is not just inequitable but also a contributor to the pallid economic growth (bubbles aside) experienced by its economy in recent decades.

While I read the book, outside in the garden an enormous amount of packaging and other waste left over from the festive season awaited the arrival of the binmen.

The combination of the book’s content and my voluminous rubbish led to what happened next: I decided to switch bin companies.

When Dublin City Council sold its domestic waste collection service to Greyhound Waste and Recovery in January 2012, it was noted in this newspaper that the company is an unlimited one, and therefore doesn’t publish its accounts. The profits being made by the company therefore remain secret.

The company is in turn owned by limited liability companies based in the Isle of Man, a structure that allows its ultimate owners retain the benefits of limited liability while avoiding the normally associated obligation to publish accounts.

Waste companies may be feeling the downturn at the moment but when the economy picks up their profits will too. And we may not be able to monitor them.

Which brings us back to Stiglitz. He argues that the people and corporations that have accumulated the most wealth in recent times in the US are its most successful makers of excessive profits. Microsoft, the too-big-to-fail banks, telecoms companies and pharmaceutical companies are among those targeted. Individuals and smaller businesses are being screwed by these rent-seeking monopolists and oligarchs, according to Stiglitz.

Maybe Greyhound is a rent-seeker, I thought, and I switched to the City Bin Co.

Every little helps

This had the added advantage of reducing my bills. Greyhound imposes an annual fee of €100 for having a 240-litre black bin, and charges a further €7 each time it empties it. City Bin Co is running a special offer to mark its entry into the Dublin City Council market (to contest Greyhound’s dominant position) of just €99 a year, irrespective of the number of times the bin is emptied. Every little helps, as the retail oligarchy Tesco says.

Alas, dear reader, it subsequently came to my attention that Co Galway-based City Bin Co is an unlimited company that is in turn owned by companies based in Jersey. Bah humbug.

In preparation for this column I decided to contact both companies. The Greyhound website told me that phone calls to it were, on average, being answered within 4 minutes and 41 seconds. I contacted the company by email and as of last night had received no response.

A call to the City Bin Co offices in Oranmore was answered quickly and in time I found myself talking with its founder and chief executive, Gene Browne.

He said the reason his company did not want to publish its accounts was that they were of too much use to competitors in what was a business with high asset costs and low profit margins.

He said the use of unlimited companies became fashionable in the sector during the noughties. The Jersey companies that own City Bin Co are in turn owned by an Irish (unlimited) company, Boscolo Holdings. He said the corporate structure does not involve any tax-avoidance advantages.

City Bin entered the Dublin city market in November. Greyhound is now targeting City Bin’s distinctive red bins in a drive to win back customers. It is attaching leaflets advertising its €79 one-year special flat rate offer to City Bin bins (most of whose owners have just switched from Greyhound) encouraging a switch back to Greyhound and a saving of €20.

It is worth noting that these competing flat-rate offers mean the polluter pays (more lifts more cost) principle has been temporarily thrown out the window in Dublin city.

Domestic waste collection is a high-asset-cost business, and you have to run your collections every week irrespective of the number of bins waiting for you. When the sector settles, most towns and cities are likely to end up being serviced by one or two companies. And households will always need someone to take away their rubbish. Rent-seeking is an obvious danger.

Browne said it was because the cost of getting rid of rubbish became so high (ie landfill costs, etc) that the public service model came to be replaced by a business model.

Certainly a contributor to the ending of the public service model was the widespread failure or refusal of so many members of the public to pay bin charges, as well as the associated failure of the local authorities to enforce payment.

We may all yet end up paying a price for those failures.

Anyone for a binman regulator?