When the Referee Steps Onto the Field: From New York’s Municipal Grocery to Guangxi’s Broken Dam
In July 2026, two news stories simultaneously tore apart public discourse: New York Mayor Mamdani loudly announced details of the municipal grocery store, promising core consumer goods would stay permanently 30% below market price; almost simultaneously, Typhoon Megi brought extreme rains that breached Guangxi Hengzhou’s Liu-lan Reservoir, a dam built in 1958 during the Great Leap Forward, creating a roughly 50-meter gap, sending floodwaters downstream, forcing tens of thousands to evacuate overnight and causing heavy casualties and property losses.
On the surface, one is about “solving expensive food,” the other about “flood-control failure,” seemingly unrelated. Yet both point to the same malady: government has stepped out of its role as arbiter and mediator, begun to craft playing fields according to its own needs, and jumped into the game as a player. The result is often that while trying to fix old problems, it creates new, more covert and more deadly risks.
One, Mamdani’s ‘Municipal Grocery Store’: History Has Already Given the Answer
Mamdani has made “one municipal grocery store in each of the five boroughs” a core campaign promise. The city government funds construction, exempts rent and property taxes, and private operators handle day-to-day management—but must keep prices on produce, meat, dairy, and eggs 30% below market rates. Official estimates claim this will save residents roughly $90 per month.
This sounds “pro-people,” but is in fact naked interest-group barter: using one group of taxpayers’ money to buy off another group of voters. Private groceries and supermarkets pay taxes, rent, and bear commercial risks every single day, yet the government takes those very tax revenues to open stores that compete directly against them, then hands the discount to voters. Private shops are squeezed unfairly and may be forced to close or lay off workers; another group gets short-term bargains and feels “the government is doing something for me”; and the government itself harvests political support and an expansion of power.
The Book of Rites says, “Those families entitled to ice shall not raise cattle and sheep”—noble households with the privilege of ice cellars should not also raise livestock to compete with the people for profit. Once the government itself steps onto the field to open stores and set prices, it is using public authority and the people’s money to squeeze private livelihoods. This is not merely an abuse and overreach of power; it is a complete betrayal of the government’s identity as a neutral arbiter.
But this is not even the most dangerous part. The most dangerous part is that state-run stores creating shortages has too many precedents in history.
From the Soviet Gastronom to China’s supply-and-marketing cooperatives during the planned-economy era, to Venezuela’s “Great Patriotic Shelves,” the formula is identical: the government promises to supply essentials below market price, then subsidies cannot keep up or production is distorted, shelves go empty, rationing or black markets emerge, and eventually even goods that were previously available cannot be bought. This has nothing to do with ideological prejudice; it is the inevitable result of suppressed price signals.
Mamdani now says “if it doesn’t work, c’est la vie“—easy words. But when the shelves are empty and voters begin to complain, political pressure will only push him toward stronger controls: increasing subsidies, purchase limits, directing supply chains. At that point, the line between “municipal grocery stores” and “supply-and-marketing cooperatives” will blur rapidly. Grocery retail is a perfectly contestable market, yet the government uses the people’s money to extract its own political benefits—this is naked rent-seeking in its purest form.
Two, The Hengzhou Liu-lan Reservoir: Original Sin of Engineering, Not Governance Failure
The flood in Hengzhou, “too much rain” is merely the trigger; the core lies in the fact that long‑term government‑led infrastructure projects reveal their innate flaws under extreme conditions. The Liu-lan Reservoir was built in 1958, a dam erected by tens of thousands of peasants shoulder‑loading and hand‑carrying materials. In early July 2026, extreme rainfall far exceeded design standards, the reservoir overtopped and burst, a 50‑meter gap pouring water downstream.
Many will blame it on “governance failure”—poor management, insufficient reinforcement, inadequate warnings. Yet these later‑stage management issues are merely surface; the deeper root is the original sin of engineering stemming from an inability to define property rights.
The dam simultaneously generates irrigation, flood control, water supply, etc., with beneficiaries ranging from farmers to city residents to factories, whose exact shares cannot be measured, making it impossible to establish an effective “beneficiary‑pays” mechanism. Dam‑break risk is a low‑probability, high‑loss tail event; maintenance costs are visible, safety margins are not; political cycles and project lifespans are out of sync, so builders reap political glory while maintenance burdens fall on successors. Once a break occurs, responsibility is diffused throughout the administrative hierarchy—designers, contractors, past management units, flood‑control command all pass the buck.
Property‑rights economics holds that “clear property rights are a prerequisite for effective governance,” yet the dam carries this innate ambiguity from its very birth. This means that, within the existing property‑rights framework, simply strengthening management cannot reach the threshold of effective governance.
More fundamentally, the dam is not merely a structure; it is a permanent node of centralization.
Flooding of a natural lake is “force majeure”; society does need temporary centralization to respond, but the legitimacy of that centralization fades after the disaster. A dam is completely different. It fabricates a lasting environment that requires centralized management of risk. Once built, the risk of dam failure acquires the same “state‑of‑emergency legitimacy” as a natural disaster.
Thus emerges a bizarre inversion: the dam is erected in the name of “serving the people,” yet it is permanently legitimized in the name of “protecting public safety” to centralize control over the populace. Construction requires land seizure and mobilization; operation needs unified dispatch; in crisis the flood‑control command gains legal‑overriding emergency powers; after the disaster it expands authority again under the banner of “reconstruction and reinforcement.” At every stage, autonomous space is squeezed a little more.
During the 1958 Great Leap Forward, tens of thousands of peasants were mobilized to build the dam. The process itself was a political‑mobilization drill: aside from the dam’s physical function, it trained the political muscle that “the state can arbitrarily allocate manpower and material for lofty goals.” That earthen dam is a material relic, but more importantly it left a political legacy: a preset that “for the collective good, individuals and communities must submit.”
Sixty‑six years later, when the dam burst, people saw the engineering failure. But the true failure was already sealed in 1958: that dam carried the centralization gene from the start, and the rupture is merely the ultimate expression of that gene.
Three, The Common Logic: When Government Plays Player, the Referee Blows a Crooked Whistle
Putting the two side‑by‑side is not a forced association; they share the same dangerous logic: the government pretends it understands and can manage markets and civil society better than they can, with the result being distorted incentives, accumulated hidden costs, and when failure occurs, pushing blame outward.
In New York, the government uses taxes paid by private stores to fund its own competing outlets, sabotaging part of the populace’s livelihood to buy off another part, while expanding its own power and prestige. Once the supply‑and‑marketing cooperative’s shelves go empty, blame is often shifted onto “capitalists hoarding and gouging” or “insufficient federal subsidies,” thereby obscuring the very ills of price controls.
In Hengzhou, the government uses compulsory force to build a massive project “to solve” flooding, yet the project itself becomes a disaster multiplier. When the dam breaks, responsibility is often deflected onto “extreme climate” or “historical legacies,” thus avoiding acknowledgment of the dam’s inherent flaw as a technical‑institutional device.
Both create governance black holes: one side uses public budgets to buy political support via retail subsidies; the other uses public safety to justify centralized infrastructure. Inside these black holes there is no accountability, only ever‑increasing power and piling‑up risk.
While private mechanisms are not omnipotent, grocery retail is a classic competitive good, and flood control also offers options such as zoning regulation, insurance, and restoring natural detention basins—no need for the government to do everything itself. A truly healthy government role should focus on setting clear rules, adjudicating disputes fairly, and acting as a limited intermediary concerning genuine public goods and externalities. Once the government itself steps into the arena to open stores and set prices, or tries to “defeat” nature with concrete and mobilization, it often ends up spending people’s money to buy its own political benefits.
Conclusion: Demolition Is Inevitable; the Only Question Is Who Pulls the Plug
For the tens of thousands of old dams like Hengzhou’s Liu-lan, post‑hoc reinforcement can only delay the inevitable. As long as the precondition of undefined property rights remains unchanged, any supervision, insurance, or maintenance mechanism will only create new bureaucratic layers and opportunities for corruption. The dam’s ultimate fate is inevitably demolition; the real question is who will do it and at what cost.
In reality, there are only two ways out: either the government, acting rationally, proactively demolishes the dam, or it opens the entire watershed to private ownership and lets the market do the demolition. Promoting watershed privatization means introducing genuine market actuarial assessment to take over, exposing the dam’s true costs and risks to sunlight. Let every parcel of catchment land, every water right, and every inch of floodplain have a clear owner; when the dam’s enormous liability and the high maintenance costs of an aging earthen dam are internalized by market prices, a private owner’s balance sheet will instantly judge it a “liability asset.” The market cares only about profit‑and‑loss, not political face; to eliminate this time bomb, the owner will inevitably choose to demolish the dam, driving risk to zero.
Conversely, if the government continues to hold the property rights, bureaucratic systems will often, out of performance considerations or path dependence, keep pouring public funds into strengthening a doomed enterprise, artificially preserving its physical existence until one day an extreme rainstorm strikes, and a catastrophic breach displaces tens of thousands, completing a “passive demolition.”
Demolition is a physical inevitability; privatization is merely the most efficient, least‑costly institutional path to achieve that outcome. When the government habitually plays the player, the referee’s impartiality wavers. Society’s cost ultimately falls on ordinary people—whether it’s the New York corner‑store owner squeezed out by unfair competition, or the villagers downstream of Hengzhou Dam who flee overnight in flood.
The proper role of government, when disputes arise, is to serve justice and act as a referee—its place is the stand, not the pitch.