I've read quite a few dystopian future novels and seen a couple of movies where this is the norm.
I understand that it can be quite a bit cheaper but whyowhyo is everygoddamned decision made based on what something costs? This is really pretty frightening when you start thinking about it. How long before gated communities decided to opt out of paying city taxes since they have their own private security firms that can make arrests? Then how long does the city last? Months rather than years.
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