The Failure of Privatization

[J Hill]

"But RMT union chief Bob Crow blamed rail privatisation. He said: 'The privatised market structure foisted on the railways cannot deliver a solution.'

"'It's crazy that money is being taken out of the industry as profits when commuters routinely cannot find a seat because of chronic under-investment in rolling stock.'

TRAUMA ON THE TRACKS: AGE OF THE STRAIN

[RS Davis]

Guest-J said:

"But RMT union chief Bob Crow blamed rail privatisation. He said: 'The privatised market structure foisted on the railways cannot deliver a solution.'

"'It's crazy that money is being taken out of the industry as profits when commuters routinely cannot find a seat because of chronic under-investment in rolling stock.'

TRAUMA ON THE TRACKS: AGE OF THE STRAIN

I can see why one would think this, but it seems to me that this is a problem created by their government, not private industry.

They've made gas taxes so high, no one but the very rich can afford a daily commute in a car. This forces everyone onto the trains, overburdening them and making it miserable to travel.

Meanwhile, the rich get to ride in style on open roads.

If they would just lower gas taxes so that it is less than $5 a gallon, more people would move back onto the roads, and an equilibrium would be struck that would even out traffic congestion and lighten the burden of the stressed rail services.

- Rick

[J. Hill]

RS said:

I can see why one would think this, but it seems to me that this is a problem created by their government, not private industry.

Britain privatized its railroads a few years ago. Now the firms operating them are trying to squeeze the ridership for every pence that can be gotten from them. It's what capitalist do. I don't think we can blame the government for the natural tendencies of capitalists.

Secondly, gasoline is a finite resource. Relying on it is foolhardy. Considering the instability of the oil market and the probable increasing scarcity of what's traded in it, public transportation seems a better public policy choice.

[RS Davis]

J. said:

Britain privatized its railroads a few years ago. Now the firms operating them are trying to squeeze the ridership for every pence that can be gotten from them. It's what capitalist do. I don't think we can blame the government for the natural tendencies of capitalists.

No, you are right. We cannot blame the government for the tendencies of unscrupulous businessmen. We can, though, blame them for taking away any recourse the poor will have to vote with their pounds. If the governments would only lower the taxes on fuel, these poor riders will have other choices. As it is now, the government has created a system where these people are forced, like cattle, into these trains.

If they could merely start driving to work, the trains would see their profits slipping and have to do more to draw them back and satisfy the customers they have left. But the businesses don't want the government to do that because, right now, they have a captive market. I wouldn't be surprised to find that industry heavily supporting higher fuel taxes. This is what economists call "rent seeking."

J. said:

Secondly, gasoline is a finite resource. Relying on it is foolhardy. Considering the instability of the oil market and the probable increasing scarcity of what's traded in it, public transportation seems a better public policy choice.

It is true that oil is a scarce resource, as are all resources. That's the first rule of economics. And the second rule of economics is that markets reward those who make most efficient use of scarce resources with higher profits.

I wouldn't worry, though, about running out of fossil fuels anytime soon. We have enough to last quite awhile, and we find new sources and better ways to procure it all the time.

When we do start running out of fuel, though, this extra scarcity will raise the price of these fuels, creating extra incentive for people to find alternative fuels. This will lead some enterprising person to make a fortune on this new resource, which will in turn bring others to market. This is and always has been the way of the world.

- Rick

[CJYJTJ]

J. said:

Britain privatized its railroads a few years ago. Now the firms operating them are trying to squeeze the ridership for every pence that can be gotten from them. It's what capitalist do. I don't think we can blame the government for the natural tendencies of capitalists.

Secondly, gasoline is a finite resource. Relying on it is foolhardy. Considering the instability of the oil market and the probable increasing scarcity of what's traded in it, public transportation seems a better public policy choice.

So you would rather let the government shove its weight about rather than let the private sector handle its own problems? How... socialist... of you.

[J. Hill]

CJYJTJ said:

So you would rather let the government shove its weight about rather than let the private sector handle its own problems? How... socialist... of you.

Yes. The private sector obviously has failed.

[RS Davis]

J. said:

Yes. The private sector obviously has failed.

Because of the public sector.

- Rick