Samizdata

Normally I would not bother to unpick the economic nonsense of Corbynista Owen Jones, but he has the sort of article up on the Guardian that passes for conventional thinking among a sizeable chunk of the population, so I am going to quickly have a pop at it:

Travel outside London….Britain’s deregulated bus system reveals itself as the source of widespread, justified disgruntlement – an overpriced, inefficient, poor-quality mess. According to a report to be published this week, since deregulation in 1986 – unleashed with the promise that “more people would travel” – bus trips in big cities outside London have collapsed from 2bn to 1bn a year. In London, on the other hand, where everything from how much we pay to which routes exist is decided by the mayor and Transport for London, bus use since the 1980s has gone in the opposite direction: from around 1bn to more than 2bn trips a year. Britain’s bus privatisation disaster is a story of profit before need, and a discomfiting tale for those who believe the private sector automatically trumps the public realm.

Jones doesn’t use the term, but he presumably thinks that the fact of there being far fewer bus services in the UK than a certain period in the past is a case of what economists call “market failure” – where there is a lot of supposed demand for X, but and under-supply of it, which needs to be fixed by, you guessed, the State (supported by the taxpayer, the very same people who are supposedly unable to pay for the under-supplied service). There are several issues here. First of all, services run by a municipality (ie, a monopoly with no competition) typically don’t lend themselves to good consumer service. Second, in a large metropolis such as London, where an organisation such as Transport for London runs things, there is still quite a lot of competition (cycling, walking, cars, etc) the abuse that any monopoly power has is constrained, although the situation is far from ideal. Funnily enough, the other day TFL, which had been lobbied by taxi drivers to go after Uber, seems to have decided against it, which is good news.

In the countryside, it may well be true that there are a dearth of buses. It may not be profitable to run them on certain routes, but is that an argument against private provision and for state control? In very sparsely populated parts of the country, it is a serious mis-allocation of scarce resources to provide such things when there are more urgent requirements instead for the resources in question. Second, if a person goes to live in the country, part of the pro/con of living in the back of beyond is that you don’t have lots of rapid-transit transport nearby. You may have to rely on having a car, driven by either you, or by a neighbour, partner, etc. That is part of the trade-off that comes from choosing to live in the sticks, rather than in the city. Why should those who have chosen the option to live in the country, or to stay there, be subsidised in transport terms by those who do not? In some cases, the persons paying for the subsidy will be far less well off than those taking advantage of it. That is the sort of regressive transfer of wealth that I assumed a lefty such as Jones would be against. This sort of issue also explains why, other things being equal, the cost of buying a home in central London is far higher than, say, the middle of Norfolk or Yorkshire.

Jones states that because, in his view, people “need” X that it is the responsibility, in the event of some alleged market failure, for the State to step in. But leaving aside whether the need is real or a figment of Jones’ socialist imagination, consider a basic example of a human need: food. Food is, despite some interventions and distortions created by the State, such as import tariffs and subsidies for farmers, largely handled in the private sector here. Ask yourself whether we would be better off in having food supplied by something such as Transport for London, or Sainsbury’s, Tesco’s or Asda. It does not even come close, does it?

I will admit to rather enjoying the sight of Donald Trump storming through the Republican race. It’s simply refreshing to see someone over turning the established and perhaps too measured way that politics has been approached recently. However, my enjoyment is as nothing to the perils of the economic policy which he’s just announced, which is that he’ll get Apple to start making “their damn computers” in America instead of in other countries. This is really not a sensible policy at all even though it accords with his other misunderstandings about trade. Because the net effect of such a policy would be to make America a poorer country. Something we’ve known since David Ricardo published in 1817. And, since making the country, or the people of the country, poorer is not at all the point nor purpose of having an economy, or even a public policy about the economy, this is something we really shouldn’t try to do.

– Tim Worstall.

Of course, I suspect that Trump knows full well that protectionism is a lousy idea and harms those who advocate it. I am guessing that he doesn’t care.

National Review’s Kevin Williamson has a book on Trump that makes for sobering reading. If anyone thinks Trump is any kind of supporter for limited government conservatism, I have a beach resort in Leeds I’d like to sell you.