Tuesday, January 27, 2009

Privatisation and profit or people and public service??

First Great Western cancelled over 4000 journeys last year, we have the most expensive railways in Europe and when you can get on a train that is running on time you often can't get a seat! The 19 train operating companies between them cancelled 62,000 trains! Hasn't serious underinvestment and privatisation of the railways been great!?!

(If you are a shareholder privatisation has been great for your pocket though - with huge profits put before people travelling)

Let's run the railways (and the buses for that matter) with a proper public service ethos, put public transport into public/community ownership and give people an affordable, good quality alternative to car use (details here).

42 comments:

  1. If the public wanted to own the Train Operating Companies (TOCs) then all they need do is buy shares in them. But they don't, do they? They'd rather somebody else took the risks (and so any profits of course).

    If people don't think FGW or any other TOC is good enough then they have a simple recourse - stop using them. But they carry on using the trains but moan about high fares (which they pay) and overcrowding (which is because the fares for peak services are too low) and unreliability (ditto).

    What would change if the TOCs were publicly owned? People would moan even more and would expect to have their cake and eat it, as they always do. But with the taxpayers pocket to dip into the politicians might be foolish enough to try to deliver the cake both ways.

    ReplyDelete
  2. 'What would change if the TOCs were publicly owned?'(Chris)

    The answer to this is in the title of my post. Railways could then be run as a public service for people instead of being run to maximise profits for a few. I think many people are disgusted by the massive profits of train operators when the service is not up to scratch.

    People not buying shares in TOCs is no indication that they either do or do not favour public ownership. All it means in fact is that they dont want shares in a rail company or perhaps dont want to own shares in anything! Some polls I've seen, admittedly a good few yrs ago now, actually show significant public support for renationalising the railways.

    'If people don't think FGW or any other TOC is good enough then they have a simple recourse - stop using them.'(Chris)

    This is a very harsh comment. I'd have thought some sympathy with rail users who have a hard time was in order. Many, many people may not have other practical options open to them. Some may be able to travel by coach, some may be able to drive, others fly (depending on destination) but these are not always practical. I am concerned though that poor service is a disincentive to people to get out of their car and onto a train - and some who do get out of their car will fly instead of go by rail!

    'overcrowding (which is because the fares for peak services are too low)' (Chris)

    Overcrowding of trains couldn't be due to lack of capacity to carry those that are travelling then? TOCs make plenty of money that could/should be spent on providing capacity. Are you advocating that rail fares should increase even more than they have in order to cut demand??

    Dont we need to run railways according to a new set of rational criteria - with goals based on a range of social and environmental as well as economic criteria??

    ReplyDelete
  3. FGW (as opposed to First Group)doesn't make that much profit and is unlikely to make any over the next few years with the recession. In fact they could be in real financial trouble as people cut back on rail travel.

    FGW high speed diesel trains are comparatively very polluting and cannot really be considered a green form of transport. Using inter city coaches could be much greener.

    Overcrowding on trains, as with congestion anywhere else, occurs because demand exceeds supply. This is easily resolved by adjusting the price upwards to balance the two. The extra revenue could cross-subsidise off peak services (where supply exceeds demand) so doesn't have to mean increasing net profits.

    People have choices about where they live and work. If they choose to live in Bath, Weston or Yate and work in Bristol then they are choosing to be dependent on FGW. If they don't like that they have the option of choosing a more sustainable lifestyle.

    ReplyDelete
  4. 'If people don't think FGW or any other TOC is good enough then they have a simple recourse - stop using them.'

    this sounds like a call to "put up or shut up", in which case I feel quite entitled to respond;

    'If people don't think Sustrans or any other cycling organisation is good enough then they have a simple recourse - stop using them (or their routes).'

    however, I prefer to rewrite another comment;

    "The current wave of criticism is not merely negative carping. It is a vital part of the dynamic environment within which we all function and will in due course bring about change. How quickly we see the necessary change depends on how far gone [First] is. Will they bury their heads in the sand and carry on currying favour with those with the money bags [i.e the banks and nominees who own nearly 90% of the shares] or will they recognise the need to re-engage with their core constituency, Britain's [rail users]?"

    I though the original comment on which the above is based was well thought out - I think even revised it remains so. The problem, of course, is that why Sustrans may take notice of creative criticism, First have a history of ignoring it - as they must, because as a PLC their first duty, enshrined in corporate law, is to their shareholders not their customers. That is their core constituency. In that situation only a radical change, one in which the local public sector has a much greater control over service provision (which, with the lack of suitable competitive tendering would almost certainly have to be through ownership) will bring about the provision of an efficient service.

    I see little evidence around the world of private ownership (especially with publicly traded shares) of public transport providing a service that is acceptable without the assistance of some form of public contribution or effective control - whereas there are numerous examples of public sector owned or partly-owned public transport systems which do provide an effective service.

    As for your final comment; "they have the option of choosing a more sustainable lifestyle"

    Actually, they also have the option of choosing a more unsustainable lifestyle, by turning to the car and insisting on further road building like the South Bristol ring road or even maybe on the Bristol to Bath Railway Path. After all if cyclists were really interested in it being a cycle path they would buy it surely?

    ReplyDelete
  5. I agree with Tony's well made observations above.


    Chris -

    Large profits are being made by TOCs, who have consistently hiked up prices (recently FGW have seen a six per cent increase in passengers and have experienced an 11.2 per cent rise in revenue due to fare increases). Making profit is their concern. It remains to be seen how these companies perform during the recession.

    Your point about high speed diesel trains seems to imply that no-one should be choosing to use them - even if it has a lower impact than the way they travelled previously! Surely they have a role to play as, hopefully, people and companies are persuaded to 'green-up' travelling (number of journeys, length of journeys, mode(s) of travel, fuel used to travel, efficiency of travel mode...). We do want some people to switch to trains as part of the process dont we??

    The particular mix of travel habits, including whether to choose coach or train, is down to individuals, though I hope with an overall carbon budget.

    Cant agree that the rail fare rises you suggest make sense from a green viewpoint. Higher prices are a disincentive to rail use and this may well mean people, who would otherwise have used the train, travelling by aeroplane and by car. We need to raise the cost of car and air travel, not rail travel, and invest the income gained into public transport, walking and cycling (though I would agree to a wholesale review of the cost of all modes, which aimed to achieve prices proportional to the total cost of each).

    The choices people have are not always straightforward (though you imply otherwise Chris). There are often many constraints and limits, not least the availability of suitable work and housing, the choices of others in a family, access and transport options that are practical...We need to gear up our society/communities/neighbourhoods such that green choices are affordable and straightforward.

    ReplyDelete
  6. Touché TonyD. Hoist by my own petard.

    But I will try to salvage a few points.

    1. Cyclists do not have the option of becoming members of Sustrans or buying shares in cycle paths, so that comparison is not entirely valid.

    2. Of course rail users are entitled to complain, like anyone else. But rail services are expensive to provide and one way or another the users have to pay more for better services if that's what they want. My criticism is that rail users simultaneously complain about high fares and poor services! So which do they want - lower fares OR better services?

    3. Public control of railways would inevitably mean dipping into the public purse (i.e. the taxpayer's pockets) to try to reduce fares paid by users, which leads to the debate we had before about why those who travel less should subsidise those who travel more.

    4. Rail travel gets a disproportionate amount of attention, funding and subsidy, considering what a tiny proportion of journeys it accounts for around Bristol. Look at the additional subsidy on the Severn Beach line which has resulted in decreased occupancy rates and therefore lower efficiency and higher emissions per passenger mile.

    ReplyDelete
  7. You are pretty sweeping with some of your comments Chris eg lumping all rail users into a homogenous mass! In any case you appear to misinterpret the complaints many rail users are making - aren't they right to expect better service than they are getting given high and rising fares??

    Yes public control of railways and getting cheaper fares does involve public money. But what would be wrong with taking more money through taxing pollution from high impact cars and aeroplanes and using it to invest in medium impact trains, buses and coaches, and low impact cycling and walking??

    Dont understand how you can say that rail gets a disproportionate amount of attention/funding...Seems to be that there has been and is chronic underinvestment - and that there is the potential to carry around much larger numbers of people locally via highly efficient ultra light rail systems. Much better option than Bus Rapid Transit.

    ReplyDelete
  8. Strip out the environmental issues and this could be an old fashion Old Labour versus Old Tory argument. One side seeking to acommodate all in as fair a manner as possible even if that means some compromising of the overall target (economic growth then - absolute zero carbon now), the other following the doctrine of allowing market forces to determine who will be the "haves" and "have-nots" but not allowing any deviation from the ultimate target (then economic growth, now enviromental protection).

    I will waving the green red flag myself, holding to the belief that the near-future can be both environmentally friendly and support a fairer society. Presumably Chris, you will be the Norman Tebbit of the environmental conservatives? :-)

    ReplyDelete
  9. Yes Tony, you have a point! Can I be the Tony Benn of the green socialists??

    I would argue that an environmentally sustainable society is much more difficult to create if fairness is not built in (both process and outcomes). Even if an environmentally sustainable but significantly unfair society could be/is established I doubt it would last long as unfairness breeds social unsustainability.

    For me its really important to approach overall sustainability by integrating environmental, social and economic considerations.

    ReplyDelete
  10. I'm not quite ready for Norman Tebbit yet. Give me another ten years.

    I was a socialist once but I eventually came to an understanding of sorts of how markets work and I realised that they tend to be more efficient and less wasteful that state decrees and five year plans.

    Being Green is about using resources in an efficient way with minimal waste, so market mechanisms offer a proven way of achieving this. I therefore see no problem in marrying the two.

    As for 'haves and have-nots', that's something that manifests itself in all societies except that socialist societies tend to have fewer haves and more have-nots, which I suppose may be a good thing form the environmental perspective.

    And what's fairness for God's sake? To each according to his need? Where's the incentive to work harder or more productively? Where's the incentive to take risks or to be innovative? And who's to say who needs what? The Council? The Government?

    I'm all for a fairer society (starting with paying me for all my blogging, thank you very much) but first tell me how you achieve it without creating an even bigger apparatchik class than we already have.

    ReplyDelete
  11. Chris raises a lot of very important issues. For one thing, modern trains are now extremely heavy (due in some part to elf'n'safety hysteria, some part to the excessive speeds they now move at) and for many people's journeys are probably less efficient, more wasteful, than using a small light car. Seems to me that too many Greens make a fetish out of rail travel.

    Light Rail? ... be careful what you wish for. Could come to destroy a cyclepath near you.

    Why can't we buy shares in cycle paths? Surely no in-principle reason? Just Sustrans being dog in the manger?

    Free markets? Are far from inextricably "right wing". Adam Smith, who the neo-liberals and corporatists have been traducing for the last decades, actually has a very good case to make.

    Some on the libertarian / left are starting to reclaim free markets. Check out Kevin Carson at the Mutalist Blog "free market anti-capitalism":

    http://mutualist.blogspot.com/

    ReplyDelete
  12. Socialism From AboveThursday, January 29, 2009

    “And who's to say who needs what? The Council? The Government?”

    Chris, you clearly don’t understand anything about politics. The best way to ensure that everyone gets what they need is to have a council of experts, including such esteemed persons as David Bishop, George Ferguson, and Jan Ormondroyd, and chaired by someone well known for their balance and good judgement; Helen Holland would be well suited to the job. Such a system could not fail to work far more efficiently than any free market.

    If you think it over carefully I’m sure you will agree that this has to be the right and proper way of doing things… If however you don’t agree, and persist in causing trouble, we have a nice warm padded cell and a plentiful supply of medication waiting for you… after all, if you don‘t agree with us, then you must be mad!

    ReplyDelete
  13. 'I eventually came to an understanding of sorts of how markets work and I realised that they tend to be more efficient and less wasteful..'(Chris)

    Oh sure, free markets are great aren't they. They haven't brought massive economic and environmental chaos to the world have they...er...oh.

    ReplyDelete
  14. Socialism From AboveThursday, January 29, 2009

    “Oh sure, free markets are great aren't they. They haven't brought massive economic and environmental chaos to the world have they...er...oh.”

    Is this what now constitutes an intellectual argument in the OU now Glenn? Chris quite reasonably asked you a question, namely “…who's to say who needs what? The Council? The Government?”, you seem reluctant to give a straight answer, which, as you are a member of a political party that make a great deal of noise about restructuring society, I find surprising. If you are serious, then we, the general public, have a right to an answer on this. To be frank, I am already pissed off with being dictated to by petty bureaucrats and officials, and, if your party proposes yet more of this, then you better be honest and up front… unless you like fights.

    Yes, liberal free market systems on a global scale, especially when applied to banking operating on a fiat currency system have indeed created a problem… however, this is not the only way of operating a free market as anyone with a modicum of knowledge about economic systems would be able to tell you… Dona’s reference to Kevin Carson should serve as a starter. As Dona so correctly points out, free markets were originally something associated with the left… parties of the right such as the Tories and their heirs the Conservatives were protectionist. It wasn’t until the 1960’s that free market ideas entered the Conservative party on any significant scale. This took place under the influence of people such as Friedrich August von Hayek - who, incidentally, wrote an essay entitled “Why I am not a conservative”, and described himself as an “Old Whig”.

    But I digress. If you want to see just how much environmental damage can be created by non-free market systems, you could talk to people from Eastern Europe; you will after all find no shortage of them here in Bristol to talk to. They are still struggling with a legacy of environmental damage on a scale unimaginable here in Western Europe, largely the result of having followed Marxist economic models coupled with Lysenkoist science. Many people on the left and in the Green Party in Britain talk a great deal about Cuba, and how it has made great use of permaculture and organics. Well, what you hear less of is that they also make a huge use of transgenic technology - Cuba is a world leader in transgenics - something that is less well publicised here in the UK. I await with interest the medium and long term effects of these experiments that the Cuban government have conducted on their own ecosystem.

    So, back to Chris’s (and now my) question… Who is going to say who needs what? The council? The Government? Come on man, spit it out, the public want to know.

    ReplyDelete
  15. "Oh sure, free markets are great aren't they. They haven't brought massive economic and environmental chaos to the world have they...er...oh."

    I'm not in the least qualified to suggest what has gone "wrong" in the global, fiancial markets but I can perhaps make some useful observations about the UK housing market, which perhaps serves as a microcosm of the larger problem.

    We all know now that house prices were over inflated. The current fall in house prices is a much needed market correction, an example of the market doing what it's supposed to do.

    Normally the market would have made the correction much earlier when it first became apparent, so softening the blow. But the involvement of so many inexperienced traders in the market, new home owners and BTLers who hadn't experienced the full cycle of the market, meant that they kept piling in, fueled by easy credit, further inflating the prices until a bubble was produced.

    So for markets to operate well all the traders need to understand how markets operate and to avoid getting caught up with the kind of sentiment (unrealistic expectations) that generates cycles of boom and bust.

    ReplyDelete
  16. "We all know now that house prices were over inflated"

    Come on, it was obvious by about 2004 to anyone with half a brain - ie not those at naice dinner parties boasting about how much their house was "worth" this week - that house prices were completely out of touch with reality and just held up by those dinner party chatterati with more money than sense.

    Apart from the obvious telltale sign that house prices were completely out of kilter with wages, there were plenty of studies from reputable international organisations showing clearly that Britain's housing market was seriously overvalued.

    Buying a house has never been compulsory. Caveat emptor!

    ReplyDelete
  17. 'Socialism from above' - I'm doing no more than trying to make a telling point about the free market.

    I dont believe in centralised/imposed socialism and I dont believe in the free market as an efficient and fair provider. Neither does the Green Party.

    I want a decentralised society, with individuals, neighbourhoods and communities empowered. Thus no-one would be dictating people's needs. I suppose this could be, very loosely, described as socialism from the grassroots rather than from above, though the economy is more likely to be a very well regulated mixed economy.

    See: http://policy.greenparty.org.uk/mfss/mfssec.html

    ReplyDelete
  18. Socialism From AboveThursday, January 29, 2009

    It doesn’t come across as if you are listening Glenn… or thinking! It sounds as if you are simply regurgitating things that you’ve read in a copy of the Green Party’s manifesto. Once again we come back to the question… “though the economy is more likely to be a very well regulated mixed economy.” yes Glenn, this begs the question “Regulated by whom?”

    “…a decentralised society, with individuals, neighbourhoods and communities empowered. Thus no-one would be dictating people's needs.” What? WTF does this mean in English (as opposed to PC jargonese)?

    “…socialism from the grassroots rather than from above” could you please give me an example of this curious beast, as it is one with which I am completely unfamiliar.

    ReplyDelete
  19. Sorry to gang up on you Glenn, but our Libertarian friend SFA is asking some very good questions which I too would like to know the answers to.

    The problem is that if you empower individuals they won't necessarily do what you and I think they should do. They might prefer to have cars and drive too fast for example. Then what do we do? Regulate them from the Centre, or from the local Committee for the Defence of the Environment (see CDRs in Cuba)?

    One can legislate for regulation, but not for 'good' regulation, even less 'very good' regulation. The regulators tend to be rather useless bureaucrats who act as a brake on initiative and entreprise - not good at all.

    That's why I'm looking to the market to reconcile environmental concerns with economic activity and personal freedom. It's not perfect but it's a lot less imperfect than the alternatives.

    ReplyDelete
  20. Chris

    How would that operate in a real society?

    Are you and/or SFA proposing a completely free market with absolutely no regulation of any kind?

    Isn't that just another way of giving power to individuals?

    If there is no regulation, who would be responsible for ensuring that your proposal for not allowing inexperienced traders to overexcite the market is enforced?

    I know I am just asking questions but it's easier than having a position to be shot at - just ask SFA.

    ReplyDelete
  21. Acccusing me of not thinking or listening doesn't wash at all. I'd say this blog is pretty well reasoned and supported by evidence on the whole. It strikes me that both SFA and Chris Hutt have held to a position that has its own dogma. In fact they are dogmatic to the extent that at this time, of all times, with free market thinking and practice in tatters, they persist in defending the ideology!! Forgive me Chris/SFA but all the evidence is that the market is taking us over an economic and environmental precipice unless we take action. You are both somewhat out on a limb - former market advocates all over the world are now organising more and more nationalisation! Its you who have questions to answer and explanations to give - for instance is it right for the large profits made by companies like First Group to go to a few shareholders rather than being reinvested in more and better public transport, to the benefit of both people and planet?

    I suspect 'SFA' and Chris Hutt could go on asking questions ad infinitum. I make a short, pointed statement and its apparently not 'intellectual argument'. I provide more detail and it prompts more questions - presumeably the more detail, the more potential for questions. There's just no pleasing some people is there, especially those who may just want to stir the pot rather than add much that is constructive or achieveable. Its just a tad rich for SFA, whose own contributions are loaded with argument tactics, to question the way I make a point!

    The purpose of this blog as a whole is to 'challenge institutions, decision making processes & politicians; identify & report compromise at crunch points; counter 'greenwash' & 'greenspeak'; describe, explain & advocate a green analysis, change & problem-solving.' Its not possible to do all these things in a debate on one post, which is why I previously gave a link to more information (alternatively people could browse over this blog as whole).

    Mind you 'SFA' appears not to have read much of this blog if he/she thinks that I want more petty bureaucrats, officials and others like 'David Bishop, George Ferguson, and Jan Ormondroyd, and...Helen Holland'. These very people and, more important than the individuals, what they stand for, have been heavily and publicly criticised by me. I still await the outcome of an official complaint that involves all of them!! So, SFA perhaps you could acknowledge that I've worked hard to challenge the power of such people and am far away from their kind of politics (and always will be).

    ReplyDelete
  22. "How would that operate in a real society?"

    Do you mean markets? Much as they do already. As individuals we go out to the market to buy the goods and services we want and to sell the goods and services we can offer. That's what we all do, isn't it? Where does the food you eat or the clothing you wear come from?

    Environmental concerns can readily be addressed using the market model by ensuring that the producer of a service or product bears the environmental costs. So the cost of neutralising CO2 emissions for example would be paid by the fossil fuel producer to an agency charged with doing just that. When the fossil fuel is sold the price will have to reflect that additional cost, and so on down the supply chain.

    The end result is that the consumer can choose whatever goods or services he wishes, subject of course to his willingness to pay the price, without having to consider environmental impacts as a separate issue. It may well be that some services like air travel for example would become much more expensive. This would cause a reduction in air travel, which is what we want, but as a result of individual choice not government decree.

    "Are you and/or SFA proposing a completely free market with absolutely no regulation of any kind?"

    I'm certainly not. I think it's obvious that markets need regulating to ensure that they're reasonable fair and transparent. But regulation should be kept in check because it can become an economic burden in its own right which ultimately hits those least able to afford it.

    "Isn't that just another way of giving power to individuals?"

    Yes it is, but that's what Glenn said he wanted, to empower individuals rather than the state. I agree with that, up to a point.

    "If there is no regulation, who would be responsible for ensuring that your proposal for not allowing inexperienced traders to overexcite the market is enforced?"

    I'm not saying no regulation, but that regulation should not become too much of a burden. Nor am I saying that inexperienced traders should not enter the market. How else will they become experienced? But I would like to see better education about markets and how they function, since we all live our lives operating in markets.

    "I know I am just asking questions but it's easier than having a position to be shot at - just ask SFA."

    I'm happy to answer clear questions such as yours Tony. But will Glenn answer the questions put to him?

    ReplyDelete
  23. Sorry, but I think I should answer some of Glenn's points too.

    "It strikes me that both SFA and Chris Hutt have held to a position that has its own dogma. In fact they are dogmatic to the extent that at this time, of all times, with free market thinking and practice in tatters, they persist in defending the ideology!!"

    I don't think the basic proposition that individuals should be free to operate in markets of their choice is dogmatic or even an ideology. It's just a natural condition that is threatened from time to time by dogmas and ideologies. If you don't think people should be free then you need to say who will 'control' them instead. The state?

    "Forgive me Chris/SFA but all the evidence is that the market is taking us over an economic and environmental precipice..."

    The latest forecast for the UK seems to be a contraction of the economy of a little under 3%. Not exactly a precipice, more a mole hill. Of course lots of businesses founded on the expectation of unending growth are gong to be in trouble, not helped by the costs the state imposes on businesses that need to contract. But that is part of the operation of the market - buinesses that cannot adapt to change go to the wall, as they should.

    There is of course an environmental precipice looming, but I've already indicated how regulated markets might respond to that, if we act quickly.

    "is it right for the large profits made by companies like First Group to go to a few shareholders rather than being reinvested in more and better public transport, to the benefit of both people and planet?"

    It's up to the shareholders of First Group. It's their money that's invested, not yours or mine. If you want a say buy some shares.

    All I can say is that in a proper market First would be competing with other public transport operators, which isn't really the case in Bristol. I would like to see a couple of other major operators enter the local market to give First a run for their money. I think we would find them much more responsive to customer demand if the customers had the option of going elsewhere.

    ReplyDelete
  24. Actually SFA didn't really ask any questions - he just repeated yours regardng regulation - the rest was largely confrontational verbage and purposeful misunderstanding - (I find it difficult to believe that somebody who appears to have a reasonable understanding of Heykel's economic writings and is also familiar with Carsons wordy offerings really couldn't understand what was meant by Glenn's references to a decentralised society, individual empowerment, and socialism from the grassroots up).

    To be honest, I am not sure that SFA has added much to this discussion apart from heat.

    The reason why you were able to answer my questions was because - as you say - they were clear and were seeking information. I am not convinced so far that SFA is looking for information or answers, just a fight.

    ReplyDelete
  25. '...will Glenn answer the questions put to him?' (Chris)

    Yes, of course but given that you have argued both against and for regulation in this discussion I must say I'm now confused as to what the difference between us is and therefore what the questions now are!! I see you've also used the term fair but - 'what's fairness for God's sake? To each according to his need? Where's the incentive to work harder or more productively? Where's the incentive to take risks or to be innovative? And who's to say who needs what? The Council? The Government?'

    If you can cut to what you think is the core of this debate with a reasonable number of succinct questions I'll give you the best responses I can.

    ReplyDelete
  26. Chris

    You've espoused a set of aims and ideas about free markets - that's a free market ideology.

    Your position seems inconsistent though, given that you've said you want regulation (actually very significant regulation if its going to internalise all external costs and benefits as in the example you give). Individuals are not entirely free in this situation as an 'agency' impacts on on them via prices. Who establishes this agency if its not the state you talk of with some venom??

    You are apparently at odds with many, many economic commentators who view the current economic crisis, for there is one, as extremely serious - unprecented even and events may well develop further. Also, if you acknowledge that an environmental precipice is looming then you should ackowledge that an economic one is too, given that the economic system lies within and completely dependent upon the environmental one.

    You've ducked the issue of profits going to a small number of shareholders instead of being reinvested into public transport, at least in the sense that I meant the question. Government has a responsibility here. Ownership does not have to stay with private shareholders and that's of course what this blog post was all about. Publicly owned railways would/could reinvest any surplus for the common good in place of the profit of a small number of people - I regard this situation as right and the existing situation as wrong. Dont you??

    ReplyDelete
  27. We all have a vague notion of fairness but it's difficult to pin it down when it comes to determining what rewards people should receive for their labours. The market gives us an answer by seeing what their labours can be sold for on the open market. But this often results in huge contrasts between what say a professional footballer might be 'worth' and say a dedicated environmental campaigner.

    It's not really what most of us mean by fair. So what mechanism can be used to better determine someone's worth than the market? I can't think of one, other than it being determined by the state which would be even worse. So the question is "can you describe a mechanism for determining people's worth that is better than the market?"

    ReplyDelete
  28. "can you describe a mechanism for determining people's worth that is better than the market?"
    (Chris)

    Yes, a properly regulated market...especially if set within a society where power is also regulated and distributed in a much more decentralised way than it now is. Didn't I say this earlier on??

    ReplyDelete
  29. Of course markets should be properly regulated. So do you accept the valuation put on a professional footballer and an earnest environmental campaigner by the markets? And if not, how would their relative values be better determined?

    ReplyDelete
  30. Chris

    We have agreement on the need for regulation. We might have differences on the extent/nature of regulation I guess! Maybe that's a debate for another time!

    No I dont accept the relative valuations. Regulation in this area is inept/absent. Power is centralised and concentrated.

    Prof footballers are vastly overestimated in value. 1.The bodies running and influencing football should set better rules. 2.The bodies running and influencing football should be reformed so that power is not concentrated.

    You'd most likely have to reform the bodies running and influencing football first as the existing set up is unlikely to set better rules.

    Establish 1 and 2 and the valuation of prof footballers would become fairer over time.

    I accept that we need the state but want to see power and wealth decentralised and distributed more evenly within it.

    Do you see no role for the state at all Chris? Hard to see how regulation you acknowledge is needed could happen without it, to say nothing of a legal system and protecting property rights...

    ReplyDelete
  31. Given that this has moved on to a discussion of free markets...

    By far the biggest market is in international currency trading. What do you think of a Tobin Tax? Under 1% on all transactions, to dampen the massive flows of speculative traders and raise cash for international projects.

    Unwarranted interference in the market, or plain common sense?

    http://en.wikipedia.org/wiki/Tobin_tax

    ReplyDelete
  32. Glenn, I don't think I ever said I was against the state having any role. I just think we have to be very wary of the state expanding its role unnecessarily. But I'm doubtful about our local council's having more power too.

    I'm not so much concerned by how much professional footballers are paid as by how little earnest environmental campaigners are paid (i.e. zilch). You don't seem to offer an answer to that.

    Pete, I've no problem in principle with taxing market operations. That's what VAT does, to the tune of 17.5%! but one needs to think through what the impact will be. To most people international currency trading will seem to have no point to it except to cream off profits for the traders, but it might well be that it performs a useful purpose in determining accurate exchange rates for example, or just preventing governments from inflating their currencies. So damping down the market may have adverse consequences.

    ReplyDelete
  33. Yes Pete this discussion has broadened out somewhat!! On your question - I'm very much against short term speculation in currencies and so finding an effective way to counter it that produces overall economic benefits would be good. I dont know a lot about this area of policy but I would think the rate of the Tobin tax and who implements it are very important considerations.

    Chris -

    We've clarified that regulation is needed and that there is a role for the state. I share your wariness about who/what has power - that's one reason why it should be decentralised and evenly spread. Decentralisation should spread power beyond local councils, to communities, neighbourhoods and individuals.

    I focussed in on the prof footballer because I thought it was the clearest example of unfairness and because super-richness, and the celebrity culture stuff that often goes with it, is a very damaging feature of our society. Its become one key feature of mass consumerism.

    I dont get any money from any source for my green campaigning and you've said you dont either. In fact its a cost to me eg in electricity for this computer! Its purely my choice to do it though. I suppose I could in the future receive payment for campaiging, if I got a job with a pressure group or perhaps wrote a book...

    There are many types of 'environmental campaigner' and some are making a lot of money (didn't the Bristol Blogger post sometime last year about how much money Mark Lynas was making from consultancy work for instance??).

    Is there any reason why the principles I applied to prof footballers dont apply to environmental campaigners?

    ReplyDelete
  34. This all seems to have become very involved. Naturally I’m a little disappointed that I seem to have been completely ignored. Is it becoz I iz a wooman? (Kerry McCarthy irony alert.)

    I’m very new to this economics stuff, so I’ve not yet examined much of what Kevin Carson has to say, yet. However, as far as I can see, Adam Smith understood the need for people at the bottom of the social pile to be able to live a decent life, and regulation too, saying:

    “[T]hose exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments, of the most free as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty exactly of the same kind with the regulations of the banking trade which are here proposed.”

    It seems to me that the current financial crisis is due to globalisation, dematerialized money (fiat currency) and corporations having far, far too much power and resources. Corporations are not individuals, but they are being allowed to play in the market with the same privileges as individuals, which is wrong and dangerous - as we all can see. None of these three things are intrinsic to free markets, we’ve just been conned into believing that they are by the neo-liberal elite.

    I certainly haven’t obtained any dogma - far from it, if anything, some might say my mind is too open to all the alternatives and not safely secured to a proper ideology.

    What Chris says here seems very sensible and grounded, whereas anything that involves socialism of any kind is very unpopular with people and could only work if it was enforced in a draconian way.

    ReplyDelete
  35. Socialism From AboveSunday, February 01, 2009

    Well well, spend a day or two away and there’s all this to catch up on. I think that this is as good a place to start as any “I find it difficult to believe that somebody who appears to have a reasonable understanding of Heykel's [sic] economic writings and is also familiar with Carsons wordy offerings really couldn't understand what was meant by Glenn's references to a decentralised society, individual empowerment, and socialism from the grassroots up.”

    The real point here is that Hayek and Carson (whose offerings you describe as wordy) both explain what it is that they mean by the terms they use… this is something that is distinctly lacking both here on this posting, or, in GP material more generally. Terms such as “decentralised society”, “individual empowerment” and “socialism from the grassroots up” are all wonderful terms from a politician’s point of view. These terms can mean completely different things to different people. If a politician promises “individual empowerment” for example, every listener hears that phrase, and, reads their own meaning into it. One could think that the phrase means empowering people to shoot burglars for example. When we ask politicians to explain what they mean, surprise surprise, they go all coy.

    “I am not convinced so far that SFA is looking for information or answers, just a fight.”

    Well TonyD, that’s a bit of an assumption to make considering that you know nothing about me, who I am, or what I do… for your information, I was folding leaflets for what was then called the Ecology Party more than 25 years ago. Sadly, that Party has now been taken over by a bunch of (predominantly upper middle class) self styled ecosocialists who seem to care less for environmental issues than they do for “building socialism”. If the Green Party want to get the votes of me and others like me, they need to think about what they are doing, and where they are going. If they don’t want our votes, that’s fine, go back to your constituencies and prepare for annihilation.

    Earlier on, I pointed toward the fiat system as being one of the things that has caused the current crisis. Fiat currencies are not an inherent part of free market systems, in fact, for most of financial history, financial systems have been based on a real world value such as gold. Allowing the entire market to run itself on nothing but wishes was always going to create problems. This is something that is not being acknowledged. Strangely it appears that Derek Wall, ecosocialist and Green Party economist, is still all in favour of allowing private banks to create money from debt… the very thing that has created the current problems?!?!


    Interesting to read Richard Lawson’s site…
    “http://greenerblog.blogspot.com/2008/12/no-more-email-economic-discussion-list.html
    a long and fruitless debate between monetary conservatives who are unshakable in their conviction that it is right that private corporations should have a monopoly on money creation for the purpose of making profits, and monetary reformers who can see no earthly reason why government should not create at least a proportion of new money coming into the economy, for the purpose of protecting and healing society and environment.”


    “What is really amazing to me is that the monetary conservatives include Derek the Red among their ranks. Others on the Green Left have dubbed monetary reformers as "mad" without even trying to justify this position with any form of rational argument.”

    Glenn, you seem to take umbrage at the mention of the current crop of the great and good of Bristol… these are the people who have been in charge for years, and, are in charge now. Unless you can set out mechanisms for change, not just vague terms such as “individual empowerment”, these are the sort of people who will remain in power for years to come. I feel it unnecessary for me to point out that you also seem to lack a sense of irony.

    You raise the case of railways as an example of how the market is not working, and propose state control via renationalization. This is a good example of what we are talking about. A few years ago, just after the Hatfield rail crash, I asked several people if they thought the railways should be renationalised… they (unsurprisingly) replied “yes”. It was then pointed out to them that a renationalised railway network would be under the control of John Prescott (for it was he at the time)… it was amazing to see how quickly their enthusiasm for renationalization dimmed.

    So once again, who is going to decide who needs what? This is a basic question. It should not be hard to answer if you have an idea, it is not up to me to come up with the answers… I am just a humble voter… I do not endorse the manifesto of any party, and I am not standing for election… you on the other hand need the votes of people like me more than ever!

    By the way TonyD, are you the same TonyD from Chipping Sodbury who has strange fantasies about lipstick environmentalists in Castle Park?
    http://www.thisisbristol.co.uk/news/Castle-Park-public-inquiry-adjourned-January/article-527821-detail/article.html

    ReplyDelete
  36. Well explained SFA. You really should be a blogger (have a guest spot on mine if you like).

    Glenn, before you go through all SFA's points refuting each one in turn, try to understand what he's saying. He's not just being mischievous or contrary but is genuinely trying to explain what I too see as serious failings in the Green Party's approach.

    Take your explanation of how the pay of professional footballers would be brought into line with something more egalitarian. you say-

    "Prof footballers are vastly overestimated in value. 1.The bodies running and influencing football should set better rules. 2.The bodies running and influencing football should be reformed so that power is not concentrated. You'd most likely have to reform the bodies running and influencing football first as the existing set up is unlikely to set better rules.
    Establish 1 and 2 and the valuation of prof footballers would become fairer over time."

    But you fail to say who will make them "set better rules", who will make them "reform", why should those imposed changes make footballers' pay fairer and who would say what "fairer" was?

    The answer is the state. Who else would have the authority and power to impose such changes? So what you are really advocating is an overweening state that interferes with individual freedom and the freedom of free associations such as the FA.

    You cloak it all in slogans like "a decentralised society, individual empowerment, and socialism from the grassroots up" yet you cannot give a description of how such mechanisms might work. I'm afraid it's just based on wishful thinking, wishing that people would be different. I too wish that people were different, but we can't base real world political policies on such dreams.

    ReplyDelete
  37. Chris/SFA

    Chris has already conceded a role for regulation and the state...now he's are back to criticising the state!

    Of course it would be the Government that intiates reforms - that's pretty obvious isn't it??

    I'm not advocating an overweening state! I've said already what kind of state I want to see. Many kinds of state are possible - and not all kinds have been tried yet! Freedom and fairness are not just about markets but also about sets of rules.

    Dona - Chris has made some good points and I've tried to address his questions but he's not being consistent with his position.

    ReplyDelete
  38. I don't see any inconsistency, Glenn. As I pointed out, sensible free markets don't have to entail absence of regulation, nor globalisation, nor fiat currency, nor transnational corporations, which are the cause of the problems, imo. I'm puzzled as to why you won't address these issues.

    ReplyDelete
  39. Dona

    Insofar as 'free' markets dont have to entail absence of regulation, globalisation etc...I'm happy with them, provided they are efficient, fair and operate within environmental limits...

    I find that Chris at some points argues as if he is against regulation/the state and yet at others agrees that there is a role for them. Apparently its only when I use the word state or regulation that its a negative (Chris simply inserts the word 'overweening' and voila!).

    Chris against regulation:
    'One can legislate for regulation, but not for 'good' regulation, even less 'very good' regulation. The regulators tend to be rather useless bureaucrats who act as a brake on initiative and entreprise - not good at all.'

    Chris for regulation:
    'Of course markets should be properly regulated.'

    Chris against the state:
    '...individuals should be free to operate in markets of their choice...a natural condition that is threatened from time to time by dogmas and ideologies. If you don't think people should be free then you need to say who will 'control' them instead. The state...'

    Chris for the state:
    '... I don't think I ever said I was against the state having any role. I just think we have to be very wary of the state expanding its role unnecessarily.'

    ReplyDelete
  40. Glenn, I think you're just playing games taking quotes out of context. I've already said I'm not against the state per se but I want to see its role limited to what can't be done by less prescriptive means. I've also said I'm for regulation to provide a framework for individuals and markets to operate but not as a substitute for individual or market freedom. The statements that you've quoted above are not inconsistent with that.

    ReplyDelete
  41. "By the way TonyD, are you the same TonyD from Chipping Sodbury who has strange fantasies about lipstick environmentalists in Castle Park?"

    Not guilty I am happy to say, although given that Chipping Sodbury is a relatively small town I find it a little suspicious that there is another TonyD who just happens to have views exactly opposite to mine, and who just happened to post them after I used the Save Castle Park campaign as an example of what we could do locally to fight a proposed local development (supermarket and residential) by the same developers (Deeley Properties). Draw your own conclusions.

    As for the comment "Dear old Mary", I have seen Mrs Bannerman speak more than once on environmental issues (not just Castle Park) and she is nobody's "dear old Mary".

    ReplyDelete
  42. 'Cloak it all in slogans' 'Playing games' (Chris)

    Slogans? Or words like decentralisation, empowerment and grassroots used to sum up huge areas of interconnected principles and policies?

    Playing games? Or revealing inconsistencies that may be present because those who 'gang up' (your words Chris) find it a convenient argument tactic.

    People who know me and who look over this blog (which incidentally is an attempt to publicise green thinking more widely not hide it away!) know very well that I dont hide behind slogans or play games in arguments.

    ReplyDelete

Genuine, open, reasonable debate is most welcome. Comments that meet this test will always be published.