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 Originally Posted by OngBonga
How about nationalising the railways? By taking into public ownership of the railways, both public transport and goods freight can be made cheaper, either by cutting out profit, or by subsidising using tax.
Profit is essential to determining what works. Without he profit motive, the train system would maintain a stasis of gradual decline. We've seen this in public infrastructure everywhere. The reason the profit motive is so important is that it incentivizes producers of goods and services to innovate so that consumers want more of what they provide.
By getting more people and goods moving on the trains, there are less cars and lorries on the road, and more people travelling directly into city centres. This has an obvious benefit to the economy.
You are correct that this in general is good. However, the underlying math for how good it is (or how bad) is in its efficiency. If the government subsidizes this (which necessarily means it ignores costs), we would end up finding very big inefficiencies like colossal traffic jams at choke points.
Jesus wept, I could probably find a cheaper taxi.
Great point. When the price of a good or service increases, consumers look for substitutions. When there are profit motives and no price controls (or other regulations), this drives innovation and lowers costs while improving quality and quantity. If, instead, the government subsidized rail travel, a lot of entrepreneurs who have good ideas would be pushed out of the market since only the wealthy could compete at such high entry barriers. We would again end up in a system where the rail is there and never improving while stymieing improvement of other things.
Government has a place in a capitalist model, and that place should be to ensure essential infrastructure is not at the mercy of profit.
Without profit, things don't improve. With government intervention, things don't improve.
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