6/7 Private companies are more efficient at generating revenues, period.
If BART is willing to cut 1/2 of its unprofitable stops/destinations,
it would get a lot more profit as well. Ditto with toll roads and
bridges and the production of milk, wheat, and other things. All of
these services would get much more revenue if they're allowed to be
privatized and cut its abundance of supply to maximize return.
Wait, why don't we privatize FBI, CIA, and outsource our Marines to
the Indians and the Chinese as well? It'll be a lot cheaper and
efficient to run, and we'll all profit at the same time! Yeah!
\_ FBI, CIA, the military and such, provide public goods, which
means they're non-rival and non-excludable. The market can't provide
such services efficiently. What about public tranportation? It
doesn't necessarily have to be public. I heard the private urban
rail systems in Japan are generating healthy profits.
\- hello, a public good isnt necessarily non-excludable.
so a lighthouse isnt like medical knowledge
["excluding" by IP law]. also the govt could contract
a private agency to provide a public good ... of course
you can get into a debate about who is doing the "providing"
in that case [vaccine stockpiling], but this does take you
into the area of efficient regulation, which is an issue
when the govt desires to regulate a (natural) monopoly. i
think it is better to say the govt has a role not in the
when the govt desires to regulate a (natural) monopoly.
[see e.g. (UCB Dept of Econ) Ken Train: Optimal Regulation]
i think it is better to say the govt has a role not in the
case of public good but in the broader case of 1. market
failures 2. when "public policy" considerations trump
"efficiency considerations" [like the post office
delivering to each and every address for the same
price]. [n.b. i am admittedly somewhat broadening this to
"when should the govt intervene or regulate, rather than
"provide". it's a somewhat slippery distinction when you
consder something like say the SEC]. and now we return you
to tom's ramblings ...
failures (mkt fail not just public goods, but also address
hold out problem, externalized costs, IO structural factors
like natural monopoly perhaps in cases of high barriers to
entry depending on your view of "contestability theory,
and asymmetric information) 2. when "public policy"
considerations trump "efficiency considerations" [like
the post office delivering to each and every address for
the same price or profitable bus routes to subsidize
unprofitable ones or not letting rich people easily
buy their way out of traffic congestion by making HoV lanes
"for pay" lanes]. [n.b. i am admittedly somewhat broadening
this to "when should the govt intervene or regulate, rather
than "provide". it's a somewhat slippery distinction when
you consder something like say the SEC].
\_ "Maximizing profit" is not equivalent to "efficient," or even
particularly close. -tom
\_ BART is not efficient. Why have a proprietary train system
instead of something more common? Why have such an expensive
system for such limited usefulness due to sprawl? Companies
make more money by being more useful to their customers. Governments
get their taxes either way. Military and police have different
considerations so there's no point lumping that together.
\_ I'm not exactly aware of BART's charter, and though I agree with the
above poster about stupidity of their lack of standardization, a
lot of private suppliers of exclusive goods (i.e. only 1 radio
station can occupy a certain frequency in a given area, only one
highway can be in a certain space) have a mandate/charter/whatnot
to provide certain services (such as a train system stopping in a
given locality, even if only 1 person gets on.) So they won't
necessarily be able to either operate at top efficiency or maximize
their profit by their very nature. -John
\_ Amtrak. Nuff said.
\_ what about it? They have the government undermining their
business by building roads at taxpayer expense, and powerful
airline lobbies keeping them from providing better service
(bullet trains) which would make them more attractive. -tom
\_ Amtrak should be allowed to go out of business instead of
keeping it alive. Businesses can't manufacture demand for
their products, but the government can continue to produce
products no one wants.
\_ Hello, is it not possible to also have products that people
want and need which are simply not profitable to provide but
which are convenient and contribute to better standard-of-
living?
\_ No. If they want them then they will pay for them. We
aren't talking about a bridge which needs government
subsidies. We're talking about a mode of transport
that very few people use and which has been obsoleted.
\_ you mean, auto traffic? Because there's nothing
more obsolete and subsidized than auto traffic. -tom
\_ Excellent. We should allow all airlines to go out of
business as well, then.
\_ Sure, if they cannot fund themselves. However,
you would not see that happen if all subsidies
were eliminated. You'd just see higher airfares
and fewer carriers.
\_ This is where the public good becomes impacted.
It's in the interest of a vibrant economy to
provide a means by which more people can travel
to other parts of the country to spend their
money, just as it's in the interest of the
economy to keep the transportation costs of
goods low. When these costs go up, the overall
harm is greater than then amount saved by not
subsidizing. But I have no figures to back this
up, so I will admit to such now.
\_ If it makes sense economically then it
will happen on its own. You don't make,
for example, transportation costs go away
by subsidizing them. You just shift the
cost onto the taxpayers.
\_ I would agree but trains are not obsolete. They
can be pretty efficient, especially long haul
freight. We don't invest in them though. Investing
in a good rail system is in the government's
interest. The gov't basically subsidizes trucks
versus trains which is kind of silly. Trucks take
more drivers, more energy and pollution, impact
traffic, and damage roads which are expensive.
Perhaps passenger trains should go dodo though,
except in denser areas.
\_ Trains are obsolete as mechanisms for transporting
people across moderate-to-long distances. The
freight companies are doing just fine.
\_ Passenger trains do just fine in every
industrialized country which doesn't put
impossible barriers in the way. Specifically,
in Europe, high-speed rail's market share is
at least 75% of traffic for trips 3 hours
or shorter by train, and is still 25% for trips
of 5 hours by train. Not many would take the
train to NYC from SF, but a high-speed line
between SF and LA would be enormously
successful (again, if the state and the country
don't let politics and corporatism get in the
way of providing useful services to citizens).
-tom
\_ Passenger trains are heavily subsidized in
Europe, population density is much
higher, and distances are much shorter. What
is a train going to get me that a $150 plane
ticket (LA<->SF) won't except for a longer
commute time? I used to dream about a
bullet train between LA<-> Las Vegas, but
after taking the plane I don't see the
point to such a train, which is probably
why the plans never get off the ground.
\_ Airlines and roads are heavily
subsidized, too. Trains are much less
stressful, more flexible about luggage,
and more enjoyable than planes. They
also stop downtown instead of, you know,
way the heck out at the airport. If
there were a three-hour train ride between
SF and LA, at least half of the people who
currently fly would take the train. -tom
\_ Not if it costs the same as flying. Last
time I checked, it actually cost more.
\_ EuroStar carries 71% of the
London-Paris traffic and 64% of
London-Brussels. How is that
different than SF-LA? Do you have
any facts at all? -tom |
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