[ExI] Serfdom and libertarian critiques (Was: Call to Libertarians)

[Rafal Smigrodzki]

On Thu, Mar 3, 2011 at 10:25 AM, Richard Loosemore <rpwl at lightlink.com> wrote:
> Rafal Smigrodzki wrote:
>>
>> On Wed, Feb 23, 2011 at 11:34 AM, Damien Sullivan
>> <phoenix at ugcs.caltech.edu> wrote:
>>>
>>> If 10% of my income goes to build a private palace, that's theft. Â If
>>> 50% of my income goes to zero-fare public transit, universal health
>>> care, funding for basic research, good law enforcement, safe housing,
>>> and many other public services, I may consider that a good deal.
>>
>> ### But public transport, especially zero fare, as well as universal
>> (I presume you mean "free") health care are highly inefficient as a
>> way of apportioning resources - and of course, provision of services
>> by a public (i.e. monopolistic, non-accountable) authority is also
>> highly inefficient. You are very unlikely to get a good deal if it's
>> offered as something you cannot refuse.
>>
>> The key to efficiency in fulfilling human desires within a social
>> structure are the twin abilities to freely make and refuse offers.
>
> But, Rafal, this is not accurate except as a theoretical ideal.
>
> Consider the simple concept of "free public transport".  In London in the
> late 1970s, the cost of public transport had risen so much that people were
> using cars more and more.  The city was becoming a nightmare of gridlock and
> pollution.  Many people overlooked the bad side effects and simple decided
> that the high fares were more important .... partly because those high fares
> were *immediately* apparent to them (tight feedback loop) whereas the
> sickness engendered by pollution, the road deaths and injuries, the cost of
> maintaining the roads, and so on, were all feeding back to those people
> along open, extended feedback loops (and so were completely invisible).
>
> Then a local government came to office and slashed the tube and bus fares.
>  Immediate result was that the same public transport facilities were used
> more, the cost of maintaining roads, etc etc, went down.  The city benefited
> enormously.
>
> You have just described that as "inefficient".  It was not :-).  Simply as
> that.  It was tremendously beneficial.
>
> Then the Conservatives won the next election and the whole scheme was
> dumped.
>
> People did have the "twin abilities to freely make and refuse offers" and it
> didn't help.

### Well, you don't need to have subsidies for zero-fare public
transportation - you only need accurate pricing of inputs and outputs.
If road owners charged by the square foot/hour of occupancy, with
supply/demand adjustment of prices on an hourly basis (i.e. congestion
pricing), and if there was free entry for the provision of private
means of mass transportation, you would have an efficient outcome.

What you describe is the result of municipal monopoly ownership of
roads and their mispricing, followed by
running-around-like-a-headless-chicken attempts to fix the resulting
problems. And yes, there are places like Singapore, or nowadays
London, which introduced congestion pricing - which works better than
subsidies even if it is imposed by an illegitimate, municipal rather
than private, authority. When you want things to actually work, the
economics narrative (price, supply, demand, incentive) always beats
the political narrative (Conservative scum, good Liberals).

Rafal