Wednesday, August 19, 2015

Lefty Fundamentalists in Britain

Right now the Labour Party in Britain is conducting a party leadership election and the leading candidate is hard left Jeremy Corbyn. He hits all the left notes including Palestinians and the IRA.

And one thing he wants to do is "renationalize" the railways.

The British railways were privatized back in 1994 during the time that John Major was Prime Minister. But in the wake of an accident just north of London due to faulty rails, the ownership of the track was returned to a nationalized corporation. Meanwhile passenger and freight services are delivered in a complicated crony capitalist system thus, from La Wik:
Ownership of the infrastructure including the larger stations passed to Railtrack, while track maintenance and renewal assets were sold to 13 companies across the network. Ownership of passenger trains passed to three rolling stock operating companies (ROSCOs) - the stock being leased out to passenger train operating companies (TOCs) awarded contracts through a new system of rail franchising overseen by the Office of Passenger Rail Franchising (OPRAF). Ownership and operation of freight trains passed to two companies - English, Welsh and Scottish Railway (EWS) and Freightliner, less than the originally intended six.
Yay! Earlier this week The Telegraph ran an come-on-fellahs article "A state-owned railway would be a costly mistake" that weakly pleaded that the Brits not renationalize the railways. OK, nothing much to see there. Except when you get to the comments. You see, 60 percent of Brits think the railways should be renationalized, and the comments tell you why.

Profits, The City, Foreigners, Things were great in the old days: You name it. People don't like private enterprise. They want the nice cozy government to take care of everything.

As Nassim Nicholas Taleb, the Black Swan guy, recently tweeted. "The free-market system has salient flaws and hidden benefits. All other systems have hidden flaws and salient benefits." Everyone is pissed off with the corporations that sell them amazing products and services. But they stubbornly defend the government health care and education systems that barely function.

OK, we know why people support the government systems that barely function. It's the free stuff.

I was reading the front matter for the upcoming volume three, Bourgeois Equality, of Deirdre McCloskey's Bourgeois Era trilogy. And she's talking now about how the educated elite turned against capitalism following the failed revolutions of 1848. But the big point, that she makes over and over, is that the Great Enrichment of the last 200 years has made the average person  between 30 times and 100 times richer. There has been nothing like this, ever.

McCloskey's insists that this was not due to "capital accumulation" (as in "capitalism") but from new ideas that transformed the production and delivery of products and services.

So let's rehearse the reasons why government is no good and making things and delivering services.

  1. Socialism can't work because it can't compute prices.
  2. The bureaucrat in the national government cannot know what a million producers and consumers know through the price system. Not even close.
  3. Government does not come up with new ideas. In fact the whole purpose of government is to stop new ideas.
These notions are, or ought to be, settled science. Every child should be taught them in school as a matter of course. And yet, patently, the vast majority of people have no clue about this, no clue about the fundamentals about our amazing and unprecedented wealth and prosperity.

As you can see in the comments section of The Telegraph in Britain.

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