Usually this blog advocates free market solutions to most problems. But the free market is not a panacea, and I'm not about to say that government is never the best option. This is where I part company with the libertarian point of view, and why I cannot describe myself as a thoroughgoing libertarian.
A case in point was the situation that led to the 1970 creation of Amtrak. The railroads had decided that they could make more money eliminating their passenger services and concentrating on freight than operating the mixture of the two that had been the case. Free-market economics said "let them." But in this case that was not a proper solution. Obviously, if they raised their fares to a certain point, they might have been happy to continue operating passenger trains. But that point was beyond the point that most people who needed to get somewhere could afford.
The problem is that the basis for capitalist economics is the ability to compete. And the railroads created their infrastructure in the 19th century, under conditions vastly more favorable than would be encountered by someone trying to build a railroad today. Land is more built-up, and consequently more expensive, than it was, and in many cases the railroads were subsidized because the government wanted to fill up unpopulated land in the West. So the conditions for free market economics to work were not present. If they were, someone could easily set up a new passenger railroad to take up the business the other railroads were trying to get rid of. But that was not possible.
I think the key is this: if private enterprise is willing to carry on a particular business, the government should let them. But if they are unwilling to, or unwilling to at a price that most of the prospective customers can afford to pay, then we need government intervention.
A case in point was the situation that led to the 1970 creation of Amtrak. The railroads had decided that they could make more money eliminating their passenger services and concentrating on freight than operating the mixture of the two that had been the case. Free-market economics said "let them." But in this case that was not a proper solution. Obviously, if they raised their fares to a certain point, they might have been happy to continue operating passenger trains. But that point was beyond the point that most people who needed to get somewhere could afford.
The problem is that the basis for capitalist economics is the ability to compete. And the railroads created their infrastructure in the 19th century, under conditions vastly more favorable than would be encountered by someone trying to build a railroad today. Land is more built-up, and consequently more expensive, than it was, and in many cases the railroads were subsidized because the government wanted to fill up unpopulated land in the West. So the conditions for free market economics to work were not present. If they were, someone could easily set up a new passenger railroad to take up the business the other railroads were trying to get rid of. But that was not possible.
I think the key is this: if private enterprise is willing to carry on a particular business, the government should let them. But if they are unwilling to, or unwilling to at a price that most of the prospective customers can afford to pay, then we need government intervention.
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