February 12, 2003

A world in a grain of sand

Patrick Crozier | Best of Transport Blog | General Points (not just transport) | Transport General

Brian Micklethwait is fond of describing my transport researches as finding “the world in a grain of sand”;. By this he means that if you look at anything in sufficient detail for long enough you will eventually be able to derive rules that are applicable anywhere.

So have I found the world in a grain of transportational sand? Well, I’ve been doing this for over two years now (in various forms) so I should be able to come up with some answers. And I think the answer is a qualified yes. Certainly, on the hard political issues the same old rules apply: free enterprise is better than state enterprise; private ownership is better than state ownership; regulation has unintended consequences, the state is poor at standardisation; subsidy is bad; price control is bad; free enterprise fosters pride and culture, state enterprise crushes it; free enterprise looks long term, state enterprise does not.

One of my happiest discoveries was that of the jitney and other forms of non-regulated motorised transport. I was genuinely surprised to discover how well they used to work and how well they still work in those parts of the world that still allow them.

I was surprised at how public-private partnerships have so manifestly failed to live up to their promise. Although I have always been a sceptic - believing that it doesn't matter how the state does it the results will be bad - I was surprised that the state found it impossible to draw up simple contracts in a reasonably short space of time that might not do too much harm. It's health and education next. You have been warned.

But having said that, there are some funnies out there. The economics of transport are not the same as the economics of Mars Bars. It is one of the weirdest things that you make money from urban railways not from the fare-paying passenger but from gains in nearby property values. That is very odd.

Transport systems also seem very specific to the areas they serve. For instance, urban railways in North American cities are pointless – the cities are too spread out. But great continent-crossing freight railways make enormous sense whereas in Japan and most other places they don’t. Equally, there are specific (and good) reasons why France and Japan were the first countries to have high-speed rail networks. Reasons, incidentally, that don’t really apply to the UK.

There also seem to be areas where the libertarian paradigm seems to break down. How, for instance, do you build a railway or a road without compulsory purchase? How do you build an airport without in some way infringing someone else’s property rights (ie the right to a quiet or non-polluted life)? Is it possible to treat these two cases in the same way – after all they both involve someone being deprived of his property?

Roads give me a huge headache. This is something I intend to work up in another post but I have severe doubts as to whether they are privatisable. OK, the motorways are easy enough but local streets? They seem to be a very different kettle of fish. I do not doubt that they ought to be privatised it is just how you go about it without creating huge injustices.

I have never quite resolved in my own mind whether roads need lots of rules or not. And is it really true that pollution has fallen over the years? And if so, why?

On a slightly more general point, it never ceases to amaze me how un-ideological businessmen are. I had always thought that they understood clearly the implications of the state in all its forms but were just keeping quiet about it. But the more I have probed the more I have come to the conclusion that in fact there is nothing there. Generally speaking they do not wish that the state would simply disappear just that it would do its job better. I rather fear that this is true of all sorts of other areas.

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A couple of thoughts in pollution. I think in rich world cities, pollution has definitely declined, and there are two main reasons for this. The first is that the richer societies become the more they care about it and the more money they have to spend on reducing it. This makes perfect economic sense. If you think you will live to 80, it does make sense to spend money on avoiding inhaling carcinogens now, whereas it makes less sense if you are unsure if you will have enough to eat next Tuesday.

The other reason is more interesting, and it is simply that industrially speaking, pollution indicates inefficiency. Resources are being wasted on creating black smoke when they could be used to make something useful. As our machines become more technologically sophisticated, they are less polluting as a biproduct of that sophistication.

(Our cities are also clearly becoming cleaner as their economies become more and more about services and less and less about goods, but that is a harder question to consider. It is harder to say whether pollution is actually being reduced or if it is being merely moved somewhere else).

As an interesting side effect of our less polluted cities, look at all the residential developments occurring around rivers and harbours. Most cities have been founded near a body of water of some sort, and in the days when the cities were actually founded, next to the water was the fashionable place to live. However, industrialisation came, and bodies of water became polluted as a consequence. The fashionable places to live then moved away from the water. Now, however, the water is no longer polluted, and we see lots of residential developments beside the water again. (This has been aided by the advent of container shipping, which means that port facilities are now so massive that you can no longer fit them in the hearts of cities (unless you are somewhere with a truly massive watercourse going through your city like Hamburg) and there is therefore lots of space that needs redeveloping. However, there is more to the story than this).

(Hmm. I've rambled a bit longer than I intended. I think I will blog this).

Posted by Michael Jennings on February 13, 2003

Good point on privatising roads. Yes, I think there is a serious justice issue in privatising local streets and roads, though motorways are an easier issue, I reckon (toll roads seem to be a success in France). Also, private roads in say, central London could create horrendous monopoly pricing headaches, though in time many users and property owners could re-locate or adjust rents etc to allow for that. But the initial privatisation would be messy, not to mention terribly controversial.

However we look at it, the upcoming Congestion Charge is gonna be interesting!

Posted by Tom on February 14, 2003

Good point. I live in New Jersey (USA) and it is a huge problem in these parts

Posted by John Newman on August 28, 2003

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