October 27, 2003

A stupid question?

Patrick Crozier | Air - Concorde | Other

In the comments section to a post I wrote sometime ago on Richard Branson's attempts to buy a Concorde, Simon Leach writes:

Does everything need to make a profit? Concorde has been an exellent advert for BA and has kept the UK only 3 hours from the USA, a large customer for Britain. Can you put a price on that?
 
310_mackey_hat[1].gif
This is what I call a "stupid question". But that does not imply disrespect. I think "stupid questions" are a good thing because they often get to the nub of an issue - as this one does.

I just wish I had a stupid answer. 'Cos, folks, I'm flummoxed. I mean really. And not a little embarrassed. The whole point of this blog is to make the case for free markets and here I find someone asking a fundamental question about them and I can't think of an answer. Drat, drat, drat.

I suppose there is a point about how lots of things don't make profits eg. clubs, societies and charities and how that's just fine - we libertarians have no problem with that. But I don't think that is what Simon Leach is getting at. He is asking whether there are things out there that make a profit for a wider community while not making a profit for themselves and if so whether they should be subsidised and if so by whom. To which my gut answer is: "No, no, no". But that's not a proper explanation. There is one out there somewhere. Hell, there's probably more than one. I just can't think of it/them right now.

Can anyone help?

Trackbacks

Comments

Simon's answer has two parts:

(i) The Concord delivered advertising value to BA, quite possibly enough to offset its operating losses. This may be true; it's always hard to evaluate the value of 'image' advertising. BA probably had a better idea than anyone else (through its customer surveys) whether this was paying off for it or not. In any case it's a commercial decision (i.e. usually made by the seat of the pants).

(ii) Keeping "the UK only three hours from the USA, a large customer for Britain" is the usual fatuous justification for the government subsidising just about anything. How many people considering multi-million pound orders they could source from either the UK or a range of other countries do you think ever made their decision on the basis that "Oh yes, if I really need to there is the fact that I can get to Britain in three hours on the Concord"? This too is susceptible to research, but I can tell you right now the answer is just about zero.

In terms of the government's involvement it has to be remembered that the Concordes had to be given to BA and Air France for exactly nothing in order for it to be feasible to fly them at all. In other words the £2,000 million or so (a lot of money back then) the British government spent on developing the thing was ALL LOST by day 1 of 'commercial' operations. Pissed away, as only governments know how to do so well. Nobody has ever seriously been able to defend the view that the stream of current operating benefits at BA or Air France ever repaid the taxpayers what they lost at the outset.

The official rearguard defence is always to talk about 'prestige', but this finds a credulous audience only at home (all that is needed to address the political goal). Viewed from anywhere else in the world with any commercial sophistication the UK and France ended up with egg all over their faces.

Posted by JK on October 27, 2003

JK said it very well.

We also need to remember that the Concord is a thirty-year-old design. If all of the arguments proposed by Mr. Leach were valid, and I'm not saying that they are, would additional subsidies to keep her flying prevent additional engineering and design work on a much more economically viable successor, because there would be no pressing need for a replacement?

Let the market forces work and see what they bring. If there is a REAL market for this plane to operate at a profit, then let's see it happen.

If not, then retire the old lady and design something better. Let's not get in the way by subsidizing something that may be better off being retired. The old Soviet Union did those "prestige" projects, and it cost them dear.

Don't worry, us "Yanks" will still like you even if it takes a few hours longer to get there. By the same token, even if travel to France were instantaneous and only cost a nickle, I wouldn't take advantage of it and neither would my company. There are MANY additional reasons that an American firm would rather deal with a UK firm rather than one were there are significant cultural barriers.

Now get back to that drawling board and design a better second-generation Concord that is affordable to fly for the average passenger. That would light USA to UK tourism on fire.

Posted by Apache on October 27, 2003

Another answer to Simon could have been that the Concorde development cost of £2 billion was never put to the public, and to decision-makers, at the relevant time. As readers of Peter Hall's "Great Planning Disasters" know, the (Tory) minister in charge, Aubrey Jones, deliberately concealed information from the public and from Treasury officials.

Posted by Gabriel on October 28, 2003

Permalink
 
 IN BRIEF

November 23, 2004

'Captain commuter' wins Sydney a free day on the trains ...link
PCCC | Comments (0)

Darling's saver ticket for slow-train Britain - he's going to do everything but close them ...link
PCCC | Comments (0)
November 21, 2004

Tollroads Jamaican style - worth it if only for the pic of the toll plaza ...link
PCCC | Comments (0)
November 20, 2004

Postive externalities come to DC - sort of ...link
PCCC | Comments (0)

Railways safer than ever - says Christian Wolmar ...link
PCCC | Comments (0)

Is graffiti art? - LFTTR think the question misses the point. FWIW I think many artists clearly have a lot of talent and it's a shame they don't have an appropriate, nay, legal outlet. ...link
PCCC | Comments (0)

Book review - Subterranean Railway by Christian Wolmar ...link
PCCC | Comments (0)

One airline, 4 crashes, 8 dead: the real price of sugar snap peas in November ...link
PCCC | Comments (0)
November 17, 2004

British Transport Films Collection DVD Volume One - Surely a must for any transport afficionado. It will be released just in time for Christmas. ...link
MH | Comments (0)
November 15, 2004

Crossrail website ...link
MH | Comments (0)
November 11, 2004

Brake fault forces Virgin to cut speed on flagship tilting trains - you know, just for once it sounds as if the HSE could be right ...link
PCCC | Comments (0)
November 08, 2004

TV Alert "When trains crash", 1930 Channel 5 tonight. Talk about timing ...link
PCCC | Comments (1)
November 07, 2004

Ufton Nervet crash - 6 now confirmed dead ...link
PCCC | Comments (4)
November 06, 2004

One person dead as train derails ...link
PCCC | Comments (0)
November 04, 2004

FirstGroup wants to add the tracks to its trains - that's brave ...link
PCCC | Comments (0)
November 02, 2004

Car charge to rise to £6 ...link
PCCC | Comments (0)
October 30, 2004

Psst wanna buy a railway station? ...link
MH | Comments (0)
October 26, 2004

'Kart Vader' - He tears around Quebec City at 100mph. In a go kart. At night. Wearing black. And he films it. Spotted by Jay Jardine. ...link
MH | Comments (0)
October 24, 2004

The downside of auto-mobile bans - drivers text instead ...link
PCCC | Comments (0)

Councils ban shrines to road crash victims - a story that neatly combines both transport and the issue of the day: mawkish sentimentality ...link
PCCC | Comments (0)
October 20, 2004

The air hostess, the long hair and the sun roof - one of the more imaginative ways of staying awake at the wheel. ...link
PCCC | Comments (0)

Wheelchair-using MP travelled in 'cattle truck' - so, that's just the same as the rest of us then ...link
PCCC | Comments (1)

23 escape from burning train ...link
PCCC | Comments (3)

Wikipedia accuracy under fire - so, it's back on with the Glossary? ...link
PCCC | Comments (0)
October 19, 2004

Rail chief quits after four months - walking away from £130,000. Golly ...link
PCCC | Comments (0)
October 14, 2004

New comment on old posting - Tim Hall explains the story of the Highland Railway, its new locos and its soon-to-be-ex-Chief Mechanical engineer ...link
PCCC | Comments (0)

Out now: DVD version of leaves on the line ...link
PCCC | Comments (0)
October 13, 2004

New link - Transport Watch UK. Lots of facts, lot of comparisons. Doesn't look good for rail ...link
PCCC | Comments (4)
October 11, 2004

Take the car and save the planet - walking kills, apparently ...link
PCCC | Comments (0)

Hybrids better than the real thing - golly ...link
PCCC | Comments (0)

Don't invest in mega-projects - says Peter Gordon ...link
PCCC | Comments (0)
October 05, 2004

Prescott backs plan to reopen branch rail lines - well, he says he does ...link
PCCC | Comments (1)
October 04, 2004

New Glossary Entry - the Advanced Passenger Train ...link
PCCC | Comments (0)
October 03, 2004

People are building their own speed cameras - One fellow is even selling fully functioning ones ...link
MH | Comments (0)

Pendolinos and Voyagers may prove to be one of privatisation's disasters - says Christian Wolmar ...link
PCCC | Comments (11)

Omedetō gozaimasu! - Tech Central Station on the 40th anniversary of the Shinkansen ...link
PCCC | Comments (0)
October 02, 2004

Compulsory purchase to go - in US? Johnathan Pearce has some musings ...link
PCCC | Comments (0)
October 01, 2004

Indian railway runs out of wheels - because it refuses to import ...link
PCCC | Comments (0)

All for sprawl - Tyler Cowen links to a couple of articles including one from the NY Times magazine which is attracting a lot of attention ...link
PCCC | Comments (1)

Underground maps as art - according to Brian ...link
PCCC | Comments (0)
September 30, 2004

Recent comment - Uncle Roger on the difficulty in working out accurate subsidy figures ...link
PCCC | Comments (0)

Europe by train - Tim Hall on Stephen Karlson's adventures ...link
PCCC | Comments (0)

Carpool lanes = communist gulags - Tim Hall is beginning to get it, possibly ...link
PCCC | Comments (0)
September 29, 2004

P&O axes 1,200 jobs as ferry travel sails into past ...link
PCCC | Comments (1)
September 27, 2004

Hurtling towards a £7.6bn bill at full tilt - Alistair Osborne on the WCRM fiasco. Actually, I thought £7.6bn was on the low side ...link
PCCC | Comments (2)
September 26, 2004

A double-decked shame - RJ3 laments the passing of the Routemaster. It's those EU bastards, I tell you ...link
PCCC | Comments (0)

Tilting trains are rubbish - according to Ross Clark. Now he tells us ...link
PCCC | Comments (2)

Delays plummet by 28% - says Network Rail ...link
PCCC | Comments (0)
September 25, 2004

New glossary item - the Health and Safety Executive - in which I demonstrate my almost complete ignorance of this institution ...link
PCCC | Comments (0)

Scant improvement in train times - according to latest figures ...link
PCCC | Comments (0)
September 22, 2004

EU plan will hit safe women drivers - and it's all in the name of sex equality ...link
PCCC | Comments (0)

Unions gang up to demand railway renationalisation - they mean it isn't already? ...link
PCCC | Comments (1)
September 21, 2004

Top car makers support road-jam charging - Ford, GM, Honda, Daimler ...link
PCCC | Comments (0)

Journey times cut as 125mph tilting train sets record - after £8bn and the odd bankruptcy tilting trains that actually tilt are finally here ...link
PCCC | Comments (0)
September 18, 2004

ABD calls for environmental audit of public transport - all those particulates ...link
PCCC | Comments (2)

Camera Partnerships must come clean on real causes of accidents - says ABD ...link
PCCC | Comments (0)
September 16, 2004

The Green Quadratic - ASI paper on planning from 1988. Now available on-line ...link
PCCC | Comments (0)
September 14, 2004

Up with conductors - they're really good, you know ...link
PCCC | Comments (1)

Speeding Britons fined in car race to Spain - "Among the cars were Ferraris, Porsches and Rolls-Royces." ...link
PCCC | Comments (0)

MPs to lose free airport parking - oh, how my heart bleeds ...link
PCCC | Comments (0)

The case against driving licences - Paul Clark in Lew Rockwell ...link
PCCC | Comments (0)
September 10, 2004

Drivers trade privacy for insurance discounts ...link
PCCC | Comments (0)
September 08, 2004

Free mints infuriate delayed commuters - some even threw them away, ingrates ...link
PCCC | Comments (1)

Privatize the roads! Liberate the streets! All we have to lose are our parking tickets! - Anthony Gregory in Lew Rockwell ...link
PCCC | Comments (0)

M6 Toll hits 10m journey mark - er, about a month ago ...link
PCCC | Comments (0)
September 07, 2004

California high-speed rail plan - all sorts of claims being made but Peter Gordon doesn't like the precedents ...link
PCCC | Comments (0)
September 06, 2004

Swedish farmer fined 1,211 kronor for illegally parking a snowmobile in Warwick - Krister Nylander lives 205 north of Stockholm and has never been to Warwick. "They can wait till Hell freezes over and I can get to Britain on my snowmobile to pay the fine.” ...link
MH | Comments (0)
September 05, 2004

"Obsession is not too strong a word to describe how railway enthusiasts feel about railways" - Matthew Parris goes to Peru and meets some trainspotters ...link
PCCC | Comments (0)
September 03, 2004

Hidden costs do not justify the level of tax on petrol in Britain - says Graham Seargeant ...link
PCCC | Comments (0)

Shovelling cash - utilities to pay for digging up roads ...link
PCCC | Comments (0)

Alistair Morton, builder of the Channel Tunnel, is dead ...link
PCCC | Comments (0)

Government 'willed' Railtrack to fail - says Corbett ...link
PCCC | Comments (0)

Cyclists saddled with seafront speed trap - in Bournemouth ...link
PCCC | Comments (1)

Historic Amsterdam tram photos Aaaah. Where's amg going to pitch up next? ...link
PCCC | Comments (0)

Why so little US electrification? - Tim Hall ponders the answer ...link
PCCC | Comments (0)
September 02, 2004

London Underground Map - as it really is. ...link
PCCC | Comments (0)

Electric v steam - in 1923. But who won ...link
PCCC | Comments (0)

Freight or passenger in the US? - they're in conflict. Stephen Karlson considers the options ...link
PCCC | Comments (0)
September 01, 2004

Fares and charge up in London - says Livingstone ...link
PCCC | Comments (0)

'Fair fines' planned for speeding drivers ...link
PCCC | Comments (0)

Railtrack is cleared over Hatfield crash ...link
PCCC | Comments (0)
August 31, 2004

Thousands 'ready to quit Aslef' - where would we be without brotherly love ...link
PCCC | Comments (0)
August 30, 2004

Rural watchdog attacks road sign blight - See it's not just me who can't abide the avalanche of street furniture. ...link
MH | Comments (0)

What the traffic will bear - Bob Poole discusses the merits of tolling ...link
PCCC | Comments (0)

Prague trams - photos. Aaah ...link
PCCC | Comments (0)
August 24, 2004

What if you can't drive? - Catallarchy's Sean Lynch considers the options ...link
PCCC | Comments (0)

97% of accidents within speed limit - according to the ABD ...link
PCCC | Comments (1)
August 22, 2004

Prosecute motorway lane hogs - says RAC ...link
PCCC | Comments (3)
August 20, 2004

Radio tags for congestion charge? ...link
PCCC | Comments (0)

World's longest road opens - in Russia ...link
PCCC | Comments (0)

Sprawl is cheap - says Iain Murray ...link
PCCC | Comments (1)
August 19, 2004

Strike threat to BA and Eurostar ...link
PCCC | Comments (0)

Toll roads are safer - at least according to my reading of this Marginal Revolution post ...link
PCCC | Comments (0)

Peking metro to hit 1000km mark - I'm not sure even London's is that long ...link
PCCC | Comments (0)
August 15, 2004

Squander Two calmly talks about speed cameras ...link
MH | Comments (1)

Parking anarchy in St Albans - Police withdraw traffic wardens, Herts council won't have any until October, it's bedlam! ...link
MH | Comments (0)

The future of transport - as seen from the past ...link
PCCC | Comments (0)

Trains less efficient than cars - yes, I know, it's old news ...link
PCCC | Comments (0)

Ferry solution, please - Eamonn Butler wonders how you could introduce competition to a subsidised ferry service in the Western Isles ...link
PCCC | Comments (0)
August 14, 2004

Drink less, speed less, save on insurance - Marginal Revolution has the story ...link
PCCC | Comments (0)