Free Market Practicalities

[Connolly]

This is a question regarding something which has recently started to become evident in Ireland and which relates to Taxi's and their licence deregulation.

Deregulation would be further removing 'government' involvement and the further implementation of free-market ideology.

I dont know the ins and outs of it, but ill try and explain what has happened and the problem that has emerged due to deregulation.



Before deregulation, taxi licences were regulated by the taxi regulator and a very limited amount of them were given out and sold. They were very expensive to buy and one would probably have needed to remorgage their house to afford one. It was an occupation, a profession and a full time job.

Deregulation pretty much meant giving out licences to whoever wanted one, and their value went down and now they are very affordable costing around 3-4k(euro).

This has resulted in a hoard of 'part time' Taxi drivers who, looking for an extra bit of cash, and while having a full time job elsewhere, come out on the Friday, Saturday and Sunday nights for work.

These nights are the most lucrative as its the time of the week when you get the most customers, and are not waiting around in taxi ranks like during the week.

What this has meant, is that the full time taxi drivers are being driven out of business, in that, the weekends were what kept being a full-timer a feasable living. Part timers, already working in another occupation, come out in droves during the most lucrative time and sweep up the customers, leaving those who make a living from it without that customer base to keep them going.

As mentioned, this is driving the full-timers out of business.

This has the effect of a declined service during the week as there are less full timers and less taxi's to go around at this time. There are now problems of Taxi availability and Taxi arrival time and a severely declining weekday service, leaving the elderly and disabled amongst others without Taxi's.

So there is the problem. A practical example of where deregulation and the free-market have disimproved the service.




So, what is the free-market solution to this, seeing as the free-market has caused it in the first place? - I assume it would be benificial for the customer whatever the solution?

[MadMoney]

There was an inefficiency in the marketplace. Essentially on oligarchy had been created. This was eliminated, allowing something closer to perfect competition. The cab rates will be forced to decrease for the weekend (due to an increased supply) benefitting the consumer. If demand holds for the week, the taxi service will continue. Although there will probably be less taxis and higher prices. Nothing needs to be done, the invisible hand is working.

[pusher robot]

So there is the problem. A practical example of where deregulation and the free-market have disimproved the service.

Has it really though? Apparently for the majority of people who go out on the weekend it has resulted in more service at a lower price. Effectively, the weekend passengers were subsidizing the weekday passengers and now they're not. The service has not disimproved for them, just for the minority you choose to focus on.


So, what is the free-market solution to this, seeing as the free-market has caused it in the first place? - I assume it would be benificial for the customer whatever the solution?The problem is that your community does not have enough demand during the week to support the taxi fleet you want at the price you want. The solution is to pay higher prices during the week or, if that's unacceptable for social policy reasons, reinstate a subsidy.

[Demogorgon]

Has it really though? Apparently for the majority of people who go out on the weekend it has resulted in more service at a lower price. Effectively, the weekend passengers were subsidizing the weekday passengers and now they're not. The service has not disimproved for them, just for the minority you choose to focus on.

It will certainly get worse for people who want to travel during the weak though. If full time Taxi drivers fold up, who is going to provide a service during the weak?

Another example could be power. Currently in order to be allowed to operate, power companies have to agree that they will supply to the sparsely populate highlands, even though it is certainly not profitable.

Should that requirement be removed due to free market principles, the Highlands would no longer get electricity. Would that be a good thing?

[Connolly]

There was an inefficiency in the marketplace. Essentially on oligarchy had been created. This was eliminated, allowing something closer to perfect competition. The cab rates will be forced to decrease for the weekend (due to an increased supply) benefitting the consumer. If demand holds for the week, the taxi service will continue. Although there will probably be less taxis and higher prices. Nothing needs to be done, the invisible hand is working.


Shouldnt you be restricted?

What oligarchy was this?

Also, Taxi fairs are fixed. People pay per time spent in the vehicle.

How would prices drop? - even if the fairs were de-regulated?

How is it practicle to charge customers a non-fixed fair? How is it practicle for customers to choose which Taxi is cheapest?

Also, you say prices will drop over the weekend. That would remove both fulltimers, and a substantial amount of the part-timers seeing as it wouldnt be worth their while.

So again, a destroyed weekday service AND weekend service. Great.




Has it really though? Apparently for the majority of people who go out on the weekend it has resulted in more service at a lower price. Effectively, the weekend passengers were subsidizing the weekday passengers and now they're not. The service has not disimproved for them, just for the minority you choose to focus on.



Taxi fairs are fixed.

Can you give a practical way to remove this fixed charge per time spent in the vehicle?

And no, the weekend customers were not subsidisng the weekday customers. Weekend prices remain the same due to a fixed and regulated charge.

There is no loss or gain for weekend customers either way, and because people are charged per time spent in the vehicle, and because there exists part-time drivers, there is no 'subsidising' of weekday customers - just - rather, there is no feasable way to serve such people, without increasing costs.



The problem is that your community does not have enough demand during the week to support the taxi fleet you want at the price you want. The solution is to pay higher prices during the week or, if that's unacceptable for social policy reasons, reinstate a subsidy.


Yes, so a reduced and degenerated weekday service - or, the customer pays more. Either way, the customer loses out.

[Bud Struggle]

It will certainly get worse for people who want to travel during the weak though. If full time Taxi drivers fold up, who is going to provide a service during the weak?


If the taxi drivers fold up than something else will take it's place. Either another form of transportation service or a different rate structure during different times of the week.

Really and truly--if there is a market then there will be goods or services to fill that market. If there are people that want to spend money to get something done then there will be people to take the money and perform the service.

The market will take care of itself. What you are protesting against is "change." As far as prices being "fixed"--there's the problem in and of itself. The price of the service should be what the market will bear. The problem here is too much government intrusion in what should be a free maket business.

[dannydandy]

communism at the very least still has its intellectual virtue as an critic to capitalism... or else the capitalist would never bother to improve their ways

[LSD]

This has the effect of a declined service during the week as there are less full timers and less taxi's to go around at this time. There are now problems of Taxi availability and Taxi arrival time and a severely declining weekday service, leaving the elderly and disabled amongst others without Taxi's.

So there is the problem. A practical example of where deregulation and the free-market have disimproved the service.

That's a retarded question. You knew it was a retarded question and yet you posed it anyway. I can't help but to interpret that as an act of smug rhetoric.

You ask how the free market could correct a problem faced by, primarily, "the elderly and disabled", knowing full well that the free market couldn't give two shits for the "elderly and disabled". It doesn't care for the young and healthy, either, of course; in fact it doesn't care about anybody. It doesn't care. That's the whole fucking point.

If peoeple can't pay for something, the market won't provide. That's why man in his infinite wisdom invented government to hamper markets and provide for those who aren't capable of providing for themselves.

But then you knew that. That was your point. You were just trying to be all clever and Socratic.

Well congratulations! You've just proven that unfettered capitalism makes for morally bankrupt social policy. And you're only the one billionth person to do so.

Seriously, what page are you on, kid? 'cause the rest of us have already gotten through the 19th century.

[Dean]

That's a retarded question. You knew it was a retarded question and yet you posed it anyway. I can't help but to interpret that as an act of smug rhetoric.

You ask how the free market could correct a problem faced by, primarily, "the elderly and disabled", knowing full well that the free market couldn't give two shits for the "elderly and disabled". It doesn't care for the young and healthy, either, of course; in fact it doesn't care about anybody. It doesn't care. That's the whole fucking point.

If peoeple can't pay for something, the market won't provide. That's why man in his infinite wisdom invented government to hamper markets and provide for those who aren't capable of providing for themselves.

But then you knew that. That was your point. You were just trying to be all clever and Socratic.

Well congratulations! You've just proven that unfettered capitalism makes for morally bankrupt social policy. And you're only the one billionth person to do so.

Seriously, what page are you on, kid? 'cause the rest of us have already gotten through the 19th century.

Bitter at all?

[pusher robot]

Can you give a practical way to remove this fixed charge per time spent in the vehicle?

I'm fairly certain most taximeters are eaily able to meter different rates at different times.

That, or you could simply tack on a flat surcharge. You're trying to make this way more complicated than it really is.

[Demogorgon]

Anyone wish to discuss my example of electricity provision. The free market left to its own devices could not supply the Scottish highlands with electricity and so under a pure free market system the Highlands would effectively go back to the nineteenth century. Is that a good thing?

[pusher robot]

Anyone wish to discuss my example of electricity provision. The free market left to its own devices could not supply the Scottish highlands with electricity and so under a pure free market system the Highlands would effectively go back to the nineteenth century. Is that a good thing?

I disupute that "The free market left to its own devices could not supply the Scottish highlands with electricity." The free market will supply anything for the right price. I would suppose that the people of the Scottish highlands would simply issue bonds or other financial instruments to pay for the construction of either the necessary infrastructure to import electricity, or of locally feasible methods of generation like combustion, wind, solar, or microreactor, whichever is less expensive.

[Self-Owner]

Another example could be power. Currently in order to be allowed to operate, power companies have to agree that they will supply to the sparsely populate highlands, even though it is certainly not profitable.

Should that requirement be removed due to free market principles, the Highlands would no longer get electricity. Would that be a good thing?

Which means that at the moment I, as someone who buys power, am subsidising the choice of the people in the Highlands to live where they do. They live in a remote part of the world, and there are costs associated with that. Why should I pay for them?

And how is people being forced to pay for other people's choices any different to the exploitation you socialists talk about so much?

[Dr Mindbender]

Which means that at the moment I, as someone who buys power, am subsidising the choice of the people in the Highlands to live where they do. They live in a remote part of the world, and there are costs associated with that. Why should I pay for them?


i think the way those lands are remote is another negative side effect of the free market. By in large, those lands are purchased by small numbers of toffs to build their golf clubs and quaint rural retreats.

By dividing the land equally, you remove the sparseness factor and it becomes equally practical to have power in the north of scotland as it is london or birmingham.

[Demogorgon]

I disupute that "The free market left to its own devices could not supply the Scottish highlands with electricity." The free market will supply anything for the right price. I would suppose that the people of the Scottish highlands would simply issue bonds or other financial instruments to pay for the construction of either the necessary infrastructure to import electricity, or of locally feasible methods of generation like combustion, wind, solar, or microreactor, whichever is less expensive.

Well okay, the free market can supply anything provided the price is right, but there are times when the rice will simply be too high. Incidentally, the problem here is not so much the generating of electricity. According to the Scottish Government's current plans vast amounts of wind power will soon be generated up there and there is a lot of generation of there anyway to supply Inverness and Aberdeen. The problem is rather the cost of maintaining the infrastructure that allows energy to be transported to remote hamlets and crofts. I don't suppose one can appreciate it until they have seen it with their own eyes, but huge electricity pylons literally have to be built and maintained on mountains, protected against avalanches and whatever else. For the people of the Highlands (which apart from a few areas is sparsely populated) to pay for all that on their own would simply not be possible.

You could argue for things like people acquiring their own generators and in really remote places (and the smaller islands), they do just that. However that would be hopefully inefficient, generators supplying single cottages and whatnot and quite likely more expensive than keeping the Highlands on the national grid anyway.

Of course nobody seriously argues that the Highlands should not be subsidised and that power companies should not be required to supply to them. When the (very right wing) Tory Government privatised the power companies in the eighties they specifically included such requirements. It is quite an academic question really, but seemingly there are people here who will not accept any such infringement on the free market, so they are going to have to come up with a solution.

[pusher robot]

i think the way those lands are remote is another negative side effect of the free market. By in large, those lands are purchased by small numbers of toffs to build their golf clubs and quaint rural retreats.

By dividing the land equally, you remove the sparseness factor and it becomes equally practical to have power in the north of scotland as it is london or birmingham.

Ehh...so post-revolution, the cities will be emptied and their people dispersed to occupy the countryside. Where have I heard this plan before...hmmm...let me think...
http://upload.wikimedia.org/wikipedia/en/c/c0/Pol_Pot2.jpg

Brilliant!



You could argue for things like people acquiring their own generators and in really remote places (and the smaller islands), they do just that. However that would be hopefully inefficient, generators supplying single cottages and whatnot and quite likely more expensive than keeping the Highlands on the national grid anyway.

So a single paragraph after pontificating about the extreme expense and difficulty of maintaining the electrical infrastructure, you're now telling me that it's still less expensive than running a simple diesel generator? And yet they're still not able to afford the infrastructure? It sounds like the real problem is that there are no productive activities in these areas, and the people should probably just move to somewhere less difficult to live or put up with the inconvenience. After all, if it's just "small numbers of toffs to build their golf clubs and quaint rural retreats," then no great harm, eh comrade?

Furthermore, you even admit that it's prime for wind power, which can be constructed an operated at rates competitive with grid electricity even without the special infrastructure considerations. So apparently, the subsidized grid power was actually holding back the implementation of more efficient alternatives that would have been less costly overall and better for the environment besides.

[Demogorgon]

So a single paragraph after pontificating about the extreme expense and difficulty of maintaining the electrical infrastructure, you're now telling me that it's still less expensive than running a simple diesel generator? And yet they're still not able to afford the infrastructure? It sounds like the real problem is that there are no productive activities in these areas, and the people should probably just move to somewhere less difficult to live or put up with the inconvenience. After all, if it's just "small numbers of toffs to build their golf clubs and quaint rural retreats," then no great harm, eh comrade?

Furthermore, you even admit that it's prime for wind power, which can be constructed an operated at rates competitive with grid electricity even without the special infrastructure considerations. So apparently, the subsidized grid power was actually holding back the implementation of more efficient alternatives that would have been less costly overall and better for the environment besides.
Are you suggesting that each hamlet or croft have its own generator? There is a reason they don't, it is ridiculously expensive.

As for the rest, in fact the Highlands are productive. There is a lot of farming up there, Scotland's tourist industry is centered there (another reason to make sure it is supplied with power) and in the more populated areas there is a lot of high tech industry. The point is that it is too sparsely populated to meet the cost of its electricity on its own. You have to understand that it accounts for most of Scotland's landmass but only a small proportion of its population.

Anyway Ulster is talking rubbish when he describes it as just a bunch of toffs on their estates and I would advise him to actually look into the Highlands before he makes such statements.

As for the wind power, you are stretching facts to quite a degree here. The majority of the wind generation will be done right on the West Coast or even out to sea. The energy will be used to power the centre belt by and large, not the rest of the Highlands.

In short, the Highlands are a vital part of Scotland because they play such a large role in the tourist industry, one of our biggest industries but the price of supplying them with electricity on a completely free market would be prohibitively high. To deny them electricity would make us all worse off, to say nothing of the mother of all political crises it would create. For the sake of free market dogma should all of that be sacrificed?

[Self-Owner]

I don't understand how it would make us all worse off if we stopped subsidising the Highlands. You say supplying electricity would be prohibitively expensive in a free market: what this means is that the costs of supplying it outweigh the benefits. In other words, it is wasting scarce resources that could better be used somewhere else! I really don't see how making people pay the real costs of their own actions is in any way a bad thing.

Can you answer the question though: how is forcing me to pay for these people's electricity against my will not exploitation?

[Bud Struggle]

I don't understand how it would make us all worse off if we stopped subsidising the Highlands.

They'd get out their Claymores and hack everybody apart. :(

I've been to Colin Glenconnor's old house the Glen in Peebleshire. Nice place, but the servants--aren't exactly such--they're Scottish.

[pusher robot]

[quote=Demogorgon;1174970]Are you suggesting that each hamlet or croft have its own generator? There is a reason they don't, it is ridiculously expensive.

Is it really? You can get a small-house-sized diesel generator that will provide a day's worth electricity on a few gallons of fuel for the price of a used car.



The point is that it is too sparsely populated to meet the cost of its electricity on its own.

My point is that this is almost certainly not true. It's too sparsely populated to get its electricity as cheaply as more heavily populated areas; but I believe I've demonstrated that unless they are entirely destitute they could afford electricity, either by cooperatively amortizing the cost of infrastructure through the issuing of financial instruments or by individually providing for their own generative capacity. Now, it may be the case that you believe those that live in the cities have an obligation to subsidize those who are not so as to make it the same price, but you have not presented any kind of ethical or practical argument as to why that would be the case.



As for the wind power, you are stretching facts to quite a degree here. The majority of the wind generation will be done right on the West Coast or even out to sea. The energy will be used to power the centre belt by and large, not the rest of the Highlands.

Fair enough. Your previous point on that was not clear and I do not have personal knowledge on that issue.


In short, the Highlands are a vital part of Scotland because they play such a large role in the tourist industry, one of our biggest industries but the price of supplying them with electricity on a completely free market would be prohibitively high. To deny them electricity would make us all worse off, to say nothing of the mother of all political crises it would create. For the sake of free market dogma should all of that be sacrificed?


Well it's really too late now. Once a subsidy is established, there is a non-negligible moral obligation under the theory of promissory estoppel not to withdraw it without compensation. So in the case at hand, where non-voluntary subsidies have been used to induce a class of people to make certain decisions, to suddenly withdraw them would be akin to a breach of contract. It would have been better if subsidies were not used in the first place, and development permitted to occur where and when it was actually efficient to do so. If the highlands tourism's benefits outweigh the costs of providing it with electricity, then that tourism will be able to pay those costs.

[Demogorgon]

[QUOTE]

Is it really? You can get a small-house-sized diesel generator that will provide a day's worth electricity on a few gallons of fuel for the price of a used car.
You seen the price of petrol lately? Like I say the most remote areas do that. But by and large people would not wish to do so. There is a reason.


My point is that this is almost certainly not true. It's too sparsely populated to get its electricity as cheaply as more heavily populated areas; but I believe I've demonstrated that unless they are entirely destitute they could afford electricity, either by cooperatively amortizing the cost of infrastructure through the issuing of financial instruments or by individually providing for their own generative capacity. Now, it may be the case that you believe those that live in the cities have an obligation to subsidize those who are not so as to make it the same price, but you have not presented any kind of ethical or practical argument as to why that would be the case.

Do I really need to? It should be pointed out that even Thatcher and her right wing loonies did not make the slightest attempt to argue that the Highlands (or rural wales or wherever) should be left without power when the lines were privatised. It is hardly a controversial issue. It seems to me the argument that there should be no subsidy is based on the notion that the market is always right and its outcome should be respected no matter what the cost. I do not buy it. Society benefits when we do not leave vast areas of the country in the nineteenth century. Particularly when those areas attract so many tourists each year.

[pusher robot]

[quote=pusher robot;1175118]You seen the price of petrol lately? Like I say the most remote areas do that. But by and large people would not wish to do so. There is a reason.

Do I really need to? It should be pointed out that even Thatcher and her right wing loonies did not make the slightest attempt to argue that the Highlands (or rural wales or wherever) should be left without power when the lines were privatised. It is hardly a controversial issue. It seems to me the argument that there should be no subsidy is based on the notion that the market is always right and its outcome should be respected no matter what the cost. I do not buy it. Society benefits when we do not leave vast areas of the country in the nineteenth century. Particularly when those areas attract so many tourists each year.

What is it going to take for you to admit that the options are not:

-POWER
-NO POWER

I will not continue to engage your false dichotomy.

[Demogorgon]

What is it going to take for you to admit that the options are not:

-POWER
-NO POWER

I will not continue to engage your false dichotomy.
Of course those are the options. Of course you could argue that power is better supplied by measures other than subsidising those areas that cannot be supplied profitably. But all you have come up with so far are inefficient and expensive to run generators.

Quite why that change should be made when I have never heard anyone complain of the Highland subsidies is beyond me.

[pusher robot]

Of course those are the options. Of course you could argue that power is better supplied by measures other than subsidising those areas that cannot be supplied profitably. But all you have come up with so far are inefficient and expensive to run generators.

Quite why that change should be made when I have never heard anyone complain of the Highland subsidies is beyond me.

Who is arguing for change? Nobody. The status quo is what it is, for better or worse. If you care to speculate about how things might be different with different market incentives, that might be interesting if academic. But I will not play your game wherein you demand I reproduce the status quo within the strict confines of a consistent set of principles. It is impossible. I freely admit that it is impossible, just as it would be were I to turn the tables and demand you reproduce the status quo while strictly adhering to your communist principles. All I ask is for you to consider the possibility that the status quo is not the best of all possible outcomes.

[Demogorgon]

Who is arguing for change? Nobody. The status quo is what it is, for better or worse. If you care to speculate about how things might be different with different market incentives, that might be interesting if academic. But I will not play your game wherein you demand I reproduce the status quo within the strict confines of a consistent set of principles. It is impossible. I freely admit that it is impossible, just as it would be were I to turn the tables and demand you reproduce the status quo while strictly adhering to your communist principles. All I ask is for you to consider the possibility that the status quo is not the best of all possible outcomes.
Yes and I have already answered earlier that your proposed alternative is worse because each hamlet or croft using its own inefficient, expensive and polluting generator is inferior to the current system.

I am not arguing that the status quo is the best system. In truth the hold system of providing power in this country is a horrific mess, but removing subsidies for the Highlands is not the answer, that's for sure.

[Schrödinger's Cat]

Er, equating regulation to socialism and deregulation to capitalism seems a bit trivial. It is very likely you would have less regulation from the community as a whole under socialism than you do now.

[Dimentio]

If the taxi drivers fold up than something else will take it's place. Either another form of transportation service or a different rate structure during different times of the week.

Really and truly--if there is a market then there will be goods or services to fill that market. If there are people that want to spend money to get something done then there will be people to take the money and perform the service.

The market will take care of itself. What you are protesting against is "change." As far as prices being "fixed"--there's the problem in and of itself. The price of the service should be what the market will bear. The problem here is too much government intrusion in what should be a free maket business.

The problem is if people does'nt have money.

[TheCultofAbeLincoln]

Taxi fairs are fixed.


By the government, I assume from your post. Well gee there's your problem. Not really a 'free-market' then is it?

This reminds me of the railroad deregulation debate here in the US. Turned out it was the best thing that ever happened to that industry, and most of their customers.



How would prices drop? - even if the fairs were de-regulated?

Companies would lower price due to competition during the weekend. they could have a weekday, rush hour, weekend rate...



Also, you say prices will drop over the weekend. That would remove both fulltimers, and a substantial amount of the part-timers seeing as it wouldnt be worth their while.

Since there would be less of them to meet demand, they could charge a higher fare. Prices aren't fixed like they would be in a socialist society.

Deregulation without allowing price changes defeats the purpose, and isn't really deregulation.