Mason makes the usual economic mistake

It is possible to “reboot” capitalism as a defensible system. You do what the post-Poldark generation had to: impose regulations that prevent exploitation, suppress the market, place certain functions and prices under the control of the state. You treat speculators, monopolists and crooks of the Warleggan variety as social outcasts, not invite them to become the biggest donors to your party.

Capitalism and markets are two different things. They’re not even measurements along the same axis.

Capitalism is about who owns productive assets? Markets are about prices and distribution. Information more than anything else, who wants what and who is prepared to produce it?

It’s entirely possible to have a functioning non-capitalist economy. We’ve got large chunks of that in our own economy. John Lewis is not a capitalist organisation. Mondragon works just fine.

But we still need the information capacity of prices to drive production and distribution. Thus we still need to be a market economy. Except, of course, where we don’t, the military being an excellent example of when we want a definitively non-market economy, a totally planned, monopolised, one.

I know I rail about this too much (something I have in common with Brad Delong) but capitalism is a take or leave it sorta choice. Useful, desirable possibly even, but not essential. Markets and prices are indeed essential – except in those areas where they’re not – for we simply don’t have anything else with the coordination capabilities available to us.

And sadly this is an extremely common mistake over there on the left. Much of it stemming from Marx’s inability to get the point but it does go all the way back to Aquinas and to one of other of the bearded Greek blokes, the idea of the “just” price. They rail about the inequities of capitalism – OK, fair enough – then insist that markets be curbed. This is akin to insisting that we don’t like that shade of blue for the living room walls therefore C# instead.

We’ve had centuries of this and they’re still getting the most basic underlying point wrong.

87 comments on “Mason makes the usual economic mistake

  1. It’ll end all in RPN.

    I’ll give you my HP calculator when you pry it from my cold, dead hands.

    (Actually, these days it exists in virtual form on my Android phone. Such is progress.)

  2. Treating monopolists as social outcasts would be something of a problem for Labour seeing as how it is nothing but the political wing of rent-seeking state-sector employees seeking to line their own pockets at the expense of everyone else.

    That was why Thatcher was so great: she stuck up for the little guy.

  3. Do we want a non-market military? I’d argue that this is what gives you eg the L85A1 rifle rather than a competitively tendered off the shelf weapon from elsewhere. We probably do want one under the monopoly control of the government, though only to avoid civil war.

  4. They understand markets perfectly well when it’s in their interests, e.g. selling their house or negotiating a salary

  5. I think Mr Xi has provided us with a perfect example of ‘where the market can set prices it should be allowed to set prices’ as he said in 2013 while showing no inclination to privatise all the SOEs as demanded by the US institutions of globalisation (who he is demonstrating are more and more irrelevant by the day)

  6. It’s even worse when one of these fools asserts that markets don’t even exist. What sort of planet is Guardian columnist John Harris living on when he can write drivel such as this:

    “Conservatism is defined by abstract economic beliefs that increasingly find no reflection in reality (question: which “markets” do Google and Facebook operate in?)” ?
    It’s as if the USSR’s great hordes of incompetent planners found new jobs writing for the Guardian after the inexplicable collapse of the only economy designed specifically for their benefit

  7. Capitalism is a market. If we believe markets are the best means for allocating resources, it follows that we DO believe we have to have capitalism. Otherwise we are excluding markets from probably the most important resource allocation decisons we make as a society.

  8. Timmy has, after long espousing LVT and lately conceding that the State is allowed to create money just like the banks, now given up on capitalism.
    Not much help to his loyal supporters who look to his support in their lifelong quest to brownnose the management by agreeing with everything they say

  9. Jono, the wiki article on capitalism is rather good:

    “Economists, political economists, and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism, and state capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition, and state-sanctioned social policies. The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership vary across different models of capitalism; the extent to which different markets are free, as well as the rules defining private property, are matters of politics and policy. Most existing capitalist economies are mixed economies, which combine elements of free markets with state intervention, and in some cases economic planning.”

  10. I also think it’s possible to be on the left (I am) and believe in the efficiency of markets.

    In fact I think that intellectual battle was won decades ago. No-one on the left is seriously suggesting going for a centrally-planned economy, because it’s obvious that a free market delivers a more dynamic economy.

    I think the more common position is that markets have limits, and there are situations where central planning is necessary. And the debate is where to draw the line.

  11. Richard – that’s a fair characterisation of the debate, I would say. I think where we would differ if that you (I assume) would have faith in some number of clever people to make the ‘right’ decisions for millions of people they don’t know, whereas we (or certainly I) think that it should almost always be left to those people.

  12. Capitalism is the very basis of free markets. In order for stuff to get done, capital is required – machinery buildings, tools etc. If a producer does not 100% control his means of production then there can be no free market in his produce, because he cannot control his production.

    As a farmer if I cannot make the decisions as to what crops I grow and what methods I use to plant and harvest them, then there no longer is a free market in what I produce.

    Freedom comes down to ownership of capital and owning the production thereof.

  13. @BraveF

    Guido has a 60 second catch-up for you.

    I watched it but felt it could usefully have been cut down further. Very pleased to have missed the broadcast.

    Who let DNR out to play in the traffic?

  14. @ Richard Yot

    “I think the more common position is that markets have limits, and there are situations where central planning is necessary. And the debate is where to draw the line.”

    Agree with much of what you say, but the devil is in the quote above- The folks who decide where to draw the line are politicians, and it’s in their nature to always take more power and exert more control.

    So you are correct and so forth, but the scary bit is that the debate rarely happens- there’s just a creeping removal of things that the market could do well (better) than government into state hands.

    Housing being the one I know most about, but there are many others…

    (NB “no one on the left is seriously suggesting a centrally planned economy”? I’m not so sure of that- the mad fringe of the left seems to be suggesting lots of bad ideas lately…)

  15. richard yot,

    Who do you consider ‘the left’ in this case. Plenty of my friends don’t support markets and instead talk to me about computation and somehow my scepticism is wrong despite them not being comp scientists or economists.

    Sure my friends don’t hold power or are regarded as serious political operators. But they do opinion form and work up through momentum.

  16. If no one on the left is considering a centrally planned economy, does it follow that you don’t consider the policies of Corbyn and McDonnell to be of the left? Nationalisation of all sorts of things that do not need nationalising seems to be the essence of left wingery

  17. ‘impose regulations that prevent exploitation, suppress the market, place certain functions and prices under the control of the state.’

    Ahh, yes, implement fascism and call it capitalism.

  18. I suspect that capitalism would be in finer fettle with some reform of corporate governance. The sight of the executives ripping off the shareholders is not a pretty one. Just as anti-monopolies legislation was once desirable, now anti-executive legislation might be both popular and useful.

    What to do about the problem of funds and ETFs owning so many shares without much inclination to use their powers as shareholders might also be worth some thought.

    It’s striking that parties of the Left have given no fruitful thought whatever to such matters, being still engrossed in 19th century problems and non-problems.

  19. “I think where we would differ if that you (I assume) would have faith in some number of clever people to make the ‘right’ decisions for millions of people they don’t know,”

    Well, not actually clever people, just politicians (as John Square says). They’re most definitely fallible, but at least they are somewhat accountable and we can eventually vote them out when enough of us have finally had enough of them.

    Of course this means that things change slowly, but for areas where the market really can’t deliver, there is no choice.

    “Who do you consider ‘the left’ in this case.”

    Just like the right, it’s a broad church. The dangers of generalisation.

    “Nationalisation of all sorts of things that do not need nationalising seems to be the essence of left wingery”

    I’m in favour of nationalising most infrastructure, such as rail and energy, simply because I’m not convinced that the market has done it better. Rail in particular doesn’t seem to have delivered, and is still subsidised, so it’s not really private.

  20. Whut? Rail carries many more people today, operating costs are almost entirely covered by ticket revenues (no, really, subsidy is pretty much only for infrastructure these days). More rail travel at lower tax cost is not working by your definition?

  21. richard yot

    Well, not actually clever people, just politicians (as John Square says). They’re most definitely fallible, but at least they are somewhat accountable and we can eventually vote them out when enough of us have finally had enough of them.

    Trouble is, that by the time it comes to vote out those fallible politicians the damage has already been done and takes years to unravel.

  22. @Tim: They have a captive audience, no real competition, and a government subsidy. It’s not a genuine market IMO.

  23. I can travel to London by car, train or aircraft – competition isn’t only about other train companies.

  24. “Trouble is, that by the time it comes to vote out those fallible politicians the damage has already been done and takes years to unravel.”

    Yep, progress is slow. We probably see it from different sides of the fence thought 🙂 ie I think it’s going to take years to unravel the mistakes of Thatcherism, whereas as most on this blog probably think we are still unraveling the mistakes of Keynesianism 😀

  25. @Richard

    ‘Well, not actually clever people, just politicians’

    But we’re repeatedly told that ministers must take the advice of the experts. One of the most troubling developments in recent decades has been the increasing ability and tendency of politicians to hide behind advice. Often it seems to me that the experts are set up purely to give the pols the advice the pols want, of course.

  26. @ H Crun esq,

    And worse than that- the unravelling is rarely attempted (much less completed). Even when we try to do unwind government growth, it’s never fully done thus leading to a three steps forward, two steps back.

    The temptation for government to try to fix a bad idea by doing more of whatever that bad idea is never avoided completely. Or partially, come to think of it.

    NHS IT is one such boondoggle. Housing is another. Tax is a third. ‘Temporary’ tax on incomes, my arse.

  27. Humans are fallible, and their endeavours, whether public or private, will meet with successes and failures.

    There are some cock-ups in the public sphere, but also many successes. It’s not binary at all.

    If the market is accountable to profit, the state is accountable to the electorate. Those aren’t exactly equivalent processes, but it’s the best we’ve some up with so far.

  28. @ Mr Yot

    “Humans are fallible, and their endeavours, whether public or private, will meet with successes and failures.”
    Absolutely- it’s just the public cock ups tend to bugger things up for everyone. The private ones less so.

    “There are some cock-ups in the public sphere, but also many successes. It’s not binary at all.”
    Absolutely, its not binary, but a continuum- the public cock-ups tend to be bigger, more expensive, and less recoverable than the private ones

    “If the market is accountable to profit, the state is accountable to the electorate. Those aren’t exactly equivalent processes, but it’s the best we’ve some up with so far.”

    Ah, we differ. The market is directly accountable to people, not profit. We can walk off and engage with another provider of services- profit is the incentive for the provider. The state, we are lumbered with- and their incentive isn’t clear. The government can change, though. And I believe Pete Townshend covered that one.

  29. We do differ, because I’m grateful for the things that the state provides. Roads to drive on, libraries to take the kids to, schools to teach them, doctors when we’re ill, etc etc

    I look around and I see something that resembles civilisation. Not a litany of cock-ups at all, but a system that runs relatively well for most of us. It’s not perfect, but it’s not dystopian either.

  30. A high speed train to shave twenty-five minutes off the journey time between Birmingham and London, for a mere £32bn. Sorry, £56bn. Sorry £100bn.

  31. Roads and libraries and hospitals were all provided before the government got involved and still could be. (Personally, I’m not against state-provided roads, but it’s not true to suggest that this is the only means by which they can be delivered.) Only a government could think HS2 was worth billions.

    @JS

    ‘“Humans are fallible, and their endeavours, whether public or private, will meet with successes and failures.”
    Absolutely- it’s just the public cock ups tend to bugger things up for everyone. The private ones less so.’

    The beauty of Coca Cola losing half its market share by fucking about with the recipe of Coke is that I don’t drink Coke, or hol;d shares in it. B choice. Only the execs and shareholders of Coke felt the pain. When governments start unnecessary wars, or piss away billions on unnecessary IT systems that don’t work, or [insert here, there’s enough to choose from] that does affect me.

  32. @Richard

    ‘At least EDF are footing the bill for the other white elephant then….’

    You mean the French taxpayer is footing the bill, rather than the British one. I suppose that’s (slightly) better, though it feels a bit racist to say so. And I very much doubt we won’t end up on the hook, too.

  33. @ richard yot
    “Well, not actually clever people, just politicians (as John Square says). They’re most definitely fallible, but at least they are somewhat accountable and we can eventually vote them out when enough of us have finally had enough of them.”

    Politicians are not remotely as accountable as a market. We get to vote once every 5 years via first-past-the-post voting system on a multitude of a policies that are lumped into a take it or leave it whole manifesto, which is often never carried out.

    Where prices are set by the market, you are casting your vote multiple times per day on each individual product/service that you choose to buy or not buy.

    Economic theory and observed economic history shows that whenever politicians set prices, either a dearth or a glut ensues. If they set the price too low, you will get a dearth, if the set the price too high you will get a glut. See toilet roll in Venezuela, butter mountains and wine lakes in 1980s EEC etc. etc. the examples are just too numerous.

    Now we know that even a stopped clock is right twice a day so occasionally by accident the politicians might get the price right; if so it would be the price that would have been determined by the market anyway, because if it weren’t either a dearth or glut would have ensued.

    If you think Ferrari’s are too expensive or alco-pops too cheap, that is your individual judgement of value not that of society as a whole. If these prices are set by the market, those prices are the revealed collective preference of the members of society individually casting multiple votes every day with their own money.

  34. @Richard

    ‘I’m half french, and I was joking…’

    Not sure how we’re supposed to divine either of those things, but if you think HS2 is a white elephant and you accept the current £50+bn cost (and are not quibbling with the potential £100bn projection) why do you remain such a fan of government? You could do a lot with £50bn.

  35. @Richard

    ‘I believe in the market, I just acknowledge it has limits.’

    Yes, but so do all of us. This is rather circular.

  36. “but if you think HS2 is a white elephant and you accept the current £50+bn cost (and are not quibbling with the potential £100bn projection) why do you remain such a fan of government?”

    Because only the government is capable of building infrastructure on scale. The market can’t deliver it.

    I’ve honestly no idea if HS2 is really going to be a white elephant. I do live on the HS1 line though, and I’m very grateful for it. In an ideal world the whole country should be on high speed rail, but I don’t claim to have a cost-benefit analysis.

  37. @ Jim 10:34
    “Capitalism is the very basis of free markets”

    I refute your statement thus..
    John Lewis Partnership inc Waitrose etc.
    A whole load of mutual building societies
    a whole list of co-ops here https://en.wikipedia.org/wiki/List_of_cooperatives#United_Kingdom.2C_Channel_Islands_and_Isle_of_Man

    All not-capitalist organisations operating within a market.

    Arguably communist USSR was a capitalist, non-market system; there being only one capitalist (the state). Also see Spain under Franco, Portugal under Salazar, Italy under Mussolini and (no… not going there, ahem), all exhibiting capitalist but not market elements to their economic organisation.

    To precis our esteemed host…
    Capitalism = system of ownership
    Markets – system of exchange

    Yes, the combination of the two is a potent cocktail for wealth creation, but capitalism is not, in any way, the basis of free markets.

  38. couple of typos to correct:

    “Because only the government is capable of building infrastructure on *that* scale. ”

    “I don’t claim to have *done* a cost-benefit analysis.”

  39. @ richard yot
    “Because only the government is capable of building infrastructure on scale. The market can’t deliver it.”

    Eh? Have you heard of the Industrial Revolution? The state didn’t build a single mile of railway or a hospital until after the 2nd world war.

    Indeed after nationalisation the state shut down many railways that had been built with private capital. When the railways were at their peak, they were all built with private capital and operated privately.

    Thomas Telford, IK Brunel didn’t need state capital to build stuff.

    Yes, you need the state to facilitate planning consent but not to finance or project manage its construction… nor to determine if there is a demand for it.

  40. @Richard Yot. “Things the state provides like schools” (paraphrased)

    The state provides schools “for free” but it isn’t actually free as the population pays, albeit a larte number are not paying enough which is a different issue. The funds that go for the schooling could quite easily be turned into vouchers and parents can choose the place where the voucher is spent. Hey presto a market. Would you be happy with that arrangement? Private schools are only expensive as they are in a *market* and the low end is catered for by the state. In general they are seen as the ferraris of the school world but why can’t there be a range? Instead the state dictates standards, classroom lessons and time spent on subjects, teacher pay and a whole bunch of other things.

    Again. Why is a free market for parents to choose not worthwhile? I have taken my kids out of one private school to a better one. Loss for one/gain for another. The problems arise often because market price signals are not working effectively. Think private senior schools in London where demand is very large but they can’t expand as space is at a premium. Mind you new private primary schools spring up all the time.

    Why does the left, every single time, choose to be a monopoly supplier of smomething, health as another example, rather than merely fund it for the market to provide? The excuse I hear is often about the failures of the market and how clients would be ripped off. Well regulate in favour of the little guy then, just as we (try to) do in finance, rather than take over a whole sector and fail at the basics.

    Writing from Singapore right now with excellent health provision but where the state funds rather than provides enabling seamless upgrades with private health insurance.

  41. “The state didn’t build a single mile of railway or a hospital until after the 2nd world war.” It was a long time after The War before the state built a hospital, hence all the belly-aching about Victorian hospitals.

    As for railway lines: I remember “Beeching” i.e. the abandonment of huge stretches of track under Wilson’s Labour govt. I saw a Beeb documentary on it a few years ago which went to heroic lengths to try to disguise the fact that it was a Labour govt that swung the axe.

  42. @Lotus51 – fair enough. I stand corrected, I’ve no knowledge of the history of the railways. Nice post on markets vs capitalism too.

    @Andrew again – I’m not dogmatic about it, but I see little evidence that the market is any better than the state at providing essential infrastructure. It’s not binary though, but overall state provision, as per the NHS, seems to work better. Sure a mixed system might also work, but a purely private system for health for example would not.

    Look what happens when you deregulate a bus service for example. I saw this in Manchester in the early 90s. Busy routes get oversubscribed, and quiet routes practically abandoned. That’s why the private bus companies that operate in London have to be heavily regulated by TFL, so that you get uniformity of service. It’s also why roads are built by the state pretty much everywhere.

    The same has happened with Broadband provision, metropolitan areas have super fast cable, and rural areas super slow copper. But if the whole country had fast cable the entire economy would be more productive – more businesses could operate more efficiently in rural areas and consumers could also make more purchases/use more services etc… But because we’ve left it to the market to deliver, there is an imbalance. Again, that’s why we don’t build roads that way, it wouldn’t be viable.

  43. “Broadband provision, metropolitan areas have super fast cable, and rural areas super slow copper. But if the whole country had fast cable the entire economy would be more productive – more businesses could operate more efficiently in rural areas and consumers could also make more purchases/use more services etc… But because we’ve left it to the market to deliver, there is an imbalance.”

    Sigh. What is the extra cost of putting superfast broadband in rural areas? What is the extra benefit? Does the one outweight the other? If not you’re just pissing real resources up against the cable box, aren’t you?

    And how do we work this out? Well, the market does that rather well. People won’t build broadband out where the costs of doing so are higher than what can be gained from having done so……

  44. The market seems to have done quite well at redeveloping the City of London and Canary Wharf. The state has developed Elephant and Castle. Quite a difference

  45. How can we know what the benefits of rolling out cable nationwide would be? It’s not inherently predictable. Maybe the benefits won’t be felt for 10 or 20 years. Did we know that putting satellites into space was going to help us navigate our way around on a phone 50 years later? Of course not.

    At the same time, how can we know anything? We built roads because they’re useful, especially after the invention of the motor car. We educate our children, presumably so that they can do something useful later on, but how do we know how much to invest in education? It’s all guesswork.

  46. “The market seems to have done quite well at redeveloping the City of London and Canary Wharf. The state has developed Elephant and Castle. Quite a difference”

    And that’s a classic market imbalance. Canary Wharf and the City of London are extremely wealthy, and Elephant and Castle are comparatively poor.

  47. “And that’s a classic market imbalance. Canary Wharf and the City of London are extremely wealthy, and Elephant and Castle are comparatively poor.”

    What! Canary Wharf “before” it was redeveloped!

  48. @PF

    “What! Canary Wharf “before” it was redeveloped!”

    And let’s not forget it took an age and a couple of bankruptcies before CW really got going. CW stalled twice because firms who already had office space in the City started using it more efficiently, so the demand for space out in the dock lands wasn’t quite as firm as their valuations predicted.

  49. “I refute your statement thus..
    John Lewis Partnership inc Waitrose etc.
    A whole load of mutual building societies
    a whole list of co-ops here ”

    Do they control their means of production?

    Then they are capitalists. A co-op is no different to a PLC – the shareholders (who may also be workers in the company) collectively own the plc and control the means of production, the members of the co-op (who may also be workers in the co-op) own the co-op and control their means of production. If the co-op was dissolved the members would decide what happened to the assets. They own them, they are capitalists.

    Owning capital makes you a capitalist,whether its a factory making widgets or its a cement mixer, a shovel and a trowel and you build walls with them.

  50. No, that’s to think that the existence of capital defines capitalism. But any economic system has capital in it. What defines capitalism is who owns the capital. People external to the organisation using the capital is the usual definition.

  51. overall state provision, as per the NHS, seems to work better

    And that’s where the satire descended into farce…

  52. “Capitalism is about who owns productive assets? Markets are about prices and distribution”

    I would say the essence of capitalism is the existence of markets in Capital goods. In addition, if there is no market in Capital goods, we cannot know what their value is, and the downstream consumer market pricing will be out of kilter.

  53. “What defines capitalism is who owns the capital. People external to the organisation using the capital is the usual definition.”

    If people can own the capital, and direct it, either personally or with the labour of others, then thats capitalism. If they can’t own the capital then its socialism or communism. And you can’t have a free market in goods and services unless the people producing them are in total control of the way they are produced.

    Once people are no longer free to own capital, then there can be no free markets to go with them. There can be a semblance of a free market, in that the State could nationalise all the supermarket chains, and order them to compete against each other, but it would never be a true free market, because there could never be a winner or a loser – free markets require there to be the possibility of a loser, for someone to go broke, and for someone else to take over ownership of the capital.

    If the State owns all the capital regardless, then none of its businesses can ever go broke, because whats it going to do, sell the assets of supermarket chain #1 off when it goes bust? Who to? Only the State can own the capital, so it would be selling the assets to itself.

  54. Richard Yot: Elephant and Castle are comparatively poor

    As a foreigner, you may perhaps be under the misapprehension that Elephant is one district and Castle is another. In fact Elephant & Castle is an excting and vibrant area of London and many visitors to our capital like yourself enjoy days exploring its original shops and famous publicy funded infrastructure.

  55. “If the market is accountable to profit, the state is accountable to the electorate.”

    Of the bollocks you’ve come out with, Mr Yot, that statement takes pride of place’ The “market”, as you put it, is not some separate monolith. Markets are the collective expression of individuals trading in them. From the stock & foreign exchange markets right down to the kid buying sweeties from the corner shop. We are accountable to ourselves, thank you very much.

  56. @Yot,

    Perhaps, but definitely true: markets are not a thing in and of themselves, to be ‘managed’, they are the aggregate of individual actions. Interference is a truncating of choice, options and rights.

    BiS is spot on

  57. Don’t participants in the market live or die by profitability? I don’t understand the angry reaction.

  58. “Don’t participants in the market live or die by profitability?”

    What do you not understand about a non-zero sum game?

  59. @Yot

    Seriously Tim has written teams on the nature of trade and how it’s done more to solve poverty than any amount of government intervention (and done it for free, as you’d see it.

    Go read some of that- really, its worth it- and then you’ll understand why intervention in markets (i.e limiting what people can do for their own benefit) is so despaired of here.

    There’s nothing personal in the responses here (none of us know you), so never fear and all, but do have a google.

  60. “There’s nothing personal in the responses here”

    You speak for yourself, Mr Square. I’m personally sick & tired of thieving socialists. I take a hyper-Ecksian view. I’d like to watch them machine-gunned. But I’d do it personally if no-one else wants to.

  61. Apologies.

    @You
    There’s mostly nothing personal in the responses here. Aside from the machine gunning.

  62. You have to hand it to the Liberal Democrats: they think they are the most pro-European of the major political parties
    But they do not want a North European health care model with high levels of market provision. They do not want VAT on domestic energy and VAT on food to be set at the correct level, despite evidence that consumption taxes ( after LVT and Pigou taxes ) are the least distorting of the major types of tax. They do not want European levels of decentralisation, foreign aid, or defence spending.
    And yet they think they are being entirely consistent.

  63. I always find it instructive that, despite history giving many many examples of private enterprise being better than the state at building infrastructure, a lefty is programmed not to believe it possible. Which government built the Empire State Building or the Queen Mary? What were the Russian equivalents? It’s a religious belief rather than an intellectual system

  64. “Because only the government is capable of building infrastructure on scale. The market can’t deliver it.”

    Perhaps governement is a good way of deciding what infrastructure should be built and maybe some of it such as motorways is best paid by government. But the only way it will be done with the right balance of cost, time and quality is if the work is done via the free market and not a single monolithic, highly unionised, government workforce.

    FYI, the last project I worked on had fibre dig costs in rural areas at £50/m and you can’t assume the shortest route. It’s the the best part of £100k to upgrade the nearest roadside box as you have to get power to them. That’s all assuming that there is fibre in the local exchange, if not start racking up costs.

    There really in no cost benefit and I know, I live in the country and have seen some of the costs and take up.

  65. BiND… Your results are consistent with the thoughts of the Boards of BT and Vodafone from 10 years ago. That’s why they kept asking local government and locals to chip in to the costs. Microwave to the church tower and then local fibre is a good solution… But there are a bundle of stakeholders to warm up. And it is still à marginal return for all that effort. As if there are thousands of entrepreneurs lurking in Wiltshire, just waiting for broadband to emerge from the chrysalis

  66. I live right out in the stickiest of sticks and we have super fast broadband put in by a private provider. They had to achieve x% of people signing up first and they got some taxpayer assistance too but their own skin and that of their shareholders/investors was/is in the game and they didn’t just do it because it’s my human right to have 50mbps because John Prescott or some other fat trougher says I should for the purposes of his own self aggrandisement.

  67. This comment of Mr Yot bears examining.

    ” It’s also why roads are built by the state pretty much everywhere.”

    England has virtually no history of state road building before comparatively recently. It’s why the roads wind from town to town connecting villages along the way. Unlike the continent, England lost most of its Roman military roads during the Dark Ages, so most roads were the creation of landowners & the people of the parishes & towns. Almost all the well travelled major roads were toll roads. Even much of city streets were laid & paid for by developers & later adopted by council authorities in the late C19th early C20th. Although I can remember the change in the now London suburb I lived as a kid. The main roads were tarmacked but the sideroads were a hodgepodge of tarmac & unmade. Then, over a period they acquired uniform pavements, tarmac & streetlamps until they were as you see them today. But the deeds to the house I owned in the area clearly showed who built the roads & sold the plots the houses were built on.
    Probably the best roads in Europe are the French péages. privately built and run. And the worst has to be the M25 which tPratchet identified as the work of the Satan. No doubt on an ongoing government contract.
    Of course, Spain has some fine government roads. Although some of them are not actually connected to the rest of the road network. And others seem to serve no useful purpose.

  68. I really don’t get this rural broadband nonsense. To hear all the carrying on, you’d think the right to stream Game of Thrones without it buffering was in the fucking Magna Carta. I have a 100Mbps Internet connection, which out of my circle of friends is the fastest. Mirabile dictu, I pay more than them, as well. Supply curves slope upwards. How does my having fast, expensive broadband benefit anyone but me and my ISP? It seems to be the fucking silly Field of Dreams approach to infrastructure provision.

  69. Diogenes,

    If your going to use microwave in the middle mile there’s not much point using fibre in the final mile. You might as well use point to multi-point distribution.

    That’s what they did in one of our local villages driven by the vicar, who happened to be ex Royal Signals. From my experience, though, church authorities are difficult to deal with as there are always concerns about “top shelf” content, and that goes back to the early days of mobile.

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