Could @RichardJMurphy please, please, learn some economics?

We\’ve this musing on public or private provision of public goods.

For some reason I was musing on this earlier this morning when well before dawn I was out walking with my dogs and a simple question occurred to me, which was who pays for street lights in the right wing libertarian model of society?

It’s not such a daft question. After all, street lights are a near perfect example of a property which will always be subject to free riding if paid for privately. Suppose for a moment a private supply model was created. So suppose, when I left home this morning I had to put 20p in a meter on a street lamp for a limited period of lighting, and repeat the process every time I turned a corner. Even if I’d done that there would have been no way I could have stopped the couple of other early risers I met this morning enjoying the benefit of the lighting I had paid for. Nor the occasional car that went by doing so either, come to that. It would be inevitable that in this case positive externalities would arise. But in that case resentment would (in neoliberal eyes) likely follow and as a result each and every person might opt for darkness rather than share the light. And that would mean that the street lighting might then not ‘pay’ and so would be removed, and we’d all be worse off.

Who knows where this could lead, or how grossly inefficient such a model would be in terms of massive admin cost and failure to supply an effective service. It’s hardly surprising is it that we came up wiuth a model of local government to do such things? And yet there is no doubt that the model of local government deeply offends neoliberal thinkers. This collectivism is an affront to market perfection.

Someone who had bothered to pay attention beyond the first term of university economics would have met an interesting discussion of just this.

Ronald Coase on lighthouses. They\’re obviously non rivalrous and non excludable, they\’re a public good. But UK lighthouses have been privately supplied for centuries. How could this be?

Ships that enter a UK harbour pay \”light dues\” over and on top of their ports dues. Such lights dues go to Trinity House who run the lighthouses. We accept that there will be free riding but it will be free riding of only those ships that don\’t use British ports. A small enough problem that we can simply ignore.

The other delight about his musings is that the UK does in fact have private streets (some 40,000 I believe, and some 2/3 of all of Sweden\’s roads) and the local authority may or may not provide street lighting on those private roads, the housing association or mutual that deals with road maintenance itself may or may not provide the street lighting.

BTW, the Swedish private roads associations are said to be twice as efficient as the government in their road maintenance.

41 thoughts on “Could @RichardJMurphy please, please, learn some economics?”

  1. Isn’t this a strawman argument? Is there anyone arguing for street lights to NOT to be provided by the Government?

  2. (Going off topic as is my wont, sorry)

    John, it’s worth remembering that Charles I only extended ship money because the hostile puritan parliament were being passive aggressive and denied him the right to collect the customary taxes necessary for the essential Royal duties, like fighting the Scots. They had done so because of the rising tide of fanatic protestantism known as Puritanism among them, and they thought he was soft on Catholics, not least because he’d married one.

    The ship money didn’t so much upset “the population” as upset the Puritan gentry. They were deliberately backing him into a corner. It really is important to avoid the Whiggish nonsense about the Civil War being about Parliament (represented as the will of “the people”) versus a pantomime tyrant king. Parliament was not the will of the people. England was not a democracy.

    The Civil War was a religious war; the events leading up to it have to be seen in that light, in particular the deliberate acts by the Parliamenterians to make Charles’s position untenable. They wanted a Puritan fanatic on the throne, and as soon as they won their jihad they installed one called Oliver Cromwell and turned England into a Calvinist-model theocracy. Puritans and Cavaliers have been fighting over the model of anglosphere government ever since (the Puritans such as Richard Murphy are currently resurging again).

  3. So unadopted roads are conducive to liberty?Can’t think of anything more exhilarating than being legally and financially responsible for the road outside the house.Either : interesting street meetings every so often when expenses are divided up (oh bliss!)/ or more likely in the uk the street gets left undrained ,unlit and impassable .(Sometimes unadopted roads get clogged with parkers whom the police say they don’t have to move).
    By this anarchist logic the freeborn citizen must defend the country against foreign invasion;take a turn policing the streets and fighting fires;and home-school the kids.
    By contrast the dopy British public prefers to pay professionals for street maintenance and main roads and motorways beyond ,plus the armed forces ,firemen and policemen out of taxation with its huge economies of scale and its proportionality so the rich bastards pay so much more than you do.
    The simple economics for most people:Statist taxation is a bargain compared with the alternatives.And you don’t have to waste so much of your time (so important to the Austrians).

  4. DBC, no. By “anarchist logic” you make a local decision as to what services you want and how best to have them delivered, rather than somebody else deciding it for you.

    Oh, wait a minute, Ricardian Georgism. You need something to spend all that tax on you’ve confiscated from the evil Rentiers, right? So you can keep saying everyone is benefitting from these obligatory externalities, and tax their land rents for said externalities, right? Georgism entirely loses its justification without them, does it not?

  5. “. . . and as a result each and every person might opt for darkness rather than share the light.”

    And maybe that might be an indication that the lights were unneccessary in the first place, that the supposed beneficiaries of their installation do not value them enough to pay for them.

    I live in a tiny little town surrounded by farmland. The local government just installed a line of streetlights down a section of road that leads out of town, bordered on both sides by farmland, and has absolutely no pedestrians since there’s nothing along that road for 10 miles.

  6. Walking the dog? Somehow I’d always imagined Murphy as a hamster person.

    I llive down a private lane. When the potholes get too bad, the farmer tips in a few buckets of tarmac and the home owners chip in a bit.

    We don’t have street lighting; when I walk the dog in the dark, I take a torch. And my car has electric lights on the front. Perhaps these technological advances haven’t reached Norfolk yet, but it’s really not a huge problem.

  7. A lot of so-called public goods that are thought to be impossible without coercive general taxation operate in the private sector. The lighthouse argument is a very good one.

    DBC: the “bargain” of state-built roads is a “bargain” only to those who use them; plainly this “bargain” is not appreciated by some who, for whatever reason, don’t pay for it.

    The case for tolls, for example, is that it focuses the cost on those who use a resource, rather than on some general “community”.

    At least you did not mention LVT in this context, for which we are grateful for tender mercies.

  8. Ian B: Be fair on the old Puritans. They smoked, drank, and made love to their wives. (Seriously. I can cite Scots Puritans who wrote poems extolling the virtues of tobacco.)

    Our Murph hates the first, decries the second, and would probably only permit the third so long as people didn’t enjoy it. (Insert customary cynical remarks about marriage here.)

  9. Strangely enough not all of us live in places where the roads are paid out of taxes. Every time I head up through France I drive on wonderful roads. Roads that I can’t use unless I pay for them. Toll autoroutes. Conversely the last house I had up in the Spanish mountains was down an unmade road*. If it’d just been Spanish people living along it we would all have pitched in to keep it in order. Unfortunately there were too many Brits, brought up on the notion that the State provides, churning up & down in their FWDs but accepting no responsibility for the maintenance, so it ended up beggar my neighbour & a mass of potholes.
    Of course, where taxes are concerned, no expense is ever spared. There’s a lovely 3km of beautiful smooth tarmac I know. According to the board with the circle of yellow stars at one end, the EU paid for it & the lighting. Only problem is, it’s not actually connected to anything. There’s a new dual carriage-way, also well lit, running alongside the entire length. And the whole lot’s in the middle of nowhere. No houses, just rough grazing that floods 2 meters deep in the autumn rains.

    *Private roads don’t mean quite the same thing in Spain & France. If it goes somewhere it’s a highway. Legacy of the Roman Empire.

  10. So unadopted roads are conducive to liberty?Can’t think of anything more exhilarating than being legally and financially responsible for the road outside the house.Either : interesting street meetings every so often when expenses are divided up (oh bliss!)/ or more likely in the uk the street gets left undrained ,unlit and impassable . …

    By contrast the dopy British public prefers to pay professionals for street maintenance and main roads and motorways beyond ,plus the armed forces ,firemen and policemen out of taxation with its huge economies of scale and its proportionality so the rich bastards pay so much more than you do.
    The simple economics for most people:Statist taxation is a bargain compared with the alternatives.

    I don’t know about the rest of Spain, but on the Costa del Sol there are ‘urbanizations’, each consisting of a number of houses that manage their shared roads, gates, pools and so on. Yes, they have regular meetings where they talk about the allocation of monies for road maintenance and suchlike. And yes, they are dull and some people would rather do something else.

    Then again,

    “Ninety-five defendants, including two former mayors, are packing a court in the southern Spanish city of Malaga for the first day of one of Spain’s biggest corruption’s trials ever”.

    “After searching their properties police discovered some 770,000 euros in cash in plastic bags in the Mayor’s home and another 20,000 euros in the house of his brother-in-law.”

    And,

    “On Wednesday last week the BOP (official provincial bulletin [in Malaga]) published the party lists for the municipal elections on May 22nd. Among them are a total of 26 candidates aspiring to become mayor of their respective municipalities who face criminal charges in cases that are still pending trial.”

    So it isn’t necessarily a bad thing for people to assume responsibility for their locale.

  11. “For some reason I was musing on this earlier this morning when well before dawn I was out walking with my dogs and a simple question occurred to me, did I have enough cash for my Carlsberg Special Brew® ?”

    One does wonder the cause of his constant idiocy.

  12. I simply cannot believe the level of utter shit i read here. Utter. Utter. Shit.

    Are you all pretend, ZX81 constructs? What a load of old toss. Not clever. &1.

    I don’t believe any of you exist within a social construct. Certainly Worstall doesn’t, judging by the unwanted post-fisting-effluent he churns out.

    Honestly! What a cunt!

  13. @agammamon: if your local council is anything like mine, and State funded bodies the world over, don’t be surprised one day to see that those brand new street lights have been switched off ‘in order to save carbon emissions’.

    The State giveth, and the State taketh away. Blessed be the name of the State.

  14. Tim, you’re losing it. There’s no object to your bollocks. It cannot, and will not gain any traction. You’re just one of a few tossers that reckon your dining table manners will change the world. No, not change the world, just make your dining table look a bit smarter.

    Nothing. NOTHING, you have ever said over the wasted months I’ve tried to understand cocks like you will ever make me believe you know anything about life. Your derivations, like 95% of your ‘disciples’ are based on pure bookish delusion.

    Murphy may not be 100%, but it’s a fucking start.

    God, you’re despicable.

    Well done!

    I’m here all week!

  15. Who is “Arnald’t br”? Arnald the brother of richard, maybe? Odd. And where does the compulsion to read post-fisting effluent (an image I could have done without), every line of it, every day, and complain, come from?

    Meanwhile, it’s fair of Tim, not at all cuntish, to point out RM’s regular rediscovery of the obvious, even classical, and the way he’s honestly impressed and pleased at his own insight.

  16. “I don’t believe any of you exist within a social construct. ”

    I’ve just looked in the mirror and I think I exist, but as far I can can ascertain, not within a social construct.

  17. ” I’ve tried to understand cocks like you will ever make me believe you know anything about life.”

    I’d hazard a guess that many if not most of the people who read and post here have more than average experience of practical economics – running businesses, dealing with the State in its multi-headed forms, and attempting to gainfully employ people and create some wealth.

    I would equally hazard a guess that the readers and posters on RM’s blog are the opposite – net consumers of the wealth created by others – such as the readers of this blog.

  18. Tim, you despicable cock, careful: your bollocks are losing traction as you toss them on the dinner table. A clear case of backsliding.

    And as for your derivations, yuck.

  19. The right-wing libertarian walks his/her dogs when they want to go for a walk, and does not roust them out of their beds well before dawn.

  20. How did the lighthouses make ships pay? Why couldn’t a ship simply dock without paying?

    The Royal Harbourmasters, or the Excise, enforced the levy.

    Of course you could dock without paying – as long as you didn’t dock at the open private or public docks. You had your own jetty? No payment to the Brethren.

  21. Haha
    I came over all Celtic with mr moniker.

    but look at this quote

    “22 ambrose murphy // Oct 24, 2011 at 7:09 pm

    And as for your derivations, yuck.”

    You trite fascist.

  22. I would venture to suggest that Central London’s “congestion charge” is a fine example of “pay as you go” use of roads. No “free riding” there: you want to drive in Central London, you pay. Excellent example of private enterprise. Oh, oops – it was introduced by a local authority, wasn’t it?

    Tim adds: Frances. A little history for you. The Congestion Charge was first thought up by Alan Walters…..yes, the economist who went on to become Maggie’s advisor. It was supported and promoted for many years by the Adam Smith Institute. And we still support full road pricing everywhere in a system where the revenues would go to the State (although we have our suspicions that getting a private company to run the computer system might be a good idea).

    We’re all entirely up with the idea that public goods exists and also that provision of them means stepping outside of pure “free market” economics. My point here was only to show that Ritchie’s default position, “existence of public good means must be provided by the State” is wrong. There are definitely times when State provision is a damn good idea. Courts, Defence etc. But as lighthouses show, not always.

  23. So lighthouses are suddenly the new social necessaries.

    Why do you guys bother?

    Rilly? (my favourite worstallism) Next up you’ll be asking to pay for the rozzers to do they’re stuff. No? What G4S can do it better? Alan Sugar? Branson’s Boys? Robert fucking Peel?

    What about the rest of everything you take for granted?

    Hang on……oh yeah…..*clueless*….

  24. Arnald, next time the Occupy St Pauls crowd offer you some home-brew, ask them what’s in it.

    And don’t be fobbed off with “mostly apples”.

  25. So Much For Subtlety

    Arnald – “Next up you’ll be asking to pay for the rozzers to do they’re stuff.”

    I wish I could. Then the lazy f*ckers might turn up the next time I am robbed.

  26. So lighthouses are suddenly the new social necessaries.

    I thought this Arnald creature was supposed to lurk somewhere in the Channel Islands?

    Yes, for shipping, light houses are a necessity. Given how much of our trade comes by sea – for the UK, they are a necessity for continuing functioning of our society in its current form – a ‘social necessary’ if you wish.

    Trinity House, the Northern Lighthouse Board and the Commissioners of Irish Lights are all funded out of the “General Lighthouse Fund” – based, as Tim said, on the “Light Dues”, with some funding from the Irish Govt for the Irish Commissioners.

    Ritchie would hate it – the Northern Board covers the Isle of Man.

  27. There are definitely times when State provision is a damn good idea. Courts, Defence etc. But as lighthouses show, not always.

    Given that the General Lighthouse Fund is administered by the DfT, the RNLI (as ever) is probably a more pure example.

    Car parking isn’t a bad example of mixed private / public provision, either. Especially as it breaks down either, as DBC Reed noted in #5, where you are unable to enforce private property rights or where there is an exploitable commons.

  28. “The Royal Harbourmasters, or the Excise, enforced the levy.

    Of course you could dock without paying – as long as you didn’t dock at the open private or public docks”

    So you weren’t allowed to dock at a public dock without paying the levy? That’s a pretty big subsidy, innit?

  29. So you weren’t allowed to dock at a public dock without paying the levy? That’s a pretty big subsidy, innit?

    Interesting question – when is it a “subsidy”?

    You weren’t allowed to dock at a public dock without paying a docking fee – which paid for the harbourmaster, pilots, dredging etc. If the fee for docking, whether at a public or private dock, includes a distinct (and possibly calculated very differently) fee for the lighthouses, is that a charge or a subsidy? It isn’t coming from general taxation and it is the same whether you dock in a privately owned open harbour or a public one.

    Extending the argument slightly, are the BAA airport fees that are added to your flight costs a “subsidy” or a “charge”?

  30. @JP
    Still on about LVT ;it has clearly struck a nerve.

    The disadvantage of toll roads to the average citizen is that some poor geezer in a Fiesta who has to go to work every day along a toll road shells out the same per day as the likes of roadhogs like Jeremy Clarkson who occasionally roar along in an outa-the-way peasants manner.
    Private sector user fees lack the proportionality
    of tax funding.
    The present proportionate system is an example of an accepted system which should be subject to the if-its-not-broke-don’t-fix- it rule.

  31. DBC Reed
    The disadvantage of toll roads to the average citizen is that some poor geezer in a Fiesta who has to go to work every day along a toll road shells out the same per day as the likes of roadhogs like Jeremy Clarkson who occasionally roar along in an outa-the-way peasants manner.
    How is this different from any other payment where there is a heavier burden on the regular as opposed to the occasional user ?

  32. @Th
    Skip the number of journeys issue then: roadhog
    can afford the tolls easily:the working stiff can’t.
    Of course as JP is itching to tell you,the answer is LVT.You can build and maintain roads entirely by a tax on how much they put up land values,so the rich geezer in his castle pays proportionately more than the poor man at his gate and the proportions show up unarguably in the increased land prices resulting from the building of roads.
    But this example of the bleedin’ bloody obvious is generally too much for the neo-liberal who gets into a right state about it.

  33. The disadvantage of toll roads to the average citizen is that some poor geezer in a Fiesta who has to go to work every day along a toll road shells out the same per day as the likes of roadhogs like Jeremy Clarkson who occasionally roar along in an outa-the-way peasants manner.

    In other words, two people who use the road to the same degree as each other pay the same for the road. And what is wrong with this precisely, other than you not liking Jeremy Clarkson?

    The interesting thing about the LVTers is that they end up as demanding nationalisation of everything, because LVT can (apparently) pay for everything. So, it’s just communism under another banner. Which is hardly surprising since Henry George (a talk by which converted G B Shaw to socialism, btw) got his duff economics from the same place as Marx; that terrible, terrible blight on economic development David “Fuckwit” Ricardo, the man who managed to outdo even Adam Smith in the “totally buggering up value theory” stakes.

  34. @IB So two road users use the road to the “same degree” and pay the same toll /what’s the matter with that?
    The working stiff loses a bigger proportion of his income than the rich geezer.With LVT,because the road enhances land values ,the rich geezer makes much more in entirely unearned capital gains in the value of his land than the less well-housed/landed working-man,so rich road hog has to pay a lot (of what he ‘s worth)in LVT; everybody else quite a lot less,down to zero.
    This kind of proportionality is the basis of the British tax system e.g.rich people pay a lot more in income tax.
    Your historical comments regarding Ricardo ,Adam Smith (!! practically the patron saint of this blog ),Henry George etc are too general and angry to deal with.
    BTW land taxers come in all shapes and sizes and from all political parties; some of the more effective are in UKIP. I don’t believe the Henry George version of LVT
    framed for California in 1880’s is now readily applicable to the UK though I would n’t mind if someone were somehow able to implement it.

  35. Arnald’t br, you are a catch arn’t you. With language like that they must be flocking.

    What Tim has said is perfectly reasonable. Externalities are only as troublesome as those choosing to abuse them claim. The simple fact is that we are all freeloaders of private goods and services. This is a simple fact of economic progress. We have all hooked into a wireless network that wasnt ours for free, or taken advantage of the peace of a church park. This ‘freeloading’ does not make it un-economically viable for the good to be provided.

    The question can be answered in the following way: Are French roads better or worse than British ones? Better. Is Swiss healthcare better or worse than British? Better. Is Hong Kong unemployment higher or lower than Britain? Lower.

    On a more general note.

    The plane, train, car, tunnel, anti-biotics, ships, oil, computers, telephones, pens, clothing….yes even starbucks, is a product of trade and capitalism.

    So when you turn out your Taiwanese made light tonight, walk across your Turkish made carpet, climb into your Swedish made bed and under your chinese made sheets do yourself a favour and remember that everything you are surrounded by was a product of free trade.

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