Category — Economics

Yesterday saw the launch of a major lobbying effort by ABTA, for a so-called “Fair Tax on Flying“:

The Fair Tax on Flying  campaign is an alliance of more than 25 airlines, airports, tour operators, destinations and trade associations who are uniting to call on the Government to make the system of aviation tax in the UK fairer.  We already pay the highest levels of aviation tax of any nation in Europe.

By fairer, of course, they largely mean lower. Or, at least, no higher than it is under current APD 4-band rules: £12 per person for economy class flights to Europe, £60 for the USA, and £85 to Australia, for example. There is a Facebook group, which has attracted “Likes” from plenty of respectable travel industry names, alongside the odd anti-all-tax nut and corporates with an obvious interest. Major players at the top level of the industry (largely the CEOs and MDs of the big airports, airlines, and large outbound tour operators) have written to the Chancellor outlining their case (pdf).

If the idea is to “unite the travel industry” behind the campaign, I’m afraid I’m not joining. [Read more →]

Last November I wrote a piece outlining the worrying implications of the BBC’s acquisition of Lonely Planet for the Corporation’s non-commercial UK neutrality. I’m not the only travel journalist with these sorts of doubts. The BBC Royal Charter and Agreement, remember, is very clear on how the Beeb can and cannot interact with the UK media market:

The Agreement requires all commercial activities undertaken by the BBC to comply with four criteria. …

4. comply with BBC fair trading guidelines and in particular avoid distorting the market.

Of course, that begs a whole series of questions, but this much is plain: BBC Worldwide activities that distort a domestic market in which the corporation is a player are forbidden. This, essentially, was the basis for the decision to disallow BBC investment in ultra-local video last year. It’s the reason that the BBC’s acquisition (through BBC Worldwide) of Lonely Planet should be reversed at the first opportunity. [Read more →]

A trip to the postbox to return the execrable Black Dahlia to LoveFilm reminded me why marketizing public services will always fail. It’s that little slot on there that tells me when the next pickup’s due. Today it read SAT. Those Next Collection signs are very useful. It wasn’t so long ago that they were trustworthy. Not any more: they’re often days out of date at my local box.

The reason’s simple: whoever changes the signs doesn’t have the incentive to bother. Nobody’s checking every little detail of his job – nobody could. And these little extras – what we used to call public service – aren’t Big Picture stuff. (You could have said the same about clean hospital toilets until a couple of years back.) By turning my postman from a public servant into a rational economic actor, we’ve destroyed the small parts of his job that used to connect him with our lives in all their complexity. Marketization can only put incentives (targets, bonuses, competition) in place for a proportion of what he does, or did. The rest is deemed worthless, history. Or it’s left up to his own integrity, which we still expect him to display in his new daily life being pushed around by capitalists.

Now I’m not saying that I oppose the market running public goods; nor do I know whether this ‘public servant’ ever really existed, or even if s/he did, whether we could re-energize the corpse. But deciding where markets can be successful needs to be an empirical judgement: they appear to be better at running airlines than train networks; better at holiday camps than prisons.

And marketization isn’t a process we should be celebrating. When markets need to take over, it’s a sign of human failure, a necessary second-best option, not something anyone should be proud of, Left or Right. Smith, like Worstall on a good day, teaches us that self-interest can be useful, not admirable.

First posted at Liberal Conspiracy.

I’ve never been much of a joiner. Even though I’ve worked as a writer/journalist for a few years, I only sent my form off to the NUJ last month. The Union, the Tartan Army, the Tufty Club… and, er, that’s about it. Still, I have given recent thought to joining my local Green Party – so I read Dave Osler’s recent piece: Green Party: vehicle for the British left? (and there), with interest.

Like Dave, I doubt the Greens can build a systematic left-wing alternative to Labour, now properly classified as a ‘centre-right’ not a ‘left’ party. But I do believe the popularity of mainstream greenish politics offers something. A ‘moment’, perhaps, for slipping something with a progressive flavour in with the recycling. A reasonable place to look for inspiration is Sweden. [Read more →]

What’s most fascinating about this lament to socialism perdu is the central thesis:

It is axiomatic, since the death of socialism, that governments must everywhere retreat… Liberalisation, privatisation and global policies of “small government” (except in the areas of defence and law and order) have led to a withdrawal by governments from areas of concern, which, until recently, had been seen as their primary functions.

He’s 180 degrees wrong. In fact, the state is hungrier than it’s ever been. [Read more →]

I don’t often write about the NHS. I don’t ever complain about it: my local GP and hospital are both excellent (and have been, unfortunately, well-used by my family). I figure if they can get it right here, in one of Britain’s poorest boroughs, it can be done anywhere. The NHS surgeon that saved my daughter’s life, in Georgeous‘s constituency next door, is no more salubriously sited.

But the best blog post I’ve read all year has given me a nudge. [Read more →]