Buses vs Mobile Phones

Posted: September 13, 2012 in free markets, government
Tags: , , , , , , , , ,

Unfortunately, I have to get a bus to work everyday. Generally speaking, buses are pretty awful. They are usually one (or a combination of) the following; late, smelly, relatively expensive, overcrowded, uncomfortable, indirect.

But why should this be so? Horse drawn buses were used in the early 1800s so you would think that 200 years of innovation and technological progress would have produced something far more adequate than our present day reality. I mean think about it, the first commercially available mobile phones were introduced in 1983 and just look what has happened a mere 20 years later! Phones that are not just mobile but maps, music players, computers, diaries, Internet equipped… you get the idea. What is even more amazing is that this technology is increasingly available to almost everyone in society.

Back in 1983 a mobile phone have cost you $3,995 (almost $10,000 in today’s terms if you factor for inflation!!). For your money you would get a 790g block with err…  30 minutes talk time. Today I can walk into any mobile phone shop and walk straight back out with a product vastly superior to it’s 1983 forebearer for a fraction of the cost. How is this so?

Well it’s certainly not due to government intervention. Rather predictably, it’s our old friends – capitalism, competition and (relatively) free markets. A combination of these factors ensured that the quality of mobile phones went up and the price went down, making this product ubiquitously available across society. Government intervention in the form of taxes and regulation has no doubt had some negative effect on this sector but has not been significant enough to have seriously dampened the productive force of capitalism.

Let’s return to the example of the bus. The bus network (in Britain at least) is prone to a plethora of state interventions. Much like the rail network, most routes are awarded by a regional QUANGO to private operators. Other bus companies are then not permitted to compete on the same route. The obvious result of which is that there is little/no competition for a bus company once it has won the right to a route. This type of privatization is better than direct state ownership of the industry, but only marginally.

Without allowing truly free competition between different operators service, quality and affordability will never improve. No doubt the bus companies like it this way and likely lobbied hard to achieve this status quo, which would exemplify the unholy alliance between big business and government.

In the meantime, my mobile phone contract is up for renewal and I have an veritable bounty of cutting edge devices to choose from. Coincidentally my bus pass is also up for renewal. Sadly, my choices in that respect are rather more limited.


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