How to privatize Prague's public transport?

How to privatize public transport (not only) in Prague, how would a private system work? How to go to it? What is the purpose and purpose of privatization and deregulation of the various sectors? You will find the answer to these and other questions in this article.

Strike: Do you know that ...?
Strike: Do you know that ...?

Prague's public transport is a system of subsidies, a system of regulations, a de facto system controlled by the city.

By decision of the city, it has an almost monopoly position in the provision of services Transport company Praguewhich is owned by the city. As a team, the company's employees have great strength - together they can "block" traffic throughout the city. Their bargaining power vis-à-vis the city, the state and others is strong. It is a classic interest group that is well organized and can easily promote its interests at the expense of other citizens.

How to take this power away from them? Quite simply - privatize public transport. Not only is it possible, but it will most likely be a cheaper system. A strike by employees of one company will not have the potential to block the entire operation of public transport.

According to many, the problem with the privatization of public transport lies in the fact that it is a so-called "network industry“. A classic example of a network industry is, for example, the gas industry or energy in general.

In the network industries, many claim, there is a tendency to the so-called. "Network monopoly". After all, no one will build two gas pipes next to each other or two power lines. It is easy to create a monopoly in this sector, which will not be eliminated - that is why, according to some economists, it is necessary to regulate the network industry and "ensure" competition in them or completely control them.

We have a de facto system of complete management at the public transport in Prague today. The system of "ensuring" competition works more or less in suburban transport, where timetables are created by ROPID (under the control of the city), which then hires carriers to run according to these rules. He rents them entire lines.

The first system of complete management it creates a monopoly as such. The second system of "competition" creates a legitimizes the cartel, so the consequences are almost identical. Neither system is sufficient. How to create an environment for the functioning of standard market principles in public transport?

To answer this question, we must ask: how to privatize the current system? Next we can add: how will the new system work? We will answer both questions in the text.

Human design

It should be noted that any deregulation process (privatization) of anything controlled by the state or its parts (city) is a process artificially created and dictated - in economic jargon, it is "human design".

Thus, any process of deregulation and privatization is full of the same mistakes as the system of state regulation as such. If we swear at the privatization process, we swear at regulation.

If we want to get rid of the mistakes of state proceedings through privatization and deregulation, the aim of these processes should be the liquidation of state proceedings in the given sector, not "other state proceedings". It should be a process in which the state deprives itself of some powers.

Thus, the process of deregulation and privatization cannot be successful as a result if the state merely exchanges one power for another. It is not about "deregulation" and "privatization", but about "re-regulation". In this case, the privatization process cannot even take place, because the privatization of one is paid for by the nationalization of the other.

The aim of deregulation

The aim of the deregulation and privatization process should therefore not be to "establish an optimal state". This cannot be achieved through privatization and deregulation, just as this cannot be achieved through state proceedings (as privatization and deregulation is state proceedings). If we give privatization and deregulation the goal of establishing the optimal state, we can never get out of the tangle of regulations and state management, because state management (deregulation) cannot achieve the optimum. It is a vicious circle.

So what goal should we give privatization and deregulation? It should be about a process in which we create the conditions for the functioning of the "human act", spontaneous market mechanisms, which correct the unequal system created by the state to the optimal state.

The aim of privatization and deregulation is not to improve the functioning of privatized companies or better functioning of services per se, but to free up space for individuals to act.in which better performing businesses and services can be created. None of us know, what companies, what services and what industries it will be. But what we do know is that these will be businesses, services and industries that arise from voluntary exchange, that is, businesses, services and industries that will be desirable and effective - that is, for the benefit of all parties involved. That these will be industries, companies and services that would not have arisen if the system of regulation had remained.

Simply put, The goal of deregulation and privatization is to make the system of forced cooperation from a position of strength (state) he got out of the way of a system of voluntary cooperation created on the basis of all-round benefit (market). Otherwise, it is not about privatization and deregulation.

How to privatize Prague's public transport?

In order to be able to carry out this "way out of the way" with Prague's public transport, the whole system is literally needed smash into atoms.

Let's get rid of the Transport Company

Who knows how big DPP, as should be, when it was created as a "human design" by the decision of the city officials and not as a result of the market process? Kdo Does he know if such a company should exist at all?

Nobody knows it. Thus, logically, there is only one way to privatize a moloch called DPP: to tear it to pieces.

The smaller the pieces, the better. We can, for example, sell individual depots with their own property (buildings, cars) in publicly accessible auctions.

Why the depots? Because I sucked it out of my finger. Since the standard market does not work in public transport, no one really knows which parts to divide the company into. The DPP arose from a power decision. Due to the non-existence of market prices in public transport, no one really knows anything in this field. Possible the debate over whether to sell individual buses, entire depots or individual "divisions" of the company is thus a mere frog dispute.

We can see similar sucking from the finger in state industries almost constantly. Defending "why like this" is then just a rhetorical exercise.

By selling surface transport depots at auctions, we achieve two things:

  1. First: several bus and tram operators with their own fleet and assets will be created who can compete.
  2. Second: The auction will ensure that the given depots will be won mainly by those who value them the most, ie those who are determined to invest the most in acquiring depots. We can assume that these will want to get the most out of public transport.

It is clear that the greatest interest will be in the depots that will contain the most cars, the best assets or will be (for example, in the case of trams) connected to the backbone lines. From this point of view, it may seem that the owners of "large" depots will be favored over the owners of "small depots".

However, we must also realize that large depots were purchased at a higher price (they are more expensive) and their management involves higher costs. The auction will thus ensure a fair market valuation of the assets.

Sale of stops

Stations adjacent to depots would naturally be sold with depots. But what about the others?

Again, we can resort to auctions. Large busy stops could be sold in separate auctions, smaller ones in some "sets" or also separately, as desired. For really small stops, however, I would lean towards "orchards". Why? Because it would involve fewer auctions, which means lower costs for the whole process as such. And what should those sets be like? I don't know. However, I believe that many would suck out interesting and creative variants.

Subsequently, we can get into two situations: some stops would probably be owned by some owners of depots, some not. But it wouldn't have to matter at all.

Stop owners who do not own depots would probably charge a fee from carriers for the possibility to stop and cash in at them. It would be a negotiation between station owners and carriers that would create timetables. Negotiations would, of course, be driven by the vision of profit: so at peak times, connections would naturally be strengthened, because it is in the interests of all: carriers, stop owners and passengers.

Owners of large stations, which is used by a large number of passengers, would be in a certain superiority to carriers and rather, they would dictate the arrival times of the individual lines.

Owners of small stationswhich uses fewer passengers would be in completely the opposite situation. Smaller stations are less attractive to carriers. In order for people to use smaller stations, their operators must offer as many attractive connections as possible - rather, they would be subject to the requirements of carriers in terms of the arrival time of individual lines.

How would a timetable come about? At the busiest stops, their owners would determine the arrival times of individual buses of individual carriers. Carriers would then set times for owners of smaller stops that are "on the way" from the depot to the large stop or from the large stop to the large stop.

Stop owners might charge different fees for late arrivals or no connections fines. The owner of a large stop could also own smaller stops, which he could request. The result, however, is that the stops used by the most passengers would be handled the fastest by the largest number of connections. From large busy stops, you would logically get to many smaller stations.

In case of frequent late arrivals also, there is nothing easier than offering the problematic carrier time to other carriers. It is thus very likely that it would be better transport with fewer late arrivals.

If the carrier, for example, did not build on smaller stations due to delays in order to get to a large station in time, it would damage its reputation and would be more difficult to get new stops for new connections or to keep stops that it already serves. The price that a problematic carrier would pay for stops would probably also be higher, as station owners would charge "risk premium“, As is the case in all other sectors.

It is not in the carrier's interest to be unreliable.

And if the owner of the depots also owned stops? It hardly changes anything. Its connections would have the stops free of charge and foreign carriers would pay for the opportunity to serve that stop if they were interested. For busy stations, it would be in the interest of the owner to provide an opportunity to stop other carriers as well, as he would probably not be able to serve the stop himself. If he could, it wouldn't be a problem.

If he is unable to do so and still does not let a foreign carrier stop, there is nothing easier for the competition than to arrange his own stop "on the street next door" and take over the passengers for the first carrier.

Tram tracks

Privatization of tram lines could seem the most difficult - however, the opposite is true.

All you have to do is divide the lines between the various points of contact: stops, junctions, large junctions, etc., and then sell these pieces (as other than at auctions) - even in conjunction with the stops. Again: the carrier and the owner of the stop / track do not have to be one person, as already mentioned.

And what if the tram only needs to cross a line, but not stop at a given stop? Of course, tram line owners can charge fees for using the line, for stopping at stops, and so on. However, it is still customary today for the tram to stop at stops that it "meets" on the line.

If it were more optimal for lines and stops to be owned by different persons, this would happen (lines would be purchased without stops), because with the auction the privatization of assets would also open up a free market for those assets as such.

It is of course advantageous for owners of various lines to have connections with as many other line operators as possible: The more connections, the greater the reason for the carrier to use the track The higher the prices for the rental of stops for the lines and the higher the charges for crossing the lines, ie the greater the profit.

It could also be expected that there would be a more significant separation of roads and tram lines as such, which in turn would lead to safer operation.

Metro

How to privatize the subway? Sell ​​individual lines with stops. Stops whose operation is too expensive for metro operators can be rented or sold. That would depend on the new owner.

It is actually the simplest thing for the whole privatization of public transport.

What if…

It is quite possible that it would all be completely different. Be that as it may, it is now quite clear that completely private public transport is not science fiction, but a real thing. And it is very likely that it would be at least as well-functioning as it is today.

Sure, you ask: how much would it cost us?

Honestly: I don't know. The ticket might cost more than CZK 32, but I dare say that less than the approximately CZK 80, how much does this ticket cost in full price (with a city subsidy). Competition is the most powerful "cutter" of prices.

You can also argue that the whole system is too fragile and can easily break down. You are certainly right. That, however it is not an argument against privatization, but for privatization.

The whole public transport system is too fragile and complex to be managed from "one center", as it is today.

And finally: as a result, it would be the passengers who determined what public transport would look like. And that's fine, isn't it?

PS: I really like games like Transport Tycoon or Open Transport Tycoon. 🙂

0 comments

  1. Vít Kučík "What is often missing in liberal visions is the so-called" phase of transition ", ie the period between the centrally regulated state and the new, liberal, decentralized state, but already fully established.":
    This is what the author described in the article as "I sucked it out of my finger". If an official is able to make perfect regulation, then he is also able to make perfect deregulation. It does not make sense to write about the opposite situation, especially if we are in favor of the state.

  2. @Milda

    Passenger cars have far stricter emission regulations than trucks, including public transport. At the same time, a person goes by car only if he really needs it. Public transport runs according to the schedule, even if no one gets on the bus all day - empty buses and trams are nothing special. Of course, this means a huge waste of fuel and therefore completely unnecessary emissions.

    Yes, maybe the cancellation of public transport would not be to the detriment at all. On some roads (where the lane is now reserved for public transport and 90% of the time is completely empty and unused), throughput would increase almost twice as much, thus reducing travel time or increasing the number of people transported.

  3. You know what, you traffic experts? 😀 One accidentally gets lost on this site and it is not enough to be surprised, with a few exceptions, the nonsense itself. This is how to read from the manuals of some Bolshevik believers. The ideology here is actually completely Bolshevik, in its idealism and monstrosity. And that article about mhd? Idealistic fantasizing impossible in practice. If so, it's probably that people would just shit on public transport and there would be a few lines left. Then it's better to cancel the public transport and drive, it's just going to take a while - the road and what then? And what about the Prague atmosphere? But if people breathe badly there, they can move - no one keeps them there, then Prague will be depopulated and there will be clean air and we can immediately cancel Prague and there will be problems and so on and so forth. So hello and nice dreaming. 🙂

  4. What is often missing in liberal visions is the so-called "phase of transition", ie the period between the centrally regulated state and the new, liberal, decentralized state, but already fully established. There seem to be (often) situations where the costs of this phase of transition outweigh the disadvantages of the original regulation, or that the duration of the transition phase is disproportionately long (perhaps decades), so that the generation that started deregulation will not see its fruits costs. This is perhaps the reason why state regulations and plans of all kinds still exist and why their de facto popularity worldwide is not significantly diminishing…
    Centrally planned public transport in Prague has existed for about a century, the question is whether its "breaking" and dismembering would not be even more "human design" than its suffering… Another question is how long after a lightning dismemberment it would take new regrouping and settlement. This process would necessarily involve price wars, regrouping of assets, bankruptcies and scandals of the less successful, changes in passenger habits, etc., etc. Such a fundamental change in tradition is never a matter of years, but rather of generational matters, during which many would certainly be found. they called such a process of change "chaos" and would push for "restoration of order."
    In the case of the "breakdown of Prague's public transport into atoms", the whole system would probably not be maintained in its current complexity, and people would mostly start driving cars. At the same time, this is a fairly sensible alternative, as reported by the experience of many places in the developed world, where the track and buses have disappeared, without anyone particularly worried about it…

  5. >>>> "But even if it is so that when a certain level of wealth is reached, people can afford to stand, so it will be advantageous for them to have it. So why would they introduce him? "

    Of course, sometimes people thought that establishing a state would be nice. But that does not mean that they could not be wrong and that we will not now allow the state to abolish again when we see what evil it can do. This is exactly the problem of the state vs. private company. If a private company does not do what customers want from it, it goes bankrupt and the owners find themselves on the pavement. Unfortunately, this does not work with the state. The state fails only when the ENTIRE NATION is impoverished and impoverished. Just look at the Czech government led by Kalousek - Abolish unnecessary offices? Abolish unnecessary regulations? Reduce government spending? No idea, let's raise taxes! The state cannot keep small!

    >>>> "I know the arguments of the anarcho-capitalists, they would tell me that what if the growth is lower, everyone has the growth they want, so it is optimal."

    Yes, because there are other goals than higher growth at all costs. You refer to the Kuznetst curve yourself. This is the best proof that growth is just one of the goals that the company strives for. But it is neither the first nor the most important, and goals change over time and space. So increasing growth at all costs is counterproductive. Of course, it is still true that the state cannot increase the well-being of society in any way.

    >>>> "I'll turn it around a bit, you're not solving the essence of the problem, the shape of the curve, but you're solving the number at the beginning"

    The number at the beginning is the alpha and omega of the whole curve. If GDP grows by 10% in a society without a state (again, I disregard that GDP is a meaningless number, but what, let's assume for simplicity that it really reflects the well-being of society) and the introduction of the state can only range up to 5% -6 %, so it doesn't matter what the curve looks like, it will always be less than in a society without a state. The author of that curve simply has to show why he drew that curve the way he drew it. Unless he explains it and proves it's true, then the whole curve is useless.

    >>>> "Those articles about how the private army, police and law would work are made up. It has never been like that and the authors only dream about it. "

    This is nonsense, there are plenty of historical articles on this server. Not to mention that everything wasn't there at first and only later it started to happen. You can use the same argument against the establishment of the state - once in history, states did not exist and theories about the state were only invented and the authors of theories only dreamed about it. Also on it were once planes, cars, the Earth as a sphere instead of a surface, etc.

  6. Proponents of the Rahn curve may not agree on exactly where growth is without the state. Probably because it can't even be measured, because there is a state everywhere today. But there is no dispute about its shape. He will not change the shape and will probably differ in different countries, but also in different types of government (democracy will have a different one than dictatorship). It is possible that today GDP growth without the state may be negative, but it used to be very slightly positive. Of course, correlation does not tell us causality. But even if it is so that when a certain level of wealth is reached, people can afford to stand, it will be advantageous for them to have it. So why would they introduce him. As with a certain level of wealth, people begin to focus on protecting the environment - the Kuznets curve. This is a really brilliant argument that my arguments are untrue. I will say the same about yours. I know the arguments of the anarcho-capitalists, they would tell me that so what, when the growth is lower, everyone has the growth they want, so it is optimal. He simply invents some moral clichés on every factual argument.

    I'll turn it around a bit, you're not solving the essence of the problem, the shape of the curve, but you're solving the number at the beginning. We don't move like that. I'll speed it up a bit, prove to other readers the benefit of the state's disruption. Such articles about how a private army, police and law would work are made up. This has never been the case and the authors only dream about it. Thanks for the discussion, it is going on indefinitely.

  7. See this article and the curve: http://www.floridapoliticalpress.com/2011/01/12/the-rahn-curve-government-vs-growth/comment-page-1/

    The guy clearly writes there that in a society without a state, growth is zero. So the proponents of the Rahn curve obviously can't agree for themselves what the curve should look like. In addition, the very first curve you linked does not solve zero at all, but if we dragged it to zero, it might end up in the red. By the way, watch the bottom video on the page you put.

    >>>> "The curve is based on empirical measurements, as is the Laffer curve."

    Empirical measurement is one thing, correct interpretation of the obtained data is another.

    >>>> "At that time, without a state, one experienced very modest progress, modest, but still progress. Since the establishment of the state, the company's progress has been much faster. "

    But this is CORRELATION, not addiction! You don't know if one causes the other or the other causes the first. It may also be that when society reached some level of wealth, it could already afford to establish a state. There are so many factors in the economy that attributing all growth to a single one is deceiving oneself.

    >>>> "When securing public goods at the level of about 10 - 20% of GDP, the advantages from the state prevail, while then there are more and more disadvantages."

    This is certainly a statement that is important to talk about. But so far it's just a statement, it may or may not be true. You have to prove its truth first. If you can't do it, you can't introduce any state. I haven't found the reason why Rahn's curve looks like it looks on the Internet yet, so I can't trust it. As you say, I'm too stiff, I don't trust people with everything they say just because they say it.

    I would still be interested in what you think are public goods and why they should be provided by the state.

    >>>> "Higher price of the metro will make its substitutes more expensive"

    So far, you have given no reason why the price should rise. Resp. the ones you mentioned are untrue.

    >>>> "It takes a kilometer to get off the metro, they are definitely not rolls."

    Even if he drove empty all night? Do you think that should be a measure of effectiveness?

  8. Again, you're criticizing something that no one has said here. If you look at the Rahn curve properly - the second picture here: http://theblogprof.blogspot.com/2010/07/no-hope-but-big-change-for-worse.html , so you can see that the curve is not based on zero growth, but very slightly positive. So your reflections on zero from zero are meaningless. All you have to do is take a good look at something before you start criticizing it. The curve is based on empirical measurements, as is the Laffer curve. Statistics and the study of empirical data are also methods of economics. Not every economist is satisfied with the Austrian school's statement that mathematics does not, statistics do not, the state does not. Austrians are based on praxeology that people just act and dot. Why deal more with that.

    Remember that humanity of today's type has been here for 400 years, while the first organization of society with the help of the state began about 000 years ago. (don't get it wrong again, as if I mean central planning, I mean market + public goods state) At that time, without a state, one experienced very modest progress, moderate, but still progress. Since the establishment of the state, the progress of society has been much faster. It can also be seen in history that the excess of the state hinders progress. When securing public goods at the level of about 5 - 000% of GDP, the advantages from the state prevail, while then there are more and more disadvantages. Therefore, I propose not to abolish the state, but to reduce it and thus improve the economic use of resources. If you're not an extra stiff type, that should be enough for you.

    I have already commented on the metro competition above, read it. The higher price of the metro will make its substitutes more expensive, and the result will be more expensive transport. Resources will be shifted to overhead transport, but road capacity has its limits. In addition, something else will become more expensive. The exit of the metro requires a kilometer, they are definitely not rolls.

  9. @ Zdeněk

    I understand the chart very well. But I didn't write the happiest, you're right. So I'll write it down a bit.

    If there were no 'GDP growth' without the state, then 'GDP' could never go from zero to some positive value. It would always be zero and therefore there could be no growth. Or, in other words, if the state is to be created and some wealth is to begin to be spent, then that wealth must first be created in a society without a state. I.e. some economic wealth had to accumulate without the state. If it did not accumulate without the state, then the state would have nothing to spend.

    Unfortunately, I did not find anywhere how the author of the Rahn curve came to just such a shape of the curve. If you know, send a link. Otherwise, I can't think of that graph as anything other than a graph sucked out of a finger. The only references I found referred to comparing historical data - that is, taking a year and seeing how big the government was and what GDP growth was. But this is nonsense - it is a common correlation, it says nothing at all about the dependence of the given quantities.

    Consumption of the state will eliminate some costs, but will introduce other costs - elections, salaries of government officials, impossibility of calculation, impossibility of planning due to the fact that politicians can change any law, corruption, theft, waste, etc. If you want to defend the state, you must prove that those transaction costs are so huge that their savings outweigh any new costs. Unfortunately, when it comes to the state, all its proponents work with a version where the state makes no mistakes, when it works as efficiently as possible, when it does its robot as it should - they simply talk about the ideal state and compare it to the worst that would be in anarcho-capitalism. could happen.

    >>>> "I wasn't talking about any AR, AC industry, but one subway company."
    He wrote: "AC = AR only concerned the metro as a… sector."
    I repeat - the competition for the metro is not just another metro! The competition for the metro is every other type of transport and there are plenty of them. The metro cannot generate monopoly profits if there is at least one other mode of transport. People don't want the subway, people want transportation. And they don't care how that transportation is secured. Whether by car, tram, bus, helicopter, teleport, horse, train, on foot, bicycle, etc. Each type of transport is a competition for everyone else!

    AC, AR, MR, MC curves are valid for specific companies. You can't transfer those curves to another company. The curve of a private metro company will be different from the curve of a municipal company providing the same service. It does not work so that every company operating in sector X has the same curve. There is no reason why a city firm should have a lower price than a private firm. Exactly opposite.

    >>> "You basically regulate the fare and reward management depending on the amount of the output, thus ensuring that costs do not rise to dizzying heights and the Averch-Johnson effect does not occur."
    What is the outcome in the case of a city metro operator, based on which you will decide whether the metro is working properly or not?

  10. From what you write about the Rahn curve, it follows that you rather do not understand it. On the Y-axis is the first derivative of GDP, not its absolute supply, which you write meaninglessly. That GDP would be zero and food shortages and such. The curve shows that a certain amount of public goods increases GDP growth precisely due to savings in transaction costs of all people in the economy, growth in security, and a decrease in risk. The optimal state rate in the economy is estimated to be somewhere between 10 - 20%. Not today's 40 - 60%, but it is also not appropriate to have no state.

    Another note to that meter, you turn my previous claims. I was not talking about any AR, AC industry, but one company operating the subway. I say that there is no place for more than one company in the metro and that one will create a monopoly profit, which does not attract any other competitors. It will offer less and for more money than a city firm. You basically regulate the fare and reward management depending on the amount of output, thus ensuring that costs do not rise to dizzying heights and the Averch-Johnson effect does not occur.

  11. @ 28 - Zdenek

    >>>> “AC = AR only concerned the metro as a strong network industry. "

    AC, AR, MC, MR are COMPANY curves, not industry curves. The AC curve for the city metro will be different from the AC curve for a private company as well as all other curves. Ie. the fact that the city would produce at the point AC = AR of its curve does not mean that that point is lower than the point MC = MR on the company's curve.

    >>>> "Many centuries ago, Machiavelli wrote about why it is not good to build the state's defense on a private (mercenary) army and mentioned many cases where it did not pay off. See the work The Ruler. "

    Wasn't it worthwhile for whom? For the ruler or for the people? It certainly did not pay off for Machiavelli. And what do you say about the many cases where the state army has not paid off? When did she attack her own citizens? You are overlooked the huge disadvantages of the state army.

    >>>> "If you want to believe in your ideology, you take on the disadvantages of the state and overlook its advantages"

    But not at all, we just claim that the disadvantages outweigh the advantages. And brutally. Unfortunately, proponents of the state marginalize and overlook these disadvantages.

    >>>> "Rahn's curve shows you nicely what the state without a state is, it's the one at point 0 on the x-axis."

    Just because x = 0 does not mean that y is also zero. This would mean that without the state there is no economic activity and nothing is created, ie that within a week everyone would be dead due to lack of food and drink. This is, of course, absolute nonsense in brutal contradiction with reality. It follows that at the point x = 0 the economic activity must be non-zero. Unfortunately, the creator of the graph did not bother to draw it on the graph at all, and those who do not understand it also devoured it with a reel.

    Unfortunately, you misinterpret the graph. The graph says this: "If we introduce a state, then the highest growth in that state will be achieved at some point x". But there is nothing at all about growth in a stateless society. It does not in any way imply that a stateless society will have lower growth. It's like drawing a curve of car speed and the cost needed to cover a distance. That curve will tell you nothing at all about which means of transport to choose and whether an airplane or a bicycle happens to be a more suitable means.

  12. "I say that whoever wants to hit a dog will always find a stick and this is doubly true for you. When you want to believe in your ideology, you take on the disadvantages of the state and overlook its advantages, so that you are satisfied that you have finally come up with it correctly. ”

    I completely agree with you completely. Do you know what this means logically? That economic theory is not verifiable or falsifiable according to empirical data (eg statistics), because it is a complex phenomenon and we do not know what weight people gave to what circumstances.

    So both the "Italian" private army, both Machiavelli's Ruler and your "prehistory" argument are irrelevant in this discussion and tell us nothing about the possible ineffectiveness of a stateless society.

    Methodology of the Austrian school, I'm glad we both stick to it.

  13. To Zdeněk:
    Of course, thoughts are more important than grammar - I also sometimes succeed….
    But I have one more note to the point (although every comparison is lame) - what do you think would happen if, for a start, we repealed traffic regulations outside the village (and only warnings for dangerous sections, bends, etc. would work)? Would tragedy happen, some would drive "left" and "kill" would we? Or it would work as before, because it's kind of better to go on the right side and everyone is so used to driving, etc. And what would insurance companies do?
    It does not seem to you that the number of accidents and deaths is declining (especially better infrastructure, cars ... and we know the bending of statistics) and yet propaganda claims that we are worse, more aggressive, more dangerous and drunk drivers year after year and without the state police (which they are still "low" and have "low" salaries, because no one knows what they should have :-)) it would be sodoma and gomorrah.

  14. AC = AR only concerned the metro as a strong network industry.

    Many centuries ago, Machiavelli wrote about why it was not good to build a state defense on a private (mercenary) army, and cited many cases where it did not pay off. See Work Regent.

    Mr. Kubec, even today we have some judges, arbitrators, private. Lawyers are also private individuals. But as before and today in England, we must act according to laws that are fortunately not private.

    They certainly shouldn't have stood in prehistory yet, but you won't give me examples that a stateless society is more advantageous, isn't it. I claim that whoever wants to hit a dog will always find a stick and this is doubly true for you. When you want to believe in your ideology, you take on the disadvantages of the state and overlook its advantages to be satisfied that you have finally come up with it right. This is certainly not the economist's foresight and is a fundamental mistake. An economist cannot say that he refuses to state and then not pay attention to efficiency, see Kosik.

    The Rahn curve nicely shows you what a state without a state is, it is the one at point 0 on the x-axis. And we will leave the shortcomings of the GDP indicator for another discussion.

  15. Ad Italy and the army - it had one positive effect: it often happened that when one army was obviously stronger, the weaker one would rather give up than undergo a fight. He paid the army (it was quite expensive), giving up was much cheaper than feeding the army. For a similar reason, not much siege.

    EDIT: As a result, the wars were less destructive.

  16. "You say that in the past, public goods were provided by the market. This is an absolutely purposeful statement, you are talking about all public goods as a whole and they were never provided by the market. When was the last time the market provided an army? ”

    In Italy, for example, private armies were quite common among city-states.

    Other goods (services) referred to as "public" have also been private in the past: the judiciary (eg England), private police compensation (ibid.), Roads and their protection (since ancient times - protection of trade routes and collection of fees for it)…

    After all - the development of the judiciary in England is very eloquent in itself. It was a private sector, but the profits of the best judges were so high that they motivated the king to nationalize the sector…

  17. @ 17 - Zdenek

    >>> "I'll tell you how I distinguish between the mafia and the state. Today I pay state taxes, in a stateless society I will pay levies to the mafia, which will currently rule in my place of residence. Today, I receive public goods for taxes, the composition of which I have the opportunity to influence through civil society and democracy. The mafia gives me my life for contributions. "

    You also pay taxes to the state, which currently rules in our territory (Well, today it does not apply anyway, taxes are also paid to the EU and it would like to decide on our taxes, ie in a foreign territory).

    >>> "The Rahn curve shows us how the state is to some extent a benefit and a burden for society."

    It is a mistake. The curve also shows nothing. Higher GDP does not mean a higher benefit for society! But even if it does, it also says nothing about whether, due to the fault of our government and our increase in GDP, GDP in another country will not decrease. Nor does it say anything about what GDP would be without the state - what if the curve looks like this: http://aa.kolejhvezda.net/fig2xl.jpg ?

  18. @ 15 - Zdenek

    >>> "Even the one person who refused to pay the army will be in danger of being the first to demand protection of his property from the state, take the poison."

    He can claim it, but it won't do him any good. Just as no state has an obligation to provide protection in the Congo, so no state (or a private organization) has an obligation to provide protection to anyone who has not contributed to it.

    >>> “You say that in the past, public goods were provided by the market. This is an absolutely purposeful statement, you are talking about all public goods as a whole and these were never provided by the market. When was the last time the market provided an army? ”

    And why do you think the army needs to be provided? And what exactly is a 'public good'? Why should the free market provide services that are now referred to as 'public goods'? Do people have any right to have these services provided to them? What came from this claim?

  19. @ 14 - Kosik

    "The Basic Economic Law states that if a good is in demand, then an offer is created through competing entrepreneurs."

    There is no such law. It would not be true.

  20. @ 13 - Zdenek

    >>> "This is how it would turn out in reality, one would not even have a place to walk, there would be private land everywhere. Some passable for a fee, others free of charge, others impassable, others only for cars, others only for pedestrians, etc. In short, each dog, a different village. One association would use these marks, another would not recognize them and would have completely different prices, for example due to a more attractive location and so on. That's why nowhere in the world do you think they should. "

    The highway is only for motor vehicles, cyclists and pedestrians are not allowed there. Cars are not allowed on the sidewalks. In some areas (eg military areas) entry is completely prohibited (and you are not able to live with it). To the Village Cinemas I do not pay for a ticket purchased at the Palace (and you are not able to live with it?) The same house near the forest is far more expensive than the house near the landfill. Food in a hypermarket is usually cheaper than the exact same food at a party (and you are not able to live with it?). There is a separate public transport in each city, where I don't have a ticket from another city (and you are not able to live with it?).

    >>> "Some public goods that are in demand simply will not exist without the existence of the state, so people always agree to establish a state."

    How can foreigners agree that I must be part of their state? Where did they get the right to do that? Why can they agree that I have to support their state, but I can't refuse? Are they superhumans who own my life and can decide it for me?

  21. @ 14 - Luke

    "I would see the ideal and fairest system for transport solutions in the state as follows: Every motor vehicle driver must drive a gps module that calculates distances, connect it to a PC at least once every six months and pay for the use of roads."

    And how much will be paid per km of road? And who will determine it?

    "With this system, it would be possible to ensure that everyone honestly pays the real price of their trip."

    What is the "real price of your trip" and how is it calculated?

    "In addition, it would help a state that could announce a public tender such as: We need to build a highway Pha-České Budějovice, the expected traffic is X, you can charge Y at most. I believe that a similar system would mean the biggest boom in infrastructure development in history. "

    Is the boom in infrastructure development something that must be achieved in all circumstances? Is there anything else that would benefit people more? The more infrastructure, the better? Always and everywhere and under all circumstances?

  22. @ 13-Zdeněk

    "Yes, and a substitute for electricity is gas, gasoline and wood, but it is still advantageous if the state operates an electricity distribution network. If you would rather let a private company (or a regulated private company) operate in this network industry instead of a private company generating monopoly profit, the fare price will increase to MC = MR, instead of AC = AR for a municipal company (my proposal). "

    How can a company generate monopoly profit in a competitive environment?

    "Now the owner will close the road to my house here, because he wants to make a pedestrian path and a private park there, for example, and I will have to go to work on a much longer route."

    Why should you be more entitled to a shorter trip to work than pedestrians on a walkway or a private park owner? I can also turn it around if you want a path, so pedestrians can no longer walk on the sidewalks and you can't even walk in the park. Are you some superhuman that the world will follow you? I.e. will it be different for the superhuman (you) whose desires will always apply regardless of the superhuman (we)?

    "There must be some spatial planning, it would soon turn out similar to Lake Balaton, which is public, but the land around it is private and the public can hardly get to the water. A few tens of kilometers you have private beaches with no entry under penalty or fenced. 🙂 Quite a bitch to get to the water, I'll tell ya. "

    Why should the public get to the lake? Is that again a godly claim? And isn't there a problem with fields, for example? Why aren't people entitled to enter a foreign field but to a lake? Or to the garden by the house? Why do people have fenced gardens and can't access them? Do you mind?

  23. I understand that my opinion may not smell good to you, but you don't have to do a sentence analysis there. I write the posts very quickly, I don't have all day to do it and a smart person will understand what the author wanted to say. I also don't correct commas in a sentence there, let alone stylistics.

    May I ask, how do you propose the transition to a stateless society? Most people will be against it. Please answer, no links to Hoppe, etc.

  24. "The world and the economy are not black and white, and complex economic and social issues cannot be solved by simple moral clichés." (You have anakolut there)
    Black and white is not the same as people. Property rights (in all their breadth of meaning) are the basis of the libertarian philosophy and their acceptance is the basis for voluntary exchange or the natural functioning of the market. If they are destroyed, distorted, violated, the market cannot function. but it works in a totally "deformed" form. Which we see at every turn today.
    Taxes (tithes, levies, etc.) are, in my opinion, a fundamental violation, albeit legalized, of our property rights. It's just a legalized theft.
    I've also heard the argument that I'm kind of weird, because taxes are paid all over the world…. 🙂

  25. I'll tell you how I distinguish between the mafia and the state. Today I pay state taxes, in a stateless society I will pay levies to the mafia, which will currently rule in my place of residence. Today, I receive public goods for taxes, the composition of which I have the opportunity to influence through civil society and democracy. The mafia gives me my life for the levies. Just look at the private armies in the middle of Africa as they enslave. They basically created their own little dictatorships.

    You don't care about efficiency, I do. The Rahn curve shows us how the state is to some extent a benefit and a burden for society. http://theblogprof.blogspot.com/2010/07/no-hope-but-big-change-for-worse.html

    The world and the economy are not black and white, and complex economic and social issues cannot be solved by simple moral clichés.

  26. to Zdeněk:

    Do you know why I always use moral arguments? I'll use a bit of an extreme example. Imagine a debate of Nazi leaders addressing the issue of Jews and discussing how it would be most effective to "resolve" the issue (ie, whether to burn them or bury them or something else). But I would argue with the argument that Jews are human beings and that they have the same rights as everyone else, and that is why their killing is murder, an act immoral and bad under all circumstances. And for me, it's basically the same as in the debate over whether a road should provide a market or a state. That is, it is not a question of what will be more effective, but that the state uses violence and therefore it is not wounded.

    I ask again. On what basis do you distinguish between the mafia and the state? In principle, there is absolutely no difference. Why aren't taxes the same as burnout or any other form of robbery?

  27. You know, Mr Kosik, it is difficult, we are dealing here with a specific situation regarding transport and public transport, and you are coming up with moral arguments about the crime of the state for every problem. You simply refuse to stand by the state and it is a waste of time to talk about a specific topic, because the debate with you always slips into the topic of state interference.

    I am well aware of these Rothbard arguments that even if a public good benefited 99 people out of a hundred, they would be willing to pay for it, and if there was one person who did not want it and would suffer a loss as a result of taxes. Its loss may be immeasurable and not outweighed by the benefits of the remaining 99 people, because the benefits of consistently maintaining subjective individualism cannot be compared. I know these books by Rothbard and Mises. There is much truth and apt analysis in them, but theories about a peaceful stateless society are not among them. It didn't surprise me that the reference to the book was from Hoppe, another anarchist. Even the one who refused to pay the army would be in danger of the first thing he would demand from the state to protect his property, take the poison.

    You say that in the past, public goods were provided by the market. This is an absolutely purposeful statement, you are talking about all public goods as a whole and these were never provided by the market. When was the last time the market provided an army? And omit the embarrassing examples with Dysney Park and the amusement park :) Edward Stringham, a respected representative of anarchism, replied to my remark about the impossibility of the market army that it is also safe in Dysney Park and they have private security there. Not like that. 🙂 However, it is true that today the state has swelled to the extent that it provides goods that are private in nature and the market did provide them better in the past. See also my proposal for the privatization of state-owned enterprises. However, we are already talking about something other than the purely public ones that have always been provided by the state, cities and regions.

  28. to Zdeněk:

    "Some public goods that are in demand simply will not exist without the existence of the state, so people always agree to establish a state."

    The Basic Economic Act states that if a good is in demand, then an offer is created through competing entrepreneurs. There is no reason why this should not be the case with your vaguely defined "public goods". Many of today's "public goods" were normally provided by the market in the past, and only then were they taken over by the state, not because the market was failing.
    I recommend the first article entitled Fallacies of the Public Goods Theory and the Production of Security from this book:
    http://mises.org/books/economicsethics.pdf

    What does "people talk" mean? Have people ever agreed to establish a state in the past? For it to be moral and just, all the inhabitants of a certain territory would have to agree, which never happened. Even if there is only one person who does not agree with the establishment of the state, taxes against him are completely normal theft. Do you think it's right when the majority agrees to rob a minority? So not to me.

    As Rothbard wrote: if you look at the state as a huge criminal organization, you will understand all the arguments of the anarchists.

    I don't know if I asked you about it somewhere, but on what moral basis do you not consider taxes to be robbery, ie a criminal act?

    In one article I wrote:
    "But what is taxation? By its very nature, it is an involuntary handover of part of the property under the threat of violence (if someone thinks the opposite, let them try not to pay taxes and see what happens). Which by definition is robbery. E.g. The Criminal Code of the Czech Republic (Act No. 40/2009 Coll.) in section 173 defines robbery as follows: “Whoever uses violence or threats of imminent violence against another with the intention of seizing foreign things.” Anyone who thinks a little can see no difference between this definitions and taxes. Once again: Who (the state) uses violence or threats of imminent violence against another (taxpayers) with the intention of seizing another's property (part of the taxpayers' funds). "

  29. Sure, such associations would exist somewhere, but in any case it would be far worse coverage available to the general public than it is today. But I don't really like debates like what if, provided I would give an example from reality. The owners of the family houses (recently on ČT 1 - reporters) probably annoyed how people from other neighborhoods go to work on the sidewalks and locked the entire road. They would certainly like to buy a public road together and make it inaccessible for good. Fortunately, the city did not allow it and the road remained public. Just for information, people would have to go to the city and take a detour several times longer. This is how it would turn out in reality, one would not even have a place to walk, there would be private land everywhere. Some passable for a fee, others free of charge, others impassable, others only for cars, others only for pedestrians, etc. In short, each dog, a different village. One association would use these marks, another would not recognize them and would have completely different prices, for example due to a more attractive location and so on. That's why it's nowhere in the world the way you think you are.

    It's nice to mention Robert Holman, but he's a supporter of public goods. So if you are referring to his thoughts, it is good to mention the matter in context. Holman never thought the state was a criminal organization, etc., as I often read from anarchists.

    Mr. Kosik, you also can't imagine what a world would look like without the existence of a state, so please don't fantasize and be factual. Some public goods that are in demand simply will not exist without the existence of the state, so people always agree to establish a state.

  30. I will just add Kosík - why it would pay off for someone - to block roads (hinder trade / transport / services) when he himself is also in the role of a user of other roads. It's not a one-way street.
    And why should the situation be worse than today? Why can't an association of road owners be formed and agree with each other, etc.? There is a nice example in Hollman with black passengers about fire insurance.

    I really like the atomization of public transport 🙂

  31. to Zdeněk:

    “The benefits of public goods? If we talk about transport, ie public roads, it is a significant saving of transaction costs. "

    To generalize, do you say that saving transaction costs justifies initiating violence? That a small group of people called the state has the right to withdraw funds from everyone else by initiating violence and then impose state roads on them, because you think they will save transaction costs? What if someone disagrees? Put him in jail? And if he defends himself, will you shoot him?

    "I'll pack up and get to work now without having to negotiate a freight or road permit with the road owners."

    The problem is that we have been living with stagnant roads for a long time, so we cannot even imagine what state-free transport would look like.
    For example, listen to this:
    http://feedproxy.google.com/~r/FreedomainRadio/~3/xwf7vHRZnWM/Roads_Part_1.mp3
    http://feedproxy.google.com/~r/FreedomainRadio/~3/jRwAFrxkeO0/Roads_Part_2.mp3

  32. Of course, this step would have to be followed by the complete abolition of excise and road taxes, which would become obsolete and inefficient when the new system is launched. The percentage utilization of individual means of transport would probably change significantly, but only because the new system would take into account the actual price of transport from point A to point B.

  33. 2 Zdeněk: There is a second problem, in the incompatibility of tariffs and timetables of individual carriers. I would see the ideal and fairest system for transport solutions in the state as follows: Every motor vehicle driver must drive a gps module that calculates distances, connect it to a PC at least once every six months and pay for the use of roads. Every passenger carrier would have to register with a ticketing system, where people would again travel with a chip card and be credited with money. Different carriers may charge different rates. It would probably be better to deal with both systems pre-paid. It may sound a bit like big brother, but both systems could be anonymized. E.g. GPS will only record points for the last 500m and will save the rest only in the format: Pay +10 CZK. Similarly, the information needed for public transport would be cut only on carrier X to pay 60 CZK.

    With this system, it would be possible to ensure that everyone honestly pays the real price of their trip. In addition, it would help a state that could announce a public tender such as: We need to build a highway Pha-České Budějovice, the expected traffic is X, you can charge Y at most. I believe that a similar system would mean the biggest boom in infrastructure development in history.

  34. Yes, and gas, petrol and wood are needed as a substitute for electricity, yet it is advantageous for the state to operate an electricity distribution network. If you would rather let a private company (or a regulated private company) operate in this network industry instead of a private company generating monopoly profit, the fare price will increase to MC = MR, instead of AC = AR for a municipal company (my proposal). Of course, a lot of people prefer to transport on above-ground infrastructure. As the price has increased and the required amount of transport by metro has decreased, the price of its substitute (bus, etc.) will also increase. Private road owners will take advantage of the situation and increase the crossing tariff.

    The benefits of public goods? If we talk about transport, ie public roads, it is a significant saving of transaction costs. I will now gather and drive to work without having to negotiate a freight or road permit with the road owners. Now the owner will close the road to the house here, because he wants to make a footpath and a private park there, and I will have to go to work on a much longer route. Or I can buy land and build my own way to collect tolls. You have public roads and sidewalks all over the world, we could split the air in a moment and planes would have to fly around the land, Mr. Gofry. I'll probably go jogging on the public road right now, and in the morning, I didn't plan anything like that. They would probably kick me out of private land, or I'd rather buy a bicycle for the TV :) (substitute;))

    There must be some spatial planning, it would soon turn out similar to Lake Balaton, which is public, but the land around it is private and the public can hardly get to the water. A few tens of kilometers you have private beaches with no entry under penalty or fenced. 🙂 Quite enough to get to the water, I'll tell ya. But there are also substitutes in the form of, for example, a holiday by the sea, which is more expensive, but be it :) Do you already understand what I want to say?

  35. @ Zdeněk

    "… While maintaining the benefits of public goods"
    What are the benefits of public goods? And don't their disadvantages outweigh the public goods?

    "How would you privatize the subway, for example? Is that a competitor to dig alongside a parallel one? ”
    The only competitor to the metro is not just another metro. People don't care about the subway, people care about getting to some place in a while. In addition to the metro, buses, trams, taxis, own cars, bicycles, scooters and feet provide this. All this is competition for the metro.

  36. I am in favor of the idea that the state should keep only that network and privatize the rest. In the energy sector, it is the electrical system (it will also not be created in parallel) - private power plants, state railways - private carriers, stops and public city roads - private carriers. This will allow competition into the sector with all the pros and at the same time preserve the benefits of public goods. How would you privatize the subway, for example? Does a competitor have to dig alongside a parallel one? One monopoly carrier would be created there anyway. But I agree with you that public transport must earn its own money and not be subsidized. Therefore, for example, I would not set the price of MR = MC for the metro, but profit = 0. Because the monopoly profit of one private metro provider will create deadweight costs and at the same time there is no room for two on the market, so this situation will persist. But such industries, where competition can not arise in the economy max up to a few units of GDP. So the problem is, as you write, the over-regulation and predicate of an industry where competition would work normally and everyone would benefit from it.

    Cities can rent stops to private carriers and they would operate public transport only where it is profitable, so it is the only effective solution. Traveling to the other end of the city by bus, which has an average occupancy of 10%, is a waste that the public sector suffers.

  37. Wanting to privatize only one mode of transport in the city is short-sighted. The only result would be an outflow of passengers to other modes of transport, which the city / state would further subsidize. You lack an insight into the entire transport ecosystem. First, come up with a strategy for privatizing the roads used for IAD, and then you can start privatizing public transport.

  38. Hi Lukáš, I don't find too many mistakes on public transport in Prague if I compare the system with most of the cities I've traveled so far. I think you should have done research on the privatization of public transport around the world before writing the article. The pitfall of privatization was mostly the desire of new owners for the greatest possible profit. New Zealand's Christchurch, for example, had a similarly dense network of tram lines as Prague (although it is incomparably smaller). However, the private carrier gradually abolished the lines and now operates only a roundabout of historic trams through the city center, which alone pays one hundred percent. The privatization of rail transport in turn has led to the almost complete elimination of passenger transport in Zealand. Maybe thanks to that, Zealand is in seventh place in the number of cars per capita after the USA. In Naples, or even in Scotland, there are so many private carriers that it is not possible to find their way around their timetables and plan transfers. If I support privatization in transport in Prague, then especially in rail. The city train system could compete sufficiently with trams, buses and the metro and could also put downward pressure on fares. Otherwise an interesting article. Keep it up. 🙂 Tomáš

  39. For that Transport Tyccon, I'm a little annoyed that I can't let the competition run on my tracks, or that I can't use the competitors' tracks.

    In the first variant, of course, I would charge fees per kilometer, in the second, I would save huge sums for investments in the construction of the line next to the competition.

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