Posted on 02/09/2011 5:24:19 AM PST by Kaslin
You are our Ruler. An entrepreneur tells you he wants to create something he calls a "skating rink." Young and old will strap blades to their feet and speed through an oval arena, weaving patterns as moods strike them.
You'd probably say, "We need regulation -- skating stoplights, speed limits, turn signals -- and a rink director to police the skaters. You can't expect skaters to navigate the rink on their own."
And yet they do. They spontaneously create their own order.
At last month's State of the Union, President Obama said America needs more passenger trains. How does he know? For years, politicians promised that more of us will want to commute by train, but it doesn't happen. People like their cars. Some subsidized trains cost so much per commuter that it would be cheaper to buy them taxi rides.
The grand schemes of the politicians fail and fail again.
By contrast, the private sector, despite harassment from government, gives us better stuff for less money -- without central planning. It's called a spontaneous order.
Lawrence Reed, of the Foundation for Economic Education, explains it this way:
"Spontaneous order is what happens when you leave people alone -- when entrepreneurs ... see the desires of people ... and then provide for them.
"They respond to market signals, to prices. Prices tell them what's needed and how urgently and where. And it's infinitely better and more productive than relying on a handful of elites in some distant bureaucracy."
This idea is not intuitive. Good things will happen if we leave people alone? Some of us are stupid -- Obama and his advisers are smart. It's intuitive to think they should make decisions for the wider group.
"No," Reed responded. "In a market society, the bits of information that are needed to make things work -- to result in the production of things that people want -- are interspersed throughout the economy. What brings them together are forces of supply and demand, of changing prices."
Prices are information.
The personal-computer revolution is a great example of spontaneous order.
"No politician, no bureaucrat, no central planner, no academic sat behind a desk before that happened, before Silicon Valley emerged and planned it," Reed added. "It happened because of private entrepreneurs responding to market opportunities. And one of the great virtues of that is if they don't get it right, they lose their shirts. The market sends a signal to do something else. When politicians get it wrong, you and I pay the price.
"We have this engrained habit of thinking that if somebody plans it, if somebody lays down the law and writes the rules, order will follow," he continued. "And the absence of those things will somehow lead to chaos. But what you often get when you try to enforce mandates and restrictions from a distant bureaucracy is planned chaos, as the great economist Ludwig on Mises once said. We have to rely more upon what emerges spontaneously because it represents individuals' personal tastes and choices, not those of distant politicians."
Another way to understand spontaneous order is to think about the simple pencil. Leonard Read, who established the Foundation for Economic Education, wrote an essay titled, "I, Pencil," which began, "(N)o single person on the face of this earth knows how to make (a pencil)."
That sounds absurd -- but think about it. No one person can make a pencil. Vast numbers of people participate in making the materials that become a pencil: the wood, the brass, the graphite, the rubber for the eraser, the paint and so on. Then go back another step, to the people who make the saws and machinery that are used to make the materials that go into a pencil. And before that, people mine iron to make the steel that makes the machines that make the materials that go into a pencil. It's all without central direction, without these people even knowing they are all working ultimately to make pencils. Thousands of people mining, melting, cutting, assembling, packing, selling, shipping -- and yet you can buy pencils for a few pennies each.
That's spontaneous order, and it's replicated with every product we buy, no matter how complex.
The mind boggles.
Lots of urban metrosexuals don’t know how to drive. ( Maybe he needs a birth certificate to get a driver’s license? )
I notice you did not call them “men”.
It was all over FR at the time.
Ummm, no. When the traffic is light, probably; the route downtown from the north is kind of indirect in that you have to travel to the east side and then back west into downtown.
But with Austin's legendary screwed up rush hour traffic, the Metroliner would win.
I might at this point add some backstory to the Austin Cap Metro trains.
Back around 1982, the City of Austin, in its always politically-trendy wisdom, cut a deal with the Southern Pacific Railroad to purchase about 160 miles of trackage between Giddings (50 mi. east of Austin) and Llano (about 50 miles west).
The SP and its predecessors had operated in this area for around a hundred years; one of their main sources of freight was the array of quarries in the rolling limestone 'Hill Country' west of Austin, providing gravel and rock to many customers to the south and east.
SP had sold the eastern part of this division (from Giddings to Houston) to the State of Texas so that they could expand US highway 290 to four lanes. Ironically, the SP (and later freight operators contracted by the City) made good money, for a while, out of hauling gravel to the highway builders to use for preparation of the new highway right-of-way that had just been abandoned by the railroad.
Now, the City of Austin, already in 1982 in thrall to the concept of Mass Transit, secured (IIRC) a $16 million loan from the FedGov as part of the ISTEA (Interstate Surface Transportation Enhancement Act) to buy this line. The city would be obligated to pay the FedGov back this money if they did not timely implement a commuter system.
The City of Austin ended up being a little tardy. The Feds cut them over a decade of slack in the start of the commuter rail system.
Of course, politics were heavily involved. And the more leftist and race-obsessed civic politics are, the nastier and more underhanded they get.
Anyhow, the City and its Capital Metro Transportation Authority eventually finalized plans, put out bids, and constructed the line. They are using only the central 32 miles of the total rails they own.
During the entire period from 1982 to the present, federal railroad regulations have required the City to continue offering freight service over the entire line. In common with many other municipally owned rails, the City of Austin has contracted this operation out to a succession of companies over the years. Typically, a rail company of this type owns and/or operates many small disconnected properties around the country. In Austin's case, a few of the contract operators have been incompetent or worse. The present operators are the best ones so far; they seem to know what they're doing, particularly with regard to the retention of the remaining customers through decent service.
But the commuter system will, in my opinion, never be self-supporting from farebox revenues. They are unlikely ever to recover avoidable operating costs, let alone the sunk cost of capital.
The City, its planning boards, and Capital Metro have mooted quite grandiose plans for running additional rail lines around the city. In contrast to the present line, which is a former Class 1 railroad, these lines would be built lighter and would be categorized as 'light rail.'
But considering the fabulous cost of upgrading the rails that were already there, including fully signalling the 32 miles for the current commuter operation, they must realize at some level that the building of even light rail right-of-way for dozens of miles through existing neigborhoods would take mui billions of dollars, and even the lefty and/or apathetic citizenry of Austin and Travis County is likely to pooh-pooh any actual realization of these plans (especially though their own back yards!), no matter how optimistically they are presented.
Greetings Arrowhead1952:
Thanks for the Willie Green update. Willie had a bad habit of sticking both foot in his mouth defending wacky rail travel theories.
Saw Willie’s final post to JR on Oct 14, 2010. ROFLMAO!
Explains why Willie didn’t reply to my question in that thread, asking how does one determine how much fuel an empty passenger train saves.
Cheers,
OLA
As far as the history of the SP rails, I know about those from years ago. I remember seeing the rails near Giddings full of old cargo rail cars. Last time I went through there, they were all gone.
Nobody tells you you aren't allowed to buy a Ferrari - but when you walk into the showroom and see the sticker, you decide for yourself that the resources required to make a Ferrari are more than what you are willing to dedicate to it. When you walk, rather than drive, out of the Ferrari dealership you are telling the dealer not to bother to make one more Ferrari (or else lower the price by a factor of ten or so). Ferrari declines to go to the trouble of making a Ferrari car on your terms, so the extra car doesn't get built.Then you walk into a Ford dealership, see a car you are willing/able to afford, and buy it. This tells Ford to build another car to maintain the inventory.
Actually, Willie’s account was still active for a few days after that. He left sort of an opus on his about page and was promptly zotted.
“How do prices give the information?”
I would very much enjoy explaining the concepts over, say, a glass or two of our preferred beverages; however, all we have is an online forum, and the other responses have hit the points very well.
However, I highly recommend, almost insist, that you take a quite hour to read the following classic article, by Hayek, from 1945, called “The Use of Knowledge in Society.” Even the left-leaning economics academia acknowledges it as one of the top economics papers ever written. In addition, it is very readable and understandable.
http://www.aeaweb.org/aer/top20/35.4.519-530.pdf
I also highly recommend Milton Friedman’s TV series “Free to Choose”. I have the book version at home, but the videos are available to watch for free at http://www.freetochoose.tv/ [Ignore Arnold’s 5-minute introduction]
Better?
This will also insure that pencils are sold in groups of colors with strict control over all yellow colored pencils.
In addition to the other points people have made, prices are used to prioritize resource production and consumption, so that those entities which can produce resources most cheaply will supply them to those which will receive the most benefit from them; as more resources change hands, it will be necessary for less-efficient producers to supply some of them (since the most efficient producers have already produced all they can), and those who receive the resources will benefit less (since those who would benefit most have already received enough that additional resources wouldn’t benefit them as much as other people). At some point, the cost of further production will exceed the benefit from further consumption.
They'd never get the tracks laid to the rig before the well was drilled...
You bring to my attention a simple fact when you drive from point A to point B: You can stop whenever you want. You can stop to get a bite to eat. You can stop to take a photo of something to remind you of the journey. You can stop to take a nap if you’re sleepy. In many cases, you are spending money that adds to the local economy. The travel can be as rewarding as you want it. Not so on a train that choo choos from point A to point B. The only rewards are inside that box car. There is no local economy that benefits from your passage. You are at the mercy of the good manners of those around you who may wish to invade your privacy or amuse themselves at your sake. It is a very boring line from point A to point B.
Over just this issue, btw.
Thanks for the info. BTW I heard on the radio this morning something that I’d heard before and forgotten, “Every line item on the budget has a constituency.” I guess Willie was the local AMTRAK constituency. Personally I’d LOVE to see the gutless wonders in the GOP totally shut down government subsidy for AMTRAK and let it sink or swim on its own, and we all know how that would turn out.
I think Woody Allen is the archetype. The kid-porker.
Obama can't drive because, away from his lectern and a TV tuned to ESPN, he's just silly.
There was a woman celeb who just admitted, or bragged, last year that she doesn't know how to drive. Can't think right off who that was. Teri Garr, OTOH, is one of my heroines. She's a beautiful blonde (Close Encounters of the Third Kind, Oh, God!, After Hours, Dumb and Dumber, nominated for best supporting actress in Tootsie, 1983) with a lead foot who appeared in a TV series about 10 years ago about excellent road trips and driving vacations. All politically incorrect now, of course.
Never knew that about Teri Garr — she’s one of my favorites, too! Add “Star Trek,” “Young Frankenstein,” and “Mr. Mom” to your list.
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