Monday, 5 May 2008

Paying for a needless new train set -- through the nose

Ever wondered why the government was the only bidder in the latest rail sale? 

Or wondered why all the people praising the Clark Government's decision to pay Toll Holdings an exorbitant sum to buy back a failing rail 'network' didn't use their own money to  buy their own shares in the network when they were available?

Answer to this last question: rail supporters are dumb, but not that dumb.  Answer to the first question: because, as everybody knows,  this 'network' is not a money-maker it's a black hole down which money gets poured, and as such, perfectly suited to government ownership because the government can simply point the gun at taxpayers to get them to pick up the tab for a train set that too few people want to use.  A tab that's cost taxpayers the princely sum of almost $1.5 billion to buy (you can read Liberty Scott for the breakdown of this huge sum), with hundreds of millions of dollars to come on the likes of new and upgraded rolling stock, and ongoing costs (read subsidies) of tens of million dollars a year.

This is paid for with money taken from our pockets by force. This is money that taxpayers could have used productively. This is money we won't see again. 

This is why when you're berating the 'wastefulness of consumerism' -- and I know there are readers who do -- you might like to know that the biggest consumer and by far the most wasteful is the government.

As I blogged a couple of weeks ago, the government is not a producer, it's a consumer. This is not an investment: it's a waste of bloody resources.  In fact, that's the precise nature of every government so-called investment.  Whereas productive investment is reproductive -- producing the wherewithal by which to  purchase its replacement -- goods used by consumers (and governments) are consumer goods, which are destructively employed. Unlike producer goods, they disappear with use.

You see, when a businessman invests in goods or assets, he expects to make sales from these assets sufficient to replace them, and more. He expects to recoup his expenditure, with a bit left over besides. In other words, sales made on the basis of these assets makes possible their own replacement when they are physically consumed. It is reproductively employed.

Not so with government, "because governments are not producers: they are consumers. "

They are not self-sustaining: they are parasitical.   In other words: government does not invest, it consumes.  Hence only private businesses can be described as self-sustaining, since only the activity of private businesses is so designed as to recoup its investment in assets, and therefore to preserve its 'seed corn.' 

Put bluntly, all that a government produces requires consuming the production of others; all the assets in which it 'invests' are at best only consumptive production that is dependent on mooching off real producers.  Without this mooching, every government asset is on the road to disappearing without a trace.

used by consumers to consume are consumer goods, which are destructively employed. Unlike producer goods, they disappear with use.

This mooching is called "socialising the losses."  It's also called "a waste of bloody money" -- and, if you care about such things, a "complete waste of resources."  In other words, it's neither sustainable, nor an investment.

If you think this assessment is wrong, that this is an excellent investment that the country desperately needs -- the best use of 'scarce resources' -- then go right ahead and challenge Liberty Scott's figures here and here and here and here and here.

NB: And if you disagree with the purchase and think a John Key National Government is going to overturn it?  Then someone needs to tell you you're dreaming: despite the waste and despite earlier pledges that they would, they won't.

1 comment:

  1. Yes, it's fucking ridiculous innit, we're in the digital age now well past the industrial. Admittedly train rides can be splendid though yeah why should taxpayers foot the bill (again) for this redundant transport method.
    If tax loot had to be spent unfairly, I'd rather it go on better broadband. But no it will probably go into reviving the horse-drawn-cart & basket weaving.


1. Commenters are welcome and invited.
2. All comments are moderated. Off-topic grandstanding, spam, and gibberish will be ignored. Tu quoque will be moderated.
3. Read the post before you comment. Challenge facts, but don't simply ignore them.
4. Use a name. If it's important enough to say, it's important enough to put a name to.
5. Above all: Act with honour. Say what you mean, and mean what you say.