From: borden@head-cfa.harvard.edu (Dave Borden)
Newsgroups: ne.general
Subject: Re: Drinking and the MBTA was Re: Sunday Liquor Sales
Date: 22 Dec 92 16:07:12 GMT
Reply-To: borden@m5.harvard.edu
Organization: Smithsonian Astrophysical Observatory, Cambridge, MA,  USA

In article <PSHUANG.92Dec21202139@ninja.mit.edu> pshuang@athena.mit.edu (Ping-Shun Huang) writes:
>In article <1992Dec21.155847.7913@m5.harvard.edu> borden@head-cfa.harvard.edu (Dave Borden) writes:

> > I would be pretty upset if government restricted the private shipping
> > companies in such a way that good quality shipping became unavailable
> > or more expensive than it is now.
>
>I agree that the quality and speed of the US Postal Service sometimes
>leaves a bit to be desired (fancy, litotes from a MIT student... :).
>However, if private industry continue to successfully assume the most
>profitable parts of the shipping business, such that USPS is forced to
>charge more and more and eventually there is a revolt, and Congress
>revoke their charter and lets the private shippers battle it out in a
>laissez faire marketplace... you wouldn't be able to mail things to many
>places.  Remember, the Postal Service will deliver anywhere, but many of
>the shipping companies will not. Likewise with bus service.

That's really a political issue, whether Congress will support the US
postal service.  Ideally, if the USPS gets less business, it will also
spend less money in providing the reduced level that it's called upon
to provide.  The government can still subsidize the less profitable
areas of USPS' services, and there's no net loss to society as a whole;
it just means less money is being funnelled through the government (which
is good).  The recent layoff of about twenty thousand postal workers has
shown that even in American government expenses are trimmed sometimes.
(Mind you, I'm not necessarily supporting that decision - I don't know
the details of it, and I prefer slow phase-outs to harsh layoffs anyway.)

>Another important issue is what kind of costs are there to put up basic
>infrastructure for the industry -- this differs greatly between mail
>delivery and electricity/water/gas delivery, I suspect public
>transportation falls somewhere in between. USPS doesn't have to share
>facilities with FedEx, but if two companies were allowed to compete in
>the Northeast to provide electrical power, it seems ridiculous to have
>to have two sets of power lines throughout the several states here, and
>clearly if one company focused on just supplying power to urban areas,
>they would have to invest much less in physical infrastructure.

Does anyone know how the different long-distance phone lines work?  It's
a similar level of commitment to power lines, yet we have several major
long-distance carriers.  The resulting competition has given us all lower
rates.  (Of course, I just wind up making more phone calls and my phone
bill is even larger...)

>Anyway, I think you are quite right in that a private company may indeed
>be able to provide some subset of the MBTA's services at much lower
>cost. However, the start-up capitalization would certainly be
>non-trivial.

Let them try, if they want to.  The MBTA already has the infrastructure it
needs, so there's no risk to that aspect of the MBTA's finances.

>       I mentioned this casually in my earlier posting, but what
>*IS* the MBTA charter, and *DOES* it expressly forbid any private
>service which could be construed as competition? If it does not, then I
>think that, in accordance with your admiration of the private sector in
>China's economy, that clearly free-enterprise has spoken and disagreed
>with you. :)

Exactly - private enterprise won't do it if it's not profitable.  And what
it doesn't do, government can still provide, if it's deemed necessary or
desirable.  I'm not attached to the idea of riding private bus lines - I
just want it to be allowed; then we can all make our own choices.  If no
one wants to start one, then that's the choice made by free people, and it's
fine with me.

>It takes a full business plan and not just speculation on
>the Usenet to create economic reality, after all....

   - Dave Borden
     borden@m5.harvard.edu
Newsgroups: ne.general