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November 29, 2004

Your Tax Money At Work.

A blinding example of the idiocies upon which tax money is spent:

The Department for Transport is warning travellers not to place too much faith in its £50 million internet journey-planner project because it may be unreliable.

So far so bad, a pound per head of population has been wasted on something that doesn’t work very well. Well, at least it’s only a pound per head eh? Not one of the multi billion monstrosities that is the usual outcome of bureaucrats interacting with computers.
However, it really is worse than it appears at first blush, for there was and is a private sector competitor:

Bus journeys suggested by the website sometimes involved illogical routings and often took more time than equivalents proposed by the long-established independent travel planning website, Xephos.
Peter White, the founder of Xephos, said his site – backed originally by bus operators and local authorities – was now having to charge users £1.66 a month to raise income because many councils felt obliged to switch to the Government's version.His site cost under £1 million to set up, 50 times less than Transport Direct."For all the money they have spent, you would have thought they could come up with a better product," Mr White said.

We now have something extremely valuable for our pound a head (I keep on at this figure because I think it’s important to rub in the fact that each and every one of us has had to chip in one small coin to pay for this particular example of the Deputy Prime Minister’s stupidity. Lord knows how many we’ve each had to contribute to the pet projects of the rest of the sorry crowd.), a simple lesson in economics. The lesson is that free markets work better than government action as shown by:
1) The free market provided the service faster than government action.
2) The free market provided a better service than government action.
3) The free market provided the service more cheaply than government action.
We can also see as clear a case of crowding out as we ever shall. This is something that economists like to bang on about and proponents of State action always seem to miss. If the State does something then it will displace activities in the free market.....often activities that would have been better or more cheaply done in that free market. It isn’t enough to state that "Something must be done", we should always be asking "What"? and "By whom"? and most especially "Is the State the answer"?
To which, the answer is, often, "No."
There is one final iota of joy to be had from this sorry tale. The State appears to be 50 times less efficient than the free market. That very State currently swallows some  400 billion a year of our money. If this ratio held true across everything that the State did then the free market would provide the same services for  some  8.5 billion. We can now calculate the cost of politicians, their egos, hubris and petty schemes:  391.5 billion squid a year. Makes you think eh?

November 29, 2004 in Your Tax Money at Work | Permalink

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Comments

"The lesson is that free markets work better than government action as shown by..."

...wild extrapolation from a single case.

Tim, I like your 'Blog and I agree that it is often true that large public projects are a shambles, but you have lapsed into ideological flatulence here. It's like Marxism in a mirror. Large private projects are also frequently a shambles. One main difference is that you don't get to hear about them so often in the media and, sadly, I can't sack, say, whoever is responsible for Windows crashing. It's pretty hard even to exert my right to choose a better product when I purchase a computer.

If I wanted to generalize recklessly in a 'Bloggish way, I'd say that the problem isn't with the state; it's with corporatism in general. Once organisations and projects exceed a certain size it takes genius to run them well. Sadly, the people at the top often get paid huge salaries even if they're idiots too---not because of any real competition, but because that's what "top people" are supposed to be paid, according to other "top people". Public or private, they also have no incentive whatsoever to keep their teams small.

Linux is cheaper, faster, and more reliable than Windows. The publicly funded Human Genome Project beat the privately funded one on most metrics---despite the private project being free to exploit the freely released data from the former. The Web was devised by a Brit working on great, big, money-sucking European public sector big science. The Internet was a public sector military/academic creation. My 'Blogging software is better, more flexible, and more open than yours. The examples of public sector superiority in innovation, robustness, and efficiency are myriad, but I would never be foolish enough to contend that the public sector does these things better because it is an inherently Better Way of doing things.

And if you want to bang on about it in public, you should look up the correct spelling of "competitiveness":

http://timworstall.typepad.com/timworstall/2004/11/european_union_.html

Grump over. You may continue. (I promise to say nice things next time.)

Posted by: PooterGeek | Nov 30, 2004 8:04:14 PM