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Is Labour's railway plan an election winner? Watch

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  • View Poll Results: Is Labour's railway plan an election winner?
    Yes
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    (Original post by nulli tertius)
    On balance that is of course right but that doesn't mean the same is true of individual decisions. RBS had to bailed out. It was too big to fail. That doesn't mean that nationalised banks are a good thing. They aren't.
    Nationalising RBS was a political decision; clearing out this failed company would have been the market working correctly.

    You still don't have the point.

    What happened during the war was that the physical assets of the railway were depleted both by damage by enemy action and worn out by overuse. For example it was not until the 1960s that the railways regained pre-war running speeds.

    Before the war, with proper maintenance schedules, the railways didn't make money.

    If the railways had been offered in a liquidation sale, a buyer would have needed the capital to reinstate the physical asset base and to provide working capital but there was no way in which any such investment could have provided an economic return on capital.

    Yet in the 1940s railways remained vital to our economic prosperity (petrol is on severe ration), all of the coal for electric power and gas is being moved by rail, most of our food is moving by rail and a large proportion of the workforce is also moving by rail.

    What could not happen is that the prices of rail freight and passenger tickets could not go up to accommodate the need to provide a return to a new owner of the railways. A economy cannot remodel to reflect that transport is now scarce and expensive that quickly. Rather like a run on a bank, you would have had a run on the economy. Railway customers would go bust faster than the economy could recognise a new orthodoxy of higher prices (which is why inflation is always damaging to the general public even though most of the population are not capitalists)

    Any potential buyer of the railway would realise that he could not achieve an economic return and simply not purchase.
    What you are saying here is simply nonsense. If the value of the railways to freight users is greater than their cost then freight users will pay for at least the freight lines and services. Companies in administration do not cease all services; it would be quite clear that there is a customer base and time to negotiate future prices and services. Things like this simply don't happen in market economies; they are post-hoc justifications for nationalisation.

    A related factor is that railways were always a boom and bust industry. Much railway infrastructure was originally built with lost capital. The people who paid for the railways were not the predecessors of the railway company shareholders in 1945. They were the people who had invested in railway companies that had gone bust in 1845 or 1870 or 1890. In other words the physical assets of the railway cost far more to build than the capital of the railway companies. But it was the physical assets that were damaged so the damage that had to be paid for in 1945 pounds represented a much greater percentage of the financial capital of the railways. If you have an asset that costs £50K to build that you buy off a receiver for £10K and half of it is destroyed, it will cost you 21/2 your capital (25K to 10K) to repair it.
    I very much doubt that is true. Overuse (there was little direct war damage to British railways) would only accelerate ordinary maintenance costs.

    The short answer is I have no idea. However we are not discussing the military impact of different kinds of land transport and wartime light rail had no impact on UK post-WWI civil transportation.
    Apparently so - despite the fact that the war produced lots of surplus rolling stock and trained operators?

    I can't give a better source than Wikipedia at present

    http://en.wikipedia.org/wiki/Bus_tra...tween_the_wars

    but this is absolutely standard stuff. Any social history account of Britain between the wars deals with this.
    This says a lot of bus companies were founded by soldiers, not that a lot of soldiers founded bus companies or even drove buses. There's also no source for the surplus of war trucks pushing down bus prices. It's plausible, but I think more plausible that the general declining cost of vehicles was controlling.
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    (Original post by Observatory)
    Nationalising RBS was a political decision; clearing out this failed company would have been the market working correctly.
    Of course it was a political decision. The decision not to have the same result as when Credit Anhalt closed its doors in 1931.


    What you are saying here is simply nonsense. If the value of the railways to freight users is greater than their cost then freight users will pay for at least the freight lines and services. Companies in administration do not cease all services; it would be quite clear that there is a customer base and time to negotiate future prices and services. Things like this simply don't happen in market economies; they are post-hoc justifications for nationalisation.
    Administration as a concept didn't exist in the 1940s. It was introduced in the Insolvency Act 1985 (almost immediately consolidated in the Insolvency Act 1986).


    I very much doubt that is true. Overuse (there was little direct war damage to British railways) would only accelerate ordinary maintenance costs.


    Apparently so - despite the fact that the war produced lots of surplus rolling stock and trained operators?


    This says a lot of bus companies were founded by soldiers, not that a lot of soldiers founded bus companies or even drove buses. There's also no source for the surplus of war trucks pushing down bus prices. It's plausible, but I think more plausible that the general declining cost of vehicles was controlling.
    I am sorry but I am not going to argue whether the world is round. Any standard transport and social histories will confirm what I am saying. I don't have the sources to hand to prove these to your satisfaction.
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    (Original post by nulli tertius)
    Of course it was a political decision. The decision not to have the same result as when Credit Anhalt closed its doors in 1931.
    Or to avoid the result of Iceland in 2014 - lower unemployment, higher growth?

    Administration as a concept didn't exist in the 1940s. It was introduced in the Insolvency Act 1985 (almost immediately consolidated in the Insolvency Act 1986).
    Then I suggest that introducing the concept of administration would have been a more appropriate change in law than nationalising, and mismanaging, the commanding heights of the economy, if this would indeed have been a problem.

    I think nationalisation was not pursued to solve a problem but rather to satisfy contemporary ideological fads.

    I am sorry but I am not going to argue whether the world is round. Any standard transport and social histories will confirm what I am saying. I don't have the sources to hand to prove these to your satisfaction.
    I will accept that, however, it is not your recollection or reporting of other histories that I doubt, but those histories themselves. Few historians seem to have a quantitative approach or to have even studied economics, which makes them liable to assign quantitative trends to a collection vague qualitative causes, without making any attempt to distinguish important from unimportant, and to accept uncritically justifications for economic actions offered at the time even if they are subsequently contradicted by events.
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    If Labour can guarantee the complete renationalisation of all British railways, Ed Miliband will be Prime minister in 2015.
    http://leftwards.co.uk/renationalisa...uccess-labour/
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    On the point of whether nationalisation is supported for practical or emotional reasons, it seems that only a tiny minority of those currently in favour believe it will improve the service. Reduction in price with equivalent (or worse?) service has less than 50% belief. Rather, the objection is to all those corporations, and how corporation-y they are.
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    (Original post by JamesGibson)
    If Labour can guarantee the complete renationalisation of all British railways, Ed Miliband will be Prime minister in 2015.
    http://leftwards.co.uk/renationalisa...uccess-labour/
    Exactly. The policy announcement wasn't far enough.
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    (Original post by Jacob-C)
    Exactly. The policy announcement wasn't far enough.
    This is, at least, a start. Once public providers are running some lines again, the idea of banning or phasing out the remaining private contractors wouldn't be out of the question. It's a process that could eventually see the renationalisation of our railways.
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    Compared with the energy plan, probably not that significant. Even with the increased use of the railways, there are many people who never use a train, especially outside London and the South East.
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    I think its a good, safe policy which will help elections, though perhaps not an election-winner by itself.

    I'd much rather have a full renationalisation rather than just competing with private businesses, but I guess that would be a poor move in the current climate where Labour are trying to gain more support. So I hope this would be a move they would take once in power.
 
 
 
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