1/22/2008
Time to return to sanity
The conflict of interest between serving the people and profit maximisation does not need further elaboration. Public services, medical, education, essential services, transportations should serve the interest of the people more than to serve the interest of a few shareholders.
In Raymond Lim's reform of the public transport service, nothing significant will come out of it if the interest of the people to move around, for work and leisure, is not addressed. And if these interests are curtailed just to serve a few shareholders, then we are going to incapacitate the movement of our people.
When people stop moving, when vehicles stop moving, we are no better than the jams in Bangkok or Jakarta. There the traffic are stopped from moving by bad planning. Here our traffic are stopped from moving by too much planning.
What's the difference? Time to return to sanity. Time to serve the people.
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5 comments:
If you want to serve your customers long-term, you had better maximise profits.
There is no conflict between caring for the customers' interest and maximum profitability. This is contrary to the beliefs of those economically illiterate, who are usually the ones who don't understand how markets work. Most importantly, these folks FORGET that the Customer is Sovereign, and ultimately his "satisfaction" will determine if you make money or lose it.
The only rational action to consistently take for any firm that wants to be "successful" is to charge as high as what the market will bear.
Any other way of thinking will lead to eventual catastrophic failure, and down the dark path of socialism.
Related article:
Profits in a Market Economy
A few points about transport reform:
First, remove the term "public" and replace it with "private", and then really get the govt out of the market and allow fully freely competing PRIVATELY OWNED providers to fight it out in the market.
To get rid of traffic jams, start pricing the "scarce goods" i.e. the road space during peak periods. Allow the "cheaper" "free" roads alone, to stay jammed or congested, but alternatives like highways and tunnels should be priced at market levels.
Then people can choose whether they want a short journey (pay more) or a long journey (pay less).
To those who incessantly complain because their world is not a "Utopia":
There is nothing "wrong" with traffic jams. There is a saying in Bangkok, "no jams, no economy, no Bangkok". In other words, despite the opinions of outside observers, social and economic life still goes on despite the jams in places like Bangkok or Jakarta (and in this case, Singapore)
vehicles are meant to be driven. roads are meant for vehicles to travel on them.
people and goods must be allowed to travel as freely as possible.
the control and management of traffic and people flow are not meant to curb such flows and to make money from them. when profit comes into it, the end result is quite different.
> when profit comes into it, the end result is quite different. <
Exactly. You get better roads, less congestion.
The roads are a resource just like any other resource and subject to pricing because all resources are "finite" (some people use the word "scarce").
If you use electricity during peak periods, you pay more. If you buy bak kwa around Chinese NY, you have to wait in a queue and pay more.
If you want the latest doo-hickey, you pay a premium and usually do not get a discount. If you buy last year's discontinued model, you'll pay less.
Time is also priced in the market. You want it NOW, you usually end up paying more.
So why should roads be any different? If you don't have pricing, every mothafugga will just use the resource during peak periods and you end up with congestion.
This phenomenon is known as (look it up) The Tragedy of The Commons - a phenonmenon unique to "non privately owned" so-called "public" goods.
Addendum:
For those who are interested....
Keywords for search engine": Walter Block privatisation of roads highways
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