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EU Commission to investigate subsidy for public transport July 19, 2007

Posted by franklittle in European Politics, Trade Unions, Transport.
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The Irish Times reports today (Sub required) that the EU Commission has begun a formal investigation, on foot of a complaint from the Coach Tourism and Transport Council of private coach operators, into State supports for Dublin Bus and Bus Éireann.

Subsidies last year amounted to E69.8 million for Dublin Bus and E26 million for Bus Éireann in the form of a Public Service Obligation (PSO) payment. To expand on the Dublin Bus figure, this covers about 27% of the company’s operating costs, one of the lowest in Europe.

In a statement published yesterday, the EU Commission highlighted three areas of concern. Firstly, whether the payments respect existing EC State aid rules. Secondly, whether capital grants used to upgrade or repair public transport infrastructure such as garages and repair depots are legitimate as they are not available to private competitors. Thirdly, a lack of clarity over how and why the Irish Government provides training subsidies.

Bus Éireann is saying that it has yet to receive a communication from the Commission and is confident it will be fond to be obeying the rules. No doubt the company will, along with the unions, be making submissions to the EU Commission’s investigation.

What this highlights again is the true nature of the EU Commission, an organisation designed to operate as a policeman on behalf of the private sector, pushing free market thinking and the liberalisation of existing markets in any way that it can. The same concepts are bedded down in the coming revised EU Constitution, yet it will be backed by the Labour party and the unions.

Despite the old saying, turkeys never have voted for Christmas. It’s bewildering that public sector workers do.

Comments»

1. WorldbyStorm - July 19, 2007

Great post. I’m fairly pro EU, but this is beyond annoying. I’m highly dubious as to the efficacy of free market solutions in transport. I think it’s notable how even in the US the free market model isn’t applied willy nilly, yet, the Commission seems to see it as almost a holy mission to liberalise existing markets, as you say, and worse again, attempt to introduce liberalisation into contexts where free markets don’t exist, and can only artificially exist. What is particularly galling is that at a point where CIE more broadly and Bus Éireann have been getting some funding this happens.

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2. Conor McCabe - July 19, 2007

I wish we could privatise the private sector – you know, cut all government subsidies, tax breaks, grants, etc, to private businesses and sectors.

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3. WorldbyStorm - July 19, 2007

I’ve often felt, Conor, that there is a sort of subsidised higher income bracket ‘welfare’ system in place not merely in the business side of it, but also if you look at tax breaks on say certain medical treatments or educational covenants and so on (although they may have been abolished now) for those who are on higher incomes which disproportionately benefit them and are simply not available for those on lower incomes.

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4. ejh - July 19, 2007

The whole inheritance system is a welfare system for the well-off (as indeed are the public schools in Britain, not sure what Irish educational arrangements are). It consciously serves to prevent people who experience problems from slipping through the net and falling out of their regular station in society.

Curiously, the people who are most in favour of welfare for the well-off are often those who are least in favour of it for everybody else.

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5. WorldbyStorm - July 19, 2007

Very true. Here since the spread of free Third Level fees there has been a transfer of funds saved by the middle class to second level schools. Unintended consequence…

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6. Frank Little - July 20, 2007

Nader actually coined the term ‘Corporate Welfare’ decades ago (
http://en.wikipedia.org/wiki/Corporate_welfare) to describe the subsidisation of American capitalism by the state. It’d be nice to claim I have long been a student of his work, but I came across the reference in Michael Moore’s ‘Downsize This’ and followed up on it.

The extreme right-wing US think-tank the Cato Institute claims that the US federal government, whatever about the individual states, spent $92 billion in direct and indirect subsidies to business and private sector corporations. Can’t find much on Ireland, but I think I’m going to try and come back to that issue when I’ve had the chance to do a bit of digging.

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7. Renegade Eye - July 20, 2007

The privatizers don’t care what amount of hardship, they cause.

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8. ejh - July 20, 2007

One reason I make the comparison between (if you like) official and unofficial welfare systems is that there’s a mainstream economic view that welfare causes dependency and weakens the will and dynamism of those who receive it. This is not quite the same as (but not unconnected to) the view of many well-off people that the proles are lazy spongers who live off everybody else.

Anyway, I think there is genuine and not just satirical value in pointing to the people who say these things and observing that they, themselves, have very often had all sorts of help themselves in getting where they are and that they, themselves, are very rarely without a safety net provided by somebody else. Yet funnily enough it doesn’t seem to have caused them to descend into dependency.

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9. WorldbyStorm - July 20, 2007

The rich truly are different.

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10. loremipsum - July 20, 2007

If you are in favour of subsidies to Dublin Bus, then aren’t you in favour of corporate welfare? Or, otherwise, what are your criteria for deciding which subsidies are corporate welfare, which ones are not, and which ones you support? Please explain the fundamental difference between corporate welfare and what the State does when it hands out huge subsidies and contracts to CIE, the construction industry, big farmers, etc. etc.

The libertarian position is a simple one: no subsidies. Don’t steal from Peter to pay Paul. Don’t give one group of people a special protected position over anyone else. Instead, have a civilised society where people are free to interact with each other as they choose.

In my (admittedly quite short-lived) days as a Left-winger, I searched as hard as I possibly could for solutions to the contradictions which abound in problems like the one described on this page. I would certainly have to consider switching back if there were principled & economic reasons for supporting some corporate subsidies (e.g. to Dublin Bus & CIE).

However, I think some of you would be pleasantly surprised by the clearness of conscience and clarity of mind which is permitted when you have rejected the mess of trying to combine freedom and equality with what socialism entails (forcing people to hand over their earnings to the politically powerful). Though, after you’ve rejected socialism for laissez-faire, you may find yourself feeling somewhat isolated for a while, there may be moments of guilt, and you’re certainly not going to tell your friends and family until absolutely necessary. In many ways, it’s probably similar to becoming an atheist.

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11. chekov - July 20, 2007

“I would certainly have to consider switching back if there were principled & economic reasons for supporting some corporate subsidies (e.g. to Dublin Bus & CIE).”

Principled reason: public transport ought to be run in order to provide as great a public service in as efficient manner as is possible to the population. Privately owned transport is run in order to provide as great a profit as possible to the proprietor.

Economic reason: transport in modern economies is a highly complex system which verges on the chaotic. Transport solutions require a high degree of integration and coordination if they are to successfully and efficiently transport the vast numbers who travel around modern cities. Using competition as your driving force in such a scenario is a bad idea. And, unsurprisingly, wherever integrated public transportation networks have been broken up, the consequences have been disastrous.

So, anyway, welcome back to the left.

Incidentally, in Europe “libertarian” is normally a synonym for “anarchist”. It’s only in the US where any significant numbers of right wingers use the term – and there it’s normally just opportunistic capitalists who don’t want to clean up after themselves, or naive and privileged kids who believe that the world operates as a meritocracy.

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12. ejh - July 20, 2007

The libertarian position is a simple one

Now there’s a surprise.

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13. WorldbyStorm - July 21, 2007

loremipsum, consider how even in the US complete privatisation of transport systems simply hasn’t happened. Now this tells me something about both ideology and economics…

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14. loremipsum - July 21, 2007

Hi Chekov.

I notice that you are a smart guy and I would be interested in knowing to what extent you have considered perspectives of the world which conform neither to a “Left” or “Right”. I know it took me a huge amount of effort to do this, both in terms of simply finding and reading the material, and then following the intellectual paths I discovered to their logical conclusions. It takes a real commitment.

But I had to do it, because it seemed obvious to me that there were unbridgeable gulfs between mainstream perspectives on politics and the economy, and the reality of experience. The Left holds out the promise of being radical and revolutionary, but under closer inspection I found serious problems (for example, the Left takes a principled stand both for and against corporate welfare).

I’m going to show you some of the questions I asked myself, focusing on how business “ought” to be run, for a reason I’ll explain at the end. Hopefully you will see how I started to have doubts about socialist/statist ideas.

You wrote:

“public transport ought to be run in order to provide as great a public service in as efficient manner as is possible to the population. Privately owned transport is run in order to provide as great a profit as possible to the proprietor.”

That’s exactly the sort of thing I told myself for years. The idea that maximising one’s profits is incompatible with providing a service which is as efficient as possible, is an economic claim, which I’ll be happy to discuss.

But before I do, I have to tackle the question of whether there is a particular way in which businesses “ought” to be run (if at all). Certainly, running a business to make as much profit as humanly possible goes against our instincts for how affairs “ought” to be conducted. Frankly, it’s distasteful to our sensibilities. But the implication that this instinct produces a moral absolute should be held up to closer scrutiny.

We need to address the question of whether it is immoral to run a business to make a profit. If so, why? Is it immoral to work hard to run a profitable business, but virtuous to choose to spend your time doing other things? At this point, aren’t we making a moral judgement about how other people decide to spend their own lives? What is the substance of this judgement, and how did we acquire the authority to do this?

Let’s suppose that running a profitable business really is immoral (for example, because it is selfish). Why then is it not also immoral for a consumer to search for the exchanges that are in their own best self-interest? If that is not immoral, what is the morally significant difference between production and consumption?

Now assume it is true that all self-interested actions, both of production and consumption, are immoral. Now only altruistic actions are permitted. But then how is any desire going to be satisfied? For example, are we allowed to communicate our desires to other people, who will then be allowed to satisfy us for altruistic reasons? Does this seem like a sensible way for society to be ordered? If you are in favour of human desires being satisfied, does this seem more likely in the society where all actions are altruistic, or in the society where some or all actions are self-interested? Are you willing to argue against the satisfaction of human desires for the sake of this moral code?

But then even if our motivation is to eradicate the immorality of self-interest, why do we believe that a powerful interventionist State will help us to achieve our ends? This is not so obvious.

For if the government is democratic, then it will require large numbers of people to vote for it to stay in power. Suppose most people are willing to vote for our virtuous policies. But if most people already agree that self-interest is immoral, then why did we need the government to enforce this idea? Do we need to coerce the minority of selfish people into being virtuous? Why? If we are doing this for the benefit of the virtuous majority (ourselves), doesn’t that make us selfish? Maybe each person in the virtuous majority is acting to help other virtuous people for purely altruistic reasons. Or, if we are doing this for the benefit of the selfish minority, how exactly is government coercion going to help them?

Alternatively, what if people are not virtuous? What if most people are selfish? What happens if we are outvoted? Isn’t the selfish, immoral majority going to control the government, claiming the exclusive right to tax and regulate the lives of everyone, including the virtuous minority? Is this desirable?

More generally, how are we going to stop selfish people from taking over parts of the government? Won’t selfish people find the prospect of abusing power incredibly attractive? How will we know when someone is being selfish and not virtuous? Or if these difficulties are insurmountable in a democracy, are we willing to propose non-democratic forms of government which will be able of promote our morality? More generally, what does history tell us about the actions of powerful interventionist governments with strong moral convictions?

These are just a few of the “Morality” questions which I ran into as a socialist. If you have abandoned the socialist morality than perhaps we can talk about the economics questions instead. It’s just that I don’t want to be like the person who spends some time trying to convince their friend that same-sex marriages should be legal, constructing intricate liberal arguments, not knowing their friend believes homosexuality is a mortal sin, so that no amount of nonmoral argumentation will convince them to change their mind.

So this is the explanation I promised you for postponing an economic discussion: there is little point in talking about how everyone’s desires can be satisfied maximally and simultaneously if the other person has moral objections to the satisfaction of some other people’s desires.

I do have principled reasons for rejecting socialism/statism, but they are related to my economic reasons in a very particular way. It works like this: Economic understanding informs us as to which systems are the most likely to result in general human satisfaction. Then, if we have universal moral principles which hold that general human satisfaction is “worth more” in some sense than the satisfaction of just some people or just some groups of people, then we will promote those systems conducive to the general welfare, with an “ought“ which is properly grounded in both a universal morality and in a sound understanding of the likely outcomes of different systems of human activity. And then the thought process is complete.

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15. WorldbyStorm - July 21, 2007

Problem is loremipsum that these neat little arguments seem to be a bit…well…redundant in the face of experience. This planet has seen hosts of different social systems, some work better than others, some work worse. Some work well during some periods worse during others. To suggest there is some absolute ‘morality’ that applies seems to me to be at worst deluded, at best self-serving. I’d tend to the approach of ‘what works’ but contextualised within a broad left approach – incidentally one which while based in socialism would be fairly suspicious of statist solutions. Others might take a different line and believe that only in a ‘free market’ context (whatever that means in reality) can returns be maximised. I profoundly doubt that general welfare is served by purely market driven solutions any more than the opposite, and I suspect that it might well be impossible for that to emerge from such solutions. But… market driven solutions have an applicability here and there. Where I’d certainly part company with you is as regards transportation of the type discussed on this thread which seems to me only amenable to market solutions if one take the most artificial means of imposing them.

But as to ‘morality’. It’s no better to argue about the inherent ‘morality’ of market driven solutions if you denigrate the ‘morality’ of socialist ones. Again it comes back to what works.

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16. ejh - July 21, 2007

And then the thought process is complete.

Phew!

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17. Hugh Murphy - July 22, 2007

The EU Commission should do something which will have some relevance, like investigating Corrupt Trade Unions – in Ireland for a start.

They honour Jim Larkin and betray his principles to the employers at every turn.

For the people answering me on Politics.ie, don’t bother. The person who runs the site – NOT – obviously a believer in FREE SPEECH, has suspended my account, for telling the TRUTH about the people in Ireland who masquerade as Trade Unionists.

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18. A plague on both your houses « The Cedar Lounge Revolution - July 22, 2007

[…] issue of EU membership is, I think, crucial. Despite franklittle’s compelling criticism of the European Union (while I don’t agree with everything he […]

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19. Hugh Murphy - July 23, 2007

There must be a word – better, stronger and more descriptive than HYPOCRISY to describe the champions of FREE SPEECH on indymedia and Politics .ie who CENSOR the very thing they champion – for their political masters but it’s too early in the morning for me to think of it.

I believe it was Camus who first said – “I may detest what you say but I will defend to the death your right to say it”. Obviously, Camus was made of Sterner Stuff than the apologists for Trade Unionism who run the above sites. SHAME ON YOU.

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20. ejh - July 23, 2007

Actually it’s usually ascribed to Voltaire, though I believe it’s apocryphal. Are all your claims this accurate?

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21. Hugh Murphy - July 23, 2007

Obviously my claims about Trade Union Corruption are very accurate as the CORRUPT Trade Unionists and their camp followers are circling the wagons.

SIPTU is a disgrace – as the dead and dying Belfast dockers know only too well.

How very interesting – that you should take me to task over the authorship of the quote, as a smokescreen to deny the TRUTH enshrined within it.

If you, and the cowardly so-called socialists on politics .ie who anonymously attack Jack O’Connor and SIPTU, would grow a pair and use their undoubted intelligence to demand Human Rights for PAST Trade Union members, AND make SIPTU honour the traditions of its founders in the ITGWU, this again could be a PROUD Trade Union and not an employers PLAY-THING.

With this done, we might – eventually have a country that the founders, who will be honoured in 2016 could be proud of.

You self-centered Hypocrite and employers servant.

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22. ejh - July 23, 2007

Obliged to you sir

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23. franklittle - July 23, 2007

Hugh, I warned you before in an email that if you’re commenting on posts on this site that you need to stay on-topic and not indulge in personal abuse against other users.

I realise that the issue of the Belfast dockers is one you are committed to pursuing, but this is not the place to do so.

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24. Hugh Murphy - July 23, 2007

I did get a little carried away – but – supercilious comments and point-scoring, when a serious issue like ex Belfast Dockers Dying from Asbestosis and my right to write about it without being censored is being discussed, would annoy anyone.

Pray tell me, exactly why is this not the place to highlight the plight of the Belfast Dockers…?

Their own union won’t help them – and neither it seems, will the so-called socialists in the 26 counties. All they want to do is condemn capitalism from cover and refuse to be unpopular by condemning SIPTU.

If ANY of my comments was taken as personal abuse – then the people who believe so have a lot of living to do. In The Real World

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25. smiffy - July 23, 2007

This isn’t the place, because this post is about the European Commission on public transport. You’ve already spammed the ‘About Us’ page with your personal grievances.

This website isn’t your personal playground. We try to avoid deleting any comments, even critical ones. However, you’ve persistently piggybacked on us to keep banging on about this particular issue, even though you’ve been asked to stop. You’ve shown absolutely zero interest in the actual content of this site, and, at this stage, are abusing our hospitality.

If you want to talk about it, fine: set up your own blog (register on http://www.wordpress.com, it’s really quite easy). This is your last warning, however. If you put up another post about SIPTU corruption, or the Belfast dockers, it will be deleted. If you do it again after that, everything you’ve posted on here will be deleted.

Don’t bother replying to this post. You’re more than welcome to share your views on any of the topics that are discussed on here. Just stop spamming.

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26. Ban Asbestos - January 13, 2009

Best way to prevent it is to install captcha antispam module

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