08 April 2005
Don’t mourn Railtrack

She who must be obeyed aka Natalie Solent has been badgering me for a couple of days to say something about the snuffing out of Railtrack (the former rail infrastructure company) seeing as the whole issue has once again re-emerged - this time courtesy of the ASI Blog.

Natalie, your wish is my command.

But I will say this: I am not enjoying it.  When writing about Railtrack I feel rather like Lord Palmerston on the Schleswig-Holstein issue who said something like:  “There are only three people in Europe who understand it.  Of those, one is dead, one has gone mad and the other has forgotten it.” 

To be blunt the whole history of rail “privatisation” is so fiendishly complicated and compromised that to discuss the death of Railtrack in isolation is close to pointless.

To my mind, the question that really matters is: is Railtrack an institution that free marketeers should seek to defend?  Was it our baby?  Should we take responsibility?  My answer is no.

Let me explain.  I am a libertarian.  I believe in freedom.  I want to see as little coercion in this world as possible.  I want that principle applied to individuals and their property and to businesses and their property.

To that extent I believe that a business should be able to decide who it sells to, how much it sells and at what price.  I believe the same freedoms should apply when it comes to buying from suppliers I believe it should be able acquire businesses in the same industry and (should the fancy take it) completely different industries.

But Railtrack couldn’t do any of these things.  It was the state via the Office of Passenger Rail Franchising (and later the Strategic Rail Authority) who decided which train operators would use Railtrack’s infrastructure.  It was the state via the Office of the Rail Regulator who decided how much it would sell and at what price.  It was the state, via the 1993 Railway Act that prevented Railtrack from buying up the train operating companies.  It was the state (if memory serves) which foisted on Railtrack its maintenance contractors and the state again (again if memory serves) that signed it up to a commitment to rebuilding the West Coast Mainline - a project whose costs shot up from £2bn originally to nearer £10bn in the end. 

Now, contrast that with the private Japanese rail company JR East.  To the best of my knowledge JR East could contract out the running of its trains but doesn’t.  It could contract out the maintenance of its tracks but doesn’t.  It is under no contractual obligation to build or renew railways.  Result?  Profit and punctuality, comfort and reliability.

The only real problem is with overcrowding which is the direct consequence of state-enforced fare control.

Free marketeers have to be careful not to fall into the trap of demanding perfection from market institutions.  All enterprises are to some extent or other buggered up by the state.  Even JR East is subject to far more regulation than the average newsagent.  But Railtrack had so little freedom that (in my book) it wasn’t part of the market at all.

PermalinkFeedback (1)Best ofRail

Feedback


 
  1. One problem that dogged Railtrack as a consequence of its structure was corporate arrogance. This made relationships with other agencies at a practical level fraught and sometimes openly hostile. Had it been a proper private company with proper paying customers, those relationships might have been somewhat different. My experience with Network Rail is that matters are getting worse in this area rather than better.

    Posted by Mark Ellott on 21 April 2005 at 10:02pm

Commenting is not available in this channel entry.