Consumption (Economics); Prices; Supply and demand
But this is not to deprive these laws of practical importance. They
represent essential criteria of sound policy in the sphere of social
reorganization no less than in ordinary business. In our days a
curious obsession has led many people to disparage these criteria, as
though they were the sordid prejudices of a stupid tradesman. Because
it has been found a matter of obvious practical convenience to
maintain the roads out of taxation or of rates, and to dispense with
charges for their use, it is suggested that the same principle should
be applied to the railways. Or, more commonly, because it has been
found convenient to make the same charge for the carrying of letters
between Land's End and John o' Groats as between Hampstead and
Highgate, it is suggested that _this_ principle should be applied to
railway rates and fares. It may be well, therefore, to point out that
the justification of uniform postal charges rests upon the facts: (1)
that the costs of collection, sorting, etc., are so large a part of
the costs of carrying a letter, that the real cost between John o'
Groats and Land's End does not differ from that between Hampstead and
Highgate by as much as might at first sight appear, (2) that the
charges in any case are very small; so that (3) the avoidance of the
small degree of taxes and bounties which the present system implies is
not worth the book-keeping expenses which differential charges would
involve. It should be obvious that these considerations apply to the
railways with a greatly diminished force. They might possibly justify
what is known as the "zone" system of charges, i.e. uniform rates
within certain narrow areas. But the notion of uniform rates
throughout Great Britain conjures up a vision of trains taking coal
from South Wales to Scotland, and others taking coal from Scotland to
South Wales, in accordance with the slightest preferences of the
consumers, and without regard to the extra real cost involved, on a
scale to which the "wastes of competition" afford no parallel. It
would in fact achieve the essential folly of "sending coals to
Newcastle." These considerations, however, are not what interest the
advocates of the postal principle. They seem to recommend the
obliteration or the confusion of the relations between price and cost
as a superior ideal. It is important to be clear what exactly this
ideal involves.
Public-domain text, read in full here on John Shaqi.
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