Four billion journeys are taken by local buses every year. That’s nearly twice as many by rail, London Underground and Glasgow Subway combined. They save parents ferrying teens around, keep the elderly connected and provide an affordable way for commuters to get to work. There are also significant visible benefits to our communities from buses – relieving our roads from congestion, reducing parking pressures and cutting air pollution.

However, our bus system is in a woeful condition and Labour’s plan for buses – and the way they hope to fund it by raising bus fares – will leave our bus system in a bigger, more expensive mess. The main way the Government is planning to fix our failing bus system is by passing the Bus Services Bill through Parliament. This will let local authorities choose to either franchise bus services – letting the local council or mayor decide routes, timetabling and standards before handing them out to private contractors – or form their own nationalised bus companies.

To grow the economy, clean up the air and cut congestion, we must improve our bus services. However, instead of pouring in taxpayers’ cash, we should be using the expertise and resources of the private sector to improve services and save public money. Only a combination of local authorities working in step with the private sector will keep the pressure off public finances, improve services and help keep fares lower.

The Government argues that the only way to increase bus journeys is by letting local authorities franchise or directly run their services. It believes that complete public-sector control can improve services and help integrate routes with other forms of public transport.

Franchising might be viable in built-up areas where people live near each other and their local stop, meaning ridership is high and margins aren’t quite so tight. It has worked well in London, which is much more densely populated than the rest of the country. But passenger numbers elsewhere are unlikely to ever reach London rates. Franchising for less populated areas is just not a financially viable option. The bus can’t compete with the convenience of a car, and therefore will not attract the same level of uptake.

The other new option for local authorities is to start their own bus company, which will require significant costs; Greater Manchester’s Bee Network cost £135 million in start-up costs alone. With the perilous state of many local authority finances, virtually none will have that sort of capital to hand. This is before funding unprofitable ‘socially necessary’ routes in rural areas.

There is a better way. The Government should add conditionality terms for operators to receive public funding. The taxpayer currently spends £260m on the Bus Service Operators Grant (BSOG) to help keep unprofitable but necessary routes afloat. The Conservatives previously used the BSOG to add incentives for operators to adopt smart card payments and in-journey audio and visual information to improve the passenger experience. 

Labour should follow their example. If they reformed the BSOG to provide relief based on how many kilometres buses travel rather than the litres of fuel they use, operators would have a greater incentive to switch their fleet to electric – improving air and noise pollution and helping to keep maintenance and running costs low. 

Local authorities should also be free to adopt flexible franchising, where private operators take the revenue risk of running services but are supported by local authorities providing a small subsidy in return for sharing the profits. We would reap the benefits of full franchising – greater coordination with other forms of public transport, as well as the power to set service standards, timetables and fares – without local transport authorities having to find the sky-high costs and burden of forming their own bus companies or franchising services.

When it comes to running ‘socially necessary’ routes – routes that local authorities have identified to stop vulnerable residents from becoming isolated – demand-responsive options could be an alternative to traditional stopping services. Instead of the expense of running full regular services where it is not commercially viable, the demand-responsive option would see passengers hail buses when and where they are needed, keeping costs low for councils and operators.

Involving the private sector should not be a source of shame. Private operators bring a wealth of knowledge, experience, expertise and financial resources to ensure our buses are better, quicker and cheaper. Ordinary families shouldn’t be left to lose out, because the Government wrongly assumes that more public sector involvement will equate to better bus services.

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The post More government won’t mean better bus services appeared first on CapX.

Democrat lawmakers have been rallying behind a simple slogan in opposition to DOGE (the “Department of Government Efficiency”): “Nobody elected Elon.” The slogan might be convincing if the irony behind the statement weren’t so apparent.

Much of the consternation surrounding DOGE has been due to Elon Musk’s involvement in downsizing federal bureaucracies such as USAID. But if this criticism (that nobody elected Elon) were applied to all bureaucrats, all the agencies Musk is targeting would be closed already.

Unlike most federal bureaucrats, Elon campaigned alongside Trump and was a known part of the package. In this sense, he’s probably closer to being “elected” than the typical agency head.

On the flip side, most DC bureaucrats are essentially immune from the democratic process. Back in 2021, I wrote an article for FEE on the existence of the deep state.

The article covered a study which, at the time, was a working paper for the National Bureau of Economic Research (NBER). It has since been published in the journal Econometrica.

The paper, titled “Ideology and Performance in Public Organizations,” makes several key observations. To quote from the previous FEE article:

“Democrats made up around 50% of bureaucrats from 1997–2019, whereas Republicans made up only 32% in 1997 and fell to 26% in 2019.” “As you look at more senior positions, bureaucratic over-representation of Democrats increases.” “[T]he authors find no clear increase in exit [of career civil servants] from bureaucracies in the Clinton-to-Bush transition, the Bush-to-Obama transition, or the Obama-to-Trump transition.” In other words, the composition of the permanent bureaucratic state doesn’t change much in response to voters. Political misalignment between bureaucrats and presidents decreases the performance of bureaucrats.

When you look at these facts together, it becomes obvious why Trump is so keen to retire these government employees. They are plurality (often majority depending on the agency) Democrats, the leftward bias increases with seniority, they are less productive under Republican presidents, and it appears like they are relatively immune to democratic votes for the opposing party.

These facts are also hard to reconcile with Democrats’ sudden urgency about unelected bureaucrats. If unelected bureaucrat Elon Musk is a threat to democracy, isn’t it a greater concern that permanent bureaucrats are not impacted by election results? That looks pretty undemocratic to me.

Undemocratic processes seem to pervade our political system—including in the Democratic Party. Remember, Kamala Harris was chosen as the Democratic presidential candidate without a primary just seven months ago.

So it seems like the problem Democrats are worried about isn’t unelected bureaucrats. They’re worried when unelected bureaucrats they don’t like displace establishment unelected bureaucrats they do like.

I think it’s fine to be worried about the influence of unelected administrators. I certainly am. I just think we should be consistent in our worries. If Democrats want to challenge undemocratic bureaucrats, they should do so by putting limitations on federal bureaucrats.

What would limits look like? A good start might be preventing government bureaucrats from taking lucrative lobbying jobs later on in their careers, or maybe imposing term limits. In any case, if unelected bureaucrats are really such a danger to democracy, then we should look for ways to limit their power comprehensively.

“Everyone wants a revolution. No one wants to do the dishes.”

This saying is often attributed to the activist Dorothy Day, and even though it’s unclear if she really said it, it would be fitting if she had. Day co-founded the Catholic Worker movement, opened her home to the forgotten and unwanted, and practiced civil disobedience in her advocacy against war and for the poor. But in these tireless efforts, she found that the high ideals of her compatriots didn’t always translate into the hard work that was needed to make a serious difference in the lives of those forgotten people who flocked to her doors. They wanted a revolution, to be sure, but few of them wanted to do the dishes.

Why Good Intentions Aren’t Enough—And What Actually Works

One of the lessons that compassionate revolutionaries should learn from this is that while the world will always benefit from the selflessness of the Dorothy Days in our midst, her model of extreme generosity simply doesn’t scale. The “revolution of the heart” which happened inside Day doesn’t take place inside most of us—and that’s the problem. To create the kind of world that compassionate revolutionaries want to bring about, where no one goes hungry or has to sleep in a cold alleyway because their neighbors act selflessly on their behalf, the vast majority of us must be changed. We must all be willing to do the dishes.

But while radical revolutionaries of the heart have been lamenting a world which treats “the least of these” as grist for the mill of capitalism, something extraordinary has been happening right under their noses—the dishes have been getting done. By the time that Karl Marx and Friedrich Engels wrote their little manifesto, the process was already well underway: extreme poverty around the world was beginning to shrink (from 84% in 1820 to 8.6% in 2018), global incomes began to rise dramatically after being mostly stagnant for millennia, slavery was disappearing, and early death from curable disease was shrinking.

What caused this shocking turnaround for the least of these? Did people finally decide to take seriously St. Basil of Caesarea’s scolding exhortation that the extra shirt they have in their closet was stolen from the poor? Did the rich sell all of their goods and give their profits to the needy? Nope. We can credit this turn of events to that dirty little word that causes most good revolutionaries to spit and cross their hearts after they utter it aloud: capitalism.

There is a significant gap between the selflessness and generosity that revolutionaries like Day thought was needed to turn this world around, and how much of those things we actually have in supply. Few are willing to give all of themselves to others—including most revolutionaries! Even so, incredible progress has been made at a rate which was previously unimaginable. The lesson here is that the best society is not necessarily the one with the highest ideals—it’s the society that can deliver the most benefits even when nobody wants to do the dishes. What kind of society can meet the needs and wants of the highest number of people without violence and without expecting everyone to be a saint? It’s a society that allows for free markets.

In their forthcoming book Mere Economics, Art Carden and Caleb S. Fuller summarize what motivates people in an economically open society to, for example, put a cheeseburger on your plate:

Did the cattle ranchers, wheat farmers, potato growers, truck drivers, meat packers, app developers, and servers wake up early or go to bed late because they were thinking about feeding you, specifically? No. They have families to feed, kids to raise, churches to support, and hobbies to pursue. They have their own interests.

The early economist Adam Smith would have agreed. He wrote in The Wealth of Nations:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

The amazing trick of capitalism is that it leverages our self-interest—our desire to feed and house ourselves (and yes, also often our families and even those whom we support through charitable donations)—and turns it into something that can benefit someone else. This means that your dead-end coffee shop job is not a pointless effort—it’s a holy calling. Through it you not only feed yourself; you also add value to the life of each person your work touches.

Thus, what might present as selfishness at the level of motive is actually reciprocity, mutuality, and interdependence in practice. The man who buys avocados which were sourced from a Mexican farmer may not have experienced Dorothy Day’s revolution of the heart, but he nevertheless does for that farmer something that mere charity or generosity could not do—he makes him productive, gives him a purpose, and allows him to contribute something to the world.

Balancing Generosity and Market-Driven Solutions

Of course, none of this high talk about the holy calling of work is to put down generosity. Christians like Dorothy Day and St. Basil are called by their faith to generosity whether they live in a rich or poor country, and many secular people feel compelled to do the same. Moreover, the realities of mental illness, disability, addiction, and just plain bad luck also create problems that markets can’t always easily address, which means we will always need people to be generous—from the investment banker who faithfully donates 10% of his paycheck to a local homeless shelter to the revolutionary who opens her apartment to people who don’t have a warm place to sleep for the night.

But free markets are also a means of helping our neighbor, just in a different way. Instead of telling other people to sacrifice, we can step back and leave our neighbors to enrich themselves through their work; or else exchange goods, services, or money with them for our mutual benefit. In other words, markets give us permission to take the weight of the world off of our shoulders and let freedom do its thing. While there will always be opportunities for us to step up and do the dishes in support of those who can’t help themselves, there’s a great deal of peace in knowing that in a free society, more often than not, the dishes will get done. And that’s something that very few revolutionaries can honestly promise.

“Liberation Day”: That is what US President Donald Trump has called Wednesday, April 2, the day he announced huge swaths of taxes on imports worldwide. Despite the label, it was far from a day of liberation. By making imports to the US more expensive, the government is actively increasing the cost of living for American consumers.

The Trump administration has fallen for one of the most common misconceptions about trade—that it only benefits a country when it is the exporter. This could not be further from the truth. One of the greatest benefits of free trade lies with the importing country, where consumers gain access to a huge range of goods, crucially, at lower prices.

Whether it’s clothes, food, medical supplies, or mobile phones, access to the global market reduces the cost of living and increases consumer choice, often alleviating poverty in the process.

It comes down to a very simple principle. No one person could produce everything he or she consumes. No family or household could do so either. No city, town, or province could produce absolutely everything they consume. Equally, no country can produce everything it consumes, nor should it. Attempts to achieve autarky are acts of economic self-harm. Freedom to exchange across borders is win-win: it allows consumers to access a plethora of goods and services, improving welfare overall.

The theory behind these economic benefits is most clearly illustrated by the economists Adam Smith, David Ricardo, and John Stuart Mill.

Adam Smith, in his 1776 Wealth of Nations, emphasized the benefits of specialization through the division of labor. Trade improves welfare by allowing people to concentrate on whatever they can do best, meaning they become even better at it, and productivity increases. He used the example of the pin factory, where each worker is able to specialize in one particular stage of the manufacturing of pins.

David Ricardo took Adam Smith’s ideas even further. He showed that it is not even necessary for one particular country to have an absolute advantage to gain from free trade. Each party simply needs to focus on what they do best in comparison to the alternatives available. They have a comparative advantage.

John Stuart Mill developed these ideas, and argued that an increased openness to trade boosts productivity overall. For example, by allowing better equipment to be imported, allowing knowledge to be shared, and allowing for new competitive pressures.

Trade barriers, in the form of tariffs, quotas, and restrictions, impose artificial costs on goods and services moving across borders. In his first term, Trump’s tariffs on Chinese imports cost Americans over $800 per household on average. Tariffs create a lose-lose situation, in which consumers suffer by being forced to pay higher prices.

Tariffs also reduce output. On the whole, aggregated data show that tariffs have significant adverse effects on GDP.

Output growth (annual) after tariff hike (percent) | Image Credit: The Society for Policy Modeling

According to a 2020 study that looked at five decades of data from 151 countries, tariffs have a detrimental impact on economic growth:

The findings suggest that tariffs have a detrimental effect on output, with the negative effect larger for higher tariff increases and persisting over time, at least over the next four years [2021–2025] or so. The residualized growth tends to be in negative territory in all four years following an increase in protectionism. For example, after the second year, the residualized output growth is −0.4/−0.8 for one/three standard deviation(s) increases in tariffs, respectively. After four years, tariff increases are associated with an annual negative output growth of 1.5 percent when tariff increase is above three standard deviations.

All evidence points to the fact that trade barriers are bad for the economy, and bad for consumers. The long-term consequences of the US tariffs implemented this week are yet to be seen, but one thing is certain: Governments that introduce tariffs in retaliation will only hurt themselves.