Chapter 9: The Reality of Nirvana
While special interests do often dominate over the general interests and while seeming near-Pareto improvements are often resisted, these failures do not undo the great achievements of the public sector, from mass education to a cleaner environment. These features should focus our attention on re-examining both how and what the government should do. Making government processes more open, transparent, and democratic, with more participation and more efforts at consensus formation is likely to result not only in a process that is fairer but one with outcomes that are more likely to be accord with the general interests.’ Joseph Stiglitz According to the neo-classical paradigm, the economic problem is one of allocating scarce means among alternative ends. Economic transport problems merely form a sub-set of the economic problem. To resolve such problems as are peculiar, if not singular, to transport, scarcity emerging from transport activity is examined and choices are recommended.2 Problems in transport activity invariably result from congestion externalities associated with peak usage of a unit of conveyance on a medium in which, or upon which, to move. The prescriptions are invariably Pigouvian, and their promoters usually stress that they are welfare-enhancing (Paretian). They are Pigouvian in that tax, subsidy and regulatory instruments are recommended as the means of equating output, costs and prices with the ‘engineering’ economists’ ideal or optimum order. And they are Paretian (or near-Paretian) in that these changes will, it is thought, make some individuals better off without making others worse off. Although the neo-classical paradigm...
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