The Expectations of Competition

Estació de França

This essay establishes the policy context for the liberalisation of public transport in Spain, with specific reference to the recent history of Barcelona’s railways. The text introduces three difficult policy areas for Spanish public transport competition – local system integration, the balance between nation and communities, and the understated role of presence. It questions both the applicability of super-regulatory structures to a state where power is not absolute, and the use of economic analysis to rationalise transport infrastructure that primarily serves a strategic function, instead suggesting a role for the state’s own form of internal competition, here called the art of public competition.

“The Expectations of Competition” is the first in a sequence of four essays titled, “The Art of Public Competition“, which together explore the competitive model underlying Spanish public transport. An anthropological analysis of the tension between this internal model and that of globalised economics, reveals the distortion of external finance on the internal workings of the art of public competition. The second essay in the sequence explores the workings of the art of public competition using the example of interurban buses around Barcelona. The third examines how the art of public competition functions when one of its most important competitors is absent, using the case of post-Independència Catalunya. The final essay ponders the strategic interplay of risk, debt and optimism, using the example of Spain’s high speed railway network.

Regulating Integration

To integrate transport is surely to promote a human antithesis. Integration implies one optimised model of transport provision akin to a perfectly engineered machine, where all the mechanisms mesh seamlessly. Integration is the thesis of a transport economics for which demand is derived, meaning transport is solely a means to an end. Its rational ideal is to eliminate transport completely, since all such transport activity is economically wasteful. Hence for economists, transport becomes a component of the economy which can be dehumanised without impact on the humans, flattened into one perfect mathematical form that supposedly liberates the wider economy to operate without the inefficiencies of its transport system.

Unfortunately for transport economists, their presumption of the dominance of rationality is too often irrational: Modern behavioural economics is awash with examples of irrational transport decision-making, from the status value of automotive brands, to the role of the daily commute in pacing life. Ergo transport actually encompasses the fluidity of humanity. That fluidity is contemporarily expressed in duality, as a perpetual rebalancing somewhere between one collective perfectly integrated transport system, and the total flexibility of unfettered individual choice. Since neither extreme position can (by our definition of fluidity) be sustained, transport is not to be definitively solved, but to be constantly evolved. And if a perfectly integrated transport system can, logically, only evolve through a process of de-integration, perhaps an ultimate objective of transport integration is misguided?

The underlying pattern goes broader: As transport demands becomes more flexible, the environment is perceived as more complex. To counteract this sense of unknowable complexity, the transport solutions demanded are more stable, where stable is inevitably less flexible. From Personal Rapid Transit to App’-centric goods distribution, technology appears to be skewing transport towards individual choice, and thereby fostering a far more intense competition for physical space than when the issue was just individuals’ cars. Cynically, integrated transport is primarily being promoted not because it can be achieved, but because its promotion simply opposes the prevailing technological tide of individual choice: Such a crude counter-balance reflects a lack of strategy for proactively managing everything from hoverboards to automated flying delivery crates. Proactive management is often at odds with a profession inclined (ironically) to attempt to fix transport systems (in infrastructure and schedules), not to perpetually juggle them. Simply “swimming against the tide” is a pragmatic policy response that may deliver a mathematical balance, but it gradually polarises policy positions toward their extremes. That ultimately makes it very difficult for the polis to find compromises acceptable to all, engendering sudden, dramatic policy changes that half the citizens completely disagree with. Good, living, politics is the ability to accommodate the wills of all the people, not the arbitrary imposition of the will of a majority. Catalunya’s Procés provides ample evidence of how poorly “democratic” structures deal with excessively binary policy positions.

European Union transport policy exemplifies this conflicted balance between the collective and the individual, in promoting transport integration through market competition: For the EU, competition is the agent that will minimise the unwanted economic inefficiencies of the transport system. Yet because active competition requires an element of choice, the transport system cannot be completely integrated. Monopolies, even mere collusion on fares or schedules between commercial enterprises, are typically interpreted as anti-competitive – a pattern exacerbated by the natural tendency of the transport industry toward economies of scale, especially geographical and temporal. Integration requires a degree of regulation, even where transport provision is otherwise highly liberalised.

For example, integrated ticketing between British bus operators (except in London, which was never deregulated) rests on a specific opt-out from European-derived competition legislation, currently regulated by the Competition and Markets Authority (a government agency operating without direct political control). Integrated ticketing is typically delivered through joint companies (often owned by local government and bus operators), that offer multi-operator ticket products at higher fares than those sold by individual operators, so as not to impede commercial competition. In practice the development of integrated ticketing schemes must balance policy aims with commercial aims – and often the administrative complexities of integrated ticketing outweigh the tangible customer demand for it. Of course that formal argument is often underpinned by the long running battles for control of the public transport system – especially in conurbations, where local government typically regards the 1980s privatisation of its local bus operations as an unwelcome imposition by United Kingdom (central) government. UK integrated public transport ticketing may be better understood as a policy battleground in the ongoing conflict for the administrative control of Britain, broadly between centralism and localism – a recurrent theme of the governance of Britain throughout the 20th century.

Regulation is justified in the public interest – for the people the government represent. This role of deus ex machina supposes government an impartial observer, somehow above the fray of the very society that government is constituted by. In practice such a regulator also needs effective regulation, else risks inflating into a form of totalitarianism, especially where that regulator operates outside of the political system. The practical solutions to this dilemma reflect the societies they evolve from. For example, Britain’s mechanised social structure affords clear lines of transactional responsibility – although as the structure becomes more complex power rises inextricably towards the centre, which struggles to process such complexity, even with the numeric quantification of everything. Europe, as exemplified in its competition policies, can operate within pre-defined toolboxes built on economic theory – which theoretically perpetuate without political influence, but are constrained by their inevitably inadequate theory of living society. In contrast, Spain’s traditional “family” (for want of a better term) social model doesn’t scale into a mechanised state, nor is her policymaking inherently predictive. As explored in this sequence of essays, modern Spain’s solution to the need to regulate the regulator is, in effect, to foster a competitive environment between public bodies. This is particularly apparent in the arena of transport. As one of the most important physical manifestation of “the state” in Spain, transport expresses power of greater importance than its utilitarian function might suggest.

Continue reading “The Expectations of Competition”

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