Privilege and Merit

The news that Virgin Trains is to stop selling the Daily Mail is a pretty obvious distraction from season ticket price rises and the scandal of the East Coast franchise, however it does incidentally highlight the class association of the railways in popular discourse. It is important to note that while Virgin Trains offered the Daily Mail for sale to standard class passengers, it provided complimentary copies to first class passengers. The howls from Northcliffe House about "censorship" do not reflect the loss of the paltry revenue stream arising from the former, but the ending of the tacit endorsement entailed by the latter. In other words, this is about the loss of privilege rather than the denial of a human right and one that challenges the newspaper's claim to pre-eminence among the UK's middle-class readership. In claiming that its staff objected to the Daily Mail's content, Virgin Trains has endorsed the liberal activism of Stop Funding Hate (changing the world one informed purchase at a time), while stopping short of suggesting that its employees might have a say over its own offerings, such as its rip-off "free" Wi-Fi. In so doing, its implies that the Daily Mail may be less representative of "decent" opinion in Britain, which is an affront to the paper's self-image.

One point made with dull regularity when the annual price rises come round is that railways are a middle-class subsidy. This is true but irrelevant. So are roads and universities. Pretty much any public good tends to be exploited more effectively by the middle class, from the NHS to national parks, but that's not a sufficient reason to argue against public investment. The question should be whether the subsidy produces outcomes that benefit all. Railways bring wider gains for the economy and society than those that accrue to actual travellers. They allow for city agglomerations that enable larger and more specialised industries, which produces more jobs and higher average pay. The increased demand for rail travel over recent decades reflects the increasing proportion of service and professional jobs within the economy plus the related rise in property values in city centres. The result is more and more people needing to travel in from the suburbs or satellite towns. This is exacerbated in cities like London by the Green Belt, which obliges commuters to live further out, and by premium services like HS2 that seek to extend the outer limit of the commuter zone. Compared to the subsidy of the Green Belt, public spending on suburban rail travel is relatively modest.

One reason for emphasising the middle-class nature of rail travel is to suggest that the cost of nationalisation would disproportionately fall on the working class (and emblematic white-van drivers in particular) in the form of higher taxes, though as ever this avoids the broader question of incidence and the shift from wealth and income to consumption taxes. Public ownership of the railways is not a panacea, though it still has significant advantages over the use of private operators. What ultimately matters, as we saw in the 1970s and 80s, is the level of investment. The attraction of rail for both operators and financiers is the same: a natural monopoly with a guaranteed income stream. But a monopoly almost always under-invests, hence rail privatisation leads to a de facto state railway parasitised by rent-extractors focused on branding and public relations (hello, Richard Branson). The franchise model is particularly unsuited to railways because few operators can realistically bid, so there isn't a competitive market, and the strategic importance of rail transport means the state will always be on the hook, which allows private operators to bale out when their profits are threatened, as we have repeatedly seen in the UK.

The argument for introducing market discipline - that competition between suppliers will lead consumers to reveal their preferences - simply does not apply to railways. By dropping the Dail Mail, Virgin Trains is cannily giving the impression of a working market in which low sales have revealed its customers distaste for the paper: it has been judged on its merits. The same sort of thinking appears to lie behind the creation of the Office for Students, which has been in the news lately. The introduction of variable tuition fees has not led to the appearance of a dynamic price signal, largely because guaranteed student loans and earnings-related repayment mean that buyers aren't actually price-conscious (and accelerated two-year degree courses won't change that). Likewise, competition has not led to market exit by poor suppliers because supply, at the level of the individual college and within the limitations created by an annual buying round, is not elastic. University access remains a game of musical chairs in which some of the chairs are in a hard-to-reach annex. Like many other regulators, the job of the OfS will be to simulate competition in order to justify rent-extraction and to institutionally favour privileged suppliers such as Oxford and Cambridge.

The furore over Toby Young has been hitched to a variety of current phenomena, from Harvey Weinstein to campus free-speech, but the central argument concerns merit. To his liberal detractors, Young lacked both specific qualifications for the job and a reputation for probity and public service sufficient to be seen as one of "the great and good". This criticism not only elided the antagonistic purpose of the OfS but ignored the lesson of his father, Michael Young's The Rise of the Meritocracy: that all elites are self-perpetuating and merit is consequently less objective than we imagine. The younger Young's defenders (wisely) did not try to big-up his unimpressive work with free schools but instead lauded his free-thinking and "caustic wit". His supposed merit was his iconoclasm, which shows how merit can easily be interpreted to suit any agenda. Young's role as the little boy confronted by a naked emperor was intended to help improve the higher education sector by forcing it to "think outside the box", but that necessarily entailed criticising the academic and public service elite who have defined the boundaries of that box up till now.

Coincidentally, Young's appointment came shortly after the resignation as a government advisor of Andrew Adonis, the meritocrat's meritocrat, which perhaps created a contrast that was a little too stark for (liberal) public taste. Indeed, you have to wonder why the suddenly-available Adonis wasn't considered as a last-minute candidate for the OfS board role, even if anything other than chair (a role he allegedly lobbied for) might be beneath his dignity. Not only is he impeccably neoliberal and well-versed in the sector but he went out of his way to criticise "fat cat" vice-chancellors last year. I suspect the answer is that Adonis might take the brief to introduce competition, as opposed to merely simulate it, too seriously. His claims that university expansion was a mistake and that the sector operates as a price cartel were perhaps a little too iconoclastic (not to mention questionable) at a time when the government was more interested in beasting "snowflake" students as part of a misbegotten culture war. Both Young and Adonis have been left without plum jobs, but I doubt they will lose the privilege of having their fervid opinions relayed by the UK press, from the Guardian to the Daily Mail.