Should the railroad rates be raised during the Chinese New Year?

Economics Economics Questions
1

Currently there is a heated debate (even among free market people) as to whether the railroad rates should be raised during the Chinese New Year. Here are some basic facts:

  1. Chinese New Year, or the Spring Festival, is the most important day in the year for almost every Chinese. Traditionally, people must be home.

  2. There is a huge army of peasant-workers who work during the year and come home before the Festival , mainly by train.

  3. facts 1 and 2 create almost insurmountable pressure for the railway every year. Tickets are always sold out, long waiting lines, overcrowding trains, accidents, tragic stories of heartbroken home-goers, etc.

  4. Railroads are owned and operated by a Ministry of Railway, with all its corruption and incompetence.

  5. There are scalpers operating by either hiring people to buy tickets or get inside tickets through political channel and sell the tickets at a higher price.

There are two sides to the argument:

  1. Both sides favour privatisation of railroads.

  2. Many economists (not necessarily Austrian but mainly free market) have argued for many years that railroad rates be raised so at to counter the rising demand. They see people queuing as a waste of resources, and see the price rise as a selection for the most urgent demand.

  3. The other side is mixed ideologically.

2.1 The left insists price rise hurts the poor most as the rick don’t bother for trains. A more sophisticated argument being home-goers’ demands in this case are extremely inelastic.

2.2 A Rothbardian libertarian position that we should always fuck the state as hard as possible. No way we gonna send more money to the Ministry of Railway.

2.3 No property right, no true price. Maybe people prefer queuing. This is actually the most heavily Austrian camp. It combines with 2.2 to make the strongest case against a rise in rates.

I know this topic is remote for Americans, please comment if you want me to supply further facts.

2

If you privatize the railways it seems like the price might initially rise but if there are profits to be made then new players would enter the market (if there aren’t onerous regulations) and drive the prices down.

3

All parties agree that railroads should be privatised. The problem is, it’s politically impossible. That’s the precondition of my question.

4

Why is it impossible?

5

Because there is such a thing called communist commissar. And some of their interests are intertwined with the said Ministry. In any case I don’t see it privatised in 20 years unless the Party falls altogether before that.

6

If in some way they manage to “fix” the problem it will only come at the expropriation of resource and subsequent distortion of another part of the market. So either option they take, it’s no actual fix.

7

2.2 is the Rothbardian position? That’s curious;

“Further: We must reject once and for all the left-libertarian view that all government-operated resources must be cesspools. We must try, short of ultimate privatization, to operate government facilities in a manner most conducive to a business, or to neighborhood control. But that means: that the public schools must allow prayer, and we must abandon the absurd left-atheist interpretation of the First Amendment that “establishment of religion” means not allowing prayer in public schools, or a creche in a schoolyard or a public square at Christmas. We must return to common sense, and original intent, in constitutional interpretation.”- Right Wing Populism, The Irrepressible Rothbard