Economic Supplement 10

I notice that train travel is going up in cost. The reason given is that capital formation is needed. There is a distinction between capital repair (when things wear out) and capital formation, capital which increases the capacity of the railways to provide services.
Where there is new capital formation there will be new streams of revenue. The railways, instead of charging present customers more, should borrow the money from the banks, which, of course, should only lend where they see profitability, sharing the risk, uncertainty and profit of the outcome.
As a matter of fact, when capital needs replacement the new investment may well embody improvements, less fuel consumption for example. One needs to make a distinction then. The current price being charged for fares ought to cover capital repair. Capital improvement should be financed by ‘capitalists’, banks and any others prepared to share the ‘risk’.
Such a distinction might be described as notional. Something notional though can express an understanding; the understanding can be true; what is true expresses reality; reality grounds morality, responsibility and justice, which includes commutative justice.
The commuters who have ‘inelastic demand’ since they must get to work will find that their disposable income after paying for fares is reduced. So beyond injustice to passengers, the fare rise, in a marginal way, works against the recovery from the slump, since such recovery must envisage consumer demand being able to pay for what the economy can produce, a situation which requires not ‘a fall in inflation’ but a fall in prices across the board.
Commutative justice has to do with where a situation has changed. It is largely neglected by the modern state, but even on its utilitarian principles, is conveniently neglected. Suppose for example the tax threshold was £10,000 per annum. (It is less than that, I am ashamed to say) Suppose in a year prices go up by 10%. If my maths is correct, commutative justice would automatically raise the threshold for tax to £11,000 per annum. Not to respect such an obligation makes the State, even the utilitarian State into a robber baron, St Augustine’s phrase, I think. Commutative justice is a notion that needs activating in a thousand dormant, cobwebby and corrupt corners of our Constitution, flowing in with a power similar to the waters of Baptism.
I have been reading Robert Peston’s book ‘Who Runs Britain’. There are these mega blighters who operate more in billions than millions (note, American billions). They sometimes might bring about an improvement in the performance of a firm but sometimes not, it seems. I applaud improvements of course. But these blighters who cream off millions, according to Peston, are reducing pensions. The State too has been robbing pensions, and the Conservatives were guilty of this, preparing the way for Labour. The huge accumulations for pensions attract the eyes not just of personal profiteers but of the Robber Barons who rule us.
There is the business of rationalisation. The Profiteers like to explain how they are benefitting humanity. The Robber Barons need hardly justify themselves so long as they win the next election. Rationalisations abound. The Pope reminds us, ‘it is good to have a job’, but not any job surely. When rationalisations abound, Lonergan says, ‘what can clear the air but faith’. It is what we give that matters, not what we receive. ‘Where hatred sees only evil love reveals values. At once it commands commitment and joyfully carries it out.’ (Third Collection, 106)