Originally Posted by whatnext
One would think that any tax is the antithesis of Adam Smith's invisible hand. By that criteria, shouldn't transit users be paying the full cost of their trip?
Transit users can pay the full cost of their trip when cars pay the full cost of their trips, bikes pay for their infrastructure, pedestrians pay a toll for sidewalks they walk on, people pay to rent books from libraries, students pay tuition for elementary and highschool, BC Hydro charges you for dams they build, we send bills out for police response, and people pay for their own medical procedures.
Subsidies are a fact of life in things run by the government, they make our society actually work. If people actually wanted to pay for everything they use, then everything would be freemarket. We wouldn't have Translink (or BC Hydro), we would still have the BC Electric Railway.
If you get passed the first few pages of Wealth of Nations, Adam Smith is pretty much a bleeding heart liberal. While he believes in the free market guiding production and wealth, he was also very critical of a total laissez-faire system. He warned that such a system would become a conspiracy by producers to gouge the consumers, to the point where they would interfere in politics and bribe legislators to pass laws that favor them and harm society (and hey, look what happened in the USA). In fact it is pretty much Smith's theories on Division of Labour and the lack thereof in Agriculture that lead to farming subsidies. Smith even writes that new industries should be supported with subsidies while they grow, but that those industries would not want to give up subsidies when they no longer need them (oil industry anyone?).
In the Wealth of Nations, Book V, Adam Smith wrote:
The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expence to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain. The performance of this duty requires, too, very different degrees of expence in the different periods of society.
That sounds pretty much like what Translink does to me. He also wrote about who should pay for it...
"The rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion" - Adam Smith.