I
enjoy watching movies. In the movies, there are the good guys and
then there are the bad guys. The bad guy, as per his character,
would go about doing something bad – robbing a bank or harassing villagers. That’s when the good guy appears. Upright and moral,
he fights the bad guy, saves the day, and gets the girl. When I walk
out of the movie theater, I have a smile on my face and at least for
a while, the world is all right.
Unfortunately,
the real world isn’t so black and white. And that is especially
the case when money, special interest groups, and government are
involved. They all like to think that they are the good guys but,
unfortunately, that couldn’t be further from the truth.
If
the Korean government gets its way, the Ministry of Land,
Infrastructure, and Transportation will submit the Taxi Improvement
Bill to the National Assembly for approval. If passed, the bill
would reduce the number of taxis in Korea by up to 50,000
vehicles over the next five years.
The reason that the government gave for this proposed reduction in
the number of taxis was “oversupply.”
NO! Stay with me! Don't fall asleep just yet. Economics graphs aren't that boring. And this one isn't even that hard to understand. It's really straightforward. All right, I swear this is the only graph I'll use! Oh come on! Really? You're going to fall asleep and drool on your keyboard? Oh fine. Just remember to wipe down your keyboard later. Source: http://www.amybsells.com/wp-content/uploads/2008/07/supplydemand.gif |
The
government came to the conclusion that there was an “oversupply”
of taxis when the Ministry discovered
that “the number of passengers has decreased by 22 percent over the
last 16 years, from 4.9 billion in 1995 to 3.8 billion in 2010, but
the number of licensed taxis has increased by 24 percent, from
205,835 to 254,955 in the same time period.”
(I
can’t help but wonder if the JoongAng Daily, from where those
numbers were cited, actually meant ‘million’ or ‘billion.’)
The
government has its reasons for wanting to eliminate this surplus of
taxis. For one thing, the Korean government has been aiming to pass
“green growth” policies in accordance with its “Low
Carbon, Green Growth” agenda since 2008. A reduction in the
number of fossil fuel-burning and greenhouse gas-emitting automobiles
would reflect that agenda.
Furthermore,
considering the fact that Korean taxi drivers have been lobbying and
protesting since late last year to be classed as public
transportation workers, which would make them liable to receive
government subsidies and benefits, the government must have felt
compelled to reduce the number of taxis. That is because the only
way for the government to grant all those taxi drivers subsidies and
benefits, if the government chooses to do so, is for it to either cut spending elsewhere or to hike taxes;
neither of which would be popular.
Source: http://static.someecards.com/someecards/usercards/MjAxMy04NzNhOGRlY2QxOWEyNWYz.png |
However,
the government was the very reason for the “oversupply” of taxis
in the first place. The government’s guilt can be summed up in one
word – licensing.
In
order to become a legal taxi operator in Korea, be they corporate
taxis or individually-owned private taxis, taxi operators have to
obtain a license from their local governments. Seeing this as an
opportunity to buy votes from their constituents, local
government officials issued those licenses indiscriminately.
Due
to the fact that Korea has an
inadequate
pension system,
senior citizens, who cannot afford to stay retired and have
difficulty finding employment in the corporate world due to ageism,
have been seeking non-mainstream employment. As a result,
more
and more middle-aged men and senior citizens have
opted to turn their cars into taxis. It is no wonder that there was
a far
greater increase in the number of privately-owned taxis rather
than corporate-owned taxis.
Source: http://sociology-age.wikispaces.com/file/view/ageism3.png/190910702/199x308/ageism3.png |
With
amoral politicians willingly selling licenses to whoever seeks to
become a taxi operator (knowing all the while that they are flooding
the market with an excessive number of taxi drivers, which would
eventually drive down taxi fares that would reduce taxi operators’
standard of living in the long run) and middle-aged and older
citizens purchasing these licenses to earn their income, it was only
a matter of time before the taxi industry imploded.
To
add serious insult to what is already a grievous injury, the
government is promising to compensate taxi drivers who willingly
surrender their licenses up to US$11,400
(because
the government, in its infinite wisdom, prohibited taxi drivers from
selling their licences to other people through the passage of the
Passenger Transport Service law) despite the fact that taxi licenses
are traded at up to 70 million won (US$62,000)
each.
Former
US President Ronald Reagan once said, “The nine most terrifying
words in the English language are, ‘I’m from the government and
I’m here to help.’” I wonder if there is a Korean equivalent
of this.
Source: http://richardofdanbury.files.wordpress.com/2011/12/governhelp.jpg |
As
I said earlier, however, there are no good guys in this story. As
mentioned earlier, Korean
taxi drivers have been lobbying and protesting to be classed as
public transportation workers since late last year, which would make
them liable to receive government subsidies and benefits.
Although
it is true that taxis are ‘public transportation’ as much as
buses and trains are, it ought to take a serious amount of fantastic
imagination to believe that taxi drivers are public sector workers,
aka civil servants. That such a notion was even deliberated in the
National Assembly and had to be vetoed by the former Lee Myung-bak
administration (only to have taxi drivers seek to have the new
government give in to their old demands) just goes to show the sheer
depth of intellectual bankruptcy of Korean politics.
That
taxi operators as a whole are operating in a saturated market, thus
driving down their income, is an undeniable fact. That this was the
result of government interference in the industry for the sake of
making political gains is also an undeniable fact. However, what is
also another undeniable fact is that the only lasting solution to the
problem would be to allow the free market to readjust the
supply-demand equilibrium.
Yes,
that means that those taxi operators who are least successful in
their line of business will have to suffer losses and seek gainful
employment elsewhere. Demanding government intervention to a
government problem, on the other hand, is no lasting solution.
When
taxi operators demand that they be counted as public transportation
workers, what they are in fact demanding is that taxpayers subsidize
their incomes. In other words, they are demanding that Korean
citizens help to pay for services that they do not want (as
evidenced by the 22 percent decrease in number of passengers) so
that taxi operators can continue to operate at a loss by offering
cheap fares. They are demanding special privileges at the expense of
taxpayers.
I
cannot help but be reminded of what Frédéric
Bastiat, the nineteenth century French economist, said about
government – “The State
is
the great fiction
through
which everybody endeavors to live at the expense of everybody else.”
So
long as the government insists on interfering in the free market, and
so long as individuals seek government help for special privileges,
problems of this kind in the taxi industry will not disappear and in
the end, all we will end up with is financial losses, frustration,
and disappointment.
Source: http://twentyfourshadesofpink.com/wp-content/uploads/2013/04/disappointment-expectation-reality.jpg |
No comments:
Post a Comment