I recently met a friend at the RAC Club in Pall Mall. Leafing through their brochures, I noticed there was an entrance fee of £2,900 and an annual renewal fee of £1,265. Gosh, I thought, that’s expensive.
Except it is and it isn’t. It is expensive when you compare it with other clubs. On the other hand, if you compare it to the cost of owning a second property, it’s a bargain.
The council tax on a London weekend flat will be far more than £1,265 a year. And, however nice your flat, it is unlikely to have five full-sized -billiard tables, several squash courts, a swimming pool, a Turkish bath, three dining rooms, a library and a staff of twenty. If you stay overnight at the RAC club, you pay perhaps 25 per cent of the cost of an equivalent hotel. And, unlike owning a second property, nobody from the RAC will phone you up at 2 a.m. to tell you that the immersion tank is leaking and you have to come over right away and fix it.
Left-wing people would typically hate the RAC. But it, is, when you think about it, a wonderfully successful experiment in social housing. It is a posh co-operative society.
I tell this story to make several points. One is to illustrate the extraordinary power of perspective in deciding what’s expensive and what’s cheap (‘framing’ is the phrase behavioural economists use). So a £2 take-away coffee from a London coffee shop may seem reasonable, whereas to buy a £50 bag of Jamaican Blue Mountain coffee (equivalent, perhaps, to 75p a cup) seems like egregious extravagance.
The second point is that we should perhaps make more of a distinction between pro-social and anti-social consumption. If I join the RAC, my dues not only benefit me but also improve the environment of the club for other people as well. If I own a weekend flat, it is largely at the expense of other (probably younger) people who may need the flat more than I do. We should study the wider effects of consumption more, for they are often highly counterintuitive. Property ownership and women’s fashion, the two highest goods of the Sunday supplements, are both highly unattractive by this light (the main effect of a woman’s being well dressed is to make other women feel worse).
Yet some things may be more socially beneficial than we think. An acquaintance of mine who works for a major airline has a colleague who is an old-school Manchester socialist. He was at first uncomfortable with the class system on aeroplanes. And then he had an epiphany. A Boeing 737, he realised, was a beautiful mechanism for redistributing wealth. The people at the front were effectively subsidising the people at the back to travel to Barcelona. And the whole system works voluntarily. You can make ‘from each according to his abilities, to each according to his needs’ work perfectly well, so long as you give the able a slightly bigger seat.
So George Osborne, frankly, should see it as his duty to travel in first class on the train. He is among the richest 1 per cent of the British population, and so it is entirely reasonable that he pays disproportionately more towards the cost of running a public good like a train. If you support the redistribution of wealth, why complain when people do it willingly? In fact why isn’t there a first class on the tube? If there were such a thing, the rich would take fewer taxis, and London Transport could run more trains.
Perhaps the biggest problem with public services is their wretched egalitarianism. The denial of the existence of social class (except among Marxists and old-school Tories) may be a very costly fiction indeed.
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