Are fares fair for ferries?

The efforts the Merchant Marine Ministry is making to keep ferry fares down to levels that even the less prosperous can afford is praiseworthy. It is a good pro-people policy, but only on condition that it does not hinder the development of coastal shipping which, in a country largely composed of islands, is the backbone of tourism and a vital link between islands and mainland. If the government is planning a new boost for tourism, one of its first concerns must be comfortable, civilized, rapid and – above all – safe transport to the islands. Major efforts have been made to break away from the ship speeds that obtained in the 1950s and ’60s. But this achievement will come at a high price. If we want to get around on faster ships, we must be ready to pay that price. A more general question arises, one of economic philosophy. Social policy is one thing, and prices are another, quite different, thing. Every government is obliged to implement a social or social welfare policy. However, it cannot do that by means of intervening in prices. It cannot, for example, reduce electricity or telephone bills for reasons of social policy. Whenever such a proceeding was attempted, both utilities languished, precisely at a time when increased demand called for major investment and modernization. Prices (of medicines and equipment) in public hospitals bear no relation to cost and are subsidized by the State. Subsidizing prices is a social policy, but it inevitably can do no more than keep services operating at a very low level. In the past, at times of pseudo-socialist elation, social policy and price policy were often confused, causing great damage to the economy and eventually disadvantaging the poorer classes. Prices are not shaped by chance or will. It is the government’s duty to ensure stable, transparent terms of competition in every sector, including that of coastal shipping. This has proved to be the best method of achieving a reasonable relationship between price and cost.

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