Potholes and socialism

OK, lo and behold, I talk about potholes, and they become a national issue: from today's Today programme, '£8.5bn needed for road resurfacing.'

See, the problem is that big infrastructural budgets are the first casualty of any budget cutting - the accountability scale is longer than most politicians terms of office. Underfunding of roads will only begin revealing defects ten years down the line, and persistent underfunding, will simply lead to a long slow decline. This decline will be very expensive to reverse, so the relative underfunding will continue because the political rewards of such repairs will be slow in coming. It’s hard to point to something not being broken.

Depreciation, or amortisation, of capital stock is dealt with separately from current accounts. Essentially, the roads are paid for up front, normally through public debts. Local authorities take out 60 year mortgages to pay for infrastructure, so over that period, they have to pay the initial capital back plus interest. So, while it's depreciating, it's still being paid for in the first place.

Of course, if the debt lives longer than the time scale required to completely replace/renew the roads, then more debt will have to be piled on to carry out that work.

Socialism can't promise infinite riches, or that choices of priorities won't have to be made, but we can say that socialism would end the requirement to turn loans back into money - essentially ending the distinction between the current and capital accounts. All activity would have to be accounted for out of real currently available resources, rather than notional capitalisations.

Further, there won't be the option for externalities - at present councils are not required to take account of the cost of the damage poorly maintained roads do to vehicle stock, but in a system of common ownership, we would have to balance the impact on inventories of vehicle repair versus road maintenance.

Saocialism isn't a magic wand, but it does offer the prospect of accountability and the mechanisms by which we can take proper control of our own communities and our social environment.