Masters of the universe
Masters of the universe
If politicians can see into the future, isn't it right to give them all the money they need?
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We are living in an era where politicians are so convinced of their own powers of premonition that they think they can bend the laws of nature to fit their vision of the future.
Throw enough money at a problem, and you can defy basic physics, turn wind into hydrogen, or water into wine.
“My favourite steel company,” gushed federal climate minister Robert Habeck during a recent visit to GMH, a steel smelter near Osnabrück that has chosen the staggeringly expensive path of using electricity instead of coal to heat its furnaces.
With its smelters guzzling more electricity than the entire city of Osnabrück, GMH is reliant on the state to pick up part of its energy tab. On Habeck's visit the firm warned that, if it didn't get more public money soon, its future was at risk.
Habeck is only too happy to oblige. For him, the viability of a technology isn't a question of science but one of subsidies. Fear not, the Green politician assures, for that which is expensive now shall be cheap, and that which is cheap shall be expensive.
In no walk of life is this quasi-religious thinking more apparent than in the realm of mobility.
On the roads, politicians are convinced that subsidies are the missing ingredient stopping a battery from being more efficient than a combustion engine. Yet, the moment subsidies disappear the market for EVs collapses.
We’ve also seen it on the tracks, where ‘underfunding’ is the catch-all term used to explain why so many Germans are reluctant to travel by train.
According to this narrative, commuters’ preference for cars has nothing to do with the fact the automobile was a revolutionary advancement that gave people autonomy over when and where they travel. Nor is price a reflection of the real costs of operating a rail system compared to roads.
Instead, the only thing that matters is how willing the state is to back one technology over the other. Artificially lower the costs of rail and commuters will soon leave their cars at home and play their part in saving the planet.
Luckily, we can test this theory against reality.
In the summer of 2022, Olaf Scholz' government decided to cut the cost of rail travel to next to zero. For the price of nine euros, Germans could travel on any regional or inner-city train across the country for a whole month.
As a point of comparison, a day ticket for Berlin alone costs more than that.
The ticket was hailed as an unrivalled success. For Scholz it was "one of his best ideas." Indeed, between June and August of that year, the ticket was sold 50 million times, leading to train fans across the world acclaiming it as a model to be followed.
Look a little closer though and it's easy to see that the €9 ticket was, in fact, a disaster. It was little more than a poorly timed voter freebee (given in the summer after an election instead of just before one) that flushed money down the drain for no observable benefit.
A €9 ticket sold 50 million times? That makes close to half a billion euros. If that sounds like good business, it was anything but. The promotion blew such a hole in the finances of regional train companies that the federal government had to fork out €2.5 billion to cover lost revenue.
Meanwhile, a new study by the Ifo Institute has shown, through GPS data, that the ticket had next to no impact on road traffic. Despite fuel prices surging after the Russian invasion of Ukraine, people with cars stuck to cars.
The people who benefited were those who already travelled by train and suddenly found that their monthly travel card had been slashed in price.
What’s more, an unintended consequence of the cut-price ticket was packed trains on weekends, as people took advantage of the offer for cheap breaks. But this only highlighted how ill-equipped the rail system was to handle large passenger numbers. Delays increased by 30 percent during the summer of 2022.
Nonetheless, Scholz's government was convinced it had found a way to alter the fundamental economics of transportation. Claiming the scheme had brought "fresh wind" to regional rail, Scholz promised to make it permanent, albeit at a higher price.
What followed was the Deutschlandticket. When it was introduced last year for €49, passenger groups and environmentalists were enraged by the price; the government placated them with assurances that it had put the project on a stable financial footing.
It's been clear for months, though, that the €49 price is anything but sustainable.
With their ticket income slashed, regional rail operators have had little choice but to thin out their services.
In the west of the country, operator Eurobahn has halved its service between Osnabrück and Münster and completely suspended another line from Bielefeld, as bankruptcy looms.
In Berlin, a city perfectly suited to public transport, local provider BVG is in crisis. The €9 ticket blew a hundred-million-euro hole in the BVG's finances. But its problems run far deeper. Forced to juggle a disillusioned workforce, aging inventory, and outdated infrastructure, the BVG has had to cut the frequency of its U-Bahn service. Delays persist regardless. Every fifteenth underground train in the capital now never leaves the depot, down from every hundredth two years ago.
And, since the constitutional court intervened to stop federal and state governments from hiding the true level of their debts, local and national governments are also now being forced to accept a modicum of economic reality.
Sure enough, a little over a year after the Deutschlandticket was introduced, the price has just risen again—this time to €58. For some, the ticket is still unrealistically cheap: the new price will also require hefty state subsidies. For others, it’s too high and will drive customers to cancel their subscriptions.
Both of these complaints are probably true. But that’s beside the point. There is still scant evidence that the scheme has done what it was meant to: noticeably reduce road traffic.
What is clear is that money subsidising cheap tickets is money that isn’t being spent on improving the quality of service. Still, how regular and clean trains would need to be to convince drivers to leave their cars in the garage is an open question. Would it take €30 billion, €50 billion, €100 billion? At what level would this be deemed an ineffective way of cutting carbon emissions?
But, perhaps I'm too much of a cynic. At a recent Q&A with voters in Berlin, Scholz said that, if only people could have a time machine, they would see that everything his government is putting in place now will turn out to be right.
How lucky we are to have leaders with such powers of prophecy.
I see comments like this all the time on social media (primarily on reddit) that if governments would simply spend more money on transit people would abandon their cars. The problem is when it's good it's good when it's bad it's terrible - as one person put it 2.5 hours on bus or 20 mins by car (Toronto).
My wife and I are prime examples - semi-retired and living close to a major station with great connections, we take the bus/train everywhere but a '"ghost train" train doesn't affect us - if we worked there is no way I would trust the system as it is.
Not sure where I read this but the vast majority of Deutschland Ticket holders are people who were already monthly pass buyers
Good article