Thank you for this, Don B; it is indeed a superb counterblast to what seems to have become the dominating ideology of our times.

For me, the underlying fallacy of market economics is glaringly simple; the free market essentially rests on a set of sweeping psychological assumptions which don't survive more than a moment of scrutiny.  It's abundantly obvious that in most spheres of life - including many of the public activities which have increasingly been privatised - people don't behave as the market would predict; even in commerce they don't necessarily do so (look for example at the big business enterprises whose activities appear to reflect a desire for power or influence rather than profit - indeed, the whole concept of the public or joint-stock company, which is at the heart of modern capitalism, was established in an attempt to resist the application of market forcces, by limiting liability, and originated in a desire to protect enterprises that were being run for the public good with little chance of profit, like building roads or bridges).

Market forces have their place, and have no doubt aided progress.  But the axioms underlying the general application of the free market can be falsified so easily (why do I give blood rather than selling it?) that continued belief in it can only be ideological, and the way in which it has captured the language seems to be a symptom of this.  It has no real root in practical experience; and the prophets of the market even choose to ignore the statements of its founders (Adam Smith believed the market must be counterbalanced by strong civic society, but the ideologues conveniently ignore that bit). 

Privatisation of services fails even on the market's own terms.  The economic case for privatisation is that the gains in efficiency outweigh the surplus that has to be paid to shareholders of the concern undertaking the work.  Has anyone ever demonstrated this?

I believe that future generations will regard our obsession with the free market as something akin to the belief in phlogiston, or the geocentric view of the universe - a symptom of ignorance rather than insight.

I think the Paddington Rail Disaster was some sort of proof - although not, perhaps, a very positive sort

It has always seemed quite remarkable to me that people are even willing to give any credence to the notion that a system which has developed piecemeal as a response to human needs should have a logic of its own which we don't understand but which musn't be challenged because it knows what's best for us.  The market, even more obviously than god, is a human construct  It can't possibly have a mind of its own no matter how many coincidences might seem to point to that conclusion.

I thought KW was quite persuasive but my heart sank when she delivered that howler towards the end.  Laudanum doesn't consist of heroin.  It's made from the same thing (opium) but it had been around for ages before heroin was even invented.  Iirc, laudanum is tincture of opium whereas heroin is a medical derivative of opium once supposed to be safer than the earlier derivative, morphine.  I'll forgive her that mistake - but then I agree with her and don't need persuading.  But to those who do need persuading, this display of ignorance could easily be off-putting.

Simon Bradley's excellent book on St Pancras Station, (Profile Books) includes the following:

"Conflicts of this kind (between the Midland and North Western Railways) followed inevitably from the state's refusal to do much more than impose a modest framework of regulation on the industry.  The Railway Mania saw the consequences at their lunatic height: at one point 815 railway ventures were before Parliament, costed at a total of six times the national expenditure.  It was quite different abroad, where the entire network was sometimes centrally planned from the beginning...  The railway approaches to Paris were determined by the state on strategic grounds.  The French capital ended up with eight railway termini, but fully fifteen were forced into the fabric of London, many of which offered competing services."

In other words the chance of personal profit lead to the uncommercial result of unviable stations.