Last week the Passenger Transport Executive Group - the trade-union for Britain's local transport quangos - published a report, saying that the local bus operators were doing a rotten job. But what made the report remarkable was the PTEs' insistence that, as a result of this, the PTEs should be given power to say who should run what buses over what routes, to what timetables, and for how much.

The local bureaucrats have been seething ever since buses were privatized and deregulated in 1985 - when choice and competition at last replaced three decades of public-sector managed decline. Now the EU is floating a Regulation, continental-style, to give 'competent authorities' the power to control bus operations, the PTEs have seized their moment.

We used to think that if the state wanted to run a business, it had to own it. To compensate the shareholders and move civil-servants onto the board.

Now, the state has realized that it doesn't need to pay for a business to control it. You just impose regulatory powers on it, so that the private owners have to run it the way you want it run. Former Trade Secretary Stephen Byers discovered that with the railways: regulating Railtrack into receivership and then setting up his own quango to run things. Now the quangos themselves have learnt the trick.

This is bad for rail, and for buses - which was awful, and got worse, when the state ran them. It's even worse for the concept of ownership and property. Why bother to save and invest to build up a company, if the state can then dictate how you run it and determine what you do with your assets - your own property? Western economies are founded on encouraging people to create and build up wealth by letting them enjoy its fruits. This new system discourages wealth-creation by turning its creators into serfs.