Tag Archives: Economics

HS2 – It’s not about speed, it’s about capacity

Intermodal freight on the West Coast Main Line

Good piece in the New Statesman by former Labour transport minister Andrew Adonis on why it would be an act of national self-mutilation to cancel HS2.

For the key justification is not speed but capacity. There will be an acute shortage of transport capacity from the 2020s to convey freight, commuters and other passengers into and between the major conurbations of London, the West Midlands, the East Midlands and South and West Yorkshire. Since there is no viable plan, let alone political will, to build new motorways between these places, or to dramatically increase air traffic between them, this additional capacity must largely be met by rail or Britain will grind to a halt. Rail is, in any case, the most efficient and green mode of transport for mass passenger and freight movements.

He goes on to explain how cancelling HS2 would be as short sighted as the 1970s cancellation of the Channel Tunnel (eventually revived two decades later) and the third London airport at Maplin Sands. The one “big project” that the 1970s Labour government didn’t cancel was the one that did turn into a massive white elephant: Concorde. Britain should not make the same mistake again.

Debates about the benefits of faster journey times to Birmingham, and whether or not business travellers work productively on trains, are beside the point. If the additional capacity is required, it ought to be provided in the most cost-effective manner.

This is something I’ve not seen a single opponent of HS2 address. Yes, there are still points up for debate over the route, such as why it doesn’t join up with HS1.

And like Adonis, I would dismiss that recent anti-HS2 report from the Institute of Economic Affairs. The IEA is a right-wing think tank that has long been anti-rail and pro-road; for them, the private car symbolises personal freedom and individual prosperity, while any form of public transport represents socialistic collectivism. Don’t forget they’re connected with the late Alfred Sherman, the ideological moonbat who wanted to pave over the entire railway network to convert them into roads. They are simply not to be trusted on this issue.

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What Happened to the Leisure Society?

David Graeber, writing for Strike! Magazine asks what happened to the leisure society predicted a couple of generations ago.

In the year 1930, John Maynard Keynes predicted that, by century’s end, technology would have advanced sufficiently that countries like Great Britain or the United States would have achieved a 15-hour work week. There’s every reason to believe he was right. In technological terms, we are quite capable of this. And yet it didn’t happen. Instead, technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.

He’s talking of things like telemarketing, insurance sales, and large sections of corporate bureaucracies. And while the political right loves to talk about wasteful public-sector “non-jobs”, the private sector actually far worse.

And all this waste of human potential comes at the expense of the far better things that people would like to be able to do instead, as demonstrated by this anecdote about the career of an old school friend who had a brief but unsuccessful music career.

He was obviously brilliant, innovative, and his work had unquestionably brightened and improved the lives of people all over the world. Yet, after a couple of unsuccessful albums, he’d lost his contract, and plagued with debts and a newborn daughter, ended up, as he put it, “taking the default choice of so many directionless folk: law school.” Now he’s a corporate lawyer working in a prominent New York firm. He was the first to admit that his job was utterly meaningless, contributed nothing to the world, and, in his own estimation, should not really exist.

There’s a lot of questions one could ask here, starting with, what does it say about our society that it seems to generate an extremely limited demand for talented poet-musicians, but an apparently infinite demand for specialists in corporate law? (Answer: if 1% of the population controls most of the disposable wealth, what we call “the market” reflects what they think is useful or important, not anybody else.)

That anecdote hit home to me, when I think of the number of musicians I know who make their music during evenings and weekends, fitted around the demands of a day job. But it’s their out-of-hours music career that touches the lives of far more people.

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When I hear the words “Laffer Curve” I reach for my revolver

Warning, this is a political post. If you don’t want to read about politics, click on one of the other subjects on the menu bar…

In the context of what may or may not be in George Osborne’s budget later this week, I’m hearing a lot of mentions of the infamous Laffer Curve.

The Laffer Curve is a somewhat questionable piece of economic thinking which states, in it’s commonly-used form, that if taxation is raised to a level higher than the rich would really like to pay, then overall revenue will fall because the rich then won’t work as hard. Such an idea has obvious appeal to the types that take Ayn Rand seriously – Indeed, I always associate the term with a particularly noxious right-libertarian troll on the Pyramid Online forums a decade or so ago.

Yes, I can appreciate the hypothesis that there is a point of diminishing returns if a taxation rate is ridiculously high. It’s why nobody today is suggesting a return to Denis Healey’s 98% taxes of the 1970s. But the Lafferites go further than that. They give every appearance of insisting on a completely arbitrary figure as the threshold of diminishing returns, and expect you to accept this in the complete absence of any empirical evidence to support it.

Not that the hard right are any bigger fans of evidence-based economics as they are of evidence-based science. You can see this in their climate change denial. And don’t even get me started on young-earth creationism. This is the sort of intellectual company the Laffer Curve keeps. So why should we take it seriously?

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Those damned Economists

Great quote from deep within a 1000+ comment thread on The Guardian Music Blog. It’s on the weekly Readers Recommend blog, where after the deadline at noon on Monday it turns by tradition into an open thread, and the subject turned to the uses and abuses of history.  Readers Recommend regular Abahachi had this to say:

History is great at explaining why something happened, and reasonably good at offering explanations of what is currently happening, and that’s why it’s vital. On the whole historians are very realistic about the limitations of their knowledge and foresight, and will be the first to say “Yes, but it’s more complicated than that.” It’s people like the damned economists, who convince themselves (largely by ignoring all of history) that they fully understand the way the world works and so can issue instructions about how it should be refashioned according to their views on how it ought to work, that are dangerous.

Indeed. Economists who set themselves up as experts in totally unrelated fields from criminology to climate science are an absolute bloody menace. And because they’ve got academic qualifications too many people who ought to know better (such as politicians) take them seriously, despite the fact that qualifications in economics aren’t always relevant outside their field.  It’s like expecting literary critics to be good at engineering (or vice-versa).

Posted in Music | Tagged , | 5 Comments