Sunday, 3 July 2011

High Speed 2: Vanity, Ignorance and the Chilterns

There are some non-ideological economic fundamentals that are the same for almost any ideological and social model. The only exceptions are completely nihilistic regimes that are actually trying to erase humanity's presence from the Earth.

And yet, economists and their political sponsors have a weakness for economic theories so detached from the fundamentals that the result resembles a "Breatharian" cult, whereby meditation, self-discipline and enlightenment are supposed to allow the devout to live for months or years without food.

All economic activity consists of doing something to a resource to make it worth more. Even in Aboriginal hunter-gatherer societies, gathered food will be processed to make it more nutritious when eaten, or to preserve it so that it can be carried to sustain people on a journey. These goods are not necessarily exchanged for money (the society might not recognize money as a concept) and they may not even be traded at all. But if something is being processed to make it more useful, that is economic activity. That's the utter baseline of the economy. Can even political economists ignore this? Yes they can.

"Knowledge-based economies" are one way in which the fundamentals can be ignored. This isn't inherent in the concept, which has virtue, it's just that a combination of wishful thinking, laziness and vanity, can lead to policy-makers becoming indifferent to the nation's access to resources and the means to process them. If the real world is being engaged with, a "knowledge-based economy" enhances our access to resources and our means to process those resources to make them more useful, making such work more efficient and expanding the number of different ways in which something can become more useful.

If the real world is not being engaged with, then a "knowledge-based economy" is just a totem or idol: "we don't need resources or the means to process them, because we've got knowledge". Give them a few years, and they will be asking a wooden figure called "Knowledge" to rise and fill their granaries and treasuries for them. An early symptom of this might be an unhealthy concentration on the needs of the "wise" (or "the rich") at the expense of taking care of resources and those who process or manage those resources to make them more useful. No matter what resources might exist, those accessible to us at any one time are finite, and if we expend an excess of resources in ways that do not in turn enhance either our access to resources or our ability to make more of them, then we reduce those resources and we diminish our ability to process them into more useful forms. We become impoverished.

Limiting the resources expended on pleasing the elite is not an ideological preference: it is frequently a matter of life and death. Ancient Greece survived the Persian onslaught only because the Spartan elite put themselves in harm's way, when the elites of every other Greek tribe insisted that their festival rituals were more important than making any preparation to resist an invading army that was already on Greek soil. It wasn't a case of other Greeks not being willing to march with the Spartans, it was largely a case of their not being allowed to, because the festivals were an expression of the elite's importance and must therefore come before anything else, even the survival of Greece...

A resource may be all kinds of things, and in the case of the Persian invasion of Greece, time was the resource being most seriously squandered. In modern Britain, as elsewhere in the modern world, investment is squandered because the elite values the convenience of the elite above the needs of the nation. It is not utterly venal, but a sufficiently ignorant and insular elite is generally incapable of perceiving for itself what the true needs of the nation might be, and highly resistant to being told, either by someone from outside the elite or by a dissident from within the elite. (Who departs the elite the moment he differs with it.) The elite directs the resources of the nation towards its own whim and convenience, because those are the limits of its perceptions.

Because, for a generation or more, resources have been diverted to ends which do not even replace those resources, still less enhance them, investment in Britain has become extremely scarce and correspondingly precious. The scarcer investment gets, the more it matters when a given sum is misdirected and misapplied. Britain can no longer afford to mis-invest a single billion. (Neither can the United States, although the folks on the hill clearly do not see it yet.)

The available investment in energy is being squandered, because a system of subsidy channels that investment into methods of energy generation which do not work, but which meet a need of the elite: that it should appear to be addressing the issue of global warming. Appearance is all. Investment in other new methods of energy generation is limited to non-existant. The untried methods might or might not all work, but it is certain that if they are never tried, they will never work. However, as long as the non-working methods are accepted as being a solution to something or other, diverting billions of investment in that direction every year satisfies the elite, even as it impoverishes the nation.

Energy is a resource, and it is also part of our means to process other resources to make them more useful. Transport, too, is a fundamental economic resource. Otherwise, there is no way to bring other resources together, or to allow people access those resources in order to process them to make them more useful. Indeed, in many cases, "processing something to make it more useful" may be defined as simply moving it from somewhere it is moderately useful or not useful at all, to somewhere it is needed and therefore very useful.

Now, the distinction between working and non-working transport systems is a little bit less obvious than the difference between a power station that produces power intermittently and one which produces power on demand.

A true knowledge-based economy that engages with the real world, requires transport that moves labour and resources so that "knowledge" can help the labour process those resources into more useful forms. A false knowledge-based economy, destined to sink into idolatory or a secular equivalent, requires transport for the "knowledgable" alone. The elite must be moved ever faster, in ever greater comfort, whilst labour and material resources are moved grudgingly, if at all.
Knowledge itself can now travel at the speed of light: there is no practical benefit in giving preference to the physical movement of the "knowledgable". The quotation marks are there because in this kind of voodoo economy, the "knowledgable" are in reality ignorant of and insulated from, the real world.

This is where the proposed "High Speed 2" new railway link between London and Birmingham comes in. After denying funds for everything from encouraging school children to stay in education till at least the age of eighteen, to allowing the Royal Navy even the most basic means of projecting air-power ashore in precisely the way that is needed in Libya, the current British government blithley proposes to invest, in this single railway, the sum of £34bn if you believe their own estimates, and up to £60bn if you give the cynics any credence at all.

This rail link, despite cutting through one of the most densely populated regions in the world, will not have enough stops to play any role in local commuting, and indeed, is designed as far as possible NOT to serve this need. Medawar predicts that some factory or shop worker will be enterprising enough to find a way of getting to work on HS2, but that's not what it's intended for. (Perhaps by taking a second job on the train, as a cleaner or steward, a worker will be able to reach his regular place of work?)

Nor is the HS2 line intended to carry a single wagon load of freight during its projected sixty-year operational lifespan.

The sole purpose of the HS2 railway line, is to carry the business and political elites between two fairly adjacent major cities, a predicted 26 minutes faster than the trains on the existing rail routes between those two cities -which will still be quite a lot slower than competing low-cost airlines, which are also likely to offer significantly cheaper fares.

Tellingly, the official economic case in favour of this massive investment, assumes that the average salary of passengers will be £70,000 in 2011 sterling. Does £70,000 sound like any average citizen that you know? The economic case also assumes that passengers on a train do nothing economically productive or necessary while on the train, and that they will immediately do something economically active and necessary during their extra 26 minutes at their destination. Neither thing is the experience of businessmen who regularly travel by train. They read letters and use their laptops on the train, they eat, drink and rest on the train: time on the train is often valued as a distraction-free opportunity to finish awkward items of work, or prepare to make the most of whatever meeting they are travelling to. When reaching their destination quickly takes precedence over these advantages of train travel, businessmen take a scheduled airline service, (this can cost as little as £59 London to Birmingham) and the uber-elite will use a private plane or helicopter.

And yet, rarely does a businessman or politician travel to a city and spend every last half hour of his time there doing something economically productive.

Even allowing these two highly questionable assumptions, the best any independent verification of the official case can come up with, is that the economic benefit of HS2 will return 47% of the projected £34bn cost. The economic benefits of countryside, way of life and existing economic activity that will be disrupted or destroyed by the construction of HS2, seems to be valued at or close to, zero. The route is through a densely populated region (Berkshire, Buckinghamshire and Warwickshire), the adverse economic impact of the construction phase will certainly not be neglible!

Taking the case for HS2 pretty much at face value, the nation's resources will be reduced by £18bn. Allowing a realistic figure for economic disruption in the many population centres along the route, and the absence of local stops means that few of these populations centres derive ANY direct benefit from HS2, it looks as if we might be lucky if the net loss to the nation's resources of HS2 is limited to the £34bn it is supposed to cost to build and equip. HS2 has the potential to show a negative return: reducing the national economy by more than the money invested in it.

There is no prospect of an intangible benefit to even things up, because every aspect of the design and technology is to be imported and already exists. The nearest we're likely to get to a "technological breakthrough" for this £34bn, will be the waiting room seats.

What is anomalous to the point of being offensive, is the way that whatever is in the way of the construction tends to be assessed as being of minimal value the way it is. This kind of bias drives a very high proportion of the elite's worst decisions. The other great offense, is that the case for these great projects is only presented in a way that tests it against its own internal assumptions: it is never, ever, tested against an alternative way of investing the same (or much less) money.

Medawar believes that it would not be an unsurmountable challenge, to identify five more pressing investment projects in Britain's railway network, each one of which would yield more than the £16bn of benefits claimed for HS2 over a 60 year operational life, and yet all five together, would cost less to implement and operate.

Firstly, it probably only costs £3M to pass a simple piece of legislation through Parliament. What is needed is an act of Parliament repealing and forbidding any law or agreement which prevents services on the existing Marylebone to Wrexham line from competing with other lines and services via the West Midlands. Currently, the Department of Transport protests about limited capacity from London to Birmingham, and simultaneously presides over a regulatory structure which prevented Marylebone to be used in competition to, (or in support of) Virgin's services from Euston station. Delete Richard Branson's unjustified sweetheart deal, and the basis for more capacity is there.

Secondly, invest up to £3bn on each of the existing railways lines from London to or around Birmingham, there are several of these. Most are capable of capacity and speed improvements by removing bottlenecks and by adding stretches of extra track along existing lines, so that freight and commuter trains can be moved out of the way of high speed intercity trains, without actually having to stop and wait. There are many stretches of line in Britain, not just near Birmingham, where the permanent way for such track is already there, and the extra tracks were simply removed as a short-term (and false) economy measure after the Second World War.

Some of the bottlenecks involve track that contorts itself to avoid an obstacle that is no longer there anyway, or which can more easily be dealt with by modern technology than was possible when the line was first designed in the Edwardian era.

Were a critic to point out that this might cost £15bn, they would be revealing just how many railway lines there already are between London and the Midlands. Making all of them work to modern standards would yield much more capacity, for commuters and freight as well as high-speed elite passengers, than building another, single-purpose, line.

Thirdly, we must recognize that the biggest problem with all of Britain's transport policies are the words "London to..." The most expedient way of removing the traffic congestion between London and Birmingham that afflict all modes of transport, road, rail and air, is to provide an efficient rail route between Bristol and Manchester. This does not need to be, and should not be, a hot-shot single purpose high speed line, merely a bottleneck-free version of what's already there, with a new tunnel under the river Severn, and as much extra parallel track as the existing permanent way will support, to allow freight and passenger services to co-exist.

If the rail route between Bristol and Manchester were of the same quality as the one between London and York (that's about the same distance) then we'd see a far healthier distribution of population and economic activity around the country, and we'd also see a lot of the heavy freight traffic through the Midlands disappear. Nearly all the freight on Britain's road and rail networks arrives by sea: if the railways out of Bristol worked better, more of that sea-traffic would arrive at Avonmouth and other south-western ports.

Fourthly, lunatic decisions are already being taken in order to divert all available investment to HS2. Perhaps the least noticed but most destructive of which is to confine the modernisation of railways in East Anglia to a modern "Thameslink" engineering standard, to lines south of Cambridge. This, coupled with a massive investment in new trains for this standard, eliminates the possibility of through trains from London, via Cambridge, to anywhere beyond Cambridge. The same government which trumpets the fact that East Anglia is the fastest-growing region in the country, is determined that modern rail travel will end in the centre of that region, trapping that growth in East Hertfordshire and Essex, basically.

Over time, because only older trains will be able to use the unmodernised network to the North of Cambridge, not only will passengers have to change trains there, but the services in the North of East Anglia will become increasingly costly to maintain. The investment will always be out of sync. And this includes services to significant sea ports, such as King's Lynn. Ports in the North of East Anglia handle relatively little freight, other than timber imports, which are considerable and vital, but they are the construction and service ports for all of the offshore windfarms, gasfields and oilfields in the Southern North Sea. Government transport policy is cutting the throats of ports upon which its energy policy depends!

The rail network to the North of Cambridge must be included in the investment to produce a common engineering standard across East Anglia and the East Midlands, or there's no discernible point in that investment! At the same time, freight links to King's Lynn must be fully restored and upgraded.

This takes us back to the "Beeching Cuts". Although railway enthusiasts traditionally hate Beeching for closing lines, what he was attempting to do, was identify a network that the country could afford to upgrade to a modern common engineering standard -and discard what couldn't be modernised. He knew that piecemeal modernization would be worse than useless: everything had to move together and to the same standard. Of course, what happened when Dr Beeching had made his cuts, is that self-interested lobbying from the elite promptly sabotaged the modernisation and commonisation programme that was supposed to go with the cuts. So what he did looks like random savagery, because its beneficial purpose was thwarted.

Unless the whole of East Anglia and the East Midlands is included in the upgrade to a common engineering standard, the effect will be to ensure the eventual closure of the unimproved parts of the network. Far from enhancing rail travel in the region, the partial modernisation will eliminate rail travel altogether from half of the region. This is precisely what Dr Beeching made huge and painful sacrifices to avoid. It is the worst outcome possible -and it is being contemplated simply in order to feed investment to HS2.

The fifth project would be a wholesale and thorough improvement in rail freight capacity and efficiency between all the "middle" East Anglian seaports: Harwich, Felixstowe, Ipswich and Yarmouth, and Peterborough (and thereby London, York and Edinburgh) and the Rugby railfreight terminal. The alternative is not merely the currently-needed £1.6bn capacity improvement to the A14 trunk road, but an ongoing need to increase the capacity of this highway by a similar amount, every five years for the foreseeable future.

All this could be done for less than £34bn. Any of them would benefit the country more than the hugely expensive single-purpose HS2 line.

(The photograph at the top of this article is of typical Chiltern Hills flora and fauna. The sort of thing which supporters of HS2 believe is worth absolutely nothing at all. Medawar doesn't argue that it has infinite worth, but it does have a worth, and that shouldn't be wiped off the balance sheet.)