Eiffel – symbolic engineer

Gustav Eiffel, one of the 19th Century's significant engineers, was born on December 15th, 1832. He became one of the leading figures in France's Industrial Revolution which, for economic, cultural and political reasons, developed much later than its English counterpart. France was building infrastructure such as railways, and needed creative engineers to build the bridges and viaducts it needed.

Eiffel pioneered many innovative design features, including prefabricated bridges that could be transported in sections to remote areas and then assembled with nuts and bolts rather than welding, and thus needing less skilled labour. He built bridges across Europe, showing a talent for combining the aesthetic with what the function required and what the materials allowed.

He is most famous for two projects that became cultural icons. He designed and oversaw the construction of the Eiffel Tower, erected for the Great Paris Exposition of 1889. He also designed the internal structure of the Statue of Liberty, and had the entire statue erected at the Eiffel works in Paris before it was disassembled and shipped to the United States. Both of these works became symbols of the nations in which they were located.

One project he was involved in that went wrong was the early attempt to build a canal across Panama. After he'd been involved for a year, the company building it went into liquidation and there were court cases that followed. Charged with raiding money under false pretences, he received a fine of 20,000 francs and two years in prison, although both sentences were quashed on appeal.

His nearest counterpart in the UK was probably Isambard Kingdom Brunel, also French by origin. It was an age when engineers could conceive and build massive prestige projects, taking on challenges hitherto thought impossible, and astounding the world with virtuoso achievements. The successful ones tended to combine a creative imagination with secure knowledge of the forces and stresses at work on the materials, and an attention to the details of every part of the project.

It was also an age in which people of talent could raise money from backers to fund such ambitious projects as these, projects that left their mark on the world and still inspire admiration for the beauty and practicality with which they combine form and function. Few of today's engineers are household names, and few stamp their individual personality on projects that are more likely in modern times to be constructed by teams without public presence, and often funded, at least in part, by public money.

Gustav Eiffel was one of the larger-than-life figures who strode across the 19th Century, role models who inspired others to aim at greatness. The world is poorer by the relative lack of such figures in modern times.

If you're worried about economic rents why not reduce economic rents?

The latest attempt to justify eyewatering tax rates is to insist that high incomes are largely gained from economic rents. Thus we should tax high incomes because economic rents.

For most of the last four decades, the gains from economic growth have flowed overwhelmingly to the rich. Much of those gains to the rich weren’t “earned” in any traditional sense, but rather extracted, excess profits squeezed out of a system designed to favor those who already have power, position and wealth.

The justificatory paper is here and looks at, as it should, the manner in which American doctors, lawyers, financiers and the like make high incomes.

Well, call us Mr. Picky if you must but we do tend to think that if you’re worried about the unfairness of economic rents then the solution is to reduce the ability to claim income from economic rents. That does seem to, rather neatly, deal with the problem.

We thus find ourselves agreeing with Milton Friedman in arguing that the American Medical Association should be abolished, or stripped of licensure powers, because its existence, or perhaps licensure powers, protects those economic rents earned by doctors.

We might even go on to agree with the Cato Institute and observe the manner in which the American labour market is infested with such requirements for licensure. Some one third of all jobs require a highly restrictive licence - membership of a guild in effect - for it to be legal to perform that labour. Strip those requirements away and we reduce that ability to collect economic rents on labour income.

We’d also add our own solution. Such licences are near always state based - moving across the state line requires the acquisition of a new one with the new restrictions placed upon who may have one. Thus there is an obvious solution, use the Commerce Clause to impose Federal recognition of each state licence in every state. Given that there are 50 states then at least one of them can be relied upon to issue a licence to do whatever for $25 or the like. Licensure then becomes a boring collection of cheap documents, not an actual barrier leading to the creation and appropriation of those economic rents.

Perhaps that solution doesn’t appeal. But back to us being Mr. Picky. If you wish to complain about economic rents then you should be proffering solutions to economic rents. Not using their existence as an excuse to tax the bejabbers out of everyone. For without your offering a solution to the thing you’re actually complaining about we might think it is just an excuse to doing that taxing of the bejabbers.

And that would never do, would it?

Andrei Sakharov

We said goodbye to Andrei Sakharov on December 14th, 1989, 30 years ago. He lived just long enough to witness the total collapse of the evil regime he had spent much of his life in opposition to.

As a PhD physicist, his primary interest was initially in cosmic rays, but he was assigned to the postwar team that developed the first Soviet atomic bomb. They were able to produce one rapidly because Soviet spies had stolen the technology from the US Manhattan Project. Sakharov researched a possible way of making thermonuclear weapons in a way that was totally original, however, and produced a device radically different from the US Teller-Ulam design. Although the US exploded the first H-bomb, Sakharov's design for the Soviet Union was in many ways more practical, and gave them a brief lead in thermonuclear technology.

His work made Sakharov a leading figure, a position he used to campaign for civil liberties and human rights, to the increasing concern of the authorities. He was also concerned by the implications of his scientific work, and opposed both nuclear proliferation and atmospheric testing. He was involved in the 1963 Partial Test Ban Treaty.

Sakharov broke with tradition by publicly opposing the election of Nikolai Nuzhdin to the Soviet Academy of Sciences, citing his responsibility for "the defamation, firing, arrest, even death, of many genuine scientists." When he succeeded in preventing the election, the KGB began to compile a dossier on Sakharov.

From 1968, he emerged as the leading dissident figure, publishing calls for civil liberties and staging vigils outside closed courtrooms. He made public appeals on behalf of over 200 prisoners he thought were unjustly detained. He was in 1970 a founder member of the USSR's Committee on Human Rights. With others he wrote petitions and established contacts with international groups campaigning for human rights.

He came under increasing pressure and, when awarded the 1975 Nobel Peace Prize, was not allowed to leave the country to collect it. His wife did, though, on his behalf. Sakharov wrote publicly that the state he had once thought of as a breakthrough to a better future for mankind, was now corrupted.

"Yet our state is similar to a cancer cell – with its messianism and expansionism, its totalitarian suppression of dissent, the authoritarian structure of power, with a total absence of public control in the most important decisions in domestic and foreign policy, a closed society that does not inform its citizens of anything substantial, closed to the outside world, without freedom of travel or the exchange of information."

After he opposed the Soviet war in Afghanistan, he was exiled to Gorky, off-limits to foreigners, in 1980, and was held in internal exile until 1986. When his wife was arrested, he went in hunger strike to demand her release, and to allow her to travel abroad for heart surgery. He was detained in hospital and force-fed. The Politburo, under international pressure now, allowed her to go for surgery in the US, but sentenced her to Gorky on her return. Finally, in 1986, Gorbachev told them they could return to Moscow.

There are many Sakharov prizes now to recognize those who campaign for human rights, including the European Sakharov Prize for Freedom of Thought. There are also streets named after him and statues to honour his contribution. He was a brave man, enduring innumerable seizures, searches and detentions, but ultimately he won. He shamed his country, and in doing so, helped bring about the demise of one of the most corrupt and poisonous ideologies that ever held sway.

Amazingly Polly Toynbee does manage to ask an interesting, even correct, question

We are not, around here, enamoured of Polly Toynbee’s political perspicacity. And yet she manages to ask an interesting question. Even, the interesting question:

Why should we not tax and spend the same as similar north European countries?

Quite so, why not?

Not that we agree with the idea, we’re not in favour of more state, more governance. But it is the interesting and important question. Why shouldn’t we? Either why shouldn’t we agree with the idea, or why shouldn’t the polity do exactly that?

The answer being in what exactly it is that those other countries do.

Polly is really referring to the Scandinavians here, her perennial cry of why can’t we be more like Sweden? Which we could be of course, sure we could. But to do so we’d have to understand what it is that Sweden does.

Which is be more free market, more capitalist than we are. Then they slice a larger chunk off the top of the economy to redistribute. This being what the Nordic Way actually is.

Sweden has no inheritance tax, you pay a fee to go and see a GP. The school system is a pure voucher one. Denmark’s fire and ambulance services have been privately provided since the 1920s. All of the Nordics come high in those measures of economic freedom listed by Heritage and Fraser.

We could indeed do the same if we so wished. Capitalism and markets red in tooth and claw soothed by the balm of redistributionary taxation.

No, we don’t think it a good idea but it is one of the two sociopolitical models that works. The other being capitalism and markets red in tooth and claw without so much redistributionary soothing balm.

The ones where we don’t use markets and we don’t use capitalism don’t work in producing the desired end goal, which is that the people gain more of what the people desire, that measure of their becoming richer over time.

That is, to answer Polly’s question, we can only tax and spend like our North European cousins if we do as they do. We’d have to carve government out of the economy in order to provide the room to be able to tax it at those levels. Once there’s a British left that understands this point then it might even be possible to have that social democracy Polly so desperately desires. Except, of course, that she doesn’t really because she doesn’t understand what it is that makes that Nordic model work. She’d be entirely horrified if we enacted the market and capitalism part which is exactly why she can’t have the tax and spend she claims to desire.

The last moonwalk

It was on December 13th, 1972, that Eugene Ceman and Harrison Schmitt, crew members of Apollo 17, stepped out onto the lunar surface on their final extra-vehicular activity (aka moonwalk). It had been an extraordinary mission, starting with a night launch and including three days on the moon and three trips in the lunar rover, the longest of which saw them 4.7 miles away from the lunar module, at the limit of the range they could have walked back if the rover had failed.

They collected more lunar samples than on previous landings, aided by the professional eye of Schmitt, a trained geologist. Before re-entering the module after their final EVA, Gene Cernan uttered the final words spoken on the moon’s surface: “… as we leave the Moon at Taurus-Littrow, we leave as we came and, God willing, as we shall return, with peace and hope for all mankind.”

No-one would have suspected, at that time, that over half a century later, humans would not have returned there. It was a hiatus in manned exploration, one only partly filled by the International Space Station circling in low Earth orbit. The American public and the politicians representing it had grown bored of the space race now they had beaten the Russians. Having achieved humankind’s greatest dream, the subsequent visits seemed like an anticlimax. The continuing cost was a factor, too.

We had all supposed that humans might establish a lunar base. and then go on to Mars. Few of us had realized how close to disaster those early flights had been, or the jump in scale that would have been needed to continue. However, there is now a renewed interest in space, and a renewed determination to continue manned exploration.

Private companies funded by tech billionaires are playing a key role, with SpaceX and Blue Origin out there among the leaders. But the US government’s own programme is ambitious, and looks not only to more manned lunar landings, but to Mars beyond, and perhaps the asteroids.

When we landed on the moon, I remember the huge sense of achievement that swept the planet, uniting us all in thrilling that ours was the first generation to visit another world and look back on our own from the far distance. It gives us a useful sense of perspective to appreciate how tiny we are, and how insignificant our problems are in the grand scheme of the universe.

It is a good thing if this encourages us to tackle and solve those problems instead of screaming in despair and prophesying ruin. When we make the first return since the Apollo 17 astronauts left, it will reassure us once again that we are the species that solves its problems and overcomes its challenges.

Economic growth is an odd little thing

As ever we’ve those around us insisting that if we put all the really bright people into government then they’ll be able to plan our economy for us. Leave aside that we never do get all the really bright people in government, that idea of the planning doesn’t work either. The world, the economy, is too granular for any central body to ever hope to plan it.

Today’s example is at Inditex, the people who own Zara etc.

The world’s largest clothing retailer has posted a surge in profits after an investment in stock-tracking technology made Inditex even more efficient.

What stock tracking is that?

It reduced stock levels by investing in radio-frequency identification technology, which means that clothes in stores can be tracked via microchips and moved between shops to cater to demand.

The effect?

As a result, Inditex’s inventory costs fell by almost £200 million to €3.4 billion.

An expanding firm actually lowers its inventory costs? That’s a pure increase in human wealth. We now get more retail services for less capital allocated to the provision of retail services. This is an increase in the Solow Residual.

This also isn’t the sort of thing we’re going to gain from a state led bureaucracy. Sure, we might argue that we could, but do we? Does MoD use such stock tracking, the NHS? And if not, why not? Or, even, if they don’t, as they don’t, then we’ve just found an argument in favour of that profit motive, haven’t we? The incentive to apply new technology to increase efficiency.

Not that this basic thought is entirely new of course. Sam Walton’s great insight was how to tie barcodes at the tills into the stock ordering system back at the warehouses. That grew into Walmart. This capitalism malarkey does rather provide the incentives to increase efficiency.

The hovercraft

On December 12th, 1955, Christopher (later Sir Christopher) Cockerel patented the new mode of transport called the hovercraft. It used fans to lift the craft on a cushion of air so it could glide over land or water with minimal surface friction.

Cockerel was an inventor with a very original mind. He experimented at home with two concentric tins, one coffee and one cat food, using a hair-dryer to blow air between them. He found that the craft could be stable of air were blown through outlets surrounding a disc or oval shape, and later found that a flexible ‘skirt’ of rubber or similar material increased the efficiency and enabled it to pass over small obstacles without mishap.

He tried to win financial backing, but despite numerous demonstrations on Whitehall carpets, the military was unimpressed. The navy thought it was a plane, the air force thought it was a boat, and the army was “not interested.” Finally, though, Cockerel persuaded the National Research Development Corporation to finance the construction of a full-size version, to be made by Saunders Roe. It became the SR.N1.

Early versions carried passengers and eventually cars, and in 1968, the SR.N4 entered service with Hoverlloyd and Seaspeed to carry passengers and cars on a regular cross Channel service. Hovercraft have been used in many parts of the world for passenger and sports services, and in particular in disaster relief operations, and for some large-scale military purposes, carrying tanks, trucks and troops into terrain otherwise inaccessible.

I’ve travelled on many of them. I used to use them regularly on cross-Channel trip from Dover to Calais or Boulogne, liking the fact that they crossed in about half the time it took a ferry boat. One of my best trips was from Carnoustie to St Andrews during an Open Golf tournament. The trip there had taken me nearly two hours, but the hovercraft trip back took about 12 minutes across the Tay estuary before pulling up outside the Royal and Ancient Clubhouse in St Andrews.

I’ve piloted a one-person sports hovercraft, and was bemused to find no steering controls. The craft was manoeuvred by throwing one’s body to the side you wanted it to turn towards.

Commercial hovercraft have tended to be replaced by hydrofoils and high-speed catamarans that do not have to expend energy in lifting the vehicle, but they are still in use on a daily basis on services between Southsea and the Isle of Wight, and elsewhere in the world on vital but non-commercial uses.

The economist Mariana Mazzucato claims that it is public money that funds the discovery of most inventions, which she says private enterprise profits from. But she misses utterly the essential point that even publicly-funded breakthroughs do not become successful commercially until people work on the technology to turn them into viable products that people will buy to add value to their lives. When public bodies try to do that part of it themselves, they have a habit of performing poorly because they are doing it with other people’s money, rather than putting their own finances at risk. Cockerel’s hovercraft was not discovered by government. It did have a government grant to validate the system, but it was commercial companies that developed and refined the craft to turn them into a useful mode of transport.

The nub of our disagreement

Danny Finkelstein writes of the Ralph Miliband book that John McDonnell seems to be using as a blueprint. Just the one detail of which explains our base disagreement with the particular flavour of socialism being promoted:

From this combination, Miliband expects social harmony to be achieved. This harmony would be produced by universal civic virtue, in which people “would find no great difficulty in the cultivation of a socialised individualism in which the expression of their individuality would be combined with a due regard for the constraints imposed upon it by life in society”. People will stop being cruel. There will be “a community of interest” between everyone.

As we’ve pointed out before we’ve no problem with - indeed celebrate - voluntary what we might call economic socialism. That John Lewis is owned by the workers is just fine. The cooperatives that were the Friendly Societies we regard as admirable. For while we might say that they’re socialist in one meaning of that word they’re also those little platoons getting on with solving some of life’s problems as they, the platoons, wish to see them solved. A rather conservative idea even if possibly socialist.

We do, after all, believe in voluntary cooperation and voluntary association.

Our problem with the Miliband - and thus McDonnell - version is that it presumes, assumes perhaps, something we don’t think will happen. That a change in the economic arrangements of life is going to change human beings and their motivations.

Our insistence is that the task is entirely the other way around. Humans are as humans are. The task is to build a system in which those impulses, urges, reactions to incentives, are harnessed to the aggregate good. Voluntary association, voluntary exchange, the price system and all the other bits and bobs that go with them. Rather than this idea that if only humans could be changed then the new rational order would work.

After all, New Soviet Man never did turn up despite a certain long lasting and intense pressure to force him to do so. We don’t think New Socialist Man will either. Which is why we’re not with a plan that depends upon, assumes, he will.

We’re pragmatists, above all, thus insisting upon the system that works the clay we’ve got as an input, not demands that unobtanium that doesn’t exist. However glorious that socialist future might be it’s not going to come to pass with homo sapiens sapiens. It’s therefore not a viable option while we remain what we are, that hom. sap.

The Mayflower and Plymouth Rock

The story has it that the Mayflower landed at Plymouth Rock in New England on December 11th, 1620. They had landed earlier at Provincetown, but had no authority to found a colony there. Plymouth Colony was settled by Puritan Separatists, known to history as the Pilgrims. An earlier English colony had been founded at Jamestown, but that was largely by entrepreneurs seeking fortune in the New World. The Pilgrims were fleeing persecution, seeking religious freedom.

The Mayflower had set sail on September 6th with 102 passengers and 30 crew crammed into a ship just over 100 feet long. In the second month of its voyage it was hit by storm-force gales. It was buffeted, sprang leaks, and saw its main beam crack. While still on the ship, the Pilgrims signed the Mayflower Contract, to have the colony they were to establish governed by “just and equal laws.”

Men left the ship to build wattle and daub dwellings, but for several weeks returned to the ship each night to join the women and children still aboard. The first winter was harsh, and 45 of the 102 colonists died. By the time they came to celebrate “The First Thanksgiving” in 1621, only 53 were alive to celebrate it. 13 of the 18 adult women died in that first winter, and another died in May, leaving only 4 left to celebrate Thanksgiving.

The Pilgrims were aided by the local Indians, especially Squanto of the Patuxet tribe, who had spent 4 years in Europe after being kidnapped by earlier traders. They taught the Pilgrims how to survive, using dead fish to fertilize the soil for crops, and they joined in the first Thanksgiving, bringing deer to supplement the local foods the Pilgrims had assembled.  

The history of the early settlements reminds us that America was settled by two types of immigrants, those that today we would call asylum seekers and economic migrants. Some came to seek liberty and safety, and endured immense hardships to gain them. Others came seeking to improve their lot, and many went through years of privation before successfully establishing themselves.

The story of the immigrants shows why liberty was valued so highly that it featured in their Declaration of Independence and in their Constitution. Conservatism in America has always differed from its European counterpart because in America tradition was in large part a tradition of liberty, which it was not in Europe.

Plymouth Rock is now a symbol of that search for liberty and of the sacrifices made to achieve it. The rock itself broke in two when they attempted to haul it to Plymouth town square in 1774. The top half was located there, moved to a museum in 1834, and returned to its original site on the shore of Plymouth Harbor in 1880. It stands with other monuments in the area as a memorial to the early settlers, none of whom could have dreamed of the successful nation that would grow from those early beginnings. 

A deep and complete misunderstanding of the value of NHS data

There is a claim that we can’t allow those naughty American tech companies access to NHS data because it’s valuable. To which the correct answer is, nonsense. Not that this stops people spouting further nonsense on the subject but there we are, that’s alarmist politics for you.

The claim about the value of the data is here:

Accountants Ernst & Young estimate its value at £9.6bn annually.

No, not quite. The actual claim is:

Data held by the NHS could be worth nearly £10bn a year through operational savings, improved patient outcomes and benefits to the wider economy, a report from Ernst & Young has concluded.

It’s necessary to be a little pedantic here. That wider value to society is all very well but what matters to the value of the original resource is how much of that value can be captured. Historic evidence suggests that in a free market and capitalist society the entrepreneur gains about 3% of that total value. Who creates the new is therefore not a major concern, it is that the new is created which concerns us.

We should also be a little more pedantic here. Data is unsorted, that’s the patient records and so on. Information is what is valuable, that’s the knowledge that we extract from the data by processing it. It is the information, the knowledge, that is valuable, not the data. It is therefore morally and logically fair enough that the people who produce the valuable thing, that information, get some to all of the value added by doing the processing.

But rather more importantly what we out here are concerned about is that we get to enjoy that value in better health care. This is simple Adam Smith again, the point is always consumption. We are even given an example of how valuable the information - note, not data - can be:

Records of 1.6 million patients were handed over to Google’s DeepMind to help create an app, Streams, intended to alert clinicians rapidly to potentially acute kidney injury. Following complaints, the ICO found that patients were not fully informed about how their data was being used, and requested that the Royal Free tighten up its own data protection procedures.

The actual finding was that the NHS dehydrates some people to the point of kidney failure, something cured by giving them a glass of water. We exaggerate but not by much. And with or without such exaggeration that’s a useful and valuable thing to know - we care not at all who provided this value to us.

So, it is the processing that creates the value, not the data. How would we want matters to proceed from there?

The current approach – of allowing free access to data, and strictly enforcing intellectual property on insights and techniques derived from it – needs to be turned on its head. Localisation of data – and therefore democratic control and data sovereignty – must always be treated as an option in trade deals, while the patenting and copyrighting of algorithms and data-derived insights (particularly when taken from public data sources) should be weakened.

That suggestion is of course entirely the wrong way around. It is the creation of the information we’re interested in, it is the processing that adds the value. Therefore we’d like a system that rewards those who create information by processing data.

Perhaps more acutely, we’d like people competent to process data into information doing that. We do rather think that Google, Amazon, and the rest know how to process data. They’re pretty good at it, they seem to have this computing thing well handled and understood. The NHS once spent £11.7 billion or so on a computing project that produced not one usable line of code. So, who do we want processing data to discover those nuggets of knowledge and information?

We’d suggest that it be those provably competent at doing so. But maybe that’s just us, it’s difficult to tell these days with some people.