The Pin Factory Blog

I had a typically nightmarish journey into London yesterday after the Bank Holiday. I arrived at Ipswich station to discover that all the trains were stationary (they had nowhere to go) and were running hours behind schedule. The wonderfully unhelpful announcements just said, "passengers for London are advised not to travel today". No replacement bus services were offered. I wasn’t surprised: I can't remember the last time I had a post-weekend commute that wasn't disrupted by overrunning engineering works, signal failures, or some other problem.

The thing is, everyone blames the train companies (i.e. the privatized rail operators) for these sorts of problems. Yet it is actually Network Rail (the renationalized version of Railtrack) that is to blame. And the trouble with Network Rail is that it just isn't accountable to consumers. The only thing Network Rail are accountable to is the Rail Regulator – which is set to fine them £14 million for the mess they made in the New Year, when everyone was trying to get back to work. However, this is a particularly imperfect kind of accountability – it doesn't amount to much more than the government claiming back part of its subsidy whenever things go seriously wrong.

I'm increasingly coming around to the view Iain Murray expressed in this ASI paper, No Way to Run a Railway, that the railways should be vertically re-integrated. That would mean the train companies would take over responsibility for the track, rolling stock and stations in their networks. That would certainly strengthen accountability to customers and increase co-ordination between maintenance and transport (Network Rail did not even tell National Express East Anglia what was going on yesterday). It might also create greater incentives for private sector investment in the railway as well.

P.S. If anyone is interested in questioning the rail regulator, Bill Emery, he's doing an ASI Power Lunch on May 27. Contact Steve (steve@adamsmith.org or 020 7222 4995) to request an invitation.

As Bernard Levin predicted those years ago with his spotting of the Single Issue Fanatic, the decisive change in life has been the march of the zealots. It's led to a large fall (sad to say) in social liberalism along the way.

Indeed, a substantial decline in liberalism of all sorts. 

Not quite the done thing right at the moment, but defending financial innovation and the derivatives markets. 

The worst movie of all time and the application of correct thinking about sunk costs. 

Such a waste, how could such a thing happen in the educational system? Although, not all the news from that sector is bad. 

Most important to make the distinction between the workers' wages and the workers' compensation. 

And finally, why all this fuss over human/animal hybirds? Been going on for years, hasn't it? 

A New York Times article by Robert Pear reports on a US government research finding that the there is an widening socio-economic disparity in life expectancy, as well as in income levels. Not only has the income gap been widening, but the number of years that affluent people can expect to live is moving further ahead than those expected by poorer people. Tim Worstall discusses the findings on his own site.

The trend has happened despite federal attempts to narrow the gap. It has widened between income groups, social classes and ethnic divisions. In two decades the gap between top and bottom had widened from 2.8 years to 4.5 years.

The gaps have been increasing despite efforts by the federal government to reduce them. One of the top goals of "Healthy People 2010," an official statement of national health objectives issued in 2000, is to “eliminate health disparities among different segments of the population," including higher- and lower-income groups and people of different racial and ethnic background.

Several possible reasons are advanced as possible explanations for the widening gap. Richer, better educated people are more likely to know about and take advantage of the latest discoveries in the treatment of cancer and heart disease. They are less likely to smoke, and more likely to have regular check-ups and screenings. More of them are covered by health insurance, and they are more likely to be well-informed about the importance of diet, exercise and healthy lifestyles.

Tim asks whether anyone thinks gains in life expectancy by the affluent are a bad thing because they increase inequality. Some people express the view that general gains in affluence are bad if their corollary is greater inequality of income. Do they take a similar view on life expectancy? There's a different view, though. In many areas, including education, some experts claim that the easiest way to improve the average is to pull the tail up; that is, to concentrate on improving the standard of those at the bottom. It is at least plausible that the same might be true of life expectancy, and that if the poor can be encouraged and enabled to take the positive actions which the affluent have been doing, the general average will be raised more readily. A general increase in healthy life expectancy seems a worthier goal than greater equality in this area.

71. "Business is polluting the environment, which we should all enjoy, just for the benefit of the rich."

Most people pollute the environment. Some do it with sewage, some with the smoke from fires or the fumes from petrol or diesel engines. Business which uses energy tends to pollute, and manufacturing tends to pollute more than service industries. For that matter, older industries tend to pollute more than the newer, high tech ones. It is not for the benefit of the rich, but in order that the products can be cheaper that a certain amount of pollution is tolerated.

Production could be totally clean, but it would make goods much more expensive if the clean-up costs were added to production. The rich would be relatively unaffected by this, and the poor would suffer most. Society has to balance the cost of a totally unaffected environment against the cost of producing necessary goods.

Even nature pollutes, with forest fires and natural contamination of air and water. A certain degree of pollution is tolerable in the sense that it lies within the regenerative capacity of the environment. As society grows richer, as a result of wealth-creating enterprise, it becomes more able to afford the luxury of a cleaner environment, and is able to insist on cleaner methods of production. One reason why less developed countries are taking a larger share of manufacturing is that for them, the advantages of prosperity outweigh the costs of pollution.

A clean environment is not something which costs the rich money; it costs everyone money in the increased cost of industrial processes, and the higher prices which have to be charged. As countries grow richer they become more able to afford that price and to produce cleanly. Although some urge us to cut back economic growth to secure a cleaner environment, it is only by becoming richer that more people will be able to afford a clean environment.

ConservativeHome asks whether the government’s new found enthusiasm for electoral reform could have anything to do with the Conservatives’ poll lead (recently put as wide as 16 percent). Frankly, it had not occurred to me that there would be any other reason for it. The official line, however, is that Jack Straw, the Justice Secretary, is worried that once the House of Lords is elected by proportional representation, the supremacy of the House of Commons will be challenged.

The simple solution to that concern would be to stop messing around with the Lords, since it works perfectly well as it is. They actually scrutinize legislation (unlike their elected colleagues), they stand up to the government (unlike their elected colleagues), and they don’t even get paid (again, unlike their elected colleagues). Unfortunately the government can’t bear to just leave things alone, and have set their hearts on making the upper house more ‘democratic’ (i.e. ‘more obedient to the government whips’).

Or maybe I’m just being cynical...

We prefer here to point you to the good and the interesting but just this once it'll to be the appalling, the near insane. Although, to be fair, it is also interesting in something of a car crash way. Possibly the worst misunderstanding of trade possible in recent times. Pleas, someone sit that man down with a copy of Ricardo.

A great deal more amusing: the perils of a hastily drawn up contract for a hastily drawn up deal. That one line might also go a long way to explaining this.

On British politics. Wouldn't it be interesting to know who is behind the Stop Boris website? 

The state of British journalism: not all that good perhaps. Not that American such is any better.

Another plank in the argument for localism.

More hopeless stupidity from the War on Drugs. 

And finally, well, it says it's to paint your own Jackson Pollock. But to Netsmith it's indistinguishable from any artist post about 1940. No doubt this says more about Netsmith's philistinism than anything else. 

Iain Dale's published his list of the 75 top political books. He's a UK based politician and journalist, so no surprise that most of them are indeed about the UK. It's possible that I'm quibbling a bit when I decry the list as being jam packed to the rafters with descriptions of what it is that politicians do (or have done). I agree that for many this is what politics is, but I'm afraid I regard it as the entirely uninteresting part of the whole process. As with Bismark's comment about the making of both laws and sausages: I'm interested in why people make sausages and what the end result is like, but I really can't work up any fascination about who is turning the meat grinder, nor whether they are wheeling it clockwise or anti-.

However, if you really are interested in the lawmaking process there's only one book worth reading: PJ O'Rourke's "Parliament of Whores". While a little dated now it's an unflatteringly honest description of how the process actually works. It might even persuade you of my own point of view: one of the more morally honest things that Mr, Spitzer did was his interaction with Ashley Dupre.

As to why we have this system, as to why politics exists at all and we do try to make laws, then there's nothing better than Adam Smith's "Wealth of Nations". Yes, those hundreds upon hundreds of pages of 18 th century prose. For what the end result can all too often turn out to be, try "The Road to Serfdom" by Freddie Hayek.

Just those three will innoculate you against either the necessity or desire to read yet another book by either an aspiring or retiring politician: "The Challenge Beyond", "Beyond the Challenge" and "Challenge the Beyond" can all remain safely unread and undisturbed upon the booksellers' shelves. You will not only understand the political process completely, you will be free to get on with more important and useful things like burping the baby, watching the footie or considering the utility of a really well made chicken balti. All of which are vastly more rewarding than the operation of the sausage grinder and similarly, vastly more interesting.