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These are shemes like the Channel Tunnel Rail Link, the West Coast Route Modernisation and Crossrail.
I am against them because they almost never profitable (which is a bad start) and, because they are unprofitable, they have to be funded out of taxation which I am against.
So, if they made a profit and, therefore, didn’t need taxpayers’ money you would be all in favour?
- Sure, but then a private company could afford to do it and so we wouldn’t need the government.
So, projects that haven’t made a profit?
- Hmm, it would be easier to list the projects that have. But here are a few recent ones:
- Jubilee Line Extension
- West Coast Route Modernisation
- East Coast Electrification
- Channel Tunnel Rail Link
- Eurostar
Were they supposed to recoup their capital outlay?
- Often not, but they were supposed to recoup it in some other way - by some kind of “social” benefit, for instance. They usually fail to achieve this as well.
Why’s that?
- Well, call me cynical but according to Bent Flyvberg, it’s because the projects’ proponents lie. I am inclined to believe him.
What’s the story with the JLE?
And the WCRM?
And the East Coast?
But don’t these projects deliver benefits besides just profits?
- I hear two arguments here. The first is the positive externality argument. The second is the one about workers needing to get to work.
There is a third argument that we don’t tend to hear but I think is the real reason behind a lot of these schemes - especially the high-speed rail ones - national virility. If the French have got one then we must, keeping up with the Joneses etc.
What is the positive externality argument?
- This is the argument that if you build a new railway line, and this particularly applies to cities, then although the line itself will never be able to cover its capital costs, the benefits to those nearby in measurable monetary terms will make the project as a whole worthwhile.
This is far from a completely stupid argument. The Jubilee Line Extension (JLE) in London cost some £3bn but local property rose in value by some £13bn.
But you reject this?
- Yes. Partly because of the danger of mission creep, so to speak. The danger is that the state will fund some winners but find that it can’t stop itself and end up funding ever more expensive losers. This seems to be what happened in Japan with the Shinkansen (aka Bullet train). Initially, these were quite successful but now everybody wants one and it has become an increasingly expensive business to satisfy demand.
Another reason I reject it is that it involves the state. The state is incompetent in most areas, so, it is bound to be wasteful in this one.
How expensive is Japan’s Shinkansen?
- It’s difficult to assess - the sums are in different places and merged with other items. I doubt if the bill for Japan’s Shinkansen disaster has come in at less than £100bn.
So, how would lines get built, then?
- Looks like a case for the super-landlord.
OK then, but what about the need for workers to get to work?
- The argument (such as I have heard) is that (typically) the unemployed live in one area while the jobs are being created in another. I always find this argument rather odd. Why is it that in the 19th Century workers had almost no trouble following the jobs but now (in much richer times) they do?
And your answer?
- Well, I’m not quite sure but I suspect council housing and planning have their part to play. Council housing because if you move you lose your house with no immediate prospect of getting another one. Planning, because it prevents housing being built where people want to live. So, the answer is to abolish planning and council housing.
So, keeping up with the Joneses?
- As it happens I am not entirely immune to this argument. In the days before the CTRL, trains would zoom up from Paris to the Tunnel and then crawl through Kent on their way to London. It was embarassing. I suppose if the state must indulge in some appalling waste of taxpayers’ money then this is the way to do it.
Nothing yet but you never know...