torsdag 29 november 2007

Whither Land Value Taxation in the UK?

If land value taxation (LVT) and the ideas of Henry George are to be promoted, it needs supporters who are familiar with the underlying philosophy and theory. That means they will have gone through the School of Economic Science (SES) economics course. Otherwise their grasp of the subject is always shaky and they are vulnerable to being out-argued or talked into conceding compromises unnecessarily. Whatever one thinks about SES, and I have my reservations, there is nowhere else teaching economics soundly.

The principal organisation for the promotion of the ideas of Henry George in the UK, the Henry George Foundation, appears to be at long last in reliable hands. Subject to the limitations of that organisation as a registered charity, there appears to be no longer any reason why all the activity should not be channelled through that body, and it would probably be advantageous if other Georgist bodies were re-integrated into this mainstream.

The other issue concerns the use of the term Land Value Tax. This may have come to the end of its useful life and there is probably a need to describe what it does in another way, not "just one more tax". And people have different preoccupations and concerns and ways of thinking about the world. We cannot present things the same way we would have done in 1947. This all needs thinking about. SES is at present providing a useful forum for discussion.

The prospects for LVT in Britain are very poor. The public is badly informed and badly educated, and are focussed on trivia and personalities. The press panders to that and provides no leadership. There is a poverty of ideas on both left and right. The alternative centre seems unable to make any mark despite good parliamentary representation. Neither of the two main parties has anything useful to offer and both are apparently committed to the delusion that Britain is a great power that needs to be in a position to project military force around the world. Strange, when we cannot even have clean streets. Thus the best that can be done is to maintain a holding operation. As long as campaigners maintain a realistic view on this and do not imagine we are on the verge of any breakthrough, there is no reason why continuing effort should not be sustained.

onsdag 28 november 2007

Big Green Machine

Steam locomotives are far from being an obsolete technology. On the night of 25/26 August this one was heading a construction train in connection with the installation of a new bridge on the Swiss railways at Thayngen. The steam engine is very popular for permanent way and works trains especially at night because it is practically silent when stationary and less obtrusive when working, which is appreciated especially by local residents.

This is not the whole story either, because unlike a diesel, which is constantly idling even when stationary, no fuel is used while in standby mode. When all the sums are done, it turns out that the greater thermal efficiency of the diesel is negated by the cost of processing the fuel to make it suitable for use in an internal combustion engine, and in these standby losses. Hence it has been found that on the Swiss and Austrian mountain railways where both steam and diesel locomotives run on the same diesel fuel, the former use less as they consume nothing when stationary or running downhill.

The locomotive has been rebuilt from a German Kriegslok constructed in 1944 and intended for no more than a few months' service. The work was carried out by the Swiss engineering companyDampflokomotiv- und Maschinenfabrik DLM AG of Winterthür. Improvements have been incorporated to provide for quick startup and efficiencies around 50% higher than the best that was being achieved when steam locomotives were last used regularly in the 1950s.

Steam locomotives are in many ways ideal for rail traction, where demand for power is intermittent, for example, when starting, accelerating, and on uphill stretches of route. Because the boiler acts as an energy reservoir, the conversion of the chemical energy in the fuel to mechanical energy is separated off from the use of that energy to provide traction. In an internal combustion engine, on the other hand, the engine where the conversion of fuel to mechanical energy takes place has to be sufficiently large to provide for the maximum power demand. And being external combustion devices, steam locomotives are not particularly fussy about the fuel that is used. The use of waste materials is relatively simple and thus the machines can be carbon-neutral.

Steam locomotives are in principle simple, with direct drive from the cylinders to the wheels. By contrast, internal combustion engines used for rail traction require a complex and expensive electrical or hydraulic transmission system, with consequential high manufacturing and maintenance costs and energy losses. Given a reasonably long production run, the cost of steam locomotives should be less than 40% of the equivalent diesel electric.

Unfortunately, so far there have been no takers for the technology, which still has to recapture its credibility amongst conservative railway managers who dismiss it as obsolete. It is unfortunate, however, that the obvious advantages when used, as here, for maintenance trains, have not been recognised.

måndag 26 november 2007

What will cars be like when the oil runs out?

aptera 230 mpg electric 3-wheeled car
Originally uploaded by mod*mom.

The oil will not run out. It will just become more and more expensive. And will people kick the car habit when that happens? Not if they can help it.

What are the alternatives? Hydrocarbons are the perfect transport fuel. They come in convenient liquid form and have a high energy density.

One possible substitute is hydrogen. It can be converted into electricity using a fuel cell, with the cars driven by electric motors or it can be used in an ordinary internal combustion engine, suitably adapted. But fuel cells are likely to be expensive, since they use rare metals such as platinum. And hydrogen is difficult to store and handle, as it does not liquify except at very low temperatures, which makes it awkward and potentially dangerous to deal with. The biggest objection, however, is that energy is needed to manufacture hydrogen. As it does not occur naturally, it is not an energy source but simply a means of storing energy obtained from somewhere else.

What about biofuels? They are fine if they do not have to be grown specially, for example if they are made from waste materials, such as biogas from sewage and landfill sites.. Otherwise, the production of biofuels takes up land, water and other resources needed to grow food. Ethanol, another biofuel, can be made from waste products, though it tends to be made from crops specially grown. And ethanol-powered vehicles emit toxic and irritant gases.

How about electricity? As long as there are only a few electric vehicles, they can be powered by low-cost off-peak electricity which is usually available because nuclear power stations cannot easily be switched off. If there was any substantial number of electric cars all being charged at night, then the demand would quickly grow to the point that there would no longer be an off-peak period.

There is also the issue of batteries. These contain either lead or lithium. The former is toxic and the latter is a fire hazard. The production of both is energy intensive and they have a limited life; fortunately, the metals in them can be recycled quite efficiency. But they are heavy.

There are no easy answers but with the days of cheap portable energy coming to an end, the future of personal transport must be ultra-lightweight vehicles running at speeds where air resistance is not significant, which means around 30kph. And being too flimsy to share the roads with today's heavy vehicles, they will need a suitable infrastructure of their own.

fredag 23 november 2007

Eurostar woes

This is a reminder of what the new Eurostar terminal at St Pancras looked like in 1960. Five billion pounds have been spent and now the train takes only 2 hours 20 minutes to get from London to Paris. But if you make the journey, you need to allow at least 45 minutes for all the messing around beforehand. This is due to the security arrangements which are still bad in London and even worse at Gare du Nord in Paris.

Passengers and luggage are screened for metal objects. Luggage goes on a conveyor belt through a tunnel with some kind of detector, which is unproblematic. At St Pancras, shallow plastic trays are provided for small objects like mobile phones, keys and cameras, and they go on the conveyor belt too. But nobody has thought about providing tables or shelving where passengers can put their things in the trays before they are screened, and back in their pockets afterwards.

Passengers themselves then walk through a metal detector. If you have anything left in your pocket, it will sound the alarm. You will then be frisked as if you were a criminal who had been caught committing a crime and arrested by the police. Unless you like being touched up by a security guard, this is degrading and embarrassing.

The situation at Gare du Nord is even worse. No boxes for small objects are provided (strange this, because they have them in the station left luggage office downstairs). So you have to take everything out of your pockets and show it to the French customs official. But there is only a tiny space to put all the things on. And I had to go through the metal detector gate five times before I was clear. So there is my stuff, including camera and lenses, balanced precariously on a small area a metre above the concrete floor, while the official pokes around with it. Who pays for my Leica if it drops on the floor, I wonder?

The French customs official with whom I dealt with was particularly stupid and awkward, insisting on opening a factory-sealed box of 35mm films, which is not a good thing to do with films. What did he think was in the box, clearly marked FUJI?

I also had trouble with the ticket, which got jammed and they had to open up the machine to get it out. This is probably because I had folded it, but the tickets are too big to get in a wallet and are likely to get folded.

So I complained to one of the Eurostar crew on the train and was given a telephone number, which I rang next morning. The person I spoke to said she knew exactly what I was talking about, having had the same problem. Presumably, Eurostar's senior managers also have the same experience. Which makes one wonder whether the company has ever heard of Quality Circles, a Japanese invention, where staff at all levels come together to consider ways of improving whatever it is the company produces. Or is the whole affair just taken for granted and regarded as inevitable by all concerned? Or, to put it another way, are their brains in neutral?

The solutions are straightforward. British credit-card style tickets will fit in a wallet without having to be folded, and if necessary they can be provided with a chip with additional information that can be detected by an electronic reader.

As for the security, there really is a need for a sane approach to the problem. The risk needs to be determined and appropriate measures put in place. If the aim is to prevent terrorism, the present arrangements are counter productive, since they force passengers to gather whilst awaiting screening, thereby making them particularly vulnerable to attack. And any serious terrorists would take account of the security measures and adopt tactics which worked round them. I am not going to spell out the possibilities, but they are so numerous that the security measures amount to little more than a charade that inconveniences passengers. There are in any case other targets, presently unguarded, that would be of far more interest to a terrorist.

But assuming that there is a rationale behind the present screening system, then it should at least be organised so that it is less troublesome. There should be a stack of boxes just inside the screening area. The boxes should be big enough to contain people's outdoor clothing ie the same size as household storage containers, about 40 x 50 x 30 high, in assorted colours so that they could be identified. There should be tables or shelves at a convenient height so that people can put their things in the boxes, with trolleys available so that people can take the box, together with their luggage, to the screening machine.

Once screened, passengers would then take their box to another shelf or table and put their outdoor clothes on again, again with trolleys available.

It is shocking that this situation has been allowed to arise, with, seemingly, nobody giving a thought to the procedure to make it run as smoothly as possible.

I have already given up on Eurostar for journeys to northern Europe, as the ferry is cheaper, quicker and more comfortable. Now I am just giving up on Eurostar for trips to France as well until I hear they have sorted themselves out. There is none of this at the smaller ferry terminals, so I will go back to using the boat, which is not all that slower because there is no need to travel up to London and the port is quite close. I do not like being treated like a criminal.

POSTSCRIPT After a couple of months I received a letter from Eurostar expressing their concern and assuring me they are looking into the problem and will try to get it resolved.

Government computer bungle

This week's Inland Revenue computer bungle is beyond belief. Why do the government's departments not have access to each others' data over a secure computer network?

But if there really is no alternative to sending data out on discs by post, why was it not encrypted with a unique encryption key sent separately to the recipient?

Any teenage hacker would know how to do it so why is this not standard practice in government departments?

Perhaps this is the explanation. In British culture, anyone who knows about science and technology is dismissed as a nerd. This has always been the case. At the root of the problem is the idea that the highest form of life is to be a country gentleman landowner with an income ie to be a parasite. This goes back to the days of agricultural enclosures and the slave trade.

When the present generation of senior politicians and civil service mandarins were at university in the 1950s and 1960s, most of them studying at Oxbridge, the science students were dismissed as the Grey Men - who were usually people from the old grammar schools.

There was a pecking order. At the top were men who spend their time with the Christ Church and New College Beagles and usually got Fourths, if they were not sent down. If they took any part in public life at all, they might have become Conservative Party grandees. Next came a self-styled elite, mostly from public schools, who took subjects like Classics, Philosophy Politics and Economics and Law. These became the Civil Service mandarins and politicians. And they were the ones who ran Britain. Few of them had even a clue about anything to do with science and technology, consequently any policy area which requires such knowledge is in a shambles, which is virtually everything the British government touches.

That generation is approaching retirement, but fewer and fewer students have been opting for science and maths, preferring the softer subjects like media studies, while the most able have generally swallowed the idea that the way to make money is to push money around and go into the financial sector. The situation can only get worse.

onsdag 14 november 2007

St Vincent de Paul

Soup runs have come under criticism recently for encouraging dependency and ignoring people's real problems. I would not like to comment on this as the circumstances in which people accept what is given out by soup runs is so varied. One can envisage lonely people just going there for the company.

There has been one on the seafront at Brighton for many years, run under the auspices of the Society of St Vincent de Paul. People from our parish go out every evening in all weathers to hand out soup and sandwiches to people, mostly young men, who live in the city. One of the stalwarts was Ann Roberts, who died last year, and the picture shows the dedication of a bench that was placed on the spot in her memory.

Who was St Vincent de Paul? There is plenty of information on him: in short, he came from a peasant family and became a priest in the French court in the middle of the seventeenth century. At that time, the courtiers' wives lived pointless and extravagant lives, and he urged them to good works, in this case, to go out and help the poor of Paris.

The women of the court responded marvellously, which was all very well but what if he had encouraged the rich courtiers to investigate the causes of the poverty and see the connection between it and their own great wealth? In the following century, the French Physiocrats did precisely this, and when Louis XIV was king, and Anne Robert Jacques Turgot, Baron de Laune, had been appointed Comptroller-General, an attempt was made to put the proposed solutions into practice. There is every reason to suppose that their schemes would have worked, but vested interests prevailed and the ideas of the Enlightenment were gathering strength. It was too late, and the French Revolution was the result.

Freemasons and Catholics

Catholics are not allowed to become Freemasons. My father was a Freemason for many years and rose to become Worshipful Master of his lodge. He suggested that I might like to join, but, being forbidden to do so, I declined.

It is sometimes suggested that the Freemasons are plotting to destroy the Catholic church. The subject came up for discussion the other day, as it does from time to time, and the case of Cardinal Bugnini is sometimes cited. Bugnini, an alleged Freemason, was the principal architect of the revised Catholic liturgy, which seems to have done the Catholic church no good at all.

Never having been associated with Freemasonry, I know little about it apart from what has been published by Freemasons themselves. It has been described by one as "a system of morality taught by role-playing in small-scale allegorical theatrics, with the addition of lectures and catechisms to which the candidate gives set answers to set questions."

Freemasonry has a mythic origin claiming to be descended from the masons who constructed the Temple of Solomon, and passed down via the Knights Templar to modern times. The rituals, known as "workings", are a representation of the ancient practices. Modern Freemasonry in English speaking countries appears to have taken shape, initially in Scotland, in the earlier years of the eighteenth century and is said to have drawn on ideas of the Enlightenment. Mozart, famously, was a Mason and, as The Magic Flute portrays, it seems that Wisdom was the highest ideal.

Freemasonry flourished in France as an Enlighenment movement in the eighteenth century and promoted notions of egalitarianism, which no doubt helped to nuture the ideas behind the French Revolution, when the Goddess of Wisdom was enshrined in the cathedral of Notre Dame. And of course it can be no accident that the currency of the United States carries masonic emblems.

There is a clearly a spritual content to Freemasonry, but because there are varieties of the practice, there will inevitably be different spritualities. All require a belief in a Deity and in the afterlife, and some require members to be Christians and have their origin in the Catholic refugee flight from Scotland in the seventeenth century. The spirituality has Gnostic and Rosicrucian elements.

So what does this mean for Catholics and the Catholic Church? The usual objection is that Freemasonry is esoteric - that is, members are initiated into the teachings of the organisation in a step-by-step manner, whereas the Catholic Church is an open path. But there is a good reason for this. Any ordinary academic subject is naturally pursued step-by-step. It is often the case that what is comprehensible to a student who has studied a discipline in the correct order will seem nonsensical if presented to a beginner. And Catholicism is not really an open system either, as the doctrines and dogmas of the Catholic Church, which make sense to a believer, appear nonsensical or oppressive to someone who has contact with them for the first time. Some of the teaching of the Catholic Church make no sense to anyone who has not experienced "conversion" and thereby received the "gift of faith". This is why the Catholic church comes under criticism for its views on all sorts of things, whereas to those who have received this gift of faith, they make complete sense.

Given this experiential dimension to Catholicism, it can reasonably be argued that it is itself gnostic, at least to the extent that Catholics have no need to become Freemasons. Should they feel drawn in that direction, they should make a more positive effort to commit themselves to their Catholicism. Were they to join, it would result in confusions and they should most certainly obey the teaching of the Church in this matter.

As to whether there is a plot to destroy the Catholic Church - it seems that Freemasonry encompasses a diversity of practices, some of which might possibly be anti-Catholic in sentiment. But as Catholics must not become Freemasons and what goes on in the Masonic rites is confidential, no trustworthy information will ever be revealed.

But there is no need to invoke the notion of a Masonic plot to account for the decline of the Catholic Church in Western Europe since 1960. The damage is self-inflicted and unfortunately continuing. The clergy responsible are going to have a lot to answer for. This is not a new thing; the Catholic hierarchy were reluctant to challenge the unjust status quo in eighteenth century Europe, thereby creating the breeding ground for the French Revolution. Even people like St Vincent de Paul seem not to have questioned the economic system which created the class of poor on which he and his patrician women associates lavished their charity.

There is no need to invoke conspiracy theory. The Catholic church comes under attack when Catholics stop proclaiming Christianity and conducting themselves as Christians.

The photograph is of the Freemason's headquarters in London

måndag 12 november 2007

Does Britain really need more high speed railway lines?

I will be travelling on the new high speed Eurostar line next week. It opens on Wednesday and will knock 20 minutes off the journey time from London to Paris, which means I can have a later start and still catch my connection. It will be quite useful for me as I use the Eurostar service once or twice a year.

The opening of the line, called HST1, prompted an article in Rail magazine (7 November) by the expert Jim Steer, arguing that there is a need for more high speed lines in Britain. What he says is unconvincing, and I drafted the letter below, but had to shorten it to 250 words before I sent it off, so here is the thing in full.

It is natural that the opening of the new high speed line will have whetted people's appetite for more. But the case for more high speed lines does not follow from Jim Steer's analysis.

Continental TGV lines have mostly utilised existing routes into city centres. But Jim Steer's article refers to the looming capacity problems on lines leading into the large conurbations in Britain, and so the option of using existing rights of way is not available. Although, as he says, new lines into cities like London, Birmingham and Manchester will be needed to relieve the congestion, they will pass through densely developed areas, making them very costly. They alone may well consume all the funds available for new rail infrastructure. For this and general reasons of cost-effectiveness, these new lines could perhaps more usefully take the form of new suburban routes for continental sized high capacity commuter trains, thereby releasing extra paths on the existing tracks.

This is why there is a need to examine the overall picture. In thirty years' time, energy will be expensive. This will tell particularly against the private car, which is inherently energy-inefficient, and against air travel. There will be less competitive pressure against rail travel and less demand for fast journeys to attract passengers to the railway. At the same time, the railways themselves will be seeking to reduce energy consumption, and running at top speeds of not more than about 160kph is an important way of achieving fuel economy. Given that 90% of rail journeys in Britain are less than 90 miles long, the time savings gained by running at higher speeds are of little value to the majority of passengers; few people make long distance journeys more than a couple of times a month.

There is also a need to set priorities. People experience transport difficulties most acutely in the trips they make daily - going to work, getting the children to school, etc. Even the simplest of journeys, like walking to the shops or park, or cycling to college, has become problematic - indeed, dangerous - because most British cities have become overwhelmed with cars, trucks and buses. Investment in high speed rail does not address this. Moreover, as Jim Steer notes in his article, long distance travel involves journeys over local networks, and so improvements to these will automatically reduce door to door times and encourage people to leave their cars at home.

As for the argument that high speed rail will improve the economic performance of the regions, this could be achieved at fraction of the cost by reconstructing the tax system to take account of geographical advantage and disadvantage; at the moment, people are expected to pay the same tax per unit of wealth created, regardless of whether they are operating their business in the middle of the City of London or in a marginal location such as remote Caithness.

There may well be a case for new high speed rail lines, but it needs to be made within a balanced set of policies which do not neglect people's mundane day-to-day travel needs, looking ahead to a time when energy is substantially more expensive than it is today.

söndag 11 november 2007

New taxes will hurt small firms that try to go green

Energy Saving
Originally uploaded by Neil101.

Small businesses that want to do their bit for the environment face higher tax bills.

An article in today's Independent on Sunday states...
"The Conservatives have warned that SMEs that want to tackle climate change and install green energy technology will face a hike in their tax charges.

"The Valuation Office Agency (VOA), an arm of Inland Revenue, is preparing to tax solar panels, wind turbines and micro-generation technology with higher business rates and council tax. This follows news that Gordon Brown is set to abandon Tony Blair's targets on renewable energy.

"The small print of last month's pre-Budget report revealed that "the installation of micro-generation equipment in business premises can trigger an increased liability for business rates".

"Parliamentary Questions have also revealed that green energy measures will result in higher council tax bills. Such measures can push a home into a higher council-tax band when the house is sold or after council tax revaluation. The VOA is already undertaking training and preparations for the revaluation..."

One might think that this is crazy, but it is a logical consequence of Britain's property tax system. The solution is to exempt all buildings and improvements from property tax assessments and to tax on the rental value of the site alone, on the assumption that it was at it optimum permitted use.

Unfortunately, such is the power of the clique of vested interests that has Britain's politicians and civil servants in its pocket, that this simple and sensible measure is promptly struck off the political agenda whenever it is suggested.

torsdag 8 november 2007

Shome mishtake shomewhere?

The house a couple of doors away is for sale. They are asking £390,000. They would certainly get £360,000 so they are obviously trying it on a bit, but I don't blame the owners for that and they will have to find somewhere else. They have probably realised the schools round here are no good.

Twenty five years ago the price of the house would have been about £30,000. Of course it is not the house that has gone up in value but the land it is standing on. The government claims to be concerned about the shortage of affordable "homes" and is proposing to allow the building of hundreds of thousands of new houses.

But this morning, a commentator on the radio was saying that there is a risk of house prices falling as this would have all sorts of dire effects. Of which, presumably making houses more affordable is one of the dire effects. And so this commentator suggested that interest rates should come down to keep the prices buoyant and prevent a fall.

So which is it? Are high house prices a good thing or a bad thing? Can someone please explain? There seems to be some mistake somewhere.

måndag 5 november 2007

Laptop computer failures - blame the EU?

I got a three year old IBM Thinkpad computer for a friend and it packed up after a few months. It is not entirely dead, but the fault is with the display, which sometimes works and sometimes does not. Apparently it is a widespread problem both with Thinkpads and Apple Mac laptops. The Graphics Processor Unit, a surface-mounted chip, becomes detached from the motherboard due to a combination of failure of the soldered joints and flexing of the motherboard.

It turns out that the root cause of the problem is the use of lead-free solder, as required by the EU's Restriction of Hazardous Substances Directive, which came into force in 2003.

The lead/tin alloys used in traditional solder have peculiar properties which is why they have long been used for making joints in electrical, electronic and plumbing work. The physical chemistry of this is explained here

Lead is of course extremely toxic and there are problems associated with both the extraction and manufacture of lead and lead products, and with their disposal at the end of their useful life. But if the alternatives result in a short-lived product, that is not environmentally friendly either.

It looks as if the legislation has been promoted by politicians and civil servants who do not know what they talking about as they do not understand the science.

The way round the problem is not to ban lead but to ensure effective re-use and end of lifecycle recovery. One of the issues affecting the life of computers is the production of new software which makes ever more stringent demands on the hardware, which, assuming it is of sound manufacture, is discarded only part of the way through its useful life, which is typically about twelve years. This has been the root cause of the mountain of electronic scrap. For the individual, this is good news as serviceable computers are available at no cost. If they are fitted with a new hard disc and the Linux operating system and software are installed, they will do everything that most people use their computers for. But it has been bad news for the environment.

In this light, surely what is needed are directives on software efficiency and the recycling of electronic scrap?

The absurdity of it is that the amount of lead used in electronic equipment is tiny compared with the amount used in car batteries and buildings, for which there is no effective substitute.

Should you have a dead laptop which has stopped working due to failure of the soldering under the GPU, you may be able to resuscitate it. There is a lot of discussion of the matter on the internet. It can be temporarily cured by putting something under the chip to force it back into contact. A risky but effective procedure is to re-flow the solder, which will effect a long term cure.

Hopefully the manufacturers might come up with a solution, but it is not a simple matter and they should have been given the opportunity to do this before the legislation came into effect. As it is, thousands of consumers have been saddled with computers that have to be thrown away after a short life.

lördag 3 november 2007

The Corruption of Banking

Towers of Mammon
Originally uploaded by seadipper.

Banks perform essential functions in society. They provide people with a place to leave their money. And they give credit. Farmers, for instance, need credit so that they can live between the time they plant their seeds and when the crop has been harvested and sold, when the credit is extinguished.

Trouble has arisen because banks lend money for land purchase, or proxies for land purchase, and do it on the basis of using the capital value of the land as collateral for the loan.

The effect of this is to stoke up land prices. And the more land prices rise, the happier the banks are to advance money, again using the land as collateral. This leads to periodic land price bubbles. Then things go bad. The real value of land it its annual rental, which is not subject to the bubble effect to anything like the same extent. Yields, as a percentage of selling prices, gradually drop, which is acceptable to investors only so long as people think that prices are going to keep on growing. Eventually, the realisation dawns that the growth has come to an end, and then there is a crash. It seems to happen every 18 years or so. An economic depression follows. It can last five years or so before confidence starts to return and the cycle begins again.

We are now in the feverish stage of the cycle. Bank have been doing all sorts of stupid and barely honest things, like lending to people who cannot pay the money back, imagining that it does not matter because of the security of the rising value of the land being used as collateral, and then selling-on the bad debt. Both the borrowers and the banks are going to be in trouble.

The underlying problem is that the rental value of land is retained by the owner instead of being taxed away. This is how capital values attach to land in the first instance, as land purchase is the purchase of a rental stream. Once that happens, land prices froth up as they reflect the expectations of a larger rental stream in the future. Then land becomes a speculatively traded commodity. And that is the whole problem. The corruption of the banks is a side-effect.

Under a system where land rental value was taxed away, land would have no significant selling price. Banks would have no option but to make their loans on the basis of the credit-worthiness of the borrower. And competition would make prices fall. There would be no necessity to charge interest because charges for credit would need to be no more than was required to cover the cost of administration and to cover the possibility of default - a kind of insurance premium. This is the key to an honest banking system.

Latest food scare

what puts the great in great britain
Originally uploaded by lomokev.

Two traditional British staples, bacon and beef, are the latest food scares. It would be nice to think there was going to be some commonsense on the subject but I fear another panic response.

To judge from the size of them, some people are obviously eating too much. A full English breakfast is calorie-laden, it is true, but you feel full up for hours afterwards. Too little exercise, too much beer and too many sugary soft drinks also play their part in the prevalence of fatness. And a lot of bacon is not worth eating. It oozes white stuff and smells of pigs' wee.

But now we are told that bacon and beef cause cancer. The relationship is not a surprise, especially in the case of meats cured using sodium nitrite. If these foods sit inside the gut, they can fester away and produce carcinogens.

So the solution is a simple one. There is not need to stop enjoying these foods now and again. But they need to be eaten as part of a balanced diet with plenty of vegetables, fruit, wholemeal bread and other things with roughage, to keep everything moving through the digestive system.

So the breakfast of bacon and eggs is probably best started with a bowl of porridge and a roast be followed by fresh fruit such as an apple or whatever is in season. And the fried bread should be the proper wholemeal stuff.

Bacon and beef are not addictive drugs and having them once or twice a week in the context of a balanced range of foods is not going to endanger health.

I shall continue to enjoy a Full English and a roast once in a while.

fredag 2 november 2007

Oxford - redevelopment of the Lucy factory

This was an iron foundry until about ten years ago and now they have built very expensive apartments. But what a strange thing to have this mixture of styles, part of which is meant to look like Victorian warehouses, which is not what the previous buildings looked like.

torsdag 1 november 2007

Not coming soon to a street near you

The Department for Transport has published a new 90 page document setting out long term strategy, Towards a Sustainable Transport System, which builds upon the Eddington and Stern reports published earlier this year.

The topic has been sliced up into five sets of policy aims: Gross Domestic Product growth; Health and Safety; Preventing Climate Change; Quality of Life; and Social Equity. This is perhaps a reasonable way of assessing policies but it seems an odd approach to developing those policies.

Achieving GDP growth has been an important target of government for many years, the assumption being that it is the only way of lifting the poor out of poverty. But there are two fallacies here. The first is to equate GDP with well-being, when experience is that some growth has a negative effect on quality of life, and present means of measurement do not attach the necessary minus sign to such "growth". The second fallacy is the assumption of the famous trickle-down effect to bring the benefits to those who are less well-off.

There is discussion of a broad range of transport-related issues. Although it claims to be opposed to continuing with the old predict-and-provide policies, it assumes that investment needs to be focussed where the pressure is greatest. This would not in itself be unreasonable if the present pattern of settlement and industry in Britain were a natural thing, as seems to be the prevailing assumption. But it is not. Over 85% of the population of Britain is concentrated into a corridor which includes London, Birmingham, Bristol, Liverpool, Manchester and Leeds, less than a quarter of the land area. Within that area, however, people are quite dispersed, to the extent that they have become dependent on road transport. Yet in principle, there is no reason why many more people could not be living in fairly compact cities outside this corridor. An important reason why it does not happen is the tax system, which inhibits economic activity in otherwise marginal locations, thereby making them sub-marginal.

The document refers to persistent regional differences in income and productivity, without considering the possibility that these could be a simple effect of geography about which nothing can be done. The notion is reasonable enough; anyone operating their business in, say, Tyneside, will inevitably have additional transport and other costs. This difference in desirability between regions is reflected in differences in land values, but it is not recognised by the tax system which does not distinguish between thriving productive enterprises in the most favourable locations in the country - the City of London, for instance - and outfits struggling to survive in remote Caithness. Until this issue is dealt with, nobody can tell what the natural pattern of settlement in Britain might be.

There are suggestions of possible schemes, such as a new railway between London, Birmingham and Manchester, but with all the references to end-to-end journeys and quality of life, one might have expected to see an emphasis on local travel. It is good that the authors of the report have acknowledged the importance of those parts of the journey from, for example, home to the railway station, because one people have got into their cars, they are likely to want to make the entire journey in them. But there is little said about how to ease people out of this dependence on cars, through, for instance, the relatively low cost investment to improve conditions for pedestrians, cyclists and people trying to move about inside towns and cities. In this context, and bearing in mind the desire to reduce carbon emissions, there is clearly a role for electric trams, which receive just one mention in the entire report. They are unlikely to be coming soon to a street near you.

There are some good things said, such as the need to avoid expensive flagship schemes, to focus on the whole journey and to consider all the external effects. Important things are left unsaid, however. Transport infrastructure is one of the major elements that goes to creating and sustaining land value, but in the absence of any coherent mechanism for capturing land value, the benefits of infrastructure investment are pocketed by landowners. The Treasury is presumably aware of this and it may be one reason why it is reluctant to put up the cash for new schemes.

As a whole, then, the report does not convey the sense that much of value will come out of it, partly because it is a difficult text to read, clumsily phrased and loaded with jargon and managementspeak. The document is constructed of sentences containing thirty or forty long words apiece. Writing of this kind is not conducive to clear thinking, and what became of plain English? Before things like this are published, they ought to be read out aloud and revised by a group of three or four people. There is no better way of making sure that the result is readable and jargon replaced by proper English words and sentences. If the government is serious about promoting an informed discussion on this or any other topic, it needs to communicate better than this.

Apart from the obvious uncertainties about the future, perhaps the most serious difficulty for long term planning of the kind envisaged is that the decisions are being made for people who are themselves makers of decisions, and what they decide depends on the options that have been made available to them. To that extent, government remains in a leadership role, where responding to the views and preferences thrown up in focus group discussions is an abdication of the responsibilities that go with government. Where government lacks a vision for the future, it has no option but to go along with the prejudices of focus groups and to push out surveys with loaded questions. If, on the other hand, it presented a picture of what kind of a transport system we might have in thirty years' time, it would give people something less vague to talk about and it would be possible to have a debate that the public could involve itself in. If the vision that emerged from such a debate was something that captured the imagination, support would be forthcoming and there would be a definite aim to move towards. If there was no support, the government would have to look in another direction. As it is, things will continue to drift.

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