A thought about money

I noticed that there has been a flurry of discussion recently about what is known as Modern Monetary Theory (MMT)). It strikes me as a bit half-baked but the proponents of MMT may have a point.

The usual view is that governments collect tax and spend it to pay for their activities. I believe this is exactly the wrong way round. As I understand it, official money is created when government spends it into circulation to cover its expenses. The money must then be withdrawn from circulation through the tax system, so as to complete the cycle and prevent the undue increase in the quantity of money which leads to a general increase in prices as the value of money falls.

Now, it is essential to remember that one of the core functions of governments is to protect land rights and provide what is needed to make land habitable and productive, thereby creating sustaining its value. The government‛s primary duties are to defend the realm, protect land titles, make justice available to the people and provide the infrastructure which enables production. Without these, land would be of little value. In addition, service provided such as education and healthcare also enhance land value; one need only compare house prices in the vicinity of good schools to observe this effect.

It follows from this that the principal form of taxation should be on land, as measured by its market rental value.

Overdue policies that will probably not happen

A handful of overdue policy reforms would alleviate many of the long standing problems that afflict the British economy. This are

Rationalisation of property taxation including

• Reform of the Council Tax
• Abolition of Stamp Duty
• Abolition of Capital Gains
• Business Rates to annual assessments and will with fixed equipment, buildings and plant being ignored in the valuation. 

Phasing out of VAT

Significant raising of thresholds for income tax and NI contributions.

Scrapping of VAT over a couple of years; it is damaging, inefficient and a solid obstacle to growth. 

Even if these changes were revenue-neutral, great benefits would follow. Of course, even though Labour has a huge majority in parliament, little or none of this will happen.

When the wind blows, the trains stop

For the second time this week, trains on many routes in the west of Sweden have been cancelled due to high winds: this happened on Sunday morning (7 July) and again this afternoon (10 July).

Apparently there is a risk of trees falling on the overhead electrification cables, and of the cables themselves getting blown down. The cables come down regularly; a couple of times a week, it is said. I have personally been caught up in two incidents. In the first, the train was stuck in a forest for four hours when the wires came down. This was on a lovely afternoon in July and passengers could enjoy the sun and opportunity to walk their dogs. The stay in the forest was so long because it took two hours to couple a rescue locomotive to the train. A month ago the passengers were ordered off a Copenhagen to Gothenburg train because the wires had been stolen, and that journey ended up with an overnight stay in a hotel.

Which raises two questions. Why are trees allowed to grow where they are an obvious hazard? In steam days the trackside had to be kept clear because of the risk of fires. On electrified lines, the risk of disruption due to trees falling on the track is even greater.

The second is why are the lines electrified at all? Now that electricity is priced on the Europool market, it is not cheap, and there are many lines where there is not enough traffic to justify the cost of putting up the wires and keeping them in order, which is an onerous task in itself.

Perhaps some of this electrification infrastructure should be removed when it is life expired?

New tri-mode locomotive is exactly wrong

The Stadler class 93 locomotive is a tri mode (diesel/25kV electric/battery) unit intended for both freight and passenger train haulage. Its power is given as 6200 hp on electric traction, 1250 hp on diesel and 540 hp on batteries. Its main purposes is to haul high speed intermodal freight while avoiding diesel running under the wires, with diesel and battery power for the ʻlast mileʼ.

This looks good but is exactly wrong. It is, presumably, a very expensive piece of kit, each one probably costing over £3 million. It that looks like it is brutal on the track - tiny wheels and a 21 ton axle load are a recipe for heavy wear. 

Freight trains should not be traveling at high speeds. It wastes energy and damages the track - the modern container carriers with small wheels are track-bashers, and modern passenger trains are also destructive to the point that it is becoming a real problem; the poor state of the track is evident on, for instance, the Great Western Main Line. 

Electricity does not come out of the sky. Supplies will have to be enhanced to get rid of diesel running under the wires, and overall thermodynamic efficiency goes down. 

The advent of this design points yet again to look at using steam as a benchmark. The 9F freight locomotive delivers over 3000 hp when using coal and about 20% more on diesel fuel. The initial cost of a steam locomotive would probably be a quarter of that of the tri-mode and much the same to run.

As a production locomotive, a new design of three-cylinder 2-8-2 would be a stiff competitor, or another build of the proven 9F class, though the track would have to be modified to allow them back on the national network.

Equal rights for women in Sweden are history

Last Sunday was a Muslim festival, and the Gothenburg city council allowed this to be celebrated with public prayers in Slottskogen, one of the city parks. There was a huge turnout, as the picture shows. How many women can you count?

Who to vote for?

I intend to vote for Reform (if the postal voting form arrives in time) but their policies are not up to dealing with the problems that face the country. These have their roots in the theories that have been current for the past 100 years in the departments of economics in Oxbridge and the London School of Economics, and which circulate within the civil service and and the government. Until these theories are recognised as bogus, policies which might succeed are simply not available to whoever gets elected. 

At their root is the notion that government revenue should be raised primarily from taxes on productive and legal economic activity. This is ultimately self-defeating, since it leads to a death spiral. The present mania for bringing ever more people into the country is a desperate attempt to escape the inevitable. The system was never viable, and much government spending has had to be financed by inflation; sterling has lost 98% of its value since the end of the war, and there are other countries which have even worse records for inflation than Britain.

Whether the country has the stomach for making the necessary changes is doubtful. Reform seems unlikely to take the initiative in the right direction, which means that it will inevitably disappoint.

What is this weird lightweight train for?

Revolution VLR is a project for ultra lightweight trains for use on routes where traffic is relatively light. It is described as

“an innovative, lightweight, cost-effective rail vehicle that provides a compelling alternative to operating traditional heavy rail vehicles on branch lines. Its low mass reduces all aspects of operating costs and can significantly improve the business cases for line reopenings and extensions, enhancing local connectivity. RVLR’s innovative design combines automotive and rail technologies to provide an attractive, environmentally and economically sustainable product that can be deployed rapidly. RVLR facilitates modal shift and enhanced public transport connectivity. It supports a more affordable, greener future for our railways.”

I look at this and scratch my head. What were the designers thinking of? It is a curious design, with vehicles only 18.5 metres long (when the standard mark 1 length of 20 metres can run over the entire British system and another metre of length is probably possible. It appears to have no means of coupling it to another vehicle or locomotive, at least not in regular use. There is what looks like cramped seating for 56, and standing for 26. It compares unfavourably with the trains provided for this kind of service in the past, such as the GWR Auto trains which were used on little branch lines, and main line stopping services a century ago. These were 21.5 metre vehicles; those built in early BR days had extremely comfortable seating.

What is it for? There are hundreds of quite modern EMUs and DMUs coming out of service which have driving trailer cars which could be converted for use as control trailers for push-pull service for this kind of operation. Traction is another issue but the power requirements are about what was needed to run the GWR Auto-trains, which were pushed or pulled by very small steam locomotives such as the 1400 class.

A single de-rated HST power car (which would otherwise go for scrap) could handle up to three coaches with ease, with years of useful service ahead, so that passengers would not have be crammed in and stand, and there would be plenty of space for wheelchairs, prams and bicycles.

Dare one say it – very small steam locomotives such as the 1400 class used for auto-trains are very cheap to build, given a production run of 20 or more; when fuelled with light oil or diesel they actually use less fuel and produce a clean exhaust, and have a 60+ years life. 

The project, sponsored by Eversholt Rail and Transport Design International, seems to be a good example of an inability to see wood from trees or to learn from history. Given the number of GWR Auto-trains which survive, one of these should at least have been brought out for use as a cost/performance benchmark. Whatever traction is used, the total carbon footprint of the operation is minuscule – just 0.7% of the UK total – in the overall scheme of things – the carbon footprint of this project is probably bigger when everything is factored in, including embedded energy. One would have thought that there were still a few people left at Eversholt Rail who were aware how this kind of thing was done in the past, but seemingly not. You can read about it here.