Click to get your own widget

Thursday, December 21, 2006


This is an important article I was pointed to by David Farrer's Freedom & Whisky. It is a very well researched PDF of 68 pages of a statistically investigation of what causes economic growth.

To give away the ending the answer is ECONOMIC FREEDOM. Perhaps not startlingly unexpected but proven in great detail.

It was written for the South African government shortly after the end of apartheid & has, for reasons which may be those mentioned on page 10, has not been absorbed by them. Since economic growth is far & away the most effective way of improving the total population's lives I would like to think that anybody involved in government would at least make themselves aware of this.


p3 Table of contents

P9 "When published data for all countries has been analyzed the correlation between higher taxes & lower growth (which exists in OECD countries) is not found"

p 10 "During recent years, simple techniques have developed for predicting probable effects of individual measures. It should therefore be easy for all countries to prosper, yet very few do, which suggests that policy makers in most countries:
 Adopt sub-optimal or counter-productive policies unwittingly;
 Do not use readily available techniques to avoid, identify and correct mistakes, or
 Have higher priority anti-growth objectives." (since this report was prepared for the new South African government it seems itself proof of government not making growth a priority - this suggests that what is needed to obtain growth is to put it higher on the political agenda - precisely my intent)

p12 "There is no evidence that foreign "aid" has the potential to "make poverty history". On the contrary, the evidence suggests that aid may be harmful......The aid paradox is that to be a positive incentive, aid would have to go to countries where it is not needed, that is, where governments adopt policies that
result in high growth." (I would point out that aid recipients are self selecting as failed states statistics shown a correlation between aid & failure may be because more aid is the effect rather than the cause)

p13 "What matters, as far as economic growth is concerned, is not the characteristics
of rich countries, but of high-growth countries." (The fact that Ireland & Norway are richer than us doesn't matter. The fact that Ireland is growing far faster than us should be a lesson)

p 25 "Everything gets better with growth....
few people realise how much faster countries become much wealthier if they achieve just slightly higher growth rates" (indeed few people understand in their bones how fast compound growth in anything works)

p40 "Most of the world's top 10 richest or highest growth countries never had

p41 "welfare states under-perform on average, which could also be attributable to the fact that welfare statism tends to coincide with other policies which compromise growth, Sweden being the conspicuous exception, where the market has been characterised by regulatory liberalism and privatisation." (I would also hold up Singapore as having a cradle to grave welfare system, though one which is cost conscious, yet has an obviously high growth rate)

p 43 "The world's experience appears to support the view that economic freedom may be a necessary and sufficient condition for prosperity"

p50 "Firstly, China cannot be thought of as a single economy or even as a single country as far as its economy is concerned. The diversity of economic systems within China, from one province to another, is bigger than the diversity of economic systems internationally. Secondly, almost all its growth (industrialisation, investment, etc) is not only confined to provinces with high scores on the ‘marketisation index’, but to a few special zones. Thirdly, these zones have the freest economies on earth, if not the freest economies the world has ever known."

PP50 & 51 - China's 10% annual growth conceals even greater success. China is not an enormous free economy, it is a range of economies from Guandong province which is nearly as free as Hong Kong (& growing at about 20%) to Quinghai, which economically less free market than the world's least free independent country Burma accordingly China is "close to a controlled experiment in social science". An experiment which goes largely unnoticed here. This proves 2 things.

Firstly that 10% growth is not a maximum beyond which other countries cannot aim but merely an AVERAGE. If China has a province the size of European countries (85 million) growing at 20% then a mere 8% is indeed for wimps (granted internal movement in China means the population is growing far faster than anybody would for the UK as a whole & this probably considerably helps growth). Applying this to the Scottish example it suggests that we can continue falling behind England & continue to see the decline of Scotland's population if we choose to do nothing.

Secondly that the Chinese "bubble" is not going to burst, indeed because the faster growing provinces are becoming an ever larger proportion of the economy we should expect their 10% growth, which represents the average, to increase.

PP 54 & 55 - Countries with high taxation levels are not automatically going to have lower growth rates than those with high taxation. This comes as a surprise to free marketists and somewhat less so to me, who at one stage was a great supporter of the state capitalism which really did produce high growth in the early days of the USSR. The reason seems to be that if government spends the money as wisely as the free market it will achieve at least as good results. To spend effectively government should (!) build infrastructure especially transport, (2) provide services rather than regulate (ie the NHS rather than smoking police) (3) do things that don't merely duplicate what the market does (don't run the railways) (4) increase efficiency by outsourcing & privatisation. To extend my point about the early USSR I believe that where government is bad is in the long term - because it doesn't have the spur of bankruptcy an efficient government enterprise will, over time, increase inefficiencies. I believe that is what happened to NASA & the USSR, both government organisations which once performed spectacularly & over time became mired in bureaucracies. By comparison a Scottish executive which insists on spending 70% of its transport budget on outdated railways & prefers windmills to nuclear has managed to omit the first stage of the process.

P58 - Most studies find that less regulated countries out perform more regulated ones (unsurprisng) and that regulations cost the people 20 times more than they cost the government (surprising).

p60 - "The relative size of education budgets does not significantly influence growth"

Wednesday, December 20, 2006


British investigators believe that Alexander Litvinenko’s killers used more than $10 million of polonium-210 to poison him. Preliminary findings from the post mortem examination on the former KGB spy suggest that he was given more than ten times the lethal dose.
Police do not know why the assassins used so much of the polonium-210, and are investigating whether the poison was part of a consignment to be sold on the black market.

They believe that whoever orchestrated the plot knew of its effects, but are unsure whether the massive amount was used to send a message — it made it easier for British scientists to detect — or is evidence of a clumsy operation. IN FULL

Does this not make it quite obvious that this was not an assassination attempt against Litvinenko but a mishandling of material by him & his compatriots involved in a much larger conspiracy presumably against Russia? Does it not also make it look very much like the Polonium was provided free by some government, probably ours?

Tuesday, December 19, 2006


Tank commander Steve Roberts died because he didn't have body armour. OK, there has never been a war where the soldiers at all times had everything they needed. As Clausewitz said "in war everything is very easy but the easiest things are very difficult" & coming up with as much of every sort of equipment possible would never be easy. Thus I was perfectly willing to accept that casualties are inevitable & must be accepted.

However it turns out that him not having body armour wasn't a cock up - it was deliberate policy, the automatic result of the government's decision to lie to us.
The inquest into Sgt Roberts' death heard he was left exposed by "serious failings" in the army's supply and training methods which meant he had to give up his personal body armour just three days before.

Had he been wearing the £167 enhanced combat body armour (ECBA) he would have survived.
which could be cock up except
The week-long inquest in Oxford tried to determine why more than 2,200 troops were sent into combat without ECBA. Sgt Roberts' fears were recorded in messages to his wife.

Geoff Hoon, the defence secretary at the time, was told six months before the conflict began that 37,000 extra sets body armour were needed.

But the hearing was informed by the MoD's director of capability that tendering for contracts would have revealed preparations for an invasion.
At the time Blair & his cabinet were pretending that they were not preparing for an invasion. They were telling us that they would only attack with UN approval & if the WMDs existed. We know that they lied to us & to Parliament. We now know that they deliberately interfered with military decisions to support this lie. We know that that, not ineptiude, not bad luck, not the proper risks of war, is what killed Sergeant Roberts.

It won't make a difference because we are all tired of yet more proof that our government lied but this is an important point. Blair should have told the truth - that we were going to war to help an ally on whom we depend - the British Parliament might have gone for it or they might not. Seeing the results we may prefer not. In either case Sergeant Roberts wouldn't have died of our government's moral turpitude.
This letter, editied & toned down has been published by the Scotsman. It went out some other papers & will say if I find any of them use it.

Monday, December 18, 2006


The Scottish Executive seem to have made up their mind about the need for a new Forth crossing. Up to now all the semi-official word has been about another bridge but the Forth Tunnel Action Group & Roy Pedersen among others have made a very good case that a tunnel would be faster to build, cheaper & lower maintenance. While a bridge will cost about a billion tunnels have been credibly costed at between £500 & £250 million. The latter depending on achieving the same cost standards as Norway has achieved. Over recent years, because of new bore technology, tunneling has become much cheaper - something the Norwegians have noticed.

This brought me to look up Norway's tunneling record & it is impressive.
There are over 900 road tunnels in Norway. The total length of the tunnels is over 750 km. [1]

The longest road tunnels (>7 km, with opening year and length)
Lardalstunnelen, 2000, 24505 m
Gudvangatunnel, 1991, 11428 m
Folgefonntunnel, 2001, 11150 m
Korgfjelltunnelen, 2005, 8530 m
Almost all of them built between 1982 & 2000. Clearly there would be substantial cost savings doing a lot of tunneling rather than just one project. Indeed Norwegian costs are extremely competitive. This goes into more cost & construction detail
Construction costs for the tunnels which are now open are shown in Figure 2. All costs are based on year 2000 costs, according to price indexes of the Ministry of Transportation and Communication.
From 1992 to 2000, prices have increased linearly by 37 per cent. This is higher than the official price index. The reason for this is the improvement in tunnel standards, which has not been compensated for in the Ministry's price index.
Costs for planning and field work are not included for all of the tunnels. It is estimated that these costs are somewhere between NOK 2,000 & 4,000 per metre tunnel. This does not apply to the last tunnels which have been completed, where all costs are included in the survey.
The total construction costs vary from NOK 35,000 to 115,000 per metre. The Tromsasund tunnel is expensive because of its double tubes, whilst the Nordkapp tunnel is costly because of the poor rock quality in the tunnel.
The conclusions to be drawn is that subsea tunnels have become cheaper, but that rock conditions are decisive for the final price.
Since there are 11 Kroner to the pound this makes tunneling costs from £3.2 million per kilometer to £10 million. Even with multilane dual carriageway & motorways we are talking about a pretty fair saving.

Useful Tunnels Projects in Scotland

Forth Crossing - I firmly believe the Forth Road Bridge can be reroped for £100 million but with traffic increases an additional tunnel would be worthwhile.

Glasgow Motorway Extention - The present above ground proposal is costed at £500 million apparrently relocting costs & because some of the ground is said to be polluted by chrome. Obviously a tunnel with bypass outlets would be far cheaper & would not cause the pollution problems opponents claim to be motivated by.

Gourock/Dunoon - Much of Argyllshire is remote from the central belt because of long lochs & roads which need to go round them. The road distance between Gourock & Dunoon is 130 kilometers despite facing each other across the Clyde.

Cowal Penisula/Bute - A few miles south of Dunoon. With 2 tunnels Rothesay would be about 35 miles from Glasgow. A pleasnt commute whereas now it takes virtually a full day including ferry.

Loch Fyne Tunnel - There are several possible crossings leading on from the Dunoon crossing which would put the Kintyre peninsula within about 60 miles of Glasgow.

Arran - Either from Ayrshire (the longer & more expensive tunnel) or from Kintyre which could tie into the roads mentioned above.

Oban Mull - Makes the place accessible to 10s of thousands of Balymory fans.

Kintyre/Jura - Another almost uninhabited island which could become a one hour drive from Glasgow.

Islay/Kintyre or Jura - Direct from Kintyre would be about 15 miles, linking to Jura would be much cheaper. Again this island has a very small population because it is, by current methods, inaccessible. Islay is know as the Queen of the Hebrides because, being the most southerly & well out into the Gulf Stream it used to be the capital of the Lordship of the Isles. When the ancient Scots kingdom & later Viking lordship communicated by sea it was very centrally located but because our transport methods are now road based it is isolated. With an area similar to the Isle of Man & & more temperate weather, because of the Gulf Stream, it could be as prosperous if it were an hour & a half drive from Glasgow.

Orkney/Mainland - This has already been proposed. It would be expensive but Orkney has an oil fund & should be prepared to put up most of the funding.

Ulster/Galloway or Kintyre - About 15 miles from Kintyre, 25 from Galloway. A Kintyre tunnel was seriously looked at last century - the technology has improved since. I assume that Ulster, which would benefit even more than Scotland would put up a proportionate share of the cost.

Isle of Man/Galloway - About 20 miles. Man could reasonably be expected to put up the bulk of the money.

Skye/Lewis - Again about 20 miles.
I don't say that all these will work & there may well be others where a tunnel would be a practical way from one glen to another. I do say that improving transport infrastructure is something where government investment almost always pays off. I can think of nothing which would so revitalise the Island communities. Check the map yourself for ideas.

Paying for it

The Executive have already talked of a Forth Bridge costing a billion & Glasgow motorway £500 million. This entire programme might well cost less. Beyond that the use of a land capture tax, whereby a proportion of the increase in value of land sales on the isles, Cowal or even Fife could be taken as payment. After that some money could be retained by local development corporations. Islay, for example has 3,000 inhabitants over 600 square miles so the land value cannot be high. It wouldn't take the building of many homes there to pay for a tunnel. There could also be a case for giving the development organisation authority comparable to that of the Manx Parliament. Home Rule did them no harm.

I have been credibly advised that where we are not dealing with "hard rock" it could be £50 miliion a kilometre. Even so when the Executive are willing to pay £1 billion for a Forth bridge & £500 million for the Glasgow motorway extension this is still highly doable.

Sunday, December 17, 2006


Dear BBC,
This morning David Attenborough was interviewed on the Andrew Marr programme on the subject of putative global warming & made the somewhat improbable statement that "in 20 years much of Norfolk will be under water". Since sea level has been rising at about 0.6 mm a year since the last ice age & does not appear to have significantly changed recently this would require much of Norfolk to be less than half an inch above sea level now which I do not believe is the case. Indeed historically Norfolk has, for geological reasons, been rising faster than the sea. Even the alarmist BBC have heretofore claimed only 30 cm a century which amounts to 2 inches in 20 years.

I was therefore somewhat surprised when the interviewer never even questioned the remark & finished the interview calling Mr Attenborough, whose basic claim to fame is as a BBC spokesman an "icon", which clearly put a BBC seal of approval on it.

If it really is the case that the BBC are officially promising us that Norfolk will largely be underwater by 2026 I will have to accept that as the sort of ridiculous propaganda which represents the very highest standards to which the BBC aspire. If it is not the case you will, on the more traditional BBC practice of leaning "neither towards political partiality nor towards impartiality" be eager to have somebody informed to put the case, on a similar length & similarly friendly interview, that such claims are wholly untrue & merely represent to lack of scientific integrity with which the whole Catastrophic Warming case & its media presentation is riddled. I would suggest Professor Fred Singer, Professor David Bellamy, Professor Mike Jackson or Bernie Peiser would be interesting new interviewees on BBC.


This page is powered by Blogger. Isn't yours?

British Blogs.