The elephant in the (waiting) room

The McNulty report – Realising the potential of GB rail – is a queer beast. The report, published last week, is the final report of a long term investigation, established by the last government, into the efficiency of the British rail industry. And the report identifies a sensible and quite extensive set of barriers to efficiency in the rail industry. But it then proposes a slightly odd set of solutions to address those barriers. Or, rather, it fails to address the most obvious question of them all – are the problems generated by the fragmented and semi-privatised ownership structure of the industry?

Actually, that’s not even true. The report identifies industry fragmentation as key part of the problem. But it doesn’t explore the most obvious solution to that problem – large scale reintegration. Whether that is a result of Sir Roy McNulty’s disposition or the DfT setting a brief that precluded asking the question publicly is less clear. It does, however, mean the review is a missed opportunity. Read more of this post

Public service reform, zombie economics and the “Great Forgetting”

In his excellent recent book Zombie Economics: how dead ideas still walk among us John Quiggin, of the University of Queensland, provides an accessible account of some key economic ideas. These ideas provided the intellectual rationale for substantial social changes we have witnessed over the last 30 years. Many of these ideas boil down to theoretical justifications for the claim that markets are a better means of allocating resources than all available alternatives. Quiggin also summarises arguments against these theoretical rationalisations. The case against markets can be boiled down to the argument that whatever conventional economics might believe to be the case in theory, the real world just doesn’t follow the script. Working on the basis that it does is a recipe for disaster. This raises a crucial question: given that many of these ideas lack strong intellectual support – they are, or should be, ‘dead’ – why do they continue to exert such influence on policy? Societies are being subjected to “zombie economics”.

One of the topics with which Quiggin engages is privatisation. Read more of this post


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