Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it

Via Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it:

[...] Taken together, the UK and US studies both account well for existing data on cost underestimation and benefit overestimation. Both studies falsify the notion that in situations with high political and organizational pressure the underestimation of costs and overestimation of benefits is caused by non-intentional technical error or optimism bias. Both studies support the view that in such situations promoters and forecasters intentionally use the following formula in order to secure approval and funding for their projects:

underestimated costs + overestimated benefits = funding

Using this formula, and thus ‘showing the project at its best’ as one interviewee said above, results in an inverted Darwinism, i.e the survival of the unfittest. It is not the best projects that get implemented, but the projects that look best on paper. And the projects that look best on paper are the projects with the largest cost underestimates and benefit overestimates, other things being equal. But the larger the cost underestimate on paper, the greater the cost overrun in practice. And the larger the overestimate of benefits, the greater the benefit shortfall. Therefore the projects that have been made to look best on paper in this manner become the worst, or unfittest, projects in reality, in the sense that they are the very projects that will encounter most problems during construction and operations in terms of the largest cost overruns, benefit shortfalls, and risks of non-viability. They have been designed like that, as disasters waiting to happen.

The paper goes on to say, “Professional and occasionally even criminal penalties should be enforced for managers and forecasters who consistently and foreseeably produce deceptive forecasts”. Wise words yet we shall have to hope the HS2 project and all the other infrastructure projects planned by the Government are unique in not suffering from the endemic flaws described in the paper.

I’ll leave interested parties to read the paper for themselves but I will add this: while the Government has cloaked itself in the legacy of the great British railway pioneers, they were entrepreneurs risking private capital in commercial projects. The same cannot be said of HS2.

That matters and it matters for all the reasons we have historically defended free societies from the encroach of planning.

Via Detlev Schlichter: Deceits and delusions – Some thoughts on the euro-crisis and democracy

Anybody with any knowledge of economics should feel uneasy at the sight of a country where half of recorded economic activity is conducted by the state. Are such semi-socialist societies operable, and if so, for how long?

Read the article via Deceits and delusions – Some thoughts on the euro-crisis and democracy.

Here’s the growth of the British Government to over half of GDP:

The growth of the British Government

We can escape this mess towards sustainable prosperity, but that escape will require substantial reforms towards sound institutions of social cooperation: honest money, strong property rights, freedom to contract, an end to trade barriers and lower, simpler taxes.

Poster of the week – 1929, “Socialism would mean inspectors all round”

From the Conservative Poster Archive, poster 1929-31, “Socialism would mean inspectors all round”.

Conservative Poster 1929-31

Too true, unfortunately: see Harry Snook’s Crossing the Threshold - 266 ways the State can enter your home from the Centre for Policy Studies (PDF) and my related question in debate.

How government and the economy interact

Here’s another thought-provoking video from Learn Liberty:

I have had a fascinating but concerning week, watching the Government commit to a giant state-planned, taxpayer-backed project in the shape of HS2, getting to know some of the surprisingly thoughtful people in the Occupy movement, speaking with Radio 4 Analysis about what is wrong with capitalism and, last night, speaking to Conservatives, LibDems and libertarians at Warwick University about the doctrine of liberty and why it matters so much today.

As I wrote in an article for The JC recently, the state has exceeded its ability to fund itself through taxation for forty years. A Ponzi scheme funded by currency debasement created the illusion of prosperity before, inevitably, breaking itself. This is the crisis we face and all of us concerned with sustainable prosperity for everyone will need to think deeply about where society heads next to best meet the general interest.

See also Why public spending is hard to cut, If this is capitalism, I am not a capitalist and my early article on Occupy.

Ideas are more powerful than armies

Update: amended links for public read access.

This afternoon, I am presenting five books which illustrate that ideas are more powerful than armies at the Young Briton’s Foundation conference. Here are the slides:

A presentation to the Young Briton's Foundation

Click for slides

Or browse here:

Did I have a Freudian slip when asking about the EU at PMQs?

In the Daily Mail, Quentin Letts reports that I called for the UK to quit the EU altogether at PMQs yesterday. Some colleagues also thought I said “leave” not “lead”.  Hansard reports my intended words:

Steve Baker (Wycombe) (Con): Does my right hon. Friend agree that it is time for this country to lead Europe into the hope and potential of a new post-bureaucratic age?

The Prime Minister: I think that there are opportunities for Britain in Europe, and we should start from the premise that it is in Britain’s interest to be in the single market. We are a trading nation, so we need those markets open, and to be able to determine the rules of those markets. As Europe changes, of course there will be opportunities, but the first priority at the end of this week must be to ensure that the eurozone crisis, which is having such a bad effect on our economy, is resolved. At the same time, however, we should be very clear about the British national interest: safeguarding the single markets and the financial services, and looking out for the interests of UK plc.

I was quoting the Prime Minister. He made the following remarks in Prague in 2007 in relation to the EU, according to the BBC:

And he added: “It is the last gasp of an outdated ideology, a philosophy that has no place in our new world of freedom, a world which demands that we fight this bureaucratic over-reach and lead Europe into the hope and potential of a new, post-bureaucratic age.”

I agree that the philosophy of the EU has no place in our new world of freedom. What Europe needs – free trade, peace and fundamental liberties – could be arbitrated under a much more limited institution such as the Council of Europe.

It’s time for reform of our extradition arrangements

Yesterday, I attended and intervened in the debate on reform of our extradition arrangements. The motion was as follows:

That this House calls upon the Government to reform the UK’s extradition arrangements to strengthen the protection of British citizens by introducing as a matter of urgency a Bill to enact the safeguards recommended by the Joint Committee on Human Rights in its Fifteenth Report, HC 767, and by pursuing such amendments to the UK-US Extradition Treaty 2003 and the EU Council Framework Decision 2002 on the European Arrest Warrant as are necessary in order to give effect to such recommendations.

I made the point that “never again must anyone spend seven years in prison awaiting extradition”. The debate was quite technical and legalistic but that was for me the key point: it is unjust for anyone to spend so long in prison without conviction. People must stand trial for offences and they must stand trial in the appropriate jurisdiction but it is clear that the present arrangements fall short of what we should be able to expect from our justice system.

In the debate, David Davis said,

There is a balance between justice and security, but security without justice is a very fragile security. It is our job to defend our lives and way of life, and in this respect I do not think that we have done so.

He went on to point out the implications of treating people as innocent until proven guilty and I recommend his speech in full.

The Human Rights Joint Committee Fifteenth Report The Human Rights Implications of UK Extradition Policy is available here. I was glad that the House approved this motion without dividing.

Thank goodness for Janet Daley

If ever there was a time for radical proposals by a governing party, this is it. Rather than the imitative, mealy-mouthed shuffling of dollops of money from one departmental scheme to another, in what will inevitably look like panic in the face of rising youth unemployment and disappointing growth figures, what we need is a display of real insight and nerve.

We will have to choose, quite soon, between liberty and the “security” of a society in which government controls the levers of economic life.

via A daring idea to fix the economy: try doing less – Telegraph.

British Bikers Protest Planned EU Motorbike Laws

Great stuff from Mike Weatherley MP:

Video from LearnLiberty.org: Equality & Respect: How I’m Equal to Hugh Jackman

More here. See also: Principles for a Free Society, Dr Nigel Ashford