Greenies don't do physics

Once again, there is more evidence that Big Green and the Brussels bureaucrats acting at their behest don't understand the basics of physics.

It started with the ban on powerful lightbulbs. This was understandable; there was a "greener" alternative in the form of compact fluorescent bulbs and it seemed a logical move by the manufacturers of these compact fluorescents bulbs to lobby for the competing product to be banned. However, it saved almost nothing in the way of power in the grander scheme of things.

This new move, to ban the more powerful hairdryers and vacuum cleaners, is completely bonkers. Not only does there not appear to be anyone who could gain out of such a ban, but it takes the same amount of energy to dry someone's hair, regardless of the rate at which that energy is supplied.

So less powerful appliances will have to be used for longer. No energy will have been saved, the same amount of CO2 will have been produced and the same number of polar bears will be left swimming around looking for an ice floe to stand on.

That OFGEM Consultation in Full

From OFGEM:

There is evidence that customer switching has been falling over recent years despite increasing prices and significant savings available for consumers that change supplier. There was a significant spike in switching in late 2013 but it is not clear whether this trend will be sustained, and we note that the switching rate has materially decreased in January 2014. Crucially, consumer trust has fallen significantly in recent years with the last survey showing that 43 per cent of consumers did not trust energy suppliers, an increase of 4 percentage points from the previous year. 

I've been on various price comparison sites for electricity and while there are savings for switching, the amounts barely warrant my time and trouble calling someone, changing my direct debit and so forth.

Previous analysis suggested that incumbent energy suppliers in both electricity and gas all have a relatively high proportion of customers who never or rarely engage in the market. These suppliers are able to charge higher prices to these "sticky" customers whilst making cheaper deals available to more active customers. 

So, some customers can be bothered to switch on a regular basis and others can't. If some customers can switch, how is this not a functioning market?

Previous analysis showed evidence of weak competition in the market due to aligned pricing strategies of the six larger suppliers. Ofgem would stress that it found no evidence of explicit collusion between these suppliers. But tacit coordination can have the effect of reducing competition between suppliers and worsening outcomes for consumers.

The Assessment has found further evidence of possible tacit coordination and indeed that this pattern of behaviour may have become more entrenched over recent years. It has found evidence of strong alignment of pricing announcements, in both timing and extent, as well as a pattern of suppliers raising prices more rapidly and to a greater extent in response to an increase in costs than they reduce prices in response to a fall in costs. This is a sign of a lack of competition. 

Well, as the energy companies are all buying from a commodity market the prices are going to stay pretty much the same. Gas isn't like cars where you can buy Suzuki gas or Rolls-Royce gas with each special properties. It's just gas. If someone's flogging it for 10 dollars a cubic litre, you can't flog yours for 11 dollars a cubic litre.

And it's a sign of real competition. You see it when Tesco and ASDA decide to have a price war over petrol or oranges. One announces a price fall followed by someone else doing the same. In the cloud hosting market you see the same thing. Amazon drop the price of EC2 servers and Microsoft announce something a week later.

Many stakeholders highlighted barriers to entry and, particularly, expansion in energy markets. These include low wholesale market liquidity, credit and collateral requirements, suppliers’ pricing strategies, regulatory barriers and reputational risks. While there has been recent growth in new entrants who now have a 5 per cent market share, there is no evidence of sustained expansion at a scale which would provide a disruptive competitive threat. 

I've checked these companies on the price comparison sites and again, they aren't much cheaper than my current supplier. Certainly not to the point where I can be bothered switching.

There has been evidence of increasing average profitability in the six larger suppliers over the last four years. The Assessment has not come to a conclusion as to whether excess profits are being made but notes the recent increases and questions the suppliers’ contentions that five per cent is a fair margin. It also notes that there is variation in profitability amongst the large suppliers, and that there has been no clear evidence of efficiency improvements that might be expected in a strongly competitive environment.

While the evidence of profitability is not conclusive, the rise over the last few years allied to no clear evidence of increasing efficiency is indicative of a possible lack of effective competition. 

Really? 5%? I'm pretty sure you can tuck money away in bonds at about 3.5%, so 5% hardly seems like that much of an excessive return on investment.

But OK, let's strip out that 5% profit margin. Let's imagine no profits at all. That still doesn't account for the 37% rise in the past 3 years, does it? So, why have bills risen in that time?

And that's what this exercise is really about - it's not about a serious investigation into these companies because the report contains nothing but suggestion about their activities. It's a political exercise to keep the blame on the electricity companies to distract attention from the government having an utterly failed energy policy.

Manufacturing the enemy

Every day, it seems, the "news" media produce another hate figure for their readers and listeners.

Sometimes it's immigrants, sometimes it's multinationals like Amazon and sometimes it's energy companies, but there nearly always turns out to be a reason behind it and it usually has to do with the Government.

Lately I've been wondering why the Tories have been having a go at the energy companies in particular, but then I read that the government is planning a big price hike of its own to comply with the carbon emissions target for 2020, and the penny dropped.

The only good thing about being cynical about politicians is that you are so often proved right.

Nigel Lawson on top form

From today's Soaraway Sun:

Recognising that Brits have too much common sense to fall for this, [the taxpayer-funded lobby groups] parade spurious environmental concerns, claiming that fracking will contaminate groundwater and lead to damaging earthquakes.

Both these objections are entirely unfounded. Despite the hundreds of thousands of shale wells drilled in the US, there is not a single, authenticated case of groundwater contamination. This is hardly surprising. Groundwater, as its name implies, is near the earth’s surface. Shale gas is drilled deep, deep, down.

As for earthquakes, while there have been a few instances of minor tremors deep down where the fracking takes place, these have no effect whatsoever on the surface, where we all live.

Reported "but aside from that, we've nailed it all down precisely" of the day?

"Scottish government officials admitted they did not know how many street lights were involved, or the eventual CO2 savings or the total cost of this programme, arguing that the project was in its early stages."

Street lamps in Scotland could switch to 100% low-energy bulbs
9 May 2013: Ministers unveil plans for the green investment bank to fund a Scotland-wide LED lighting programme.

"Car pollution, noise and accidents cost every EU citizen £600 a year'"

Emailed in by David C, from The Guardian:

The perennial complaint from drivers that they are excessively taxed has been challenged by a study which concludes that road accidents, pollution and noise connected to cars costs every EU citizen more than £600 a year.

The report by transport academics at the Dresden Technical University in Germany calculated that even with drivers' insurance contributions discounted these factors amounted to an annual total of €373bn (£303bn) across the 27 EU member states, or around 3% of the bloc's entire yearly GDP. This breaks down as €750 per man, woman and child...(1)

The study, The True Costs of Automobility, accepts that such calculations necessarily have an element of approximation but give an important overall picture. In a national breakdown it says UK drivers accounted for £48bn of costs, second only to Germany, or about £815 per person per year.(2)

The figures deliberately do not offset motoring-connected taxes unless they are specifically ringfenced for car use, for example a motorway toll where the money is set aside for highway maintenance. The authors argue that other motoring levies form part of the general tax pot and are no more reserved for the impact of cars than alcohol duties are reserved for healthcare or policing drink-fuelled disorder.(3)

Even if motoring taxes were taken into account there remains a significant shortfall in the UK. Fuel duty and its associated VAT along with vehicle excise duty contribute around £38bn a year to the Treasury's coffers, £10bn less than the estimated cost.(4)

1) OK, let's call it £600 each.

2) Or £815 each for the UK, which gives us a total cost of a nice round £50 billion. The report appears to exclude the cost of building and maintaining roads, which is no more than £10 billion a year in the UK, so let's call it £60 billion all in.

3) What is the relevance of this? The government has to get money from somewhere, so the taxes it collects from motorists (minus direct costs) either reduce the amount of tax which non-motorists have to pay or are spent on stuff which benefits non-motorists.

UPDATE: as David C himself puts it in the comments: "...according to EU Greenie Logic, motoring can never cover its external costs, because whatever tax revenue it contributes to society is either hypothecated and doesn't count or non-hypothecated and doesn't count. QED!"

4) But "fuel duty and associated VAT" are not the end of the story. There's also VAT on new cars, car repairs and car parts; road fund licence; insurance premium tax; the P11D scale charges way in excess of the actual cash cost or value; parking charges; parking and speeding fines. It all adds up to rather more than £50 billion a year, if we include all the other taxes which car manufacturers, repair workshops etc pay then we are well over £60 billion. So as a matter of fact, the taxes cover the costs.
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The wider points are the more blindingly obvious ones:

5) As a matter of fact, most households in the UK own at least one car, so each household is simultaneously causing and suffering approx. 1/27 millionth of these external costs, so is breaking even, give or take a couple of hundred quid a year.

6) We can guesstimate the external costs of motoring, but what about the external benefits? For sure, we used to somehow manage without private cars and lorries, and if this country had a massive horse-breeding and railway building programme (the costs of which I can't even be bothered to guesstimate), we might just about manage again, but what would the impact be on GDP?

Allow me to guesstimate somewhere in the region of fifteen per cent, so motoring brings an external benefit of £200 billion per year. As well as the pleasure from simply owning and driving your own car, go where you like when you like in a comfy seat with your own choice of music etc.

7) Of course, the bulk of these external benefits accrue to motorists themselves (more jobs to choose from, or, for a given workplace, a far wider choice of places to live within commuting distance; more shopping and leisure opportunities), but these benefits still spill over to non-motorists (i.e. they buy stuff in the shops which was delivered by lorry, their rubbish gets taken away by lorry, relatives with cars come and visit them more often than if they had to walk there).

So by definition, the average household is considerably better off (a share of £200 billion benefit; the external costs and the tax net off to zilch on both sides), even those households who bear more than their "fair" share of the external costs are benefitting from some share of that extra GDP and £50 billion tax paid and must be at least breaking even.
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As ever, they bung in some land value points towards the end:

"...it must be stated that car traffic in the EU is highly subsidised by other people and other regions (7) and will be by future generations: residents along an arterial road,(8) taxpayers, elderly people who do not own cars,(9) neighbouring countries,(10) and children,(11) grandchildren and all future generations subsidise today's traffic."

8) Woo hoo! What 'other regions'? As far as I am aware, 'other regions' i.e. oil producing countries make a pretty penny out of our motoring habits as this boost the value of their land (the oil under it).

9) Yes, house prices and rents are lower along arterial roads, but you get a discount when you buy it; there's your compensation. By the same token, house prices in outlying commuter villages or industrial estates are higher. If the price of fuel doubled overnight, then the value of homes (and business premises) in inner suburbs would go up and values in outlying commuter villages and industrial estates would fall. Land Value Tax would be an automatic compensating mechanism, whatever happened to fuel prices.

10) Poor Widows Without Cars. Presumably In Mansions.

11) Repetition.

13) Yes, but children benefit if their parents go to work, and most people go to work by car. And children like being ferried around by car. As harsh as this sounds and without wishing to make light of individual tragedy, if ten million children can benefit by having parents with a job and being ferried around and a couple of thousand are killed or injured every year, that's still an overall benefit to "children".

Chris Huhne: Put out more flags!

Nick Drew suggests we celebrate this momentous occasion by hanging out the bunting. I don't have any bunting handy, so I'll just repost a caricature of him looking glum:For good measure, here's his ex looking smug:

More pro-FPTP drivel which ignores the obvious

From a reader's letter in the FT:

Australia’s voting system is no paragon; it helps unpopular governments stay in power. (1) In last year’s national election, 62 per cent voted against Labor but that is the government they ended up with. The ruling Labor party received just 38 per cent of the popular vote, while the Liberals got 43.7 per cent. The Greens polled 11.6 per cent of the vote and other parties the remainder. (2) Who governed was decided on the preferences of the least popular candidates. (3)

Righty-ho.

1) The man prefers the Liberals and so is a bit miffed that his party didn't get in, and he imagines that under FPTP, the Liberals would have won. That completely disqualifies him from the debate. I don't like the Lib Dems, but the fact that AV might tend to favour them is not an argument against AV as such. In fact, my favourite voting system is multi-member constituencies, which would tend to favour the Tories, whom I hate just as much as the Lib Dems or Labour, so what?

2) Does he have any reason to assume that the most of the 11.6 per cent of people who voted "Green 1, Labour 2" would not have voted tactically for Labour under FPTP?

Nope, thought not.

3) The notion that "Who governed was decided on the preferences of the least popular candidates." is an outright f-ing lie. Correct would be "Who governed was decided on the second preferences of those who would have preferred the Greens, but were prepared to settle for Labour". The opinions of the "least popular candidates" (i.e. Green party candidates) had nothing to do with anything at all, they were eliminated and it was ordinary people who were allowed to go for their second-best.

Twat.

Damn! I missed it!

Apparently it was Earth Hour yesterday at 8.30 pm. Now, being me, I had all the usual lights (and probably a couple of television sets or computers, fridge, freezer etc) turned on at the time. I wouldn't have turned them all off anyway, but as I didn't know that the Greenies wanted me to turn them all off, I was deprived of the extra pleasure of not doing so.

In other news, George Moonbat would appear to be amiably mad:

"I’m lucky enough to have half an acre of land. In normal circumstances that’s more than enough to provide all the food we need. But unfortunately it was a devastating winter and wiped out all my kale, broccoli, winter salads and slightly optimistic fruit like kiwi and figs and Chilean guavas and frost-tolerant oranges and lemons. So things aren’t looking too good."

An Englishman reckons it serves him right for gambling on global warming (tee hee) but if normal human beings were trying to be self-sufficient in the UK (and yes, it is possible on half an acre, although it's very labour intensive), would they not go for stuff like potatoes, carrots, onions, apples and maybe a few chickens or even a pig? The only vegetable on that list that comes even close is broccoli (Her Indoors grows some broccoli in our back garden, if memory serves).

The New Localism proves to be devastatingly effective...

From the BBC:

Plans to turn down planning consent for 150,000 affordable homes by 2015 will be achievable, due to changes to England's planning system, says a committee of MPs.

It said axing "regional spatial strategies", targets for houses and other developments, drove a "stake through the heart" of the planning system. The committee said planned new homes blighting the countryside have dropped by an estimated 200,000.

The government says "top down" targets failed to protect the green belt and its plans gave councils a "clear political incentive" to turn down new builds.

Regional spatial planning strategies, introduced by Labour, set out non-development plans for nine English regions over 15-20 years. They included restrictions on house building as well as developments that would be locally unpopular even though they were strategically important - like mineral extraction and waste treatment sites and accommodation for Gypsies and Travellers.

Communities Secretary Eric Pickles described the new rules as "Whitehall's grip on local planning policy" when he announced they would be introduced in July 2010 and said they would prevent housebuilding.

'Simple choice'

The communities and local government committee said that, since that announcement, fewer houses were due to be built.

"With the figures for new house building contained in local authorities' plans already estimated to have reduced by 200,000... we conclude that the government may well be faced with a simple choice in deciding whether to build more homes than the previous government, or to pander to NIMBYs and Greenies in decisions of this kind," it said.

The Localism Bill, currently going through Parliament, scraps the regional strategies and hands decisions on new homes to existing owner-occupiers. But the report said "transitional arrangements" should be introduced in the meantime, to prevent new homes being started during the "hiatus in planning"...

Planning Minister Bob Neill said: "It was under the last government that house-building rates fell to their lowest peacetime levels since 1924. Regional targets clearly succeeded in not building the right number of homes in the right places. Top-down targets achieved their aim of alienating the public and undermining support for new housing. Under the coalition government's reforms, councils have no clear financial incentive to build from the New Homes Bonus. Latest figures from the National Housebuilding Council and from the Office for National Statistics already show a surge of pessimism from a construction industry which will probably never recover."

... and finally they came for the water users!

The BBC wheel out their fakecharity template article.

1. There's a "should" in the headline, repeated in the first sentence, which is a signal that what you are about to read is complete fabricated bollocks.

2. Then there are some rent-a-quotes from the National Trust, RSPB and World Wildlife Fund etc.

3. It rounds off with a government spokesman agreeing that "more must be done".

So far so good.

Now, I can understand Them going for smokers, drinkers, fatties, skinnies, gamblers, pornographers etc, because those are all minorities; They launch occasional skirmishes against car drivers, but they are the majority so it's half-hearted at best; but what makes Them think they can humiliate water users? That's all of us, surely? Even tramps have to visit public toilets or take the occasional communal shower in a drop-in centre or something.

PS, water is indeed "a precious resource" but there is no lack of the physical substance itself; the cost is collecting it, storing it, purifying and pumping it.

Vested Interest Fun

Nice to see a whole shed load of Vested Interest groups sticking their oars in at the BBC:

The UK government should put a moratorium on shale gas operations until the environmental implications are fully understood, a report says.

Inevitably, the article kicks off with a 'should'.

"We are aware that there have been reports from US of issues linked to some shale gas projects," a spokesman for the Department of Energy and Climate Change (Decc) told BBC News, "However, we understand that these are only in a few cases and that Cuadrilla (the firm testing for shale gas in Lancashire) has made it clear that there is no likelihood of environmental damage and that it is applying technical expertise and exercising the utmost care as it takes drilling and testing forward."

Regulator takes regulated's word for it. Nice.

The Tyndall report also expresses concern that the exploitation of shale gas is bringing new greenhouse gas sources into play. It says: "This will further reduce any slim possibility of maintaining global temperature changes at or below 2C (3.6F) and thereby increase the risk of entering a period of 'dangerous climate change'."

All things being equal, the amount of 'greenhouse gases' and other pollutants created per unit of energy consumed in a building is probably lower with domestic shale gas than e.g. importing gas from Russia or the Middle East.

... there have been reports of problems with the technology in the US, such as cattle dying after drinking water from the fracturing process that found its way to the surface.

Possibly true, that all depends on whether cattle drink water which has recently fallen as rain or which trickles out of rocks. But the overall safety record of European oil and gas producers is vastly better than in the USA, so I'm not sure that's relevant.

In Pennsylvania, some residents can now set fire to their drinking water after methane leaked into wells. They are blaming shale gas extraction.

Possibly true. Safety tip: if you turn on your water tap and smell gas*, then open a couple of windows and leave the tap running until the gas dissipates, and most importantly, don't hold a lighted match under a running tap.

The Tyndall report says that gas drilling in Lancashire will give rise to a range of local concerns including noise pollution, high levels of truck movements and land use demands.

Ah... the NIMBYs making a late guest appearance. As a rule of thumb, where there's a Greenie there's a NIMBY not far behind.

The Decc spokesman said: "We support industry's endeavours in pursuing energy sources (like shale gas), provided that tapping of such resources proves to be economically, commercially and environmentally viable...

If it weren't 'economically viable', then no private company would want to do it, short of there being massive subsidies. The reason why we can't rule out the government subsidising this is hinted at earlier in the article: "Experts say the technological breakthrough increases energy security worldwide and reduces the diplomatic power of gas-rich nations, such as Russia."

The article concludes:

"All onshore oil and gas projects, including shale gas exploration and development, are subject to a series of checks, including local planning permission before they are able to move ahead with drilling activities."

Not going to happen then, is it, short of energy companies merrily greasing a few palms. So it's in the interests of local politicians to stoke up Greenie and NIMBY opposition because that enhances the amount of bribes they can demand.

*The problem being that apparently you can't smell natural gas, but hey. More to the point, UK water companies are very much geared up to separating out methane from water pumped into the system, that's what sewage works are for.

It can't be rocket science to separate a heavy liquid (like water) from a light gas (like methane). From here: "Methane can also migrate from coal seams into sandstone aquifers. If methane is present in an aquifer, it will likely exist as a dissolved gas in the water. When the well is pumped, the water level is drawn down. The draw down will lower the pressure in the well and allow more gas to be released from the water. Methane will readily move from the water phase to the gas phase when water pressure is reduced to atmospheric pressure at the ground surface."

This cheered me up

The Scottish Greens published a report on Land Value Tax today (which I haven't read yet) but I'm mentioned briefly on page 5.

So that's a nice birthday present, I suppose.

Carbon Footprint Of The Day

Somehow I managed to get on The Eden Project's* mailing list, and the special offer on today's selection of Environmentally Friendly And Sustainably Overpriced Tat is a Reclaimed Teak Candle, yours for a modest £39.50 (down from £49.50).
They have a burn time of 40-50 hours, allegedly, and are imported from Indonesia.

Go figure.

* Who are of course a fig leaf for the French nuclear industry.

Ha ha! I told you so!

My post of 8 June 2010:

I shall adopt the same approach with the recent [oil spill] in the Gulf of Mexico. No doubt the Yanks will engage in a lot of knee jerk stuff (like 'banning' future offshore drilling etc)... and Greenies the world over will adopt Louisana cray fisherman as their poster boys for a while but I give it six months* and the oil spill itself will be history, with or without any mass clean up efforts.

Daily Mail 30 july 2010:

He sparked outrage in the US when he suggested that the Gulf of Mexico oil spill was nothing but a drop in the ocean.... But now, 16 days after the leak was finally stopped, scientists are coming forward to suggest that perhaps BP boss Tony Hayward may have been right after all.

Oil from the well is clearing from the sea surface much faster than scientists expected. Indeed, some are asking whether the original threat was actually exaggerated. And just over 100 days after the Deepwater Horizon drilling rig exploded in the Gulf of Mexico, killing 11 workers, the water around the Gulf is almost entirely clear...

* With the benefit of hindsight, I'm kicking myself that I didn't say six weeks. Ah well... the MSM has now firmly fixed its gaze on this week's 'worst ever' oil spill. I'm sure the evil capitalists are to blame for that one as well. Whatever.

"UK should use waste for power"

From CityAM's What the other papers say this morning:

THE TIMES - As much as 17 per cent of Britain's electricity needs could be met by burning rubbish and the methane produced from landfill sites. David Palmer-Jones, chief executive of Sita UK, which handled nine million tonnes of waste last year – 8 per cent of the total – said that Britain was failing to grasp a huge opportunity.

OT1H, "He would say that, wouldn't he?", but OTOH I am quite sure that there is something in it. Other countries have been doing this for years, so it can't be too difficult to work out whether it's economically viable or not. Plus it winds up Greenies and NIMBYs no end, so that's a bonus.

We own land! Give us money!

At first blush, you might think that landowners, NIMBYs and the Home-Owner-Ist coalition generally are more 'right wing', while the Greenies are 'left wing'.

I'll cheerfully bash both sides, not in the interests of any particular political neutrality (I'm not political) but because what underpins both camps is that they wave The Righteous Flag ('Protecting The Hallowed Green Belt') in order to mask the fact that they are actually rent-seekers and authoritarians - that is what galls me as a small government, free market liberal.

Worst of both worlds is a Greenie landowner of course. Charles Bazlinton alerted me to this article in The Times (which will require you going through a laborious registration process) concerning the activities of one such individual:

Michael Eavis [an agriculural landowner], who will host the 40th [Glastonbury] festival at Worthy [ooh, the irony] Farm next week, will become the first person to take advantage of the Government’s new, heavily subsidised scheme to create a large array of solar panels... Mr Eavis will sell the electricity to the National Grid at a premium rate, guaranteed by the Government for 25 years. He expects to earn about £45,000 a year from the feed-in tariff as well as reducing his own energy bills, meaning that the system will pay for itself in six years.

Mr Eavis told The Times: “I’ve been planning this for a long time but the Gulf of Mexico oil spill has brought home just how urgent it is that we move to renewable electricity..."

The Department of Energy and Climate Change estimates that the scheme will cost more than £8 billion to subsidise over the next 20 years, or £8.50 a year on the average household electricity bill.

So who pays? Average households occupying a couple of hundred square yards. And who benefits..?

I love these large scale experiments

Most of you will probably remember the Exxon Valdez 'disaster', where the clean up actually caused more enviromental damage than the oil spill itself, or when the Iraqi army left Kuwait nineteen years ago, and just for a giggle they set fire to oil wells and released eleven million barrels of crude into the Persian Gulf.

Everybody was predicting that the world would come to an end, but it struck me that oil is a natural product (which admittedly can do a lot of short term damage if it's in the wrong place) so it would probably sort itself out, which it did. So I shall adopt the same approach with the recent one in the Gulf of Mexico.

No doubt the Yanks will engage in a lot of knee jerk stuff (like 'banning' future offshore drilling etc), rather than address the underlying regulatory failure* and Greenies the world over will adopt Louisana cray fisherman as their poster boys for a while but I give it six months and the oil spill itself will be history, with or without any mass clean up efforts.

* It must be said, the Yanks have an appalling record on this, there was another disaster yesterday.

Minister For Eco-Fascism

Collective Ownership & The Invisible Hand

Those two phrases tend to split opinion along traditional left and right wing lines.

The lefties love the idea of Collective Ownership ('CO') because they think it means centralised state ownership, and the right wingers hate the idea for the equal and opposite reason. Right wingers appreciate the concept of The Invisible Hand ('TIH') but lefties deny it even exists, which is why they want everything to be nationalised, regulated, centrally planned etc.

Actually, CO and TIH are much the same thing: consider a large plc with tens of thousands of shareholders - instead of each shareholder owning a desk, a delivery van, or some computer records and employing one or two people, they each own a small percentage of a larger whole. The business and all its assets are owned collectively. In theory, shareholders could vote to liquidate the company and take the assets pro rata to the number of shares they own, but in all but the most extreme cases, they would lose out sorely by doing so - you're better off with £5,000 worth of shares than you are with a second hand delivery van, for example (or else you'd sell the shares and buy a second hand delivery van).

Similarly, you could say that this pooling is TIH at work; if there are economies of scale, people end up better off by owning a small share of a larger pie than the whole of a very small pie.

[Further, that plc might have tens of thousands of employees. Of course, they do not 'own' the business in a legal sense, but in economic terms, they very much do, and they speak of 'their colleagues' or 'their desk' or 'their cash till' or whatever. In the long run, an employee has much the same interest in his employer doing well as a shareholder does.]

"What's the point of all this musing?", you may ask.

Let's be old fashioned and assume that this plc is run for the benefit of its shareholders. It may be that they have a shop (or factory) near you, which you visit frequently because you shop (or work) there, but it is making losses and they close it down. As a customer (or worker), you will be a bit miffed, but if you are also a shareholder, you will benefit. TIH continues working.

Or it may be that the plc wants to open up a new shop (or factory) near you. Maybe you don't like this, because it will mean more traffic on your road. Or maybe you do like this because you'll get a job there. If they open the shop or factory, some win, some lose, but the economy as a whole wins. TIH is still working.

The problem is that NIMBYs will always have a stronger voice than people who are looking for a job (because there are more of them). Imagine that every business had to get the permission of everybody within a certain radius of its stores or factories before it opened one or closed one, we'd end up with some quasi-socialist nightmare. No new shop or factory would be allowed to open, and existing ones would not be allowed to close (or would be subsidised, like 'rural post offices').

Oh ... this is exactly what has happened to this country. As this story illustrates, TIH has been largely smashed to pieces in this country by the Home-Owner-Ists; it cannot guide people to the overall optimum outcome. The story concerns NIMBYs and Greenies, both staunch opponents of economic progress, ganging up against the third Heathrow runway, but the same principle applies to anything and everything.

"With you so far" I hear you sigh, "So what's the solution?"

OK, as a thought experiment and not a serious proposal, let's superimpose the CO model that we had with a plc on land ownership. Everybody hands over their land to UK Land plc (which then owns all UK land) in exchange for shares to the same value. UK Land plc collects market rent on everything and dishes it to shareholders as regular dividends, so that instead of owning a house worth £200,000 and living 'rent free', you own £200,000 worth of shares in UK Land plc, pay £8,000 a year rent and get £8,000 in dividends. Shares in UK Land plc would be freely tradeable, of course.

UK Land plc would thus have one aim - to maximise its rental income on behalf of its shareholders. When deciding whether to allow a third runway at Heathrow it would compare the possible fall in rental values of houses in the flight path against the increase in rental values (more jobs in the area, they can collect more rent from BAA etc) and if this gives a positive result, it would go ahead (I'm assuming that it would, for the purposes of this post).

The same applies to power stations, sewage works, new houses, roads - things that help the UK economy and which enhance rental values overall go ahead; other stuff doesn't. Land would be put to its most efficient use without the NIMBYs and Greenies blocking everything.

So, turning back to the people affected by a third runway, some don't like aircraft noise, but they wouldn't have to worry about the capital value of their home, because the capital value of their shares in UK Land plc would go up ever so slightly; and if the rental value of their house goes down, they can either stay there and pocket the difference (their dividend income from UK Land plc also goes up ever so slightly) or move elsewhere. Others are happy to live near Heathrow because they work there and want a shorter commute. And so on.

But all shareholders in UK Land plc would benefit from the new runway, even if they live in the Outer Hebrides. Almost by definition, the gains would outweigh the losses. TIH would sort out who lives where on the basis of free markets; rather than the Home-Owner-Ists first deciding where they want to live and then dictating everything else that happens via a rigid planning system.

Just sayin', is all.