Why nothing works and HS2

This article is prompted by the conjunction of reading Marc Dunkelman’s book titled Why Nothing Works while thinking about the problems which led to the fiasco that is the HS2 project. The book is both instructive and extremely annoying.

The instructive element lies in the stories about how the barriers to implementing infrastructure projects grew from well-intentioned legislation and regulatory rules. The story is not new and even though the book is addressed to a US audience, the examples can easily be mirrored by similar examples in the UK. The argument in the book highlights similarities between the difficulties of implementing projects in the US and things that have long been clear in Britain. The problem lies not with environmental and other regulations per se, but with incoherent procedural requirements combined the incompetence of public agencies or their inability to resolve vague and often inconsistent obligations.

However, the book also extremely irritating because it is both parochial – Mr. Dunkelman has learnt almost nothing from experience in other developed countries – and completely blind to its strong biases. It is addressed to a “progressive” audience, i.e. the technocratic (mostly Democratic) Washington elite – what in Britain we would call the Blob. Anyone who does not accept the technocratic consensus is referred to as a “conservative”, whose views are not worth consideration. Instead, the argument focuses on divisions within the technocratic elite which result in policies and projects that Mr. Dunkelman and his ilk endorse being delayed or stymied.

For an author who boasts of having spent more than a decade in politics, including stints working for members of both the Senate and the House, the reluctance to acknowledge practical politics is remarkable. This defect is reinforced by the pervasive assumption that the technocratic elite knows what needs to be done and should be allowed to get on with things. Mr. Dunkelman acknowledges that in the mid-20^th century that a similar assumption allowed a charismatic charlatan like Robert Moses to implement a string of rotten projects whose costs fell on the people who were displaced and on taxpayers who received minimal benefits. Of course, in Mr. Dunkelman’s world this could not happen.

As an illustration, the prime example discussed in Chapter 8 focuses on more than a decade of efforts to build a transmission line from Canada to Massachusetts via either New Hampshire or Maine. The purpose of this line was to allow the Government of Massachusetts to meet its CO2 targets by importing “cheap” hydro power from Quebec. However, local groups in both states objected to the potential impact of the pylons, cables and wayleaves on protected areas and tourism. Eventually, a referendum that rejected the route through Maine was overruled by the Maine Supreme Court and the line is being built, but the total cost of the project will be much higher than originally claimed.

However, several aspects of the story grate. Mr. Dunkelman denounces non-renewable generators for opposing the line on the grounds that that the line would jeopardise the viability of their investments. However, he does not mention that Hydro-Quebec and other renewable generators heavily funded the referendum campaign in favour of the project. In addition, Hydro-Quebec does not have the spare generation capacity to supply the 1,200 MW capacity of the transmission line along with existing exports to other segments of the New England system. The major benefit to the company is not an increase in the volume of electricity sales but an increase in the market prices which they can earn – paid, of course, by current customers in both Quebec and New England.

Perhaps most important, the whole farrago could have been avoided had the developers been willing to put most of the transmission line underground. This option would have been substantially more expensive, but it would have minimised the impacts that prompted opposition. In truth, this project was about the desire of the politicians running Massachusetts to virtue-signal on the cheap, and in a way that imposed the primary costs of the project on residents in either New Hampshire. The state could have met its CO2 targets either by building more in-state renewable plants (but voters objected to that option) or by accepting the higher costs of putting the line to Quebec underground (but that would have increased the cost paid by electricity customers).

Almost everyone has lost out because of a poorly designed but politically convenient project. And this is the kind of project that advocates of reform to environmental rules and planning procedures, both in the US and the UK, want to accelerate.

This brings us to HS2. For readers outside the UK, the High Speed 2 railway project is the construction of a high-speed line north from London to Birmingham and, at different times, Manchester, Leeds and other destinations. In referring to London, Birmingham, etc as destination points, I should emphasise that there are no agreed plans on how the railway will get into to the centres and main railway stations of the destination cities. That was too difficult before construction started so the destinations are XXX (tbd) – to be determined.

One immediate implication is that all claims about how much time the railway would save travellers between, say, London and Birmingham are pure fantasies. No-one knows how much time will be spent travelling from hubs on the outskirts of London and Birmingham to final destinations in the cities. In effect, HS2 is a substitute for air travel under which most of the travel time is spent getting to and from airports and railway hubs.

The fact that HS2’s routes into the centres of destination cities remain unsettled more than 15 years after the original plans for the line were announced highlights the true nature of the project. It is a vanity project, pure and simple, whose varying symbolism to different groups in the UK is its true purpose. Agreeing on engineering plans for the project remains extraordinarily difficult and expensive because there is no common agreement on its functions beyond that the UK government can build something (anything).

The claimed costs of building HS2 have multiplied several times but nobody really knows by how much as every set of costs relates to a different version of the fantasy. In 2023 the Institute of Government produced what they called an “Explainer” on HS2: Costs and Controversies. This demonstrated, in the usual bureaucratic waffle, that the scope of the project has changed so much and so frequently over time that it is impossible to carry out any coherent analysis.

Alongside the uncertainty about costs, the time scale for building the project, even in its truncated version, has repeatedly been extended. There is a sense, even though it is not strictly true, that the completion date moves forward in time by more than 1 year for each year that passes. Anyone of a philosophical disposition might draw a parallel with Xeno’s arrow.[1]

Given the history of the project, there are good grounds for arguing that everyone would be better off if construction of HS2 had been delayed indefinitely – and, ultimately, abandoned – because of the barriers described in Why Nothing Works. And HS2 is not alone among disastrous high speed rail projects. The California High-Speed Rail (CAHSR) line from Los Angeles to San Franciso, authorized in 2008, looks likely to waste even more money and take even longer to complete.

In both cases, a significant part of the failure can be ascribed to the desire to achieve dramatic reductions in journey times, which required speeds greater than 200 mph. This is the clearest sign that these are vanity projects. Analysts who point out that high-speed rail lines can be built much more easily and cheaply in other countries rarely highlight that railway lines built to operate regularly at over 200 mph are much more costly to build and operate.

Technocrats like Mr. Dunkelman would point out that not all large projects are as disastrously misconceived as HS2 and CAHSR. But too many are! Such projects undermine any case for believing in the competence – or good intentions – of politicians and technocrats. Take the case of the transmission line from Massachusetts to Quebec. How many policymakers in positions of power – or expert analysts – acknowledged that the primary goal of the project design was to reduce the cost to Massachusetts of virtue-signalling over carbon emissions at the expense of residents of and visitors to New Hampshire and/or Maine? Mr. Dunkelman hasn’t the knowledge or willingness to do this, but instead he wants to put the blame for the debacle on groups that he dismisses or despises.

Returning to HS2, even the least competent of planners had to realise that the project would pass through (over) large swathes of countryside in the Chiltern Hills, Northamptonshire, Oxfordshire and Warwickshire that were highly valued by local communities. However, no serious attempt was made to offer compensating advantages that might have mitigated the natural opposition to the project. Instead, it was primarily justified on the grounds that it would reduce travel times for those travelling from Birmingham and Manchester to London – hardly a group that commanded much sympathy in the Home Counties.

Later, the justification shifted to the argument that HS2 would reduce capacity constraints on the West Coast Main Line. This argument was salt in the wounds caused by the miserable incompetence of railway technocrats in managing the upgrade of this route in the last decades of the 20^th century. Even worse, the route taken by HS2 is largely separate from the West Coast Main Line, running close to the Chiltern Line out of Marylebone Station which does not serve passengers travelling from Birmingham to London.

The central point is that HS2 was conceived as a project that would offer nothing but harmful effects for those living near to its route. The people affected were expected to put up with the expropriation of properties, general disturbance during construction, and loss of amenity after the line started operation. Naturally, such a combination of arrogance and incompetence produced a strong adverse response. Telling, if only implicitly, many people living in some of the wealthiest and most middle-class parts of the UK that they were “little people” of no account was the epitome of political stupidity. This was then exacerbated by the usual parsimony and incompetence of British governments in compensating those who were going to be displaced or severely affected by the project.

The central problem highlighted by HS2 and the Maine transmission line is one of public consent to policies or projects that have large adverse impacts on segments of the population, even though the wider benefits claimed for the project outweigh its total costs, at least those identified by proponents. Consent in turn is linked to the question of public trust. If the opponents of projects do not trust that those who develop and advocate such projects are competent and honest, then there is practically no basis on which consent can be willingly given.

The case that the HS2 project would yield significant net benefits for the UK economy was largely based on claims relating to the value of the time saved by workers travelling from Manchester or Birmingham to London. While the framework of analysis was standard, the assumptions on which the initial calculations were based were rapidly seen to be absurd. Various attempts to rescue the analysis gradually reduced the ratio of benefits to costs for the project but also highlighted how fragile and narrow such analyses were.

Put in the bluntest terms, the HS2 proposal required many people and businesses living between London and Birmingham to accept (often uncompensated) losses ranging from noise and amenity to the destruction of houses and farms to enable middle managers and bureaucrats to save between 10 and 20 minutes on travel between London and Birmingham. It is hardly surprising that the response was a very loud raspberry together with legal action against every aspect of the project.

The technocratic response ran initially along the lines of breaking eggs to make omelettes combined with the argument that a large majority of MPs had approved the project. Well, of course they had. The political decision was a classic example of imposing large burdens on a small group to offer minor benefits to many people, including MPs who travel frequently from Manchester or Birmingham to London. It is this kind of oppressive behaviour that leads to a widespread loss of trust in both technocrats and government bureaucracies.

The outcome was a progressive redesign of the whole HS2 project at vast expense plus the eventual abandonment of the northern segments of the railway as initially conceived. On any independent assessment, the HS2 project as currently being implemented will generate benefits that are a small fraction of the costs that will be incurred. As with all vanity projects, both politicians and bureaucrats are unwilling to admit that they made a mistake. Hence, the UK will finish up with an elegant but largely useless railway line from somewhere near Central London to somewhere near the centre of Birmingham.

The technocratic response to such examples is a combination of: (a) we need to design and evaluate projects better, and (b) we should remove the barriers to implementing controversial projects highlighted in the book and by lobbyists in the UK. Response (a) is, of course, completely unconvincing when the primary action is along the lines of response (b). What need is there to improve the design and evaluation of projects when they can be forced through in face of strong objections? Nowhere does Mr. Dunkelman acknowledge this, since he takes it as given that “progressive” technocrats are both competent and virtuous.

How do we judge and forge consent to large projects with diffuse benefits but large impacts on small groups? What is clear is that the technocratic approach doesn’t work. Trying to change the rules as sought by the Why Nothing Works lobby is the equivalent of people shouting louder when they run into opposition. It will simply exacerbate the animosity that grows ever larger as the technocratic Blob tries to impose its visions of virtue on everyone else.

I will try to address this and related questions in my next article.

[1] For those with mathematical training, Xeno’s arrow is a vivid way of illustrating the convergence properties of infinite sequences, which every young mathematician is expected to learn.