The letter, which says up to one million British jobs could be created, states: “Economic studies show that effective modes of transport, including high-speed rail, enable entrepreneurs to get their goods and services to market in a secure and timely manner and facilitate the movement of workers to the most suitable jobs.”It goes on: “The absence of a high-speed rail line connecting the north of England to London and the European Union is a continuous embarrassment to British businesses promoting UK plc overseas.”
We really do have idiots in charge – since when does a high speed rail link get goods to market? And we’re supposed to build a high speed rail line because it’s an embarrassment to British businesses?!
And creating one million jobs has got to be the most inflated figure imaginable.
Most of the UK rail network is subsidised – one assumes that high speed rail will be also. Even with subsidies, high speed rail will only be affordable to the rich – so all this is a transfer of wealth from the working poor to rich businessmen. If HS2 was to be built solely with private money, I’d have no objections. But I do object to my hard earned cash being spent on its construction and to subsidise those richer than me to get to and from the capital just that little bit faster. On a peak time train, you can already get from Manchester to London in 2 hours – what’s slow about that?!
With just 70 miles of high-speed rail track, they say the UK lags behind other “world-class” economies such as France and Japan, and is also trailing Morocco, which has 422 miles, and Saudi Arabia, with 342.
I always love these comparisons to other countries. Who cares how much high speed rail there is in Morocco or Japan? Do any of these lines turn a profit? Morocco has far more urgent economic priorities than high speed rail, but when governments direct investment, grand projects such as these are preferred to the mundane needs of citizens.
And of course, the broken window fallacy is never far away.
In written evidence to the committee, the Department for Transport said building the London to Birmingham section would create more than 40,000 jobs.
Ah but how many jobs will be lost? Money spent on HS2 is money either the government can’t spend elsewhere – so there’ll be knock-on effects there – or if through increased taxation (including via debt) taxpayers will have less money to spend in other areas of the economy. Henry Hazlitt dealt with this (as with so many other bad economic ideas) in the book I’ve previously highlighted, Economics in One Lesson (pdf). On public works, he had this to say (page 19):
Two arguments are put forward for the bridge, one of which is
mainly heard before it is built, the other of which is mainly heard after it has been completed. The first argument is that it will provide employment. It will provide, say, 500 jobs for a year. The implication is that these are jobs that would not otherwise have come into existence.
This is what is immediately seen. But if we have trained ourselves to look beyond immediate to secondary consequences, and beyond those who are directly benefited by a government project to others who are indirectly affected, a different picture presents itself. It is true that a particular group of bridgeworkers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000,000. They will have that much taken away from them which they would otherwise have spent on the things they needed most.
Therefore for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $1,000,000 taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, radio technicians, clothing workers, farmers.