Liberal Vision

The Government’s rail bailout

Quite a lot of nonsense has been written about the recent announcement that the Government has stripped National Express of its franchise to run the East Coast mainline. Something which is going to cost us a lot of money. 

So lets be clear .

THIS IS THE GOVERNMENT’s FAULT. plain and simple.

1. GREED- the Government wanted to raise some cash (for the next potty plan up its sleeve no doubt) and cut its own cash input into the railways.  So it set up a sealed bidding process that blindly awarded rail contracts to the highest bidder. There was no account taken of how feasible/affordable that bid was. We all know that the highest bid is not always the best bid – which one would have hoped would have weighed with the governement- unless of course, it did not give a toss.

2. INCOMPETENCE : They were either stupid or lazy (or most likely, both) to allow the Franchisee (National Express) to create an entirely separate company to operate the franchise – thereby allowing the bidder to cap potential losses in event of problems. National Express did what any sensible company would do to protect its shareholders/investors money. Dont blame them if the rules they were told to play by had holes the size of channel tunnel in them.  

It still is unclear where the Government is even capable legally of stripping National Express of the other two franchises it operates. Incompetence piled on more incompetence .

But I dont know why we should expect anything else from this government. More fiasco’s will follow as this sorry mess unravels.

BBC: what’s wrong in the Mekong?

The Today programme ran a story this morning on drug resistant malaria growing in south east Asia (around the Mekong delta).

They’re right to highlight the problem, and correctly point out that around half the world’s population are at risk of the disease.

Every thirty seconds a child dies of malaria.

Furthermore, artemisinin is our last defence against malaria – older drugs have succumbed to resistance themselves, and no new drugs appear to be in the pipeline.

So whose fault is this? Is it just one of those things that happen? Predictably, no – it’s worsened by overbearing governments, fetters on liberal institutions and ugly politicisation.

Today’s report mentioned that insecticides now might be brought into the heavily affected areas. These have always provided great protection to the poor from infectious diseases, yet since the ’60s have been vehemently lobbied against by environmentalist group opposed to anything that doesn’t directly spring from the mud. Government bans on DDT and other insecticides continue to thwart the fight against diseases like malaria.

Secondly – fake drugs. These don’t kill a disease parasite sufficiently, so allow it to mutate and become resistant. The Mekong delta is home to some of the highest rates (up to 68% according to one study) of fake malaria drugs in the world.

Funny how it’s also where drug resistant malaria first blossoms.

Governments provoke the existence of fake drugs by imposing high tariffs (and non-tariff barriers) on pharmaceutical goods – this deters high quality drug producers so that they don’t enter the market, leaving a vacuum for counterfeiters to fill.

Action against counterfeiters is often not possible due to flimsy courts where political interference and corruption are commonplace. Where liberal institutions and the rule of law are strong, companies and victims can take action against producers of fake and substandard drugs.

Examples abound of political vested interests in counterfeit products. In China, the second largest supplier of fake drugs in the world, this is very much the case. Li Guorong, the General Manager of China United Intellectual Property Protection Center, says that action against counterfeiting would “destabilize a government where counterfeit factories and warehouses are often owned by local military and political grandees.”

As usual stories like this provoke the “what can government do to help?” reaction. And also as usual, we should instead be acknowledging how big, centralised government is culpable in the first place.