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Despairing about liberals

by DoDo Tue Apr 21st, 2009 at 09:42:21 AM EST

 EUROPEAN ELECTIONS 

Last week, the liberal party in the EP, ELDR, wrote a letter to the PES and the socialists across Europe. (Hat-tip to nanne.) It is a depressingly crude recital of the market-liberal faith, in the era of the economic crisis brought by that faith. For a light touch, you best read ThatBritGuy's excellent parody. With more seriousness, below, I deconstruct only a single sentence: the through-the-looking-glass part on railways.

Successful cross border projects such as the Thalys or the Eurostar project have served the European consumers while German state-owned railway services become constantly more expensive.

...except they forgot to check the owners of Thalys and Eurostar, the reason for the German railways' woes, and the performance of other state railways... this is like an old Soviet-time joke.


Der Reihe nach...

  1. Thalys is a subsidiary company owned entirely by SNCF, SNCB and DB: the French, Belgian and German state railways, respectively...

    Eurostar was owned entirely by three state railways, too: SNCF, SNCB and British Rail. After the privatisation of the last one, its share in Eurostar was given to a private company, but even that company contracted operations out to a consortium – 50% of which is again owned by SNCF and SNCB...

  2. Both Thalys and Eurostar provide services thanks to new high-speed lines built & maintained by others (in effect, a form of externalised costs). While for Thalys, those others happen to be simply the constituting state railways resp. state infrastructure managers; for Eurostar, one could say more – it uses:
    • the SNCF-built LGV Nord in France – built largely on budget and time;
    • the SNCB-built LGV 1 (ex la branche Ouest) in Belgium – built with some delay;
    • the public-private partnership High Speed 1 (ex CTRL) in Britain - finally built as a PPP project after long inaction, largely on-budget but that budget was rather heavily overpriced;
    • the privately built and operated Eurotunnel – built with delay, and as a financial disaster.

  3. The German state railways is indeed not in the best possible shape. However, I'd argue that that is the result of mismanagement due to a long adherence to market-liberal ideology.

    First, for two decades now, the top goal is to prepare the company for stock market listing. In practice, this meant anorexic cost cuts, and re-organisations that disrupted operations.

    Second, mismanagement was not only the result of the goals, but the choice of mis-managers, too. Falling for the neoliberal cult of managers, which worships CEOs as hyper-productive wizards who achieve profit in any field without knowing the technical details, DB's top echelons were staffed with managers from the private sector – and non-rail private sector at that.

    Three of the last four CEOs were such private sector champions with no prior knowledge about the workings of railways. (The fourth was a political nominee, an equally rail-clueless economy ministry career bureaucrat.) The last change at the helm was just this month: the previous one was forced to resign in the wake of a scandal about spying on employees, the new CEO is Rüdiger Grube – until now a Daimler manager and EADS supervisory board member...

  4. The liberals' actual claim about DB's bad performance is that services are getting more expensive. I guess this is backed up by nothing but the belief in competition resulting in reduced prices. Well, the only price cuts on railways I can think of now were special fares to compete with budget airlines – something even DB did.

  5. Finally, it is rather strange that the ELDR guys had to go as far as Germany for a comparison to Eurostar and Thalys aint' it? Why not pick something closer: SNCF? With well-run TGV services, which, incidentally, include cross-border services to almost all neighbours... Or, one example is no example, what about the well-run AVE services of Spain's state railways RENFE?...

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Check the Train Blogging index page for a (hopefully) complete list of ET diaries and stories related to railways and trains.

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As for that classic Soviet-time joke I alluded to, translated with some poetic license...

"You are listening to Radio Yerevan's Listeners' Questions Hour.
Question: is it true that in Moscow, Mercedeses are distributed for free?
Answer: the news is true, but it's not in Moscow but in Leningrad, not Mercedeses but Moskviches, and they aren't distributed but disfigured."

(In Hungarian, it ended with "osztogatnak" = distributed and "fosztogatnak" = ransacked.)


*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Apr 21st, 2009 at 09:46:00 AM EST
Second, mismanagement was not only the result of the goals, but the choice of mis-managers, too. Falling for the neoliberal cult of managers, which worships CEOs as hyper-productive wizards who achieve profit in any field without knowing the technical details, DB's top echelons were staffed with managers from the private sector -- and non-rail private sector at that.
It is hard to believe that these folks are not acting with malice but it may be useful to consider that this is not true for the majority of the individuals involved.  The assumptions here might influence the effectiveness of the counter argument.  Generally, one is a more effective proponent of a particular program and philosophy if one strongly believes in their correctness.  Conviction can add charisma.  My experiences with Los Angeles Unified School District may illustrate this view.

I worked directly for one of the top technical administrataors in the district--the specifying electrical engineer, an E.E. and a P.E.  He is a man of enormous integrity and ability, one of the 20% who did 80% of the work.  There were many able and dedicated professionals in the Architecture and Engineering Division at the time.

The Director of that division was a career school administrator with a principal's certificate whose earlier teaching experience included Physical Education.  Being responsible for an entire campus is a challenging task and those who are good at it tend to move on to greater and greater responsibilities.  Administrators have their own bargaining unit, however, and not all who obtain the certificate and work their way up from program coordinator to principal can handle the assignment satisfactorily.  This can lead to very public problems, criticisms and embarrassment for top of the organization.  What to do with such individuals?

This lady was put in charge of a division where she was not involved with parents and teachers.  (The Information Technology Division was likewise run by a former shop teacher turned administrator with a passion for ham radio.)  Much less opportunity for negative publicity--until the District got voter approval for a $2.3 billion renovation bond issue.  She did her best but I doubt she really understood the technical and administrative implications of the decisions she made and she routinely accepted the superior claim of ad hoc claims of District politics over technical necessity.

Just one of those decisions illustrates the scope of the problem.  In order to show faith with the public and the personnel on the 600+ school sites in the District to[ administrators wanted to front load as much of the work as possible.  Leaking roofs were low hanging fruit, as were contracts for painters and muralists.  There had been a 20 year drought in maintenance from the passage of Prop. 13 in the late 70s to the passage of this bond issue in 1997.  So, in order to further front load the effort it was decided to re-surface the playgrounds, most of which were asphalt.  Unfortunately, the bulk of the work being done consisted of technology upgrades: public address/telephone systems, intrusion detection, cable TV distribution systems and network wiring systems.  These usually required conduit to be laid in trenches, usually over asphalt that had just been re-done for the first time in 30 years.  

The engineer for whom I worked had cogently argued against this to no avail, and this was just the most obvious of the problems arising from weak upper management.  My own diagnosis for this situation is institutional incompetence:  a situation where good people with good intentions are prevented from doing good work by the very nature of the system within which they work.      

   

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Apr 21st, 2009 at 12:26:29 PM EST
The above comment is not intended to deny that there are those that thoroughly understand that the chief benefit from "privatization" is to generate revenue for private companies, but rather to suggest that many, if not most, may also truly believe that this results in better service.  Ideology trumps actuality.  The best attack may be to subvert their views rather than to try to overwhelm them in a frontal assault.  First make them uncertain.  That is demoralizing.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Apr 21st, 2009 at 12:33:41 PM EST
[ Parent ]
Wonderful example!  And it seems applicable to the financial system.  
by cambridgemac on Sat Apr 25th, 2009 at 08:58:14 AM EST
[ Parent ]


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