Monday 28 September 2015

Volkswagen, emissions and diminishing returns

The Volkswagen emissions scandal looks like becoming the car industry equivalent of the Libor and Forex scandals in banking.  According to European campaign group Transport and Environment, cheating on emissions tests is widespread across the car industry and applies to both petrol and diesel engines.  The group claim that there is as much as a 40 percent gap between the emissions during testing and emissions under real road conditions.

At face value, the Volkswagen scandal appears to be just another example in a tediously long list of psychopathic corporations putting short-term profit ahead of long term sustainability.  Indeed, in Volkswagen’s case, there may not be a long-term now that sales are plummeting, record fines are anticipated, and investors seek alternative investments.  When we discover – sadly unsurprisingly – that other car companies have also been fiddling their emissions data, we may simply assume some undocumented cartel-like behaviour in which everyone involved turned a blind eye.

There may, however, be a darker story here.  Why would a trusted company that has led the world in engineering risk everything on a short-term gamble to fiddle the data?  The stock answer is “profits”.  But this doesn’t stack up.  German companies have a track record of investing for the long-term.  They tend not to suffer the British disease of having to put the immediate gains for shareholders and bankers ahead of the long-term development of their companies.  So what else might be going on here?  An alternative answer is “diminishing returns”.

In the late 1970s and early 80s, the internal combustion engine was under threat from two directions.  First, and most painfully, the oil shocks in the 1970s had demonstrated just how vulnerable western countries were to any future shortage of oil on international export markets.  Second, a growing environmental lobby was raising concern about the damage to the atmosphere caused by millions of cars belching out carbon dioxide and other noxious emissions.  With millions of jobs worldwide dependent upon the car industry and the oil industry that feeds it, these concerns threatened a major economic upheaval. 

The absence of an electric car with anything like the performance of petrol or diesel cars undoubtedly saved the internal combustion engine.  Moreover, with the temporary glut of oil coming out of the newly profitable North Sea fields, the crisis seemed less urgent.  But the car industry did not emerge totally unscathed.  In a concession to detractors, the industry had promised that they could cut emissions and improve the fuel efficiency of their cars.

Initial technical improvements to engine design, improved exhaust systems and the use of catalytic converters were simply lying around waiting for someone to deploy them – they had simply been ignored back in the days when performance was considered to be the prime aim of car engineering.  The problem was that environmental and fuel concerns did not go away or even stand still.  The price of fuel continued to rise even as awareness of man-made climate change was spreading.  Having made the initial easy gains, the car industry was obliged to deploy growing teams of scientists and engineers to continually improve fuel efficiency and lower emissions.

As with all such processes, having made the initial gains, each new small increment came at an increasing cost.  More scientists and engineers were needed to work on the problems, while solutions came with an increasingly steep price tag.  Eventually they were doomed to reach a point beyond which improvements would render the vehicles unprofitable.

Of course, both the governments responsible for the emissions tests and the manufacturers themselves had vested interests in maintaining the illusion of progress.  Indeed, since the crash of 2008, exports are one of the few areas where GDP growth can be generated; and cars make up a large proportion of exports.  So both governments, struggling with balance of payments deficits, and manufacturers desperate to maintain market share, were willing to allow lax testing and inflated results.  That they would get caught out in the end was certain.  But as with all things economic in the current depression, kicking the can down the road has become the only workable approach.  Volkswagen undoubtedly hoped that someone else would be caught out first.  However, it appears to have been the high-tech manner in which they fiddled the figures that has singled them out for particular disapproval.  Where other companies have deployed low-tech cheats like sloping the test bed, ensuring batteries are fully charged, and smoothing and hardening the tyres, Volkswagen deployed their software engineers to create an algorithm that could sense when their vehicles were being tested.

The deeper issue here is not that companies cheat or that even world-leading Germany appears to have moved into short-termism.  The real problem is with our understanding of progress itself.

Progress has been the religion of the West since the Second World War.  In those heady days we told ourselves that through the white heat of technology, our road to the stars had been mapped out.  There is, we were assured, no problem that science cannot solve, no technology that our engineers cannot create.  .  In the real world, our economic wellbeing has been falling like a rock.  Middle class families that could once operate comfortably on the income of a single (usually male) earner now struggle to get by with both partners working; and often only then by accumulating mountains of debt based on the illusion that their house earns more than they do.  Working class families do not even enjoy this standard of living, finding that even with both partners working it is impossible to buy their own home.  For several decades now our road to the stars has appeared only in Hollywood’s CGI fantasies.

In truth, the story of human “progress”, like the Volkswagen story, is a tale of diminishing returns.  In every field of human endeavour we find the same story.  Initially, great discoveries and inventions could be made by lone scientists and engineers given enough time to retreat to their laboratories and think… something that did not happen too often prior to the industrial age.  Given sufficient time, a Newton could figure out the movement of the planets while a Darwin could put together the basics of evolution.  Throughout the nineteenth century, great discoveries and inventions could be made by single (mostly) men who enjoyed enough spare time.  But by the twentieth century, fewer inventions and discoveries were made by lone individuals.  More often, small research teams were required to make real breakthroughs.  In the modern – internet enabled – world, thousands of scientists and engineers in teams spread around the planet are employed to make incremental advances in our understanding and our technology.

Medical writer and doctor, Ben Goldacre has made this point well in relation to medicine.  He argues that most of the genuinely new medical breakthroughs came in the years between 1929 – with the synthesis of insulin – and 1969 – with the first transplant surgery.  Since then, we have added detail to what we already knew, and we have engineered improvements to technologies we already have.  But – and this is the point – despite vastly more scientists engaged and exponentially more money deployed, we have made very few genuine breakthroughs.  Physicist Tom Murphy has made the same point in relation to technology more generally:

“[Today] the big deals are: the computer revolution, the internet, mobile phones, GPS navigation, and surely some medical innovations. But I would characterize these as substantial refinements in pre-existing gizmos. It’s more an era of hard work than of inspiration. I’m not discounting the transformative influence of the internet and other such refinements, but instead pointing out that the fundamental technological underpinnings—the big breakthroughs— were in place already.

Murphy asks us to imagine what it would be like to be transported from the world of 1885 to the world of 1950.  What would have been new and not understood?  The list includes cars/trucks, airplanes, helicopters, and rockets; radio, and television (but not, just, the telephone); toasters, blenders, and electric ranges; radar, nuclear fission, and atomic bombs.  What would it be like if we were transported from the 1950’s into the present?

“Most things our eyes land on will be pretty well understood. The big differences are cell phones (which they will understand to be a sort of telephone, albeit with no cord and capable of sending telegram-like communications, but still figuring that it works via radio waves rather than magic), computers (which they will see as interactive televisions), and GPS navigation (okay: that one’s thought to be magic even by today’s folk). They will no doubt be impressed with miniaturization as an evolutionary spectacle, but will tend to have a context for the functional capabilities of our gizmos.”

What about the technologies that we have been promised will solve our most dangerous and conflicting problems – energy insecurity and climate change?

“Solar, wind, hydro/tidal, geothermal, nuclear fission (including thorium), wave, biofuels, fuel cells, etc.: all were demonstrated technologies before I was born. Where are the new faces? It’s not as if we have lacked motivation. Energy crises are not unknown to us, and there have been times of intense interest, effort, and research in my lifetime. Tellingly, the biggest energy innovation in my time is enhanced recovery techniques for fossil fuels: perhaps not the most promising path to the future.”

This brings us back to the Volkswagen scandal, because of its part in the fight against climate change and energy shortages.  What it tells us is that we cannot escape the process of diminishing returns.  For a while, at an increasing cost in resources, energy, capital and labour, we can enjoy some incremental improvements.  But ultimately we reach the point of denial – the point where the only thing left to us is cheating and fiddling the figures.  But when it comes to curbing carbon emissions and deploying clean energy generation, cheating will not do.  Quite simply, if humanity has a future, the lesson here is that we need to invest far more than is currently the case if we are to have even the remotest chance of coming up with a game-changing new technology.  The alternative is that, sooner or later – and probably sooner – much of what we take for granted in our western lifestyle – private motoring, constant electricity, affordable heating, abundant drinking water, free medical care and education, and much more – is going to disappear.

We can cheat for a while – as governments have been doing with their GDP figures, and oil companies have been doing with their reserves – and we can hide in a CGI-generated fog of denial – as we have been doing with climate change.  But we are fast coming up against limits that will not be ignored – we might be able to defy gravity and thermodynamics in a Hollywood movie; but in the real world these hard physical laws result in collapse and decay.

Monday 14 September 2015

Dear tired old "New" Labour,


I understand that you think you have something to say... and have been all too keen to feed the media with anti-Jeremy Corbyn interviews and soundbites.  But we need to get one thing clear:

You lost!

I don’t mean just that you lost the Labour leadership election this weekend.  In case you hadn’t noticed, you lost the 2015 and 2010 general elections too.  And you only managed to win the 2005 election (on just a third of the vote) by conning people into thinking that Gordon Brown was an alternative to the war criminal Blair.

You managed to lose the Scottish government to a minority SNP administration in 2007, and since 2011 the SNP has governed alone in a Scottish Parliament that was designed to prevent government by any one party – just how useless do you have to be to achieve this? Worse still, your presence alongside Cameron during the independence referendum paved the way for the annihilation of Scottish Labour in May 2015. 

Unless the situation in Scotland can be reversed, Labour cannot form a majority under the first past the post system.  Yet it is far from clear how “appealing to Tory voters” – essentially taking Mr Miliband’s lead in promoting Tory-lite – is going to win back Scotland from the SNP.  To win in 2020, Labour will need to appeal to everyone, not just swing voters in Tory marginals.

This summer you have had every opportunity to present a vision of what a future Blairite Labour government might be like.  Instead, your candidates chose not to campaign at all; preferring instead to attack Jeremy Corbyn – the one candidate who did campaign on policies.  To a man, your ageing Grandees were wheeled out to tell Labour members and supporters that Jeremy Corbyn would be a disaster.  The war criminal Blair was all over the media reminding us of how he and his acolytes used to hand policy edicts down from on high.  Just as during your time in office, you treated the rank and file of your party as donkeys – not to be involved in politics, but merely to turn up to deliver the leaflets during election campaigns. Gordon Brown, Jack Straw, David Blunkett and Charles Clark were wheeled out to tell us why we should not trust Corbyn.  Their pronouncements were all too reminiscent of the war poster published by the discredited Chamberlain government in 1939… “Your courage will bring us victory”.  We – the ordinary people of Britain – must forget about our needs and aspirations so that you – the Westminster elite – can enjoy the privileges of office.  Not one of you offered any kind of vision for the future that ordinary people could rally behind.

Your sitting MPs also threw their rattles out of the pram.  Irrespective of the wishes of the rank and file, they made clear that they were not prepared to work with Corbyn.  It is precisely this contempt for the views of ordinary Labour members and supporters that resulted in your defeat in May.  Thousands of your core "supporters" either stayed at home because they could see no reason to vote for you, or worse still, chose to vote UKIP, SNP, Green and even (one suspects) Tory.  Just prior to the election, despite being aware that you needed every vote you could get, Rachel Reeves – one of your number who refuses to work with Corbyn – told 8 million benefits recipients that “Labour is not the party for you”… with friends like that, who needs enemies?

You accuse Corbyn of wanting to recreate the past.  But it is you who seem to want to recreate the glory days of 1997 (which, in case you hadn’t noticed) was 18 years ago, and we've been through the deepest recession in living memory since then.  

Like all arrogant people, you choose to believe that Labour's success in 1997 was entirely down to you.  You conveniently overlook the fact that by the end of 18 years in office, a tired Tory party had alienated large swathes of the electorate.  The reversal over the Poll tax, the economic debacle over the exchange rate mechanism and the constant squabbles over Europe sealed the Tories' fate.  Rather like your own period after government, the Tory party of 1997 to 2005 was so full of tired old men clinging to the fading memory of power that there had been no room for the new generation of leaders to emerge.  Hague was a joke (albeit often a very funny one); IDS was as disastrous for the Tories as leader as he now is for Britain’s poor; Michael Howard was unpopular beyond the Tory rank and file.  It took the Tories a decade to develop a leadership that could take you on.  And once you were faced with a coherent opposition, you wilted away.  In that light, what political credibility do you really have?

The Labour party rank and file were devastated by the 2010 election result.  More importantly, the ordinary people of Britain, who are now shouldering the burden of your bank bailouts, were devastated. The expectation had been that either Gordon Brown would scrape a small majority together or, at worst; you could form a coalition with an apparently left-leaning Liberal party.  Instead, we got Cameron, Osborne and the hapless Clegg…  and you couldn’t even beat them in 2015!

The truth is that, like the 1979-1997 Tories before you, you steadily alienated your supporter base to the point that they would rather vote for someone else.  Many were alienated by your illegal invasion of Iraq.  Others, myself included, defected over the increasingly authoritarian policies you chose to pursue; policies operated with relish by the incoming ConDem coalition. 

Meanwhile, the insistence of your grey and tired old men than they have some unique insight into how to win elections – a position seriously undermined by your inability to get elected or even to win the party leadership – has served to prevent a new generation of leaders from embarking on the process of rebuilding your party following your defeats.  You are unable to tell us what purpose the Labour party serves (beyond keeping you in a job).

I fully accept Corbyn may not be able to win in 2020.  But that is what they said about Thatcher when she became Tory leader in 1975.  I also believe that given the mountains you will have to climb in Scotland, the north of England and Wales, a Blairite Labour leadership would definitely lose.  Frankly, your "power without principle" proposition means nothing to an electorate that is fed up to the back teeth of the Westminster elite.  We understand all too well what the Tories stand for – privilege, the banking and finance sector Ponzi scheme, and the perpetuation of rule by the elite.  What we don’t know is what Labour stands for.  Nor, clearly, did Yvette Cooper or Liz Kendall.  Late in the day, Andy Burnham appeared to come to the realisation that there was a world beyond Westminster.  But by then it was too late.  The task Corbyn must now perform is to foster a new coalition of trade unions, traditional Labour supporters, Greens, Celtic nationalists and new grassroots movements and campaigns that can provide the Labour party with a reason to exist (beyond getting tired old men – and women – re-elected) like a previous generation did in the run up to 1945.

The Labour party will fight the 2020 election after a decade in opposition, 23 years after Blair was swept into Downing Street, and 17 years after Blair chose to invade Iraq.  In 2020 it will have to be relevant to a new generation or it will lose.  You need to understand that just as the politics of 1983 will not work, nor will the politics of 1997.  The baby boomers that you, and the Tories before you, relied upon to win elections are dying away.  Those who haven’t already died by 2020 will be increasingly frail and out of touch.  At the same time, a new generation of “millennials” will be flexing their political muscles for the first time – we see the beginnings of this to an extent with the high proportion of young people active in the Corbyn campaign.  This generation will have an entirely different agenda to yours.  They will want to address genuinely life and death issues such as climate change, population overshoot, and food and energy security.  They will also have immediate concerns around the housing crisis, student debt, unemployment and underemployment, and falling living standards.  These were all issues that your government chose to leave for a future generation to deal with.  Well that future generation just grew up!

You did some good things in office; particularly in your first term.  Devolution, reform of the House of Lords, and the minimum wage are not to be sniffed at.  But they were largely outweighed by what you did later.  The illegal invasion of Iraq will be a permanent stain on your reputation.  Less obviously, your hated Work Capacity Assessment Test has resulted in the premature deaths of nearly 90,000 of the most vulnerable members of our population.  Your Regulation and Investigatory Powers Act together with various so-called anti-terrorism legislation has left Britain one of the most surveilled countries on Earth, and has helped to create a security service that is out of control.

So dear Blairites, let me finish be repeating the words of Cromwell so devastatingly voiced by Leo Amery in May 1940:


“Somehow or other we must get into the Government men who can match our enemies in fighting spirit, in daring, in resolution and in thirst for victory…  Some 300 years ago, when this House found that its troops were being beaten again and again by the dash and daring of the Cavaliers, by Prince Rupert’s Cavalry, Oliver Cromwell spoke to John Hampden…  ‘Your troops are most of them old, decayed serving men ...’  You must get men of a spirit that are likely to go as far as they will go, or you will be beaten still. It may not be easy to find these men. They can be found only by trial and by ruthlessly discarding all who fail and have their failings discovered.   We are fighting to-day for our life, for our liberty, for our all; we cannot go on being led as we are.  I have quoted certain words of Oliver Cromwell.  I will quote certain other words.  I do it with great reluctance, because I am speaking of those who are old friends and associates of mine, but they are words which, I think, are applicable to the present situation.  This is what Cromwell said to the Long Parliament when he thought it was no longer fit to conduct the affairs of the nation: You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go!