May 2009

28 May 2009
What Formula One should be doing - Part II

In Part I I explained how Formula One’s regulations were ruining the sport...

So, the answer is to get rid of the regulations, yes?  If only it were that easy.  Formula 1 has a secret.  No, not a particularly dirty one, but a secret, nevertheless.  They solved the problem.  About 30 years ago (and we’re talking ground effect here again) Formula 1 teams solved the problem of how to go round corners quickly.  Hooray, you might say, and so might I, on a technical level.  But going round corners quickly creates at least two new problems.  First the potential g-forces are greater than the unaided human body can stand and second, if anything goes wrong when the car is cornering (as it did in Ayrton Senna’s case) the car is going to crash at very high speed.  Such things might not matter if F1 was still a largely amateur sport made up of gentlemen racers but it isn’t and the audience that pays the professionals doesn’t want their heroes to be just people who can stand up to high g-forces.  They want them to demonstrate some skill.  Oh, and stay alive.  That’s also quite important.

So, I have no doubt that cars do have to be slowed down in the corners.  It’s just a question of how to do that without tying up the sport in red tape.  My candidate is a weight limit.  Tell teams that they can have any design they like so long as when it leaves the start line it weighs less than, say, 500kg.  As technology improves and cars get dangerously fast simply lower the limit.  Every time this is done teams will have to work out which bit of their car - whether it be the engine, transmission, suspension, wheels or bodywork has to lose the weight.  Each team will answer the question slightly differently leading to a wide variety of designs.

Another way might be to make the cars behave more like ordinary cars.  This might include demanding that all cars be started by the driver alone (they’re not at present), that they be drivable by amateurs (although I am not quite sure how you’d enforce this), that they make their way to the track under their own power.  It’s always struck me as bizarre that cars are allowed to refuel when they like.  Make each team state in advance when they plan to stop for fuel - it would at least be closer to the situation in real life.

27 May 2009
"Owing to its benign character it was at first, together with its victims, the subject of much good-natured badinage and pleasant writing in the newspapers. To-day the complaint has passed the joking stage."

He can say that again.  And probably did.  This was the first Times report (that I can find) to cover the Spanish Influenza.  At the time (2 June 1918) it had killed 700 people in 10 days and there were well over 100,000 sufferers.

The disease would appear pretty much everywhere over the next few weeks, go away again over the summer and come back with a vengeance with the onset of winter.  It peaked at about exactly the same time as the signing of the Armistice and ended up killing perhaps 20m people.

And people are worried about swine flu.  Call that an epidemic?  This is an epidemic!


21 May 2009
What Formula One should be doing - Part I

Formula One is in crisis.  As the Depression bites many teams are running out of money.  The cars are dull to look at and the racing is much the same.  Up until this year the same two teams (Ferrari and McLaren) dominated.  And now several teams including Ferrari are thinking of quitting the sport altogether.

So, what should the sport do?  The first thing it must do is to understand how it got into this mess.

But before we do this I would like to deal with a red herring.  People often complain that there’s not enough overtaking and wheel-to-wheel racing in F1.  But there never was, apparently.  And when you think about it, why should there be?  Surely, the best car-driver combination should, under almost all circumstances, shoot off into the distance?  The only real reason why this should change during a race would be either through driver fatigue or brake and tire wear.

Having said that there is a problem with overtaking a slightly slower car.  Modern racing car aerodynamics like to take clean (or laminar) air flows and spew out dirty (or turbulent) air flows.  So, the car attempting to overtake finds that it has to deal with the overtakee’s dirty air rather than the clean air it’s designed to deal with.  The result? Appalling and unpredictable handling.  And difficult overtaking.  Perhaps they could experiment with overtaking lanes or come up with a measurement or the turbulence from the back of cars and limit it.  Who knows.  But, as I said, it’s not as big a problem as people tend to think.

No, the real problem in F1 is regulation.  Want a bigger engine?  You can’t, it’s banned.  Or maybe you want to put a turbo on it?  You can’t do that either, that’s also banned.  Hey, there’s even a restriction on the number of cylinders you’re allowed.  Or what about high wings, fans, skirts, more than four wheels, closed cockpits, closed wheels?  You can’t.  Banned, banned, banned, banned.  It’s no wonder all the cars look the same.  The complexity of the regulations eventually forced Gordon Murray, one of F1’s most talented designers and the man behind the McLaren F1, to abandon the sport altogether.

But while it is easy to see why the regulations make for boring cars it is difficult for many to see why this leads to spiralling costs and a lack of competition.

But that’s what regulations always do.  They always help the big guys at the expense of the little guys.  For instance, in the 1970s Lotus came up with ground effect.  Using skirts to control air flow, ground effect “glued” the car to the ground while cornering.  It was cheap and it was banned.  It then took 20 years of expensive computer modelling and wind-tunnel testing to regain the downforce the ban had removed.  It’s not hard to guess which teams were the first to reap the benefits.

But what about this year? I hear you ask.  They’ve changed the rules and all of a sudden it’s the little teams that are prospering.  Just you wait, I say.  Give it a year and the big boys will be back.

See here for Part II

14 May 2009
In praise of Tom Woods’s Meltdown

Topical books, they’re a bit rubbish aren’t they?  Let’s face it, any book written to cash in on an issue of the day is bound to suffer from the need to get it out before the hot topic starts to cool.

Which was pretty much my thinking when I forked out for Tom Woods’s Meltdown, a free market take on what I like to call the Greater Depression.  I wasn’t buying it in the hope of greater wisdom, more in the way you might buy a Watford replica shirt - to show support, to egg the team on.

Well, I was wrong.  “Meltdown” is a triumph.  It chronicles the boom and the early part of the bust before explaining how it all fits into Austrian Business Cycle Theory.  In doing so it manages to to explain that theory better than I’ve ever seen it explained and (I’m pretty sure) expand on it.  Oh, and it’s short.

One bit I was particularly impressed with was Woods’s description of money.  For him, and now me, money is a claim on real resources. Now, Woods is not being particularly original here - Mises said this - but it’s something - and I regard myself as reasonably au fait with Austrian economics - that I hadn’t heard before.  It’s importance lies in the way it explains why any form of funny money - whether in the form of central bank notes based on nothing or fractional reserve bank notes - er, also based on nothing - are so economically damaging - because they deceive people as to what precise resources they can command.

Or, to put it another way - you think you can build the Empire State Building but actually you can only build half of it.

But that’s only one example and “Meltdown” is full of them.  This really is genius.  To have produced a book that combines topicality, lucidity, and theory is a breathtaking achievement.  If Woods didn’t sweat blood writing this I don’t believe he’s entirely human.

12 May 2009
“It would become an object of desire to adventurers of a low class…”


I found this in The Times of 13 March 1906, a time when MPs didn’t so much as receive a salary let alone expenses.  A W.S.Lilly quotes J.S.Mill on the subject:

The occupation of a member of Parliament would thereupon become an occupation in itself, carried on, like other professions, with a view chiefly to its pecuniary returns, and under the demoralizing influences of an occupation essentially precarious.  It would become an object of desire to adventurers of a low class, and 658 persons in possession with ten or twenty times as many in expectancy, would be incessantly bidding to attract or retain the suffrages of electors by promising all things, honest or dishonest, possible or impossible, and rivalling each other in pandering to the meanest feelings and most ignorant prejudices or the vulgarist part of the crowd.


07 May 2009
The Fall of Rome v2.0

The Fall of Rome v1.0 went something like this:

1. They created for themselves a welfare state (think: bread and circuses)

2. They went bankrupt

3. Gazillions of barbarians brushed past the army which hadn’t been paid and sacked the place.

It would appear that in the West we have met Condition 1, are about to meet Condition 2 and have the barbarians (I use the term in its literal rather than pejorative sense) for Condition 3 in the form of gazillions of actual and would-be immigrants.

Can anything be done about it?  Well, if the ideas of Mancur Olsen (I believe it’s pronounced Man-Sir) are to be believed, not much.  Now you understand I haven’t actually gone to the effort of actually reading anything Olsen wrote but I am reasonably familiar with his ideas.  Or, at least what I think are his ideas.  If they are not his ideas then there’s a good chance they are my ideas which is even better.  Anyway, his argument (or, at least what I think is his argument) is that over time societies introduce ever more layers of regulation creating ever more interest groups.  These laws and interest groups form a tight web that not only stiffles progress but is highly resistant to change.  The only way it can be changed is through the total collapse of the state as in the case of the Soviet Union or Rome.

It is not difficult to think of examples of the kind of thing he’s getting at.  I sometimes imagine what it would be like to be a reforming Transport Minister.  Let’s say I wanted to liberate the railways.  I might, for instance, want to close down loss-making lines but I would be greeted with howls of protest - not to mention the considerable bureaucratic obstacles in the way.  I might wish to end price control and would get much the same response.  If I wanted, heaven forfend, to allow train operators to own the tracks on which their trains ran, first the UK would have to leave the EU - which would mean repudiating a treaty. Big stuff.

And so on and so forth.  And that is just an area I know about.  It’s bound to be repeated right the way across government.

So, a collapse of the West seems inevitable.  But is it a bad thing?  The Dark Ages do not get a great write up but that’s mainly because they didn’t get any sort of write up (great or otherwise) at the time.  It is possible that it’s inhabitants were experiencing a land of milk and honey.  Certainly, it is one of the complaints that my immigrant colleagues make that the West constantly claims how free it is but you just try building yourself a house…

The litmus test will come when the barbarians try to feed themselves.  Given the complexity of modern agriculture with its technology, financial systems and distribution networks we can only hope they succeed.

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