The confusion of Will Hutton
We've Will Hutton telling us that we really need to be taxing corporations more. For they're paying less in tax on their profits than they used to and this is what ails our State. Sadly, what has really been shown is Will's confusion in reading GDP figures.
If companies in Britain paid, proportionally, as much tax as they did in the last year of Mrs Thatcher’s prime ministership, the country would be £30bn better off.
Well, no. Moving money from one account to another does not make "the country" better off. It might make the Treasury better off, this is true, at the expense of making investors in companies worse off, but this is not the same as the statement that it will make the country better off. For, as we might all have noticed, living as we do in a place where there are things outside the state, the State and the country are not the same thing. But then we get the more detailed confusion:
Nor is that where the bending of the tax system – and the state – to accommodate companies’ chosen behaviour stops. Over the same years there has been a monumental bidding down of wages as the share of company profits has risen by 6%, in terms of GDP, with wages falling by a commensurate amount.
This is a basic schoolboy error and one that's embarrassing for someone who was a Governor of the LSE to make. GDP is not made up of the wage share plus the profit share. there are more components than that: most notably the taxes paid upon consumption and the taxes paid upon employment. And a couple of us have been pointing out what has actually been happening over these years. The wage share has indeed been falling. But the profit share has not been notably rising. The difference explained by those two tax shares, on consumption and employment, rising. It's is not that the capitalists have been stealing the crusts from the workers' mouths, it is that government has been.
But we will admit that this produced a guffaw:
What is striking about the international system is the variety of tax regimes, wage and profit shares – and the lack of convergence, as the IFS’s exhaustive review of the tax system, led by Nobel Laureate Professor James Mirrlees, pointed out. There is plenty of scope for redesigning our tax system to make it fairer, increase its yield and refashion the bargain between companies and the state if we choose.
That's the Sir James Mirrlees of optimal taxation theory fame? Whose major contribution to taxation theory is that we should not be trying to tax corporations or capital returns, but instead should be taxing rents and consumption? And this is what is called in evidence to underpin the clai9m that corporations should be paying more tax?
It is to laugh, eh?
It's a pity to see Larry Elliott going off the rails
We always thought that Larry Elliott was a little oasis of comparative sanity over at that small part of The Guardian that has actually heard of the basic concepts of economics. So it's something of a pity to see him coming off the rails over the desirability of limited liability:
Finally, there’s the nuclear option: stripping companies of the protection provided by limited liability. The owners, the shareholders and those running companies wield enormous power but don’t bear full responsibility for their actions because their liability is limited to the size of their investment in a company or partnership. But limited liability is a privilege not a right, and in return for granting it society should get something back in return. The argument the Thatcher government used when it said employers could sue unions for damages caused by strikes was that there was no such thing as a something-for-nothing world, and the same argument applies to companies.The deal should be that companies get the protection limited liability provides in return for looking after all their stakeholders: the workers they employ, the customers they serve, the companies that form their supply chains, the taxpayers who pay for the transport infrastructure and the education system that businesses require. The deal should not be limited liability in return for boardroom greed, running rings round the taxman and breaking the law.
As Prem Sikka said in this series, any change to limited liability would be fiercely resisted. But even the suggestion of change would concentrate minds. Imagine, for example, that a future government set up a royal commission to look into the issue. Would this lead to companies treating their staff better and paying more tax? You bet it would.
Limited liability has been called the third great invention, after agriculture and the scientific method. That might be rather overegging the argument but we do face Chesterston's Fence here. We shouldn't be thinking about removing something until we've worked out why it was introduced in the first place. And the reason we have limited liability isn't particularly because it's a necessary feature of capitalism, neoliberalism, corporatism or any other -ism that might currently be unfashionable. It's because it's a necessary precondition of having any large scale economic activity.
Some economic projects require the mobilisation of the assets of tens of thousands to tens of millions of people. Or some reasonable fraction of those individual assets. And it doesn't matter, for our argument here, whether that's done through the State, a workers' coop, a capitalist style corporation or any other method. If all those thousands to millions are to be held jointly and severally liable for all of the risks of however many projects their assets support then that mobilisation simply will not happen. Limited liability is simply a precondition of being able to have large scale projects undertaken.
So Prem Sikka is howling at the Moon here but then we knew about the Professor's tendency to do that already. what's disappointing is Elliott's support for the argument. For Elliott is missing something we've mentioned around here a number of times. The value to us of an organisation that produces things is not in the tax they pay, the wages they cough up, the manner in which they treat their suppliers. The value to us of a producing organisation is in what they produce. And, as above, limited liability allows large scale producing organisations to exist. And that's the benefit that we the wider society get from it.
Nothing else is necessary.
Europe’s Digital Dirigisme
Google has recently announced that it is ending its Google News service in Spain before a new intellectual property law – dubbed the ‘Google tax’ – requires Spanish publishers to charge the company for displaying snippets of their articles. Whist newspapers claim that Google infringes copyright by using their text, Google argues that their News service drives traffic to the featured websites, boosting advertising revenues. Certainly, Germany’s biggest publisher Axel Springer scrapped plans to block Google from their news items when they discovered that doing so caused their traffic to plunge.
This is yet another complication of Google - EU relations. In May, the European Court of Justice ruled in favour of the ‘right to be forgotten’, which has so far resulted in over 250,000 takedown requests. Building on this 'success', the EU now wants to force search engines to scrub ‘irrelevant or incorrect’ (read: inconvenient) links at a not just a European but a global level.
And as the European Commission’s four-year antitrust investigation into Google drags on, the European Parliament symbolically voted to break up its operation and ‘unbundle’ its search function from other services. Whilst the parliament has no power to touch the internet giant, it sends a very strong message as to what European politicians want.
European politicians portray such moves as guarding against monopoly, enabling fair competition and safeguarding the privacy of individuals. However, it’s not obvious that the way Google presents search results is to the detriment of its actual users (as opposed to rival firms), whilst the ‘right to be forgotten’ sets a dangerous precedent against internet openness. American firms and politicians have responded harshly to the actions, branding them politically motivated, anti-competitive and detrimental to trade relations.
European policy makers should be very careful not to cause harm to the digital economy through politicized regulation. Policymakers may be concerned by the digital domination of American firms like Amazon, Facebook and Google – yet it's worth noting Europe fails to produce many rivals of its own.
As the Eurozone struggles with weak growth and low inflation, the WSJ reports that the number of those engaged in early entrepreneurial activity in countries like Germany, France and Italy (5%, 4.6%, and 3.4% of the population respectively) is a fraction of those in the US (12.7%). Once they are established, these businesses tend to be smaller and slower-growing than their US counterparts. They also seem less likely to hit the big time: among the world’s 500 largest listed companies, only 5 of the European firms were founded after 1975, compared with 31 from the US and 31 from emerging economies.
Digital policy analyst Adam Thierer argues that the relative performance of US and European tech firms is largely driven by the regulatory culture in each country. US policy makers have by deliberate design fostered a culture of permissionless innovation, which allows and encourages entrepreneurs to innovate, push boundaries and take risks. As a result, the American tech sector has boomed, producing inventions and companies beloved and envied across the world. In contrast, European culture has been far more risk-averse and policy far more bureaucratic. The result of unnecessary regulation and data directives has been a dearth of successful European firms. Those European ‘unicorn’ firms which strike big have overwhelmingly come from countries fairly removed from continental Europe, such as the UK, Scandinavia and Russia.
The EU’s move towards net neutrality regulation, market interventions and tighter data laws will only further disadvantage tech firms. State interference is particularly unhelpful in dynamic, evolving digital sectors, where fast-paced progress is typical and innovation key to staying relevant. Moreover, European policymakers may want to check Google’s power through legislation, but it is large incumbent firms who have the resources and lawyers to comply with new regulation. Those hit hardest are smaller competitors, and the fledgling start-ups the EU should focus on encouraging.
In some sense, European policymakers are onto something with their suspicion of ‘big tech’. The vast majority of UK internet users say that they’re uncomfortable with what they share online and with whom, and even the technophilic Wired ran a recent cover story on how the data industry is ‘selling our lives’. Perhaps people really are fed up of Google, which then only maintains its 90% European market share in search because there’s no decent alternative.
But attacking Google's influence requires innovation, not regulation. Tech history is littered with market leaders such as IBM, Nokia and AOL who have slid, sometimes quite spectacularly, from the top spot. In tech-orientated sectors it is particularly hard for large firms to stay relevant and embrace new trends – let alone to develop them.
To facilitate creative destruction and the emergence of challenger firms, Europe needs a digital policy which is favorable to new technology and experimentation, and which encourages individuals to accept risk and forge ahead with business plans without first jumping through hoops and courting regulators (the trials and tribulations of Uber and Skype spring to mind here).
Blockchain-based projects which aim to ‘decentralize the internet’ and give users more control over their data are part of an exciting peer-to-peer movement which could re-sculpt the shape of the net. But these innovators are entering unchartered territory (a wild west, if you like), and an open and permissive regulatory culture is essential in allowing them to flourish (or fail).
Were Europe to grasp this, the benefits could be enormous. But if European policymakers carry on down their current path of tightening control, we're likely to see less entrepreneurship, less competition, reduced consumer utility, and probably a lot more Google.
Don’t worry about Brand’s sexism – worry that he’s the new poster child for the left
I don’t throw around words like racism and sexism. Not because they don’t exist – on the contrary, I recognise both ‘isms’ as serious problems that plague different parts of the world to different degrees on a day-to-day basis. Racial and gender prejudices are the most heinous of crimes, and that’s why the accusation of such things must be used with thought and caution; to levy the words at a Republican voter or someone who points out the real numbers behind the ‘equal pay’ myth takes away from the seriousness of the words. I wasn’t surprised to wake up this morning, however, and read the many headlines that accused Russell Brand of being sexist. During his appearance on BBC Question Time last night, Brand got a bit carried away with the ‘confrontation game’ and wound up in hot water with his fellow, female panellists:
As communities minister Penny Mordaunt praised firefighters, Mr Brand interrupted, saying: "Pay their pensions then, love. Excuse the sexist language, I'm working on it."
This isn’t the first time Brand has been accused of ‘lazy sexism’ – he’s gotten in trouble, multiple times, for objectifying professional women he encounters, and many have noted that much of his humour stems from humiliating women in personal, direct ways.
Was last night another addition to the sexist Brandwagon? Probably not. Putting cultural differences aside, [In the States, calling any woman who is not in fact your love, ‘luv’, would be considered deeply unacceptable.] I think it’s fairly obvious that Brand was speaking casually, and arguably being a bully- but without any sexist intent. Perhaps someone should have flagged up to him (or written on that note card he seemed so attached to) that when you’re on a world-renowned platform with lots of elected officials, you try a little harder to sound more professional.
What about the other accusations? Is Brand a sexist at heart? Honestly, I don’t know. Brand’s a comedian. He makes jokes about women. Presumably he does this, not because he wants to preach his sexist manifesto, but because people laugh. Men, and women, laugh at jokes about women. Depending on the joke, I may or may not laugh along with them. Having researched some of Brand's previous jokes, there's no doubt that some of them cross the line; at which point, we should be able to get up and walk out, turn off the TV, tune him out and not give credence to his remarks.
But now we’re getting to the real problem – which is not his humour(less?) remarks, but rather that Brand, along with his jokes, have been given a huge political platform to be taken seriously by his fans and the public at large…and it’s obvious that when it comes to women, and everything else, the man has no idea what he’s talking about.
Clearly unable to come up with any stat about Britain’s population growth or housing/land availability when asked to make the case for immigration (there are some great stats out there, by the way, in favour of this argument), Brand decided to go on a loud, but not always so coherent, rant about bankers’ bonuses and why the City is ‘bad’, whatever that means. His only evidence that more redistribution of wealth would help those at the bottom was that his bank account was big enough to handle a cut, and when asked if he would actually try to put into practice what he preached (ie: stand for Parliament), the answer was pretty straight-forward: no.
This, my friends, is not just a comedian with an opinion. He is the new poster-child for the left, in the UK and beyond. He is being given the highest platforms to discuss his views and opinions, and despite his attempt at anti-establishment rhetoric, almost every policy he promotes – if you can be generous enough to call them that – advocates heavy government intervention, centralised redistribution, state-funded everything, and heavy emphasis on paternalism and left-wing policy.
Brand’s political stardom is going to backfire, but it’s hard to know who will suffer. Either, Brand will continue to slip and slide on national television, further associating the left (to their despair) with his radical, inarticulate rants; or he’ll wise up, graduate from one note card to three, cut back on the lady jokes and actually have a shot at convincing a few more people that his bank account is the only number you need to cite when reforming the UK’s buckling welfare structure. The former would be a spectacle; the latter would be nothing to luv.
Maybe we should like patents
For a long time I was very sceptical of the benefits of patents. For one thing, they seemed to interfere with other types of property—Apple's patents over certain shapes for phones mean Google cannot use its factories, materials, etc. in certain ways. For another, I coincidentally had come across work suggesting their benefits are overstated, including Against Intellectual Monopoly (appropriately available in full online) by Michele Boldrin and David K. Levine.
But three recent papers exploiting a novel source of data have made me reconsider, since they throw cold water on one of the popular alternatives to patents: innovation prizes. All three are by B. Zorina Khan, an economics Professor at Bowdoin College and fellow at Stanford University's august Hoover Institution.
The first looks at annual industrial fairs in 19th century Massachusetts and finds that (relative to patents awarded over the same period) prizes were mainly used for advertising purposes, were awarded unsystematically and unpredictably, and did not vary in line with how useful or popular an invention or innovation ended up being. What's more, prizewinners were typically from a more privileged class than patentees. This all implies that patents are more market driven and better at incentivising creative innovation, Khan says.
The second looks at similar data (American Institute of New York annual fairs) from a different angle. One argument against patents is that they limit what others can do on top of a given innovation, or how much they can be inspired by a particular breakthrough, because they might have to license the patent or risk infringing it. One argument in the other direction is that patents allow people to bring their information out into the open because others will not use it to jump ahead, so it encourages openness. What's more, all of their info surrounding the innovation is written down and easy to find.
Khan finds that the second effect predominates; patents encourage 'spillover' innovation more than prizes:
In keeping with the contract theory of patents, the procedure identifies high and statistically significant spatial autocorrelation in the sample of inventions that were patented, indicating the prevalence of geographical spillovers. By contrast, prize innovations were much less likely to be spatially dependent. The second part of the paper investigates whether unpatented innovations in a county were affected by patenting in contiguous or adjacent counties, and the analysis indicates that such spatial effects were large and significant. These results are consistent with the argument that patents enhance the diffusion of information for both patented and unpatented innovations, whereas prizes are less effective in generating external benefits from knowledge spillovers. I hypothesize that the difference partly owes to the design of patent institutions, which explicitly incorporate mechanisms for systematic recording, access, and dispersion of technical information.
Finally, her 2013 paper “Trolls and Other Patent Inventions: Economic History and the Patent Controversy in the Twenty-First Century” (the argument is given in less length in a Cato Unbound essay) argues that if you take a long historical view, current patent controversies around non-practising entities, patent thickets, litigation and so on are not new. She says they are part of a well-functioning and successful intellectual property system.
So maybe we should like patents. After all, we support regular property rights because the institution has been proven to lead to a wealthy, successful society, even if messed with substantially. If patents are the best tool we have for generating innovation—a key ingredient of continued social progress—then we should support them too.
Someone's lost their marbles here and it's not us
This little video by Owen Jones over on The Guardian's website simply has to be seen to be believed. It starts out with a reasonable enough analysis of property prices in London. They're high, perhaps it might be a good idea if they weren't so high and so on. At which point it might be useful to start thinking about what might be done. Perhaps more properties could be built for example, that seems a reasonable enough idea. Prices do rise when there's not that much supply and increasing supply does tend to have the effect of reducing prices. But of course this is Oor Lad Owen so someone must be to blame for this. And who does he blame? The politicians who don't seem to be addressing the problem very well? The bureaucrats who don't issue enough of the planning chitties? Us, the citizenry for having the temerity to desire somewhere to live? Nope, the enemy is apparently property developers. Yes, that's correct. The people who actually build housing are the declared enemy. He's not saying that they're just not building enough, nor that they're building the wrong type or anything. He is quite flat out stating that those who build housing are the wrong 'uns in this campaign that desires more housing. That the solution to his claimed problem would actually be to have more property developers developing more properties just doesn't seem to occur to Jones. Entirely bizarre.
Wikipedia: Another answer to the tragedy of the commons
The tragedy of the commons is an oft-cited theoretical example by those who advocate government intervention. It postulates that, without regulation and intervention, public goods that everyone has an interest in using will actually not be provided (or at least not efficiently or to an optimal quantity) if contributions are voluntary. The logic is that everyone’s dominant course of action is to essentially just refrain from contributing because, if one contributes and others don’t, then the public good is not provided and their payoff is worse than if they don’t contribute and the public good is not provided. Additionally, if they don’t contribute and the public good is provided, the individual’s payoff is higher than if they do contribute and the public good is provided. In this sense, a society full of rational, self-interested individuals (as this scenario represents it) could actually lead to a harmful or sub-optimal outcome for society in the long run. However, Wikipedia is a prominent, empirical illustration of how the tragedy of the commons does not always hold since the website runs purely on private donations. Periodically, the site’s owners ask for donations to maintain it and keep it running ad-free. They claim that if everyone who read their plea paid £3, then fundraising would be over within an hour – nice in principle but not everyone pays up in practice. Some, inevitably, end up contributing more than others and many don’t contribute monetarily at all.
The following chart lists the percentage of donators corresponding to each reason for donating to Wikipedia, according to Wikipedia.
Conversely, here are the reasons cited for not donating:
Of course, one might argue that the knowledge found on Wikipedia is unreliable. However, a study published in Nature found that Wikipedia “is about as accurate on science as the Encyclopaedia Britannica”. Of course, Encyclopaedia Britannica attempted to refute the study. Access to a vast store of monitored, reviewed information via Wikipedia is an incredible asset to humanity and this asset is made possible entirely through voluntary contributions (whether this be in terms of time spent editing or money contributed) rather than through the coercive dictates that people are so often subject to.
Furthermore, it’s interesting to note that if you were to, hypothetically, replace “donating to Wikipedia” with “tax” in the second bar chart, you might find a lot of people agreeing with the affordability, with unwillingness to pay tax based on principle or their belief that it would not be used properly. Similarly, people may want to contribute time to society rather than pay money to preserve it.
In our rapidly changing world, voluntary contributions to fund public goods may become feasible sooner rather than later.
What is this objection to private charity?
One of the more difficult things to fathom about a certain strain of thinking is the antipathy to private charity:
In fact, you may be astonished to learn the extent of children’s rights to which we, as a nation, are signatory. Under article 26 of the UN convention on the rights of the child, children have a “right to benefit from social security”. According to article 27, they have “a right to a standard of living adequate to their physical, social and mental development”.There is scope for argument within those terms but, by any measure, an adequate standard of living includes the right not to be hungry. So the fact that more than 300,000 children are using food banks – supplied, bear in mind, not by a state agency but by a charity, Trussell Trust – puts the UK squarely outside its UNCRC obligations.
By what appalling misfortune has that hunger been allowed to fester and left to non-state agencies to deal with?
A detailed answer to that would come from the Trussell Trust itself. Which points out that 83% of food banks have reported that benefit sanctions have led to more people being referred for emergency food. Private charity is here compensating for the incompetence or malevolence of that state and its agencies.
A more general answer would be that what is this insistence that rights, whatever they are, must be supplied by the state? The right to a family life does not mean that David Cameron has to find me a comely wife does it? The right to free speech does not mean that Ed Miliboy must purchase me a newspaper. In fact, we don't care in the slightest who provides whatever it is that enables a right to be enjoyed: only that that right can indeed be enjoyed. And so it should be with food.
It's simply astonishing that people are regarding food banks as some bad idea. They are instead a glorious example of the way in which us humans are sociable, societal, beings who really will go out of our way to help our fellow. What the heck is wrong with Burke's little platoons anyway, why this insistence that what people will happily do unprompted must be replaced by bureaucrats?
Today's prize for economic illiteracy goes to Aditya Chakrabortty
This is painful, even for The Guardian, even for the history graduate that writes their economic leaders:
This is what the Centre for Research in Socio-Cultural Change terms “social licensing” in its latest book, The End of the Experiment. The academics’ suggestions have been followed by one council in north London, Enfield. Officers and researchers sat down and worked out how much money its 300,000 residents sent the way of big businesses: 11 Tesco stores, for instance, provided the PLC with around £8m of its annual profit. And what did the area get back? Not very much, but the highlight included a community toilet scheme and some charitable giving from the supermarket’s corporate social responsibility department.
And so the council has started asking big businesses, such as utility firms, what they had done for Enfield recently. They’ve begun hassling banks to lend more to local businesses, the likes of British Gas to give more of their local work to local contractors with local staff – or run the risk of being named and shamed in the local press. It may sound small, but imagine if the same approach were taken by Holyrood or Cardiff – or by Westminster.
What?
To take that example of Tesco, so what did Enfield get back in return for that £8 million of profit? Given supermarket profit margins it got a couple of hundred million pounds worth of groceries. Something that's rather more important that piddling around with the community lavvies you might think.
This idea that the value to us of what an organisation does is in what it does not produce is simply insane. The value to us of a producing organisation is in what it produces. The value of Google to us is that we get to Google, the value of Starbucks to us is bad coffee and the value of Tesco in Enfield is that people have somewhere to buy their loo roll and something to eat. And it's absolutely no use trying to insist that a supermarket isn't providing value: if it wasn't the good people of Enfield wouldn't be spending £200 million a year there, would they?
Try to think about this rationally for a moment. The NHS provides absolutely nothing towards local loos for local people, pays not a bean in taxation and yet most would agree that it does provide something of value. Perhaps not as much value as the same amount spent in another manner would but we do indeed value the fact that it occasionally manages to treat patients. The value to us of the NHS is in what the NHS produces: medical treatment. The value of Tesco to Enfield is in what Tesco produces. Why is this so difficult for people to understand?
Prof. John Alfred Blyth Hibbs OBE
John Hibbs was born in Birmingham but spent his childhood in Brightlingsea, the Essex trading and sea-faring town from where came both sides of his family, Hibbs and Blyth. His father died just ten days after John’s birth, so John was brought up by his mother, supported by two aunts and his grandmother. He was educated first locally, followed by Colchester Royal Grammar School, and then boarded at Haileybury College, Hertfordshire.
By the time he was 18, John was a committed pacifist, following his father, a Congregationalist minister, and satisfied the war-time Tribunal for registration as a Conscientious Objector. He spent the time he would otherwise have been on National Service working in agriculture and in hospitals. It was in such capacity at Essex County Hospital, Colchester that he met a nurse, Paddy, who was much later to become his second wife
After some further periods of hospital working, including at the Radcliffe in Oxford, he took a BCom(Social Studies) degree of Birmingham University at Woodbrooke, one of the Quaker Selly Oak Colleges. The turning point in his career was securing a second-year placement with the bus and coach company, Premier Travel in Cambridge. That placement supported John’s BCom dissertation “The place of the motor bus in the rural economy”, and led to a job in 1950 as Personal Assistant to the Managing Director. John learned a great deal about how to run buses from his boss, but by 1952 the company was in trouble, and John was one of the staff who had to go. By this time he had married Constance, whom he had met at the Radcliffe.
He was fortunate to gain the position of Rees Jeffreys Research Student at the London School of Economics. His MSc research project examined the economics of the road transport licensing system, and became the foundation of much of his later career.
After two years as a transport consultant and technical journalist, together with a fellow Omnibus Society colleague, Bert Davidson, he acquired Corona Coaches in Acton, three miles from Sudbury. Within a few years, Bert died, and not soon after things got difficult. Rural car travel was increasing rapidly, leading to less need for public buses; the licensing framework stifled innovation; credit for fuel became hard to come by. So, with great sadness, John sold the business. After a period as a transport consultant and technical journalist again, he was appointed Traffic Survey Officer at British Railways Eastern Region HQ at Liverpool Street in 1961.
Surviving various re-organisations at BR, and as a member of the British Transport Costing Service, John undertook a wide range of projects involving computerised traffic analysis, costing, market research, demand forecasting, and the market for specific passenger train services. Frustrated at intransigent attitudes, and having acquired a unique set of experiences across road and rail, John took up the challenge of creating the first UK undergraduate course in Transport Studies at what was then City of London College (later, City of London Polytechnic, now London Metropolitan University). Having previously taught with the Workers’ Educational Association (WEA) and been self-employed as a consultant/researcher, this was a smooth transition for him. By the time he left in 1973, he had been promoted to Principal Lecturer, and established a national reputation.
Following his divorce, John moved to Birmingham to be nearer Paddy, and took a post at Birmingham Polytechnic, which proved to be a great career move. In due course he became Director of Transport Studies, and subsequently Professor of Transport Management. He developed new courses (such as a Postgraduate Diploma in Transport Management); taught widely; set up and managed programmes such as an MSc Transport & Distribution Management, researched, undertook consultancies, published extensively, and successfully supervised postgraduate students to MBA, MSc, MPhil, and PhD degrees. In parallel with this, he gained his own PhD in 1983 with a thesis: “A comparative study of the licensing and control of public road passenger transport in selected overseas countries”. The title of Professor of Transport Management was conferred in 1986.
John became a significant national figure. As an academic, he was in great demand at conferences, through invited contributions, as an external examiner and validator. He also was exceptionally active in a range of professional bodies. By way of illustration: he joined the Chartered Institute of Transport (as it then was) in 1951 and remained in continuous membership, holding several offices, including Editor of the ‘Proceedings’; he was a member of the Omnibus Society from 1947, and was Vice-President from 2006 – sadly he passed away without knowing of his election as President this year. John founded the Organisation of Teachers of Transport Studies (later, the Transport Teachers Association), and also the Roads and Road Transport History Conference/Association. He also played roles in the Institute of Transport Administration, the Passenger Vehicle Operators’ Association, the Transport Studies Society, and the Adam Smith Institute.
John Hibbs was an eloquent speaker and wrote with precision and flair. He was a prolific writer of papers and authored several books. He was particularly renowned for combining clear intellectual analysis with practical experience of the industry; challenging conventional thought; presenting argument with passion and conviction.
John thus had a strong influence, arguably more than anyone in the UK, on establishing Transport Studies as a credible and important academic subject and as a highly professional area, economically and socially. He effectively created the subject of transport economics, and encouraged a whole new cadre of transport specialists. For his outstanding services to transport education, John was appointed OBE in 1987.
It was little wonder that John’s expertise was sought by policy makers on the national stage. As a long-time Liberal, he was transport advisor to the Party (as well as being active at the constituency level). Moreover, his views were influential in formulating the 1980 Transport Act, which was the first move to reinstate the market. Through discussions with the then Secretary of State for Transport, Nicholas Ridley, the 1985 Transport Act and its White Paper precursor owe much to John’s arguments; the bus industry was reformed, bringing in a commercial structure, removing the road service licence system and weakening monopoly. There were some aspects of the Act of which John did not approve. In particular, he regretted that the Act did not actually achieve his desire for full deregulation, which was the popular (and political) description; he regarded it as about ‘regulatory reform and reorganisation.’ Later, John advised John Major and his government on railway privatisation. In the event, privatisation proceeded in a manner contrary to John’s advice (and that of many others): wheel was separated from rail, leading to what John regarded as ‘the mess we have today.’
John continued an active professional life way after his formal retirement, and was frequently called upon as a media commentator. He was still teaching postgraduate students at Aston University into his 80s! He regularly wrote and presented extensively about road and rail policy matters, especially privatisation and deregulation. He continuously challenged the establishment – the road and rail transport industry and government regulators – with careful and critical analysis and research. Not everyone found his arguments to their liking or conviction; but John’s standing and powerful exposition, his integrity and mastery of the economics and practice, and the respect with which he was held, made for compelling listening and attention.
John Albert Blyth Hibbs passed away on 7 November 2014. He is survived by children Mike, Alison and Robin from his first marriage to Constance, and five step-children Krysia, Cyrrhian, David, Enistine and Tim from his second marriage to Paddy.