post industrial ruins

Image courtesy Freeimages.com/trip fontaine

Some background

Before I can get to the main subject of today’s article, I need to tell a few short real-life stories to set the scene, putting the article into context.

The Story Of Canterbury Road

When I look out my front window, I am confronted by the somewhat depressing site of one of Sydney’s main thoroughfares, Canterbury Road. It’s distressing because of the state of repair that it appears to be in. Last year, as part of a major “improvement”, the bitumen surface was scraped off, leaving the underlying concrete, which was then patched here and there. New surfacing was carried out only at intersections, because the road surface needed to connect to cross-streets that were still paved.

Funding for a road upgrade was set aside by the State Government in 2011, but work didn’t start until 2014. The plan was for the whole road to be resurfaced, but when the surface was stripped back, the underlying damage was found to be worse than expected, needing far more repair than allowed for. Further delays were caused by weather, and the result is that traffic has been running on the under-surface, doing fresh damage that also needs repairs. Changes to traffic flows have produced additional wear and tear, and all that has to be repaired before the resurfacing can proceed, and the repairs aren’t keeping up with the ongoing damage.

As a result, it was named the worst road in Sydney in September 2014 and has only deteriorated since. I’d love to provide an image to show you just how bad it is, but the only ones I could find are subject to copyright. According to (which does include images – and these are not selected “worst bits”, they are typical), and according to everything I’ve heard from members of government, work was “expected to be complete” in October 2014. So here we are in July 2015 – and the road still looks as shown in those photos. Either the work never included a planned resurfacing, or the plan had to be abandoned. According to the most recent report I’ve been able to find – a press release dated November 2014 – “resurfacing” with fresh concrete was supposed to happen, and to be complete by now. It hasn’t and isn’t.

Poles and Wires

Telecommunications is another area where there have been long-standing maintenance issues. When I moved to Lakemba something like 25 years ago, it transpired that the phone lines were connected to the exchange via a pit that flooded during rainy weather, causing service disruptions – but the telecommunications carrier that owned the basic infrastructure, and was responsible for maintaining it, didn’t know which one.

Each connection is allocated two connections or ‘pairs’. One is in use, the other is in reserve for use when there is a problem with the first or maintenance is required. The second pair simply didn’t work, but whenever there was a connection problem because of water leaking into the ‘pit’, they would swap to that pair at the exchange and the whole thing would collapse – no phone, no internet. Thankfully, when I was forced to move a couple of years back, I left that particular problem behind, and while I still have the occasional connection drama once a year or so, the overall service has improved immeasurably. I can only sympathize with whoever’s been stuck with the old problems since I moved.

The problem is that maintenance costs have skyrocketed over the last 30 or 40 years, and an attitude of “fix it before it fails and make it last” has been replaced by one of “fix it when it fails, as quickly and cheaply as you can – and if it fails again in six months, fix it again.”

The same problem exists with our electrical network. About 18 months ago, there was an accident on Canterbury Road, caused from all appearances by a driver taking the corner too fast and mounting the curb to strike the power pole. I was watching TV at the time, and heard the crash from about 70m away, through a closed door, and over the top of the program, at the same time that the lights flickered. I summoned emergency services, who dealt with the accident itself, but nothing was done about the damage to the pole, now inclined at roughly a fifteen degree angle to the vertical, and seemingly held upright only by the power lines supplying electricity to residents.

After three days with no sign of repair activities, I contacted the electrical service provider who informed me that no damage to the pole had been reported to them, and who sent a crew out to inspect it. They decided that it was still sufficiently held by the hole in the ground – they do bury the base of those things quite deep – and no repair was needed; so it has been left leaning to one side and over the street. For over a year.

Eventually, the unbalanced strain will be too much for whatever is holding it up, or some other vehicle will hit it, and the result will be crushed vehicles, trapped drivers, and live wires in the street.

The same story gets repeated time and time again. Maintenance is expensive, and it is not profitable to repair things until you absolutely have to – and that’s not until it fails. I’d love to be able to blame someone, or to think that this was strictly a local or even a state issue – but any Google search for “Aging Infrastructure” will quickly show that the problem extends throughout the western world. Such a search produces more than 5 million hits.

It’s clear to me that our infrastructure is breaking down and has been for a long time. There simply hasn’t been enough financial incentive to maintain it, and infrastructure projects in recent years have suffered from financial blowouts that make them white elephants.

The Airport Rail Link Story

In 1990, the then-elected State Government called for private bids to build a rail link to connect Sydney’s airport, both Domestic and International terminals, to the CBD and hence to the rest of the public transport network. The tendering process took until July 1994, when a public-private partnership to build the rail link was announced.

The project involves four kilometers of tunnel through rock and six kilometers through soft ground. Three new suburban railway stations were built, in addition to the stations at the air terminals.

The deal was that a private company would be formed that would cover the costs of building four of these five stations and would receive the right to operate them for five years with the right to impose a surcharge on fares for their use, so generating a profitable return on the investment.

Construction began in February 1995 as part of the infrastructure development for the 2000 Summer Olympics, and the line opened in May 2000, three months prior to the commencement of the Games. It had cost the State Government A$700 million and the private investors A$200 million.

That was when the project really ran into trouble. There were two serious problems: the trains to the air terminals were ordinary suburban rolling stock without dedicated luggage space, and hence those using the service had to compete with ordinary domestic travelers; and the surcharge meant that it was actually cheaper for a lot of travelers to take a taxi to the airport than it was to use the public option. Even after the cancellation of a rival Airport Express bus service, and the imposition of Taxi Surcharges and Expensive airport parking, the Airport Link consistently failed to attract the projected levels of patronage.

In January 2001 it was announced that the private investor had gone into receivership, exposing the government to costs of around A$800 million on top of the A$700 million already spent on the rail link. What’s more, many of the alternatives had been wound up or rendered untenable in the Government’s efforts to drive traffic onto the service if a buyer for the failed private business was not found – and, of course, no-one would buy a failing business, so that sale would be contingent upon renegotiating the operating terms with the government.

The renegotiations took until October 2005 – more than four-and-a-half years – but they made it possible for the failed private business to be sold. Ultimately, the state government agreed to pay an additional A$111 million dollars to the private company and renegotiated the operating parameters of the link, and as a result, a buyer (one of the country’s largest Banks) was found.

Today, the rail link is profitable to both public and private stakeholders, but it took until 2009 to get there. This failure, and a few other high-profile public-private projects that encountered similar problems in becoming profitable due largely to wildly optimistic expectations, diverted much of the government’s capacity for infrastructure investment, and especially for the maintenance of existing assets, and soured private enterprise on the notion of investing in public infrastructure.

Recent Developments

Lately, that attitude has been changing a little; the Cross-Harbor tunnel beneath Sydney Harbor has been such a success that another is planned, the tollways have become far more popular following the introduction of e-tag payment systems and an accompanying decrease in the tolls, and the Airport Rail Link is turning a profit.

A new rail line, the North West Rail Link is currently being constructed for rapid transit between two major suburban centers without the need to transit the CBD. But there are new problems arising from short-term solutions taken despite longer-term cost blowouts – for example, the tunnel is being deliberately bored too small for existing rolling stock, necessitating the purchase of all new trains for the line, trains that are designed for many stops close together and not fewer stops spaced more widely apart as is the case with an express service. There are serious concerns that even if the projected number of passengers desiring to use the service proves accurate, the infrastructure won’t physically or logistically allow that level of service, because of bottlenecks and poor integration with existing services.

In addition, a new state government initiative taken to the polls as part of the last election sees the state government in the process of “leasing” part of the electrical infrastructure to private hands. Part of the reason for selling is that while it is substantially profitable now, rising infrastructure maintenance costs over the next ten years will demolish that profitability and devastate the value. The plan is for the purchaser of the lease to invest heavily in infrastructure improvements and maintenance immediately, which the state government can’t afford to do, so as to delay the date of that decline in value. The promise is that electricity prices will fall as a result – and, in the short term, they might. But this is more robbing of Peter to pay Paul; in the long term, the infrastructure costs will rise as predicted, delayed for a time at best – and prices will have to skyrocket as a result. A government has many options for dealing with such an increase in costs, and does not need to show a profit each and every year; a private “owner” doesn’t have that luxury.

Dystopian and Utopian Futures

All this – and more in the discussion to come – is good news for anyone creating a game set in a Dystopian future, because it all seems to add to the credibility of such a social prediction. It’s not so promising for anyone looking to establish a more Utopian future game setting because it adds to the problems that have to be solved – and if our best political and social minds haven’t been able to solve these problems, what makes you and I think we can do it?

I think I have an answer to the problem. It might not work in real life – I’m not for one minute arrogant enough to think that my little theory is enough to change the world – but it should be plausible enough to get sci-fi GMs and authors past the current dystopian trend.

I’ll get back to that in a little bit. First, I think it worth spelling out all the other challenges that a Utopian future faces.

Dystopian Breakdown

Infrastructure is breaking down because of a change in maintenance policy and rising costs. Social systems have been breaking down, too. The drive to generate profit has seen the gutting of standards of service in most areas, machinery replacing people as wages rose to make the artificial more cost-effective. This affects everything from customer service in Banks to call centers.

Disposable Products

The rising costs of labor have also influenced the products that we buy, producing an engineering ethic in which it is more cost-effective to throw broken products away rather than repairing them, producing unsustainable pressures on our waste disposal systems. (The news is not all bad on this front; a new counter-trend is emerging as a result of environmental consciousness on the part of consumers which priorities recyclable technology).

Distribution Of Wealth

Disparity of incomes has been rising as CEOs and money-spinners earn outrageous salaries while paying less and less, in real terms, to lower-level workers. Extremes of social class are evident now in the western world in a way that rivals or even dwarfs the only other real examples that we have – slave-based economies in the American South and Feudal economies in which Kings and Nobles had the wealth while the peasantry had virtually nothing.

Concentration of wealth has left media control in a relatively small number of hands. While the degree of influence of the modern media barons is a hotly-disputed subject, the potential remains for Kingmakers to control our economic destiny.

Employment

Unemployment is another modern problem, though it is one that may exhibit some relief in future decades; as the baby boomers retire, the workforce will thin at the same time as demand in the aged-care sector and related industries boom. The problem is that the jobs that are likely to be available are not those that most people want or aspire to. In the longer term, this won’t be an issue; as we Baby Boomers die off (I date from the extreme tail end of the social group), and this surge in demand will ease. Automation is a bigger issue; some estimates suggest that as many as 20% of current occupations will be automated out of existence over the next 20 years. Personally, I think that’s a little pessimistic, and fails to account for new jobs being created; but even a 10% rise in unemployment is a serious social issue.

Technological Retreat

At the same time, the world has been going backwards in other ways. With the end of the Concorde, supersonic intercontinental travel became a thing of the past. Modern aircraft move more people at once, more economically than ever before, but we have nevertheless retreated from the cutting edge of what was possible to focus on what is most efficient. At least there’s some positive news in that direction, with a new generation of supersonic passenger jets being announced recently. Both Boeing and Lockheed Martin have unveiled aircraft concepts, while Airbus is also developing a supersonic aircraft.

At the same time, operational costs and maintenance have been starved of funds by airlines struggling to stay profitable, producing corner-cutting and a deterioration in safety that is being masked by airlines going out of business – a problem that has existed for more than 20 years, but is growing progressively worse.

The Confinement Of Mankind

We first went to the moon in 1969; 5 more missions to the lunar surface followed, and then we stopped. Instead, NASA focused on the space shuttle because it promised to be a more efficient way of getting a payload into orbit, a promise that was never completely fulfilled, due to the expense and complications of the tiles. And now even that has been cast aside in favor of traditional launch vehicles. Surveys have shown that the general American public consistently overestimate the percentage of the US Federal Budget directed to NASA; the average according to the most recent such survey is 25%, a vast difference from the 0.5% that it actually is. This has made it an easy target for budget cuts, which is how they ended up with such a small budget in the first place. Similar surveys have shown that the public estimates NASA’s budget as being up to 75% of the total budget during the period of the moon landings, with 50%-60% the most common estimate, and not the 10% that it was at its’ peak.

It’s symptomatic of a common pattern: putting the short-term ahead of the long-term because the longer into the future you look, the greater the risks that any sort of investment will not pay off.

The Environment

And finally, the environment. Climate change is still a deeply-divisive subject, but my opinion on the subject is one that seems sensible to both myself and a lot of other people: While it may or may not be happening as a result of human agencies, the potential consequences make the subject too important to ignore. Action needs to be taken – but there is little profit in it, and so – for many organizations and industrial concerns – it remains a policy afterthought to pacify a very vocal minority. In effect, we have to assume that once again, the infrastructure is breaking down faster than it can be rebuilt, because excessive conservatism would be totally disastrous if the worst really is happening.

The Aggregate

Put it all together and it paints a pretty grim picture, doesn’t it? Small wonder that our visions of the future are far more dystopian in modern times than they were fifty-odd years ago. Even the banner-waver for an optimistic future, Star Trek, needed a dystopian reboot to remain popular enough to justify its ongoing adventures.

Chicken Little

There was a time when population pressure was seen as the driving force behind total collapse. Then the bogeyman became a shortage of fossil fuels. The first has been solved; the global population is stabilizing, and new methods and agricultural products are slowly solving the problem of feeding the masses. The second remains a problem that will have to be confronted, but doomsday deadline after doomsday deadline have come and gone, and advance after advance slowly pushes future ones farther away.

And yet, things don’t seem to be getting better, as that long list of problems makes clear.

Genesis

I was mulling all of the above over, as I occasionally do, and musing on the need for a new social, political, and economic vision to get things moving in the right direction once again, when I had an idea.

I’m not an economist, so I have no doubt that my idea is as full of holes as a kitchen sieve, but it would seem to hold enough water to at least make a plausible premise for an optimistic future world.

Planned inefficiency.

Sounds crazy, right? But follow my logic, if you dare…

Planned Inefficiency Phase I

We start by making it profitable for organizations to employ more people than they need to have in order to be efficient. This can be achieved by raising the business tax rate, while allowing businesses a tax concession for each employee in excess of a mandated number based on the income of the business. Having more staff thereby becomes tax-deductible, dropping the effective tax rate back to something in the vicinity of what it is now, or even a little less. The balance point would be set so that the cost of the employees would be slightly less than the increased cost of the tax.

More staff means more paychecks which means more tax revenue from income taxes. These can be reduced somewhat even though they are at historic lows in many countries, and still leave more money for essential needs like infrastructure maintenance.

No business will take on extra staff and then have them sit around doing nothing. The challenge for business will cease to be efficiency and will become true productivity – defined as giving those extra staff something to do that benefits their employer. Things like improved customer service, for example, or a shift in engineering objectives to make simple servicing of broken/defective equipment possible with relatively little training.

Can you feel the paradigm shifting?

Planned Inefficiency Phase II

Next, we need to encourage industry to invest in areas that are not profitable, like the construction of new infrastructure and refurbishment of the old, by making them profitable.

We again lift the basic business tax rate, and put in place a new tax deduction: infrastructure constructed to an adequate standard and donated (not sold) to the public, with the Government to have oversight over the buildings etc. Smaller businesses don’t have to try to match the big boys; new investment funds can be set up designed to permit many smaller operators collaborate in funding projects beyond the scope of any singly can both spread the burdens and the risks.

Of course, these new projects will require more employees to build them, and to administer them, and to operate them, so employment goes up again, even as the effective business tax rate again falls.

That means that the government’s bills will start to decline; when something is new and properly cared for, maintenance becomes less expensive. This enables another round of tax cuts for both business and individuals, as well as a boost in support services.

Conclusion

It’s not realistic for all businesses to be measured against the same standards of expected profitability per employee; determining the correct indexing and classifications would be the most complicated part of implementing this new economic approach.

That’s about as far as my thinking has taken me. Would it work? I can’t see why not, but I’m not an expert. But it’s at least plausible enough for an RPG, and it solves almost all of that long line of problems. Go over them all again, if you don’t believe me. And from our Dystopian trends, a more Utopian future can emerge.

It’s certainly food for thought, wouldn’t you agree?


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