If you had a load of money you wanted to invest in a project, how would you go about ensuring that you made as much return for as little risk as possible? Chances are you'd seek some sort of professional advice. Now suppose that someone forced you to hand over your own money and they told you that they would invest it for you - you wouldn't be very happy. You'd even less happy if they told you that they were just going to have a punt with it rather than treating it like they had something to lose. This, in a nutshell, is what the government is doing with our hard earned money through collecting our taxes and ploughing it in to project regardless of risk. Take carbon-saving projects...
If it's not your money to lose, why speak to the people who really know what they're talking about? That is the mentality of the government - they would rather hand it all over to a Quango with nothing to lose. Enter the Carbon Trust.
The government has awarded more than £1m to fund seven projects. Garry Staunton, from the Carbon Trust, said they had "the potential to make significant carbon savings and to be commercially very successful". Note the word potential. Coventry University has been awarded £150,000 for aluminium smelting technology that could reduce emissions by 20%. Note the word could. Warwick Manufacturing Group has been given £250,000 to develop a paint coating process that would eliminate the need for paint shops in the making of plastic components. Note the word would. Incredibly over the past four years the Carbon Trust has invested more than £17m in low carbon projects. Why?
Why should they be handed money to take a gamble on what they speculate would be the next great thing in carbon reduction technology - they have nothing to lose and therefore no real incentive to get it right. Surely it would make more sense to get real backers in to push these projects meaning the ones with real potential will get noticed and the ones with no chance go back to the drawing board. It would save us money, make some money for the designers and investors and we would not be wasting millions of pounds and man hours on pointless initiatives.
Comments
Reality gap
Bang on, JG. Pure Bastiat or Hazlitt.
One of the reasons that this sort of state-funding for commercialization of academic ideas is "necessary" is that British academic scientists and engineers are, on the whole, so economically illiterate. They place very little value on money and risk. They underestimate the possibility that there might be problems with their ideas, and the costs of developing those ideas. Consequently, it is very difficult for businessmen and academics to reach a compromise that an academic regards as acceptable reward for their intellectual contribution, and that a businessman regards as fair representation of the risk he is taking with his shareholders' money.
So government steps in to ensure that Britain does not become an RD&D desert. The problem is that, by doing so, they make matters worse. Academics are aware that such money may be available on terms that they regard as more favourable. This allows them to cling to their illusions about the value of money. And what they gain in retaining a greater share of their business, they more than lose in the absence of entrepreneurial and management skills, and the application of conditions by government to achieve objectives (technical or "social") that divert the project from simply pursuing the most rational course to commercialization as efficiently as possible. Consequently, we have very few academic entrepreneurs or successful, technically-innovative businesses, because most of our brainboxes choose to retain control of ideas that continue to be worthless through lack of commercial know-how. A small share of a lot is worth a lot more than a large share of nothing, but try explaining that to an academic.
I commented recently on Bishop Hill's blog that the best thing the Government could do with WRAP is shut it down. The same goes for the Carbon Trust. I've only mentioned two so far, but those potential savings from closing quangos are already starting to stack up. Only another 700 to go.
Turn Your Objections and Dissent Into Action Not Hot Air.
Taxcutter
Sorry about the subject Title. But I have read every post on the first page and it is obvious that there isn't very much admiration for Politics amongst the people who use this Website. It just makes me feel at home.
In the column on the right, Organisations, there is a link to the BBC, I had alook and there in nothing posted. I was tempted but then I found these Political Postings and and Comments. Between this and the BBC, it was no contest.
My favourite subject is Direct Taxation. I have spent some years finding out how it works and how to Legally Avoid it. I think it was the year 2000, that I stopped contacting the Treasury, the Inland Revenue and other Government Offices. The Treasury had explained that if any Business or Company, wanted to avoid all Direct Taxation, it must become a Holding Company.
And place the Employment of Staff, the Payment of its Workforce and the settlement of all outgoings into the hands of an Off-Shore Agency. You can of course, set up your own Agency. All Wages and Remunrations, are paid into individual Off-Shore Bank Accounts. I'll stop at that and let you imagine just how simple it is to access your money and how it is possible to borrow against your Tax free income allowing the Lender a chance to make a much better return on his capital.
I do have a site at, http://www.bbc.co.uk/dna/actionnetwork/G2287
The last time I looked, this site was still top of the google search engine for, Sovereignty Politics Taxation Democracy It has been there most, if not all of this year. Have a look at it. I find it more producive to plan the downfall of Westminster, than just tearing out my hair and swearing. Another Website worth a visit is the TaxPayers Alliance. Remember though, Politics won't give up,you will have to remove the power from them.
As Lord Giddens said, "In order to manage risk, you must scare people".
When you think of the Stern Report, you can imagine Lord Giddens speaking to Sir Nicholas Stern as he put the report together.
Enough for now, Regards, ATFlynn, Taxcutter.
Thanks
Taxcutter, That is really helpful, thank you. You have shown up a couple of flaws in the site that aren't obvious to regular users like JG and me.
Firstly, that Organisation block shouldn't be visible by default, because we decided it was unnecessarily complex to expose most people to. If you can see it by default, then we have got something wrong. If you enabled it through your settings, then that's great.
Secondly, I moved BBC from under the "Businesses" heading to the "Media" heading. I thought I had removed the BBC item under Businesses, so that is a very helpful warning. I will try to make it go away now. Have a look instead at the BBC category here - you should find plenty to whet your appetite. In return, I will indeed check out your site.
I like your imaginary teaming of Giddens and Stern. Add Layard and Howard Davies into the mix, and we can shed a quiet tear for that once-proud bastion of classical-liberalism, the LSE - now the joint spiritual home (with Cambridge) of interventionist, corporatist, micro-managing politics and economics.
Incidentally, if you want to see how original and intellectually coherent Giddens' "Third Way" really is, have a look at this. He could have saved us all a lot of bother if he had gained a better understanding of economic history and philosophy.