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Incremental improvements to infrastructure offer better value for money

Does it lift your heart to hear that “Britain is uniquely placed to lead the world in a smart power revolution”? Do you share the ambition of George Osborne, chancellor of the exchequer, to discover “what the government needs to do to become a world leader in 5G infrastructure”? Here’s why my heart sank when reading these words in the plans of the UK’s National Infrastructure Commission.

Our tax system needs purposeful change, not tinkering

George Osborne has, it is reported, abandoned plans for root-and-branch reform of the taxation of pension saving and will content himself with tinkering with rates of relief. However, what’s really needed in our tax system — as in so many other areas of political life — is purposive change: reforms may well be implemented in piecemeal fashion but should be motivated by a sense of strategic direction.

Pharma responsibilities are to a wider community than its own shareholders

Two recent events have served to highlight the range of difficult questions raised by pharmaceuticals regulation. Last week, a man died in the French city of Rennes after a clinical trial of a painkiller went tragically wrong. In New York last month, the company controlled by former hedge fund manager Martin Shkreli, raised the price of the life-saving drug, Daraprim, from $13.50 a tablet to $750.

The business of attacking companies is hard to admire but publicly useful

In cases of fraud official action inevitably damages both the business and its share price, and no agency will be right all the time. Short selling hedge funds are not right all the time either, but when they are wrong they lose their own money.

UK invites more bank failures by backtracking on executive liability

The Parliamentary Commission on Banking Standards, which reported in 2013, recognised the central significance of executive responsibility for systemic failure in the sector. It proposed a senior managers regime which would hold executives liable for wrongdoing in activities for which they had responsibility even if they had no specific knowledge of the improper conduct. Having accepted this recommendation, the UK government is now backtracking.

Organisations advance by asking “what went wrong” rather than “who is to blame”

Bad events in organisations are generally the product of bad systems rather than bad people. So, while it is right to place responsibility for the VW scandal with the chief executive rather than the individuals who falsified emissions tests, we need to go on and ask what it is about modern corporate life that has made such misbehaviour not only possible but appear increasingly common.

The rich and powerful obstruct criticism of their actions through ‘Maxwellisation’

Sir John Chilcot recently explained that the delay to his Iraq war inquiry is in part due to “the ‘Maxwellisation’ process, in which individuals are given the opportunity to respond to provisional criticism of themselves in the inquiry’s draft report”. This is, perhaps, an appropriate legacy for one of the most flamboyant and litigious crooks of recent times.

Limited liability led to limited care for other people’s money

The financial sector in the 1980s and 1990s was characterised by a rush to incorporation. The mantra of “shareholder value” restored the nexus between finance and business that Smith had feared and Brandeis denounced. And the stage was set for negligence and profusion to prevail once again.

Rail privatisation has delivered improvements through accountability and autonomy

Both the leading candidates for the leadership of Britain’s opposition Labour party have now committed themselves to renationalising the country’s railways. But the state-owned British Rail was one if the most reviled institutions in the UK, and privatisation has delivered many relative benefits.

Solutions to the Greek debt crisis should be found through pragmatism not blame

The Greek crisis is not simply the result of Athens’ inept public administration but also of an extensive carry trade on eurozone convergence by northern European banks, notably in France and Germany, which obtained short-term profits by matching northern eurozone liabilities with southern eurozone assets. For every foolish borrower there is usually a foolish lender.