Tuesday 14 August 2012

Running On Different Lines

A Different Ethos: A page from the May 1938 issue of the New Zealand Railways Magazine. There are more ways to measure the value of an enterprise than simple profit and loss.

THE FLINTY-FACED MEN who run everything these days will call me a hopeless romantic, but I won’t care. They’ll point to the bottom line of the company’s accounts and shake their heads. “This is a business,” they’ll say, using that patient tone reserved for fools and children. “It must be run as a business.” But I won’t be convinced.

“Business”, no matter how hard its backers try to convince us otherwise, does not belong in the same ontological category as “Weather”. It’s not something we simply have to live with because, no matter how much we talk about it, or complain about it, we cannot change it. Businesses are the work of men and they are whatever men tell them to be. Bottom lines can be made to measure more than profit and loss.

The New Zealand Railways used to have 20,000 workers on its payroll. On the trains and railcars and electric units there were engineers, conductors and guards. In the stations and marshalling yards there were station-masters, schedulers, pointsmen, shunters and ticket-sellers seated in narrow booths. In the railway workshops hundreds of highly skilled tradesmen designed and built locomotives and rolling stock, refurbished carriages and undertook running repairs and maintenance. Up and down the thousands of miles of track gangs of railway workers checked the signalling gear, maintained the rails and ties and sleepers, noted signs of wear and tear and assessed the risk of washouts and slips. In between keeping the network safe, at ten and twelve and three o’clock, you’d see them hunched around a primus stove, boiling a billy, smoking a fag, chewing the fat. Working men, gainfully employed, bringing home a living wage to their wives and children.

How do you fit that picture into your bottom line, Mr Businessman?

How do you measure the value of kids growing up in working families where Dad and Mum pointed with pride to the great machines that the brains and hands of working people had made? What price do you put on the mastery of the complex tools, the lathes and presses, that produced the components that kept the machines running? Or the lifetime of productive work that their makers could look back on, and their sons and daughters aspire to? Where, on your bottom line, Mr Businessman, do you account for the vibrant neighbourhoods radiating out from the marshalling-yards and workshops at their heart? The shops and the supermarkets where people gathered and swapped gossip; the pubs and clubs where they argued about sport and politics? Are they not worth as much as the working-class neighbourhoods of China?

If you were honest, Mr Businessman, you’d tell me (sotto voce) that, really, it’s not THE bottom line that matters, but WHOSE.

The railways belonged to the people, but the road haulage companies belonged to their shareholders. Hardly surprising, then, that under the shareholders’ political party roads and lorries began to take precedence over rails and locomotives. When budgets were being drawn up it was to concrete and bitumen that the funds were allocated – not diesel oil, steel and hardwood sleepers. In other parts of the world the symbols of modernity were high-speed trains and light-rail public transportation networks, but here in New Zealand the future belonged to six-lane highways and 18-wheeler trucks.

Symbols Of Modernity: High-speed trains became emblems of progress and technological prowess in Japan, Western Europe and China - but not in New Zealand.

In 1986 the party that had pledged to “Save Rail” corporatized it. NZR became an SOE and from that moment on it was to be run as a business, with a business’s bottom line, and a business’s ruthlessly “downsized” workforce.

At the stroke of a pen, all the benefits that could not be accommodated in the accountant’s ledger ceased to matter. The benefit of having people gainfully employed and paying taxes instead of rotting on the dole. The benefit of working-class kids aspiring to be skilled tradespeople rather than patty-flippers at Macdonalds. The benefit of having socially coherent and flourishing neighbourhoods rather than decaying factories and weed-infested marshalling yards full of young people without jobs getting high on drugs where their fathers and mothers once earned a decent wage.

But that’s the way it was. New Zealand had joined the “Real World” of global markets and bloodless calculators. Railways were so … well … Nineteenth Century. Horny-handed sons of toil poring coal into puffing-billies. Away with them! Sell it to the highest bidder (and the friends of the highest bidder). Strip out the assets. Let the rest run down. Then (and this is the point where it’s really important to keep a straight face) sell it back to the people at a price that has nothing to do with the bottom line.

Still, we romantics are patient folk. As the Earth’s atmosphere heats up, and Peak Oil plays havoc with the truckers’ profits, those much-despised and long-neglected rails are beginning to hum.

This essay was originally published in The Press of Tuesday, 14 August 2012.


Peter Wilson said...

What a beautiful post. The railways built New Zealand, and yes, as cheap energy starts to run down, we'll be needing them again, and soon, if we wish to remain as a united, single nation.

An interesting fact is that the economics of modern steam traction just about level pegs with diesel, and if you added in the value of fuel flexibility and indigenous fuel sources (wood, biofuel, a bit of coal if you had to etc) and longevity, it would probably trump it.

Time for a Real Labour party that understands this value.

Guerilla surgeon said...

Bottom line - we subsidise businesses all the time. They arn't owned by the people. Sometimes I wish the right would live up to their own principles.

Victor said...

I'd lived in New Zealand for around five years when I took my first train ride from Auckland to Wellington. Only then did I understand what a rich engineering heritage this country has. The bridges, viaducts and other works were superb examples of nineteenth and early twentieth century technology. It's a pity that the trains no longer measured up!

Adolf Fiinkensein said...

Not forgetting, of course that the Railways, The Pee and Tea along with the MOW were the parking places for the tens of thousands of unemployable who could draw the dole while appearing to work but not feature in unemployment statistics.

Jigsaw said...

Only a person who has never been in business could have written this! Amazing! This is the stuff that will sink countries like Greece-you can't have something that is so uneconomic and still survive as a country. It's easy to be sentimental about such times-all those grossly overmanned state industries just couldn't possibly have survived into the 21st century-not even to the end of the
third quarter of the 20th century.
The state itself would have sunk under its own weight. You write beautifully about it but that can't disguise even slightly that it was UNSUSTAINABLE and that's the ultimate reality.
If that's the idea of some new version of a Labour party then they are stuck in an economic cul do sac where the only way out is economic ruin.

guerilla surgeon said...

Those 'unemployables' (stoopid in itself.) were drawing wages and spending money - then they weren't. You all seem to forget that what drives the bloody economy you all love is spending.

Peter Wilson said...

Jigsaw, I do run my own business...

Tiger Mountain said...

Some commenters here seem to lack basic comprehension skills. “peak oil” and our long narrow country as mentioned by Chris mean that rail is odds on for a major comeback in the next several decades.

Unless of course people fancy living in some futurist grimness ala “Mad Max II” or “The Road”.

Victor said...

Tiger Mountain


The notion that road transport = the wave of the future is already several decades out of date.

Those few (mainly Anglophone) countries which have de-invested in rail transport will find it hard to catch that wave, wheresoever it leads.

BTW I recently found myself in conversation with the wife of a member of the road lobby. She told me, without a trace of irony, that rail transport couldn't make a comeback because it involved too much traction and hence energy use.

I expressed polite puzzlement and enquired why, if this was the case, railways had been invented in the first place.

Perhaps predictably, I haven't been invited back.

Don Malcolm said...

A very eloquent and idealistic essay, well written and from the heart. Sentiments many would remember fondly, and share.
None of us want to see any one out of work(or worse still, be out of work), but with any sort of subsidisation or benefit, it is the taxpayer who inevitably foots the bill.
The difficulty as I see it is the willingness of too many to spend each dollar taken in tax, several times over. Those of us who live on a fixed income know this to be impossible (bugger!).
By all means, employ 20,000 on an inefficent rail system, but please explain to me where the funding comes from - surely, if we are not to be bankrupted, any funds directed here must come from somewhere else? Perhaps education, superannuation or health?
Greece is a modern example of an encomy that refused to accept limits to their spending, and they are now humiliated in the eyes of the Western world.
It is a sad fact, that despite the very best of intentions, we cannot hang on to the best of the past without considering the realities of the present.

Kat said...

@Jigsaw: "you can't have something that is so uneconomic and still survive as a country."

So please explain the rationale behind Nationals intention to now borrow huge sums of money, burden future generations, to finance highways that can't seem to pay for themselves?

I agree with Chris that the railways were more than just a 'business' and that goes for the 'MOW' as well. So what if those organisations moped up unemployment, the cost has to be cheaper in the long run.

Jigsaw said...

Bright Spark- do you really think that the Greens would allow coal fired engines to work on the main truck line? All that nasty smoke.....

Anonymous said...


Only a highly subsidised New Zealand businessperson who has been pampered by neo liberal governments for the last 30 years could think like you do.
The country is sinking. Too many subsidies to the private sector like Working for Families so private employers can avoid paying proper wages and housing subsidies so landlords can get away with rack rents and banks can lend far too much on housing.
Its the neo liberal economic theories that are foist upon us that are not sustainable.
Being all sentimental about the good old days in the 19th century like you neo liberals are, is no way to run a country - it failed in centuries gone by and fails now.
Mutual support and solidarity has been the only way humans have ever made sustainable progress.

TM said...

Various unofficial polls have shown that the majority of the public back the sentiments of this article.

We should be maintaining the railway infrastructure. The government directly pays for road maintenance with minimal costs being recovered from the road freight industry, so they should also do the same for the rail lines. Then you will find Kiwirail is a lot more price competitive.

However, we shouldn't romanticise the old railways too much. It was known for its gross innefficiencies. There is nothing wrong with a bit of corporate efficiency.

Anonymous said...

a crafted PR line for Shearer’s next speech, courtesy of the unemployed

‘Recently I was speaking to an old friend just after a regional Labour party conference. He was a good old boy — had paid his union dues thirty-odd years, had a buggered shoulder and bad lungs from decades of wage slavery — still possessed a real sense of political purpose. Ever the optimist, he’d recently re-joined the party, and was hopeful despite the betrayals.

We were midway in a cigarette and a discussion about the Great Depression and the New Deal when this slightly spacey baby boomer came walking out of the hall in a shirt and tie muttering on his phone, waved goodbye, walked off, came back, waved embarrassedly a second time, and walked off the other way when he’d remembered where his car was.

My friend pointed at him and said, ‘He’s the party leader. Do you think that’s fair?’

My friend told me this guy had come out of an incoherent political irrelevance. He didn’t believe in socialism or even social-democratic revisionism, had voted National all his days, spent all his time “listening” because he didn’t have any political positions to assert, had been gifted a safe seat and done only one term, and now he was leader of an already historically highly compromised Labour tradition.

The party’s recalcitrant neoliberals and careerist cling-ons had shored up his support against the unequivocal and better judgement of the party membership. This guy had surrounded himself with scheming opportunistic backers, a Pagani spin team the ideological equivalent of the house wine at a suburban Indian restaurant, and bungled out non-committal platitudinal fluff in every speaking engagement like a down syndrome Lange. He was still languishing in the polls after months for want of a political purpose or any narrative traction, and his plotting parliamentary heirs-apparent were shamelessly attacking much more viable alternatives publicly.

I said it wasn’t bloody fair. It made a mockery of our ostensible political freedom and pointedly demonstrated capitalist social domination.

I have little tolerance for cosseted political elitism. We don’t like an arrogant out-of-touch minority ripping us off while perpetuating a system of exploitative oppression. We struggle do the right thing according to antiquated bourgeois morals and sometimes we’re stuck on welfare because capitalism wants to drive wages down, and we’re getting increasingly militant.’

Anonymous said...

What is it about lefties and their infatuation with rail? Next it will be a longing to bring back telegrams at the Post office and the Morse code!

Anonymous said...

A beautiful essay about the 'once and future king'- rail. Our Strongman coal is the gold standard of coal types, yet we sell it cheaply for northern Hemisphere smelters. Add this high-efficiency coal to the special advantage of moving weighty freight on a metal-to-metal system -rail-and we can have a nationwide system that supports communities around the country.

Not sentimentality, just thinking long-term about remaining viable. Ports are being hampered by their inability to submit dredging costs in their IRD returns. And yet there are still folk who believe that National is the one party able to 'manage' our economy. (The captcha words ARE illegible!)

Chris Trotter said...

Ah, yes, and those high-speed trains and highly efficient PT systems in North America, Europe, Asia and Australia are just figments of the Left's imagination. One could just as easily ask: "What is it about righties and their infatuation with roads?

Brendan McNeill said...

Hi Chris

Traveling in Vietnam on overnight train from Hanoi to Sapa. Nothing nostalgic about that experience! It seems the Vietnamese have exchanged a life of, no free education, no free health care, but free rice (when you can get it) under strict communism for a life no free education, no free health care, no free rice and no welfare under a new system of market communism started about 10 years ago. No one I have spoken to wants to go back. Everyone is measurably better off living in a market economy and paying about 10% tax to keep the army and other govt functions working.

People seem to be happy earning USD $600 per month.

NZ by comparison is a workers (and non workers) fools paradise. How can it last?

Chris Trotter said...

To: Brendan.

I'm bemused by the way right-wing people rely on a variation of Goodwin's Law.

Whenever the ideological going gets tough they immediately revert to an argument based on the shortcomings of countries ruled by Communist parties - just as liberals immediately revert to arguments based on the rise of Nazism.

What they never do is look at countries where social-democratic policies have produced strong, caring societies AND healthy economies AND efficient railways.

Funny that.

Chris Trotter said...

To: All Commentators

I know how frustrating the "prove you are not a robot" procedure is - I have to endure it, too, whenever I leave a comment.

Unfortunately, it is Blogger's system - not mine.

Jigsaw said...

Chris-how you conventiently forget that New Zealand has substantial differences both in the make-up of its society and the conditions under which its railways work. The countries that have the social-democratic policies almost invaribaly are closer to their markets, have much more homogenious and larger populations. Their railways are almost always through much more benign countrysides and thus have a wider gauge,fewer tunnels etc etc. You have obviously never travelled on AMTRAC which has to be one of the most hopeless passenger rail systems you could encounter.
So like the left to discount all of the things that tend to disprove their arguments.
Comparing New Zealand with Sweden is a huge waste of time besides being pointless..

Chris Trotter said...

Of course New Zealand's different from Sweden, but that doesn't mean we have nothing to learn from the Swedes.

Your arguments reflect the extraordinary degree to which the Anglosphere has become the plaything of the big oil companies and automobile manufacturers.

Amtrack is the classic example. Eisenhower wanted a strategic roading network to move the US army's heavy armour about in the event of WW3 (shades of Hitler's autobhanen).

The private owners of the US railway network were too slow to adapt to the new realities of auto and air travel and when, inevitably, the Federal Government was forced to step in they did the bare minimum required to prevent the whole system from grinding to a halt.

If that sounds familiar - it's because it's our story too.

Rail would be fine if the state invested in it with the energy and commitment with which it is currently investing in roads.

Robert M said...

Apparently private freight rail is starting to do fairly well in the USA. NZ distances are not long enough for economical freight haul by rail, particulary as Auckland to Christchurch is five or six stages. Truck to Auckland terminal, change diesel to electric at Hamilton and vice versa at Palmeston North, On and off Rail Ferry and then the long steep rail haul from Picton-Christchurch.
In has always been my view that rail in NZ was more suited to short to medium distance passenger trips with running up to 160kmh up to distances up to 200miles
In the 1950s the Nat govt basically decided to favour the private buses and NAC which many of them wanted to privatise. My the time the Fiat railcars were introduced in 55-59 the real traffic had already gone to Newmans and other bus firms and on the Viscounts and Friendships. Rail is now only real useful for diverting social and transport policy activists and Keynes point of the gains in productivity and multiplier of digging holes and slightly more sensible than makework projects.

Victor said...

Just to make my position clear....

I don't think it would be sensible to invest public funds in railways just for the collateral advantages of jobs, economic stimulus and revived communities, important thought these things all are.

There are many simpler ways of achieving such desirable goals but they would count for little if our total economy (and not just our currently trivial government debt to GDP ratio)came under excessive strain as a result and there was no compensating improvement in productivity, export growth or efficient use of limited reseouces.

The point is surely that a revival of railways is essential to our economic development and hence an inherently sensible field for public investment. And, in addition, such expenditure would offer jobs, revived communities, stimulus, the 'multiplier effect', etc.

What's not to like?

And just to clear up another area of doubt; I am a robot!

Brendan McNeill said...


I'm actually more aware of the shortcomings of our own society where we have bred a culture of blame and entitlement.

I find none of that in Vietnam. The Vietnamese from both north and south have told me that they have put their war(s) behind them and they hold no animosity towards the Chinese, French or Americans for past wrongs.

How many kiwis are vehimently anti-American with far less cause?

The Vietnamise are by and large positive hard working and hopeful.

We could learn a lot from them. Except for their railways of course which are awful!

Jigsaw said...

Its not by accident that the same story is repeated-that shows the weakness of the systems. The state is investing in roads because that's what is needed now and that is what has been neglected in the recent past-no mystery.
I think we now have Trotters' Law -that things in the past are looked at through rose tinted glasses-(especially Socialist eras)the good is emphasised and the bad or unpleasant side is minimized. It makes great reading and is most entertaining-it's just a basically unproductive way of planning a future -which it seems to me is what the Labour Party is currently doing.
Of course we can learn from the Swedes, no question in that-but the good along with the bad. I recall talking to a Swedish couple in Ireland a few years ago and their experience as older people didn't match up to the glossy image the country generally portrayed.
Rail has a place but it's in the future and different-the past is a romantic place but not real anymore.
Not complaining-I am sure you will write more using Trotter's Law and I will enjoy it-just don't see it as a blueprint.

Wayne said...

Chris, you really have indulged in nostalgia here, but that of course is the intended theme of your blog. It seems like you wish the world never changed after 1984. But while you remember the good parts you seem to have forgotten the cost. The extrordinary level of regualtion and the lack of choice. It was unsustainable by 1984, how much more so would it have been now.

No, in New zealand rail has had its day. Maybe good for bulk frieght, but not much else, though i do support urban rail in Wellington and Auckland. But rail to the Auckland airport or to the North Shore - it simply does not make sense.

For those who wory about oil prices, well cars are going to get a lot more efficient, and we are on the cusp of the electric car revolution. If oil costs twice as much in ten years the real cost of car journeys wont change due the technological change that is about to occur.

The Flying Tortoise said...

Great post Chris, thankyou, but would the people with their bottom lines ever read this blog or if they did, would they allow themselves to be swayed by it?
No, I don't think so.
They know they're doing wrong by the people of this country but they're too committed to worshipping Mammon to change their ways...
It's a shame and it's a shame that is worn by many in this mad western world...

guerilla surgeon said...

Unsustainable. How many times do we hear that glib word without a shred of actual evidence.

Anonymous said...

chris-nice article. the energy/climate change predictament we have produced seems to have eluded many of your readers.
after visits by nicole foss and guy mcpherson and the almost daily/weekly studies on sea ice loss/fires/droughts/floods the arguments or paths we will take are much more limited than we imagine. the sad part to me is that new roads, railroads -let alone electric cars are probably extravagant steps in the wrong direction. i certainly think we need to be planning for a much 'simpler' existence - hardly any long distance travel or trade in the forseeable future.

RobertM said...

The inhert problem with NZ Rail is it was built as a revenue railway to Vogels specifications as an African style development rail, narrow gauged steeply graded, sharp curves and with very limited loading gauges and track gauges. The actual 3ft 6inch gauge isn't too much of a problem if you don't want to run the trains at more than 170kmh but in the NZ situation the degree of sealing off of the trackes and level crossing protection etc required means only a few sections of track in NZ could ever be upgraded for that speed of operation anyway.
By the 1940s NZ rail was completly obsolete anyway without complete reconstruction. As early as the 1920s the state of the rail was desperate, because the light track meant the axle loadings allowable for nz steam locomotives of 10-12 tons was only half that allowable on US, UK or French main lines and meant 140 ton NZ steam engine like a KA only produced about half the hp of a UK LNER, LMS or BR main line steam. A LNER A1 Pacific of 1950 era would produce 3500hp at 80mph while a KA would produce about 1500hp at 60mph.
The cost of diesalisation was enough to transform basicaly profitable railways like the UKs in the mid 1950s into hopeless uneconomic losses. In the early 1950s a rail workforce of 20,000 was sensible in NZ, but automation and changing business and manufacturing needs means it should have been no more than 10,000 by the mid 1970s and Fay and Richwhite were doing useful work cleaning out the stable by the early 1990s because a lot of that kind of person was no longer useful for anything by then and the competent staff were treated better by Fay than by Toll and the Aussie Mafie. The real obscenty was the Toll days with the Australian war bonnet on NZ diesels.

Chris Trotter said...

To: RobertM

You're quite correct RobertM.

The tragedy was that successive governments of the 1920s and 30s did not embark on the wholesale modernisation of the rail network - a sort of Kiwi-style TVA, Grand Coulee Dam infrastructure project.

The guage should have been widened and the whole system rigged for electricity.

After all, NZ is no more mountainous and disconnected than Japan - and their railways are state-of-the-art.

Sparky said...

Good post Chris.

The advantage of a good rail service is the way large amounts of freight can be moved by it. Consistently, Rail is moving 1200tonnes per train and there isn't a truck/trailer rig that can haul that much.
NZ is unique in geography; two islands with a ditch in the middle, and a big range of mountains through each island. These things offer a challenge to freight moving around the country. We need a good rail system that is well maintained and serviced.
Rail is the most efficient way of moving large numbers of people around a city as well. It must be reliable and run on time or people get disillusioned by it.