Yup, bureaucracy costs even them

A nice little horror story from Ireland showing us all what the immense costs of bureaucratic wibbling are. The net effect of which is that, sure, in theory having people considering decisions can be a good idea. But the losses from how it is actually done are such that we’d almost certainly be better off by simply slaughtering everyone who has ever attended a committee meeting. That might be considered a little de trop perhaps, possibly a little bloodthirsty even, but fair and proportionate in the circumstances I think.

The story itself is really very simple:

Apple is scrapping plans for an €850m (£743m) data centre in Ireland after three years of planning approval delays, the company has said.

Note that in this little part of the economy 3 years is actually a generation. No, really, it’s an entire generation of the machines that live inside those sorts of centres. We’ve an entire generation of economic growth stopped here.

Apple announced plans in February 2015 to build the facility in the rural western town of Athenry to take advantage of green energy sources nearby, but a series of planning appeals, chiefly from two individuals, delayed its approval.

Two people eh? Looks like Eire has imported more of the American culture than just the company Apple itself then.

Three years ago, Apple announced that it would invest $2 billion into building a pair of new, green data centers in Ireland and Denmark.

The first phase of the Danish center announced at the same time, incidentally, is nearly completed and Apple is now working on a second center in the country.

The Irish one is cancelled because of the planning process. The Danish one is just about to come online. Hmm.

About which we can say two things. The first is that all of this planning, all this bureaucracy, it has a real cost. No, it isn’t true that things are just delayed a bit – not that that would be a reasonable excuse anyway. For economic growth now is income, consumption, that people can enjoy now. That the growth will still arrive in 2 years time doesn’t stop the fact that we’ve all missed enjoying two years of it.

That we had lots of growth in 1965 didn’t aid those in 1565 much either, did it?

Over and above that thing about delay is of course this story, that delay can and will mean some of the growth not arriving at all. Not one of these good things.

Our second thing being that joy that the other place is Denmark. You know, one of the most equal places on the planet, oft cited as one of the happiest and all that. In fact, the sort of place that near all the leftists of the Northern Hemisphere say is how we ought to be, one of those Nordic social democracies. And how do they do that? By loading everything up with bureaucracy? By strict planning controls which take years to navigate?

No, in fact, they don’t. Actually, the run matters entirely the other way around. They run a more free market, more capitalist even, and definitely less bureaucratic culture than we have. True, they then slice vast bits off the top to pay for their social welfare policies. But note how they do start, more free market than us.

And that is an interesting finding, isn’t it? That road to nirvana, to the outcome we’re supposed to want of an encompassing and caring social democracy, is through more redistribution, more economic freedom and less government. It’s just odd that our own home grown lefties never want to do the latter two, despite that being what makes the first work or even be possible.

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    • OECD Ease of doing business ranking (http://www.doingbusiness.org/rankings) is a useful measure of the limits of bureaucracy. Denmark is third, behind NZ and Singapore. It ranks first for construction permits, which may explain why the Apple centre is coming live in Denmark and not in Ireland!

      Heritage Foundation’s Index of Economic Freedom (https://www.heritage.org/index/ranking) is a useful proxy for how free market an economy is; in this one Denmark is 12th and ranks as a “mostly free” economy. Here it is behind the UK and Ireland but ahead of the USA. The main area that it scores well in is regulatory efficiency

  1. “More redistribution” was certainly not a magnet for Apple, which has to pay the people managing the Danish data center extra to convince them to join or relocate despite having to pay that extra income tax to be redistributed. Rather, the relative simplicity of building the plant outweighed the cost of “more redistribution.”

    The Reuters article doesn’t go into detail about how and why two Irish individuals can kill a showcase foreign investment, but this would be fascinating to know.

    • If it like UK you just have endless appeals which get more costly and bureaucric.

      Those who object are aided by a cornucopia of designations which make planning even harder: Sites of Special Scientific Interest, Conservation Areas, Areas of Outstanding Natural Beauty, Green Belts etc on top of which if the new structure is within sight of historic buildings it needs special clearance. Then there’s bats, badgers, voles and a whole Noah’s Ark of protected species which have to be considered and reports written.

      All this means that a small number of self appointed busybodies have a de facto veto on any development by demanding ever more reports and hearings.

      • Yup, I give you again that landowner in northern New Hampshire (where the designation is simply forest) who spends days testifying at the state capital about the study he commissioned that his property value would be HALVED by glimpses of high-tension lines transmitting “sustainable” Canadian hydro-power to the market in the south.

    • Irish bureaucracy is not unique, as the “slip-and-fall lawyer” is an American stereotype too. Technically, this is law not bureaucracy, but the huge number of prerogatives business now gives itself over its employees and prospects, such as drug tests and access to their social media accounts, is a result of our modern open-ended legal liability.

  2. There are few things that can drive a person to despise government more than a planning commission. The crazy thing is, they are largely made up of older guys (very often guys) who’ve grown bored in retirement, and perhaps want more time away from the missus, so they get themselves onto a commission where they can play little tin god. On projects I’ve been involved in I’ve seen commissioners ague that we flip the orientation of a proposed development, or that all units had to have some sort of big planter in the yard so the people can grow vegetables. I’ve even seen a demand that the units be built with carports and not garages because people will store stuff in the garage and park the cars in their driveways. Apparently a visible car in a carport is somehow less offensive to the eye than a car in a driveway.

    All those people who advocate for more government I think fail to understand how so much of increased government would be implemented by bored old retired guys wanting to get involved in such minutia as whether people can store stuff in garages, while also getting away from their wives for a bit.

    • Bottom line, advocates for more government fail to understand that it would be implemented by humans!

      Apple chose the location considering “green energy.” Was it not clear that Apple does its own planning, extending even to niceties that don’t help it do business? But there is no limit to a Planning Commission’s ability to invent new criteria to take into consideration. And to decide which criterion takes precedence (this time). Those oldsters who would each privately concede that some choices belong to the landowner cannot resist opining about which choice is better, when sat at the table at the head of the meeting room.

      • Not just opining, but then mandating as a condition of approval. The latest in California is a proposal that all new houses be built with solar panels at an added average cost of $10K. This on top of either requirements for a second unit or an affordable housing fee paid in lieu of a second unit in some areas. Not to mention expensive service hookups.

      • As of two days ago, more than a “proposal”: https://www.bloomberg.com/news/articles/2018-05-09/california-votes-to-require-rooftop-solar-power-on-new-homes

        The only way this will not kill the California homebuilding market is if used homes also increase in price by $10K, which is the value of being outside the mandate. Though this was done by the “California Energy Commission,” which presumably can do anything provided it somehow relates to energy. Do people think that “no one is harmed” if this regulation only affects currently nonexistent homes?

        It is amazing that it is still so chic to live in California that people endure malevolent government activism, changes to the election laws to make it impossible to oppose the ruling party, compulsory unionism in everything, and eager hospitality to border-jumpers who commit other crimes once settled.

        • Well, if you’re older and owned your house a long time, and thus are not extremely affected by the increased costs, then you wind up tolerating it because the weather is pretty good near the coast and chances are friends and family are nearby. What’s a bit balmy, is that with an older 2600 sq ft house near SF Bay, my electricity bill is only about $45-65/Mo (gas goes up and down $30-$200 depending on whether the heater is running or not, which it isn’t for 8 months of the year). Would I pay $10K to try to cut $50/Mo to $3/Mo? Not I.

        • That is simply why We need to take the decision out of your hands if we want results.

          Inflating home prices through mandates and “high standards” is not just tolerated, it is embraced, here in New Hampshire as well. I’ve got mine and it’s worth more than it’s worth, whereas everyone moving into town has to pay more: the pull-up-the-drawbridge syndrome.