Should London even get more supply expansions?

There is an ongoing discussion, that has featured frequently in the media over last week, about how to extend London’s air travel capacity. The discussion is focused on how to go about it, that is which airport should get the extra capacity [2]. One thing that seems missing from this discussion is whether such an extension should happen at all.

The UK is, in my opinion, far too centralised. We are told that the things that go on in London make up the industry drives the UK’s economy. It’s taken for granted that adding to London’s supply capabilities will benefit everyone. No-one even mentions by what mechanism extending London’s airport capacity will contribute to people’s lives [3].

Economic theorists do things in aggregation. They think in terms of aggregate demand. And demand is always good. London is home to the majority of the financial sector [1]. You will remember this as the industry that almost destroyed the world economy. Does this industry need help?

London already has all of the huge problems associated with overpopulation. Centralising our industry into one mega-city is also strategically dangerous for lots of reasons. It’s been decades since concentrating industry in a capital city was necessary. It’s ironic that at one time the UK’s economy was built on production, which requires physical access to transport infrastructure. The economy was reconfigured during the 70’s to be based on financial services. Such financial services are effectively weightless, you can do financial services anywhere, and yet we for some reason think it necessary to concentrate it all into a few square miles.

Now we are trying to figure out how best to cram more supply into London (which is far more expensive than doing similar in other parts of the country as London is already full). We should be thinking about how to decentralise our country for human, economic and strategic reasons [4]. This would also address the countries disparities in quality of life.

Spokespeople from London will point out that London is hugely prosperous (even if the measures of such prosperity are disconnected from actual human outcomes), but this just underlines the disparity between London and elsewhere in the UK and begs the question of why they need more help.

[1] People interviewed on the subject keep talking about the ‘industry’ in London and how it need’s more air capacity. What kind of industry needs more air capacity? Surely productive industry needs sea and rail links, which we happen to be downscaling elsewhere.

[2] Though it really seems that all the options will have to happen (because increasing capacity will have to happen again at some time), so the discussion is about which option to choose first.

[3] We’ve are in a huge economic down-turn. People are getting paid less and many have lost their jobs. People have less money to spend on holidays and travel so there is no believable benefit to people at large.

[4] Human: overpopulation of London and disparity of metrics like social mobility. Economic: giving more resources to an industry that has a vested interest in creating debt at any cost is not a good contribution to the economy. Strategic: putting all of your strategically vulnerable targets in a tiny place is a terrible idea. If we could make no part of the UK more strategically important than any other part attacks on any part of the country would be much harder to justify.


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