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Cautionary Tales – Flixborough: The Factory That Was Wiped Off The Map
Dec. 12th, 2025 05:01 am![[syndicated profile]](https://www.dreamwidth.org/img/silk/identity/feed.png){kind=small}
tim_harford_feedA megaplant near the small village of Flixborough, England, is busy churning out a key ingredient of nylon 6, a material used in everything from stockings to toothbrushes to electronics. When a reactor vessel fails, the engineers improvise a quick-fix workaround, so the plant can keep up with demand. Before long, the temporary patch – a small, bent pipe – becomes a permanent part of the factory, and the people of Flixborough unknowingly drift towards disaster.
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Further reading
The Flixborough disaster. Report of the Court of Inquiry
Flixborough 1974 Memories. Essential eye-witness history from the North Lincolnshire Museum.
‘Fire and devastation’: 50 years on from the Flixborough disaster what’s changed? Chemistry World
Are bubbles good, actually?
Dec. 11th, 2025 05:23 pmtim_harford_feedSwiss psychiatrist Elisabeth Kübler-Ross suggested that there are five stages of grief, but nobody has the attention span for that any more. We have leapt instead from stage one, denial — “there is no AI bubble”, to stage five, acceptance — “AI is a bubble and bubbles are great”.
The “bubbles are great” hypothesis has been advanced both in popular and scholarly books, but it was hard to ignore when Jeff Bezos, one of the world’s richest men, sought to draw a distinction between financial bubbles (bad) and industrial bubbles (less bad, maybe good). Bezos, after all, built one of the 21st century’s great businesses, Amazon, in the middle of a bubble that turned contemporaries such as Webvan and Pets.com into a punchline.
There is a solid theory behind the idea that investment manias are good for society as a whole: it is that without a mania, nothing gets done for fear that the best ideas will be copied.
Entrepreneurs and inventors who do take a risk will soon find other entrepreneurs and inventors competing with them, and most of the benefits will go not to any of these entrepreneurs, but to their customers.
(The dynamic has the delightful name of the “alchemist’s fallacy”. If someone figures out how to turn lead into gold, pretty soon everyone will know how to turn lead into gold, and how much will gold be worth then?)
The economist and Nobel laureate William Nordhaus once tried to estimate what slice of the value of new ideas went to the corporations who owned them, and how much went to everyone else (mostly consumers). He concluded that the answer — in the US, between 1948 and 2001 — was 3.7 per cent to the innovating companies, and 96.3 per cent to everyone else. Put another way, the spillover benefits were 26 times larger than the private profits.
If the benefits of AI are similarly distributed, there is plenty of scope for AI investments to be socially beneficial while being catastrophic bets for investors.
The historical parallel that is mentioned over and over again is the railway bubble. The bluffer’s guide to the railway bubble is as follows: British investors got very excited about railways in the 1840s, share prices went to silly levels, some investors lost their shirts, but in the end, guess what? We had railways! Or as the Victorian historian John Francis wrote, “It is not the promoters, but the opponents of railways, who are the madmen.”
Put like that, it doesn’t sound so bad. But should we put it like that? I got in touch with some bubble historians: William Quinn and John D Turner, who wrote Boom and Bust: A Global History of Financial Bubbles, and Andrew Odlyzko, a mathematician who has also deeply researched the railway mania. They were less sanguine.
“Funding the railways through a bubble, rather than through central planning (as was the case in much of Europe), left Britain with a very inefficiently designed rail network,” says Quinn. “That’s caused problems right up to the present day.”
That makes sense. There are several possible definitions of a bubble, but the two most straightforward ones are either that the price of financial assets becomes disconnected from fundamental values, or that investments are made on the basis of crowd psychology — by people afraid of missing out, or hoping to offload their bets on to a greater fool. Either way, why would anyone expect the investments made in such a context to be anything close to socially desirable?
Or as the Edinburgh Review put it, “There is scarcely, in fact, a practicable line between two considerable places, however remote, that has not been occupied by a company. Frequently two, three or four rival lines have started simultaneously.”
Nor was the Edinburgh Review writing in the 1840s — it was describing the railway bubble of the 1830s, whose glory days saw promoters pushing for sail-powered trains and even rocket-powered locomotives that would travel at several hundred miles an hour.
The bigger, more notorious bubble of the 1840s was still to come — as was the 1860s bubble (“a disaster for investors”, says Odlyzko, adding that it is debatable whether the social gains outweighed the private losses in the 1860s). The most obvious lesson of the railway manias is not that bubbles are good, but that hope springs eternal and greedy investors never learn.
Another lesson of the railway mania is that when large sums of money are on the line, the line between commerce and politics soon blurs, as does the line between hype and outright fraud.
The “railway king” George Hudson is a salutary example. Born into a modest Yorkshire farming family in 1800, he inherited a fortune from a great uncle in suspicious circumstances, then built an empire of railway holding companies, including four of the largest in Britain. He was mayor of York for many years, as well as an MP in Westminster. Business and politics inextricably intertwined? Inconceivable!
Another bubble historian, William J Bernstein, comments on Hudson that “the closest modern equivalent would be the chairman of Goldman Sachs simultaneously serving in the US Senate.” That’s a nice hypothetical analogy. You may be able to think of less hypothetical ones.
Hudson, alas, is not a man to emulate. He kept his finances looking respectable by making distinctly Ponzi-like payments, funding dividends for existing shareholders out of freshly raised capital, and he defrauded his fellow shareholders by getting companies he controlled to buy up his personal shares at above-market prices. In the end, he was protected from ruin only by the rule that serving parliamentarians could not be arrested for unpaid debts while the House of Commons was in session. He eventually fled to exile in France.
The railway manias are not wholly discouraging. William Quinn is comforted by the observation that when banks stay away from the bubble, its bursting has limited effects. That was true in the 1840s and perhaps it will be true today.
And Odlyzko reassures me that the mania of the 1830s “was a success, in the end, for those investors who persevered”, even if one cannot say the same for the 1840s and the 1860s. But Odlyzko is not impressed by analogies between the railways and AI. People at least understood how railways worked, he says, and what they were supposed to do. But generative AI? “We are losing contact with reality,” he opines.
Written for and first published in the Financial Times on 6 November 2025.
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Cautionary Tales – “What a Bloody Mess we’re in” – Britain’s [REDACTED] Accident
Dec. 9th, 2025 05:01 amtim_harford_feedWindscale is supposed to be Britain’s big leap into the nuclear Age, bringing science fiction to life in 1950s Northern England. But in the race to catch up with America’s nuclear program, scientists are tinkering with forces they don’t fully understand. When the reactor catches fire, no-one knows how bad it could be, or how to put it out. As the reactor workers scramble to save lives, other eyes on Windscale are much more concerned with containing the political fallout and burying the truth.
This episode is available exclusively to members of the Cautionary Club, and Pushkin+ subscribers.
Further Reading
This script relied on two books by Lorna Arnold – Windscale 1957: Anatomy of a Nuclear Accident, and her autobiography, My Short Century. The BBC’s 2007 documentary, Windscale – Britain’s Biggest Nuclear Disaster, can be found on YouTube. In the same year, Richard Wakeford published The Windscale reactor accident—50 years on in the Journal of Radiological Protection. Bill Penney is remembered in obituaries by The Royal Society and New Scientist.
Cautionary Tales – The Disappearance of Grace Oakeshott
Dec. 5th, 2025 05:01 amtim_harford_feedAt the start of the 20th century, Britain was slowly becoming a freer place for women. Young Grace Oakeshott seized every opportunity to learn and improve the world around her – though she found those opportunities frustratingly narrow. One day, she vanished suddenly, leaving behind only a pile of clothes on a beach. A hundred years later, the truth about Grace’s disappearance has finally come to light.
For bonus episodes, ad-free listening, our monthly newsletter and behind-the-scenes conversations with members of the Cautionary Tales production team, consider joining the Cautionary Club.
Further reading
The key source for this episode of Cautionary Tales is Radical Reformers and Respectable Rebels: How The Two Lives of Grace Oakeshott Defined an Era (2016) by Jocelyn Robson
We also drew on:
“Shooting Affair at Parakae”, Poverty Bay Herald, 10 June 1908.
Breton Folk: An Artistic Tour in Brittany (1881) by Henry Blackburn
And my own book The Logic of Life (2008) .
The following websites were useful:
A kidney could be the perfect Christmas gift
Dec. 4th, 2025 04:07 pmtim_harford_feedChristmas now is drawing near at hand, and your favourite undercover economist has been observed performing some most uncharacteristic acts. My father used to make amazing Christmas puddings and distribute them to his children. Now that he’s dead, I have the recipe and the solemn duty falls to me. Any economics textbook could explain that I am undervaluing my time. I could buy a hundred good puddings with the money I could have earned, had I not been making half a dozen.
Then there is the Harford-Monks Christmas card, designed using a still life created by my wife. And the Harford-Monks Christmas mixtape. (This used to be a true labour of love, requiring dozens of CDs to be burned. Spotify makes life easier, although that somewhat cheapens the ritual.)
No such shortcuts for the Christmas Game, an all-day role-playing game in which, since time immemorial, my friends and I have gathered and pretended to be wizards — often in some seasonally inflected adventure, and always created by one of the group rather than bought off the shelf in a gaming store. This is the way.
I’ve devoted many columns over the years to the “deadweight loss of Christmas” — the grotesque waste involved in buying badly chosen gifts. I remain convinced this loss is quite real, and that if you are choosing a gift for your grandchild or niece, picking from a wishlist or sending cash are underrated choices. Face facts, you’re not demonstrating that you’re down with Gen Alpha, you’re transferring purchasing power.
But there is a different kind of gift-giving going on in homespun rituals. Lewis Hyde’s much-loved book, The Gift, recently gave me a new perspective on the matter. Hyde looks upon creative acts as gifts, and gifts as creative acts. One gift inspires another, he argues, retelling fairy tales to underline the common motif of a small act of generosity which begets a larger one, and a larger one. One story begins with a mother giving a small loaf and a blessing to her daughter; the daughter gives the bread to some birds; a virtuous spiral begins and before the end of the story, she has been gifted with a flask of cordial that can raise the dead. The gift grows as it is passed along.
Hyde devotes a chapter to the way gifts establish bonds between people. This is certainly true of my Christmas game, and is the impulse behind those handcrafted cards, the family pudding recipe and even the endless burning of CDs. One friend insists that the spell of Christmas can only be woven on Christmas Eve by the playing of the Harford-Monks Christmas album with a glass of champagne in hand. Flattery perhaps, but the idea of connecting with that friend compensates for the knowledge that many others will quite reasonably shrug and listen to their own music instead.
Bonds of friendship are all very well, but sometimes bonds can be graver. Consider the connection between kidney donor and kidney recipient: the recipient is literally walking around with part of the donor’s body inside them. (Few gifts, incidentally, create more value than a live kidney donation, where the recipient has their health transformed while the donor usually suffers no more than temporary discomfort. It is the deadweight loss of Christmas in reverse.)
It is easy to romanticise such gifts, but they can be socially complicated. In 2006, the writer Virginia Postrel donated her kidney to Sally Satel — a friend, but “no one would have called us close”. Postrel argued for a legal market in kidneys, and once told me that Satel “would really have liked to do an arms-length transaction with a stranger, where she paid somebody she didn’t know, because there can be a great deal of emotional entanglement when there is a gift”.
Lewis Hyde describes the flip side: a daughter who offered to donate a kidney to her mother, in exchange for a fur coat. “It really shook me up,” said the mother, who agreed to the terms but came to view her own daughter with something close to contempt. Hyde writes, “the gift did not render the mother subservient to the daughter. And for a good reason: it wasn’t a gift.” The daughter turned it into a barter, and in doing so surrendered her moral authority. Evidently, she preferred the coat.
The gift is neither superior nor inferior to a market transaction; it’s different. Sometimes we want those bonds with others, and use gifts to strengthen them. Sometimes we want to be cut free, and then cash is king.
Cash for kidneys remains frowned upon, but one intriguing development has been the emergence of kidney exchanges. Cruelly, it’s quite common for people who’ve had children together not to be compatible for transplants, but two couples can pair up and donate to each other. Such exchanges have to be simultaneous, because of the risk that one couple gets the kidney they want and then backs out on the (legally unenforceable) deal.
But much more can be done if someone volunteers to donate a kidney, no strings attached, to any stranger who needs one. That donation can trigger a series of sequential kidney exchanges — in 2015, an altruistic donor, Kathy Hart, started a record-breaking chain of 35 transplants, each one involving a pair of people who received a kidney, then donated one to keep the chain going. That’s a more complicated affair than simply paying cash for a kidney, but everyone seems to feel a lot better about it. One gift inspires another — and the gift grows as it is passed along.
Written for and first published in the Financial Times on 13 December 2024.
Loyal readers might enjoy the book that started it all, The Undercover Economist.
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