Join Date: Jul 2003
Location: Raleigh, NC
My Ride: Trek 1.5
The Baffling Economics of the Island of Sodor
Being the father of a toddler, I spend a lot of time watching Thomas the Tank Engine. As a writer for a business magazine, my mind can’t help but be puzzled by how the economy of the Island of Sodor actually functions. It seems to me to be dreadfully inefficient, and for the life of me I can’t figure out how anyone on the Island turns a profit – especially the railways. Here’s just a few questions I’ve had while watching the show:
How does Sodor make cronyism work?
There’s clearly a bit of cronyism on the Island of Sodor helping to line the pockets of Sir Topham Hatt. Although reference is frequently made to elected officials such as a Mayor, Sir Hatt seems to be in charge of virtually everything on the island. In addition to running his own railroad, he’s often in charge of projects – like building a Search and Rescue station in Misty Island Rescue - that should properly be the purview of government. Indeed, the Island of Sodor bears no small resemblance to Boss Hogg’s Hazzard County, with Hatt seeming to own most of the businesses around and able to get the government to back those industries.
Usually, though, this type of cronyism leads to massive inequalities of wealth (like in povery-stricken Hazzard County) as established businesses use the power of government to thwart competition. On the other hand, the Island of Sodor seems to have a thriving middle class is generally prosperous. It’s not clear how this is possible.
Five Leadership Lessons From James T. Kirk Alex Knapp Alex Knapp Forbes Staff
The Seven Habits Of Highly Effective Hobbits Alex Knapp Alex Knapp Forbes Staff
Five Leadership Mistakes Of The Galactic Empire Alex Knapp Alex Knapp Forbes Staff
Five Leadership Lessons From Christopher Nolan's Batman Trilogy Alex Knapp Alex Knapp Forbes Staff
Why do the trains have drivers?
One of the most remarkable things about the railways of the Island of Sodor is that they are managed by intelligent trains. These trains are capable of reasoning and planning out their own workdays. They also drive themselves – it’s made clear that they can move on their own power. So why do they have drivers? That seems remarkably inefficient All of the money spent on their payroll is pretty much a loss for Sir Topham Hatt. For a guy who has the ambition to turn 300 square mile island into his own personal fiefdom, that seems to show a remarkable lack of avarice and foresight. Surely he has some other economic operation he could hire those drivers for. Or else not keep them around at all.
Why aren’t the trains used more efficiently?
For the most part, the freight trains on Sodor only haul one car at a time – occasionally, they’ll haul two. Even more inexplicably it’s not uncommon to see two engines being used to transport one freight car. This level of inefficiency is simply insane. The Island of Sodor isn’t that big. There’s just no reason why one engine can’t be used to haul multiple cars. The engine fleet of Sodor’s rails could easily be cut in half, at least, and its regular costs cut accordingly. Of course, this represents the economic danger in Sir Topham Hatt’s monopoly. Through Hatt’s cronyism, he’s clearly keeping trucking out of Sodor, making his rails the only place to turn for businesses that want to transport freight.
Why aren’t routes and schedules determined centrally?
On Sir Topham Hatt’s railroad, engines are given a cargo manifest and told the destination of the cargo. The route the train takes to the destination is up to the intelligent train. In theory, this sounds good – local knowledge and individual initiative are usually superior to central planning. However, the personalities of the intelligent trains on Sodor are, for the most part, very naive and child-like. This is almost certainly a deliberate decision to prevent the trains from rising up and rebelling against their human masters. But as a consequence, the trains often find themselves losing cargo or delivering it late. If you’re going to have child-like trains, they’re going to need guidance and direction. Their routes and schedules should be planned rather than relying on the unreliable trains to do their work.
Why does Sodor ignore its massive economic comparative advantage?
The Island of Sodor is pretty economically self-sufficient. It has farms, coal mines, quarries, zoos, and many other industries. And while that warms the heart of my inner 19th-Century Whig, in an era of globalization, it’s not the Island’s best economic decision. As David Ricardo described way back in the 18th century, economies should focus on their comparative advantages. And the Island of Sodor has a major comparative advantage: they have the best artificial intelligence researchers in the world.
AI research on the Island of Sodor is massively ahead of the rest of the world. The trains on Sodor have been designed to understand natural language, solve problems for themselves, recognize new situations, and even have emotions and personalities. This is way, way ahead of artificial intelligence research in the rest of the world. Google, BMW, and many other car companies, for example, are working on driverless cars – a problem that Sodor has solved. Apple and Google are also working on natural language comprehension for use in voice-activiated search engines for phones. Again, Sodor has this licked.
In reality, Sodor shouldn’t be a quaint island whose dominant industry is rails. It should be the new Silicon Valley, using its advanced artificial intelligence research as its primary economic export. This tiny island could be worth billions – if not trillions – of dollars if it focused on its software industry instead of coal and rail.
How else do you think the economy of Sodor could be made more efficient? Feel free to chime in in the comments.