The Baffling Economics of Thomas the Tank Engine

Happy Sunday morning, Geekdads. With any luck, you've been able to sleep in a little later than usual today – perhaps because the kids are plunked down and watching their favorite video again for the N+1-th time. My kids are both teenagers now, but I definitely remember the early years and the endless repeats of Teletubbies, Land Before Time, and Thomas the Tank Engine.

And if you happen to be sitting with your kids as they watch Thomas the Tank Engine, you might enjoy reading Alex Knapp's whimsical analysis of the baffling economics of the Island of Sodor, home to Thomas, Gordon, James, and all the other engines. Alex is a writer for Forbes and the father of a toddler himself; the latter fact has apparently provided Alex ample opportunity to research and reflect on the market forces at work in the business empire of Sir Topham Hatt. This has lead Alex to such questions and insights as...

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. Usually this type of cronyism leads to massive inequalities of wealth 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. It's not clear how this is possible.

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?

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.

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.

Why does Sodor ignore its massive economic comparative advantage? The Island of Sodor has a major comparative advantage: 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.

Head over to Forbes for Alex's complete analysis. And enjoy the rest of your Sunday...