Tag Archives: review

Letting the Red Wall speak

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This is a meetings-free week, taking advantage of the fact that people are largely willing to take no for an answer until mid-Jan, and I’ve also still got (I hope) quite a fierce email autoreply telling people to go away. It’s amazing how much more work this makes possible, even leaving time to catch up on reading. The latest book, which I started when it came out but has since been parked on the side table, is Sebastian Payne’s Broken Heartlands: A Journey Through Labour’s Lost England.

I really enjoyed this. It’s classic, careful yet evocative reportage from ‘Red Wall’ seats across the northern part of England. It starts in Gateshead, the author’s home territory, and, via a number of these once solidly Labour and now – extraordinarily – Conservative constituencies, ends up in Burnley, close to mine. It’s a very fair book: Payne lets people talk, reports what they said at decent length, and limits his own opinions to comments on prospects for the various parties in elections that lie ahead. (There’s a bit more discussion of electoral arithmetic than I wanted but that’s a quibble.)

One key message I took is not to over-generalise. There is indeed a lot of poverty in the Red Wall seats but also a lot of affluence, in the places where old heavy industry has been successfully replaced, so part of the story is the growth in numbers of ‘natural’ Conservative voters around the country. The truer generalisation is the substantial decline of public amenities around the English regions – transport, libraries, pleasant high streets. Another message – and in fact one on which the book quotes me (and many others) – is the crying need for devolution of powers within England.

A few other things struck me. One – a parenthesis in the Sedgefield chapter – was this: “nearly all the Red Wall seats had a train station closed in the infamous [Beeching] programme.” Reminded me of this marvellous paper on the Beeching cuts by Steve Gibbons. What economic, social and cultural vandalism Dr Beeching unleashed with the massive scope of his cuts: a great lesson in the imperative of taking into account network effects and spillovers in a cost-benefit framework, and the fact that some subsidies are worth every penny.

Another section was a discussion with Neil Kinnock, in which the former Labour leader observed that what has been lost is not so much collective sentiment in former industrial areas as the security that came with the social fabric of the post-war era. Kinnock said that modern individualism “is a source of choice but it’s also a source of weakness and insecurity. You’re on your own. In previous decades the one thing you weren’t, in richness and then poverty, was on your own.” I read this as Keir Starmer made security the theme of his New Year speech so presumably this will be part of Labour’s pitch for 2024.

Above all, though, Broken Heartlands is a terrific read and gives a real flavour of its territory. I’m just glad it wasn’t me out on the road in the North in the cold, wet winter of a pandemic.

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The deep structure of the knowledge economy – or, 25 years of weightlessness

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I read The Knowledge Economy by Roberto Mangabeira Unger because James Plunkett (who reviewed my Cogs and Monsters for Prospect) tweeted how struck he was by the similarities between Unger’s book and mine. I can see what he means as we are after all writing about the same phenomenon of the increasing intangibility of value in advanced economies. Indeed it’s 25 years this year since my first book The Weightless World was published, so I’ve been writing about it for a quarter century, which is pretty startling.

However, one of the strange things for me reading Unger is the way we approach the same phenomenon using different languages, so I found some of his observations hard to understand. One of those is a key term, vanguardism, which can either be insular (what we have no – bad – only the few benefit from the knowledge economy) or inclusive (good, what we want). If you read left of centre philosophy perhaps this doesn’t need explaining, but it mystified me.

In the end, the way I translated this was as referring to a system of production (to use the terminology of, say, Michael Best, particularly his older book The New Competitive Advantage but also How Growth Really Happens) – from Fordism to post-Fordism to whatever is emerging now (a prize for whoever comes up with the best ‘-ism’ term?). And there are some very interesting observations in The Knowledge Economy. For instance, Unger reckons the progressive left is too focused on demand side questions (MMT and all that, redistributive tax) and not enough on the supply side – the issue not even being ‘pre-distribution’ but something more deeply structural. 51E08vPVsIL._SY291_BO1,204,203,200_QL40_ML2_

Unger criticises the dominance of economics by marginalism, which I’m on board with, as indeed with his observation about the importance of ideas in shaping the realities of economic life. We’re in the mioddle of a period of contestation of world views for the first time since the late 1970s, although the free market Thatcher/Reganism or neoliberalism (or your preferred term) is putting up a stiff fight. But then he oddly asserts that economists are not interested in production. This would be news to all the many I/O economists and institutional economists out there. All in all, I found this an interesting read but in the end a bit abstract. If only I understood what inclusive vanguardism meant. Still, this is the joy of stepping outside your own discipline to look at it from the perspective of others.

 

 

Essential white elephants?

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I recently finished re-reading Brett Frischmann’s (2012) Infrastructure: The Social Value of Shared Resources. It’s very interesting although I don’t entirely agree with his conceptualisation. The reason for going back to it is a convergence of two issues I’ve been thinking about.

One is the idea of social infrastructure. This was centre stage in Eric Klinenberg’s book Palaces for the People, on which we had an excellent Bennett Institute event. A report on The Value of Social Infrastructure by my colleagues Michael Kenny and Tom Kelsey aroused a lot of impact across the UK government and beyond. I’ve been writing about the health system as social infrastructure – am currently writing a handbook chapter as a follow-up to this paper (revised version forthcoming in NIER). So the questions concern definition and measurement: what is social infrastructure, can it be intangible as well as tangible, how does it relate to the older concept of social capital? etc.

The second is the puzzle about infrastructure in general: what to invest in and what are its (spatial) economic impacts? Bent Flyjberg has amassed a great deal of evidence that major projects generally fail – they are over-budget, late and have disappointing impact. (See eg this paper on how far projects fail their cost benefit analysis assumptions.) And the examples of white elephant projects are legion. Yet the economy must have infrastructure to function at all. How to reconcile the paradox? And why has construction (which includes infrastructure) itself been so low productivity?

Frischmann’s book is helpful in thinking through the questions. One key point is that demand for infrastructure is derived: people want it to be able to carry out activities that feed into final demand. And infrastructure is a social good that will change context and social relations. It’s generic – can be used for many purposes. Spillovers are inherent, and large – and difficult to measure. Infrastructure also creates private and social option value.

He defines infrastructure as being identified by the following characteristics:

–Non-rival over certain portion of demand (although congestion possible)

–Provides stream of services over time

–Demand is derived, for infrastructure capital services as productive inputs into other activities

I think this omits universal service need/obligation as a key aspect. I find his classification of types of infrastructure (commercial, public, social) a bit odd too. That said, the book is very useful in thinking about the ‘essential white elephant’ paradox.

Resolution of the paradox will require finding a way for policymakers or investors to judge whether a project is a white elephant worth having. I was discussing this with David Cleevely, a successful Cambridge investor, in the context of a forthcoming paper of mine in an issue of the Oxford Review of Economic Policy on major projects. Why, I asked David, did the Victorians manage to build so much infrastructure that we in the UK are still using after 150 years? He made the powerful point that the advantage the Victorians had (compared to economists today deploying cost benefit analysis) was that they could imagine a future in which the infrastructure they were going to build would have transformative effects. Applying this thinking now, for example, we know the future will be renewable energy-based, so projects need to be evaluated in the light of this transformed world.

I don’t know how much infrastructure investment we need altogether in the UK, but definitely more, and social infrastructure definitely counts too. To be continued….

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Sailing into the future

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I’m not a big reader – or fan – of leadership-type books (see the previous post) but picked up Margaret Heffernan’s Uncharted: How to Map the Future because I’ve read her FT columns, met her a couple of times, and admire her. She’s also a great friend of the Bristol Festival of Economics, which alone is enough to warrant buying and reading her book.

The book was published early in 2020 so written before the pandemic and as a result qualifies as prescient. For the characteristics she identifies as important for effective strategic thought and action have become far more widely debated since then.They are the importance of resilience and trading off some efficiency for robustness; the role of decentralization and permission for people across an organisation to try and err; the importance of enough deliberation to elicit the preferences and the information held by a wide range of people or stakeholders; and the vital role of trust in effective organisations. I was nodding my head as I read along. Despite the title, there isn’t much about forecasting the future, mainly a scepticism about the usefulness of the exercise.

It isn’t a particularly analytical book – these are my categories, not hers. You could contrast this with Radical Uncertainty, which touches on the same themes in a highly analytical way. Rather, Uncharted assembles many examples to make these arguments. This does make it a good read – lost of stories, lots of her own experience. I enjoyed it. (Tim Harford did too.)

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State of the person & state of the nation

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When I picked up Anne-Marie Slaughter’s book Renewal: From Crisis to Transformation in Our Lives, Work and Politics, I was expecting something big picture about the state of the world – why capitalism is failing, precarious work, inequality, populism and the like. After all, she’s a noted public servant and foreign policy expert. It’s not that at all. Indeed, it is a highly personal reflection on her own failings at a time (2017) when the organisation she led, New America, was plunged into a public crisis. The crisis was an allegation that the think tank had parted ways with an employee who had been critical of Google, a $20m donor to its coffers, to avoid offending the company. As always, the reality was more complicated, but as she explains, Slaughter mishandled the response. She goes on to diagnose her limitations as a leader and how she went about addressing them.

Through this lens, the book draws lessons about national political leadership – and it is very US focused, so while some of the challenges are common to all the leading industrial democracies, some are highly specific. As well as the personal focus, which is only partially successful to my economics-oriented mind, it also has a religious thread that left me completely cold. And it is indeed peculiarly American to have to make a declaration of religious faith to have the authority to comment on the state of the nation.

Anyway, ‘renewal’ lit is big in a number of countries now. This is a decent read and as a human being I found the personal story interesting. But I wasn’t convinced about the attempt to project the personal onto the political in this case.

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