Wednesday, 18 April 2018

If you are neither cold nor hot, I will spew you out of my mouth...

This blog first appeared on the Radix website...

Well, that is how the Book of Revelation puts it (3:16), and it may be peculiarly good advice for the Lib Dems in the local elections.

I ought perhaps to apologise for returning again to the continuing mental strife between me and my own party, but I am a Liberal and always will be. It is just that I’m not quite so confident that my party is as much as it should be.

At the beginning of the month, I posed the question here: why do voters hate the centre left. I was not just talking about the UK, but right across Europe where the trend has been the same.

I have had a number of thoughtful responses from most parts of the political spectrum. They include the strange Blairite preference for symbolic gesture over actual action, or for political correctness over concrete solutions. In fact, there was a kind of consensus, as far as it went, that the centre left seemed to have – over a generation or so – lost faith in their ability to change anything.

Worse, it was almost as if anyone who wanted to change anything in reality was almost treated as an extremist.

Strangely, there have been two contributions along similar lines in the last few days – one in the Economist, on in the Spectator – which came to similar conclusions, at least about the prospects for a new centre party, which people are discussing with surprising frequency at the moment. "Britain does not need a new centre party," says the Economist, "It needs new ideas".

There is some agreement here too, and with the line that we have mostly been taking in this blog – that a new centre party set up to defend the status quo, or existing institutions, or the position pre-Brexit and pre-Trump, is doomed to failure.

It is doomed because it would require us to paper over the cracks that have divided the world – when the poor are expected to deal with mass immigration on their own, or the way that free trade has been transformed into a kleptocratic conspiracy to make billionaires richer, or that our public services have been transformed into unresponsive, inflexible sausage machines. Do I put it too strongly? I don’t think I do.

The same lesson applies to the Lib Dems. If they simply mount a defence of the past, or become a cult dedicated to moderation in all things, then they will fade away. If they can tap into the depth of people’s indignation, accept that the world has changed, and build a platform for a participative and tolerant future, then it seems to me that there is a chance they may revive.

Above all, that means daring to get to grips with the abject failure of the current economic orthodoxy. For goodness sake, don't leave the central task to Corbyn.

Otherwise, they may just get spewn out of the mouth again.

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Thursday, 12 April 2018

Why creativity is the future for the UK economy

This is a version of a blog post that first appeared on Radix:

I have just come back from travelling around Europe by train. I wanted to show my children some of it before the re-imposition of passports and border checks (or, as I told my friends, to see Europe while it's still there!)

I suppose I have come to three rather simple conclusions as a result:
  • The trains in continental Europe are effectively run, and on time, and they are clean and affordable, and above all humane – because they re not being run by the Treasury under our bowlderised version of privatisation – beyond anything I had realised before.
  • The value of the pound made the cities we visited ruinously expensive.
  • There is a clear future role for the UK – in fact we already seem to be fulfilling it: it is to be the world’s cultural and creative engine.
Let me just step back a little before explaining what I mean. Many of our stops – Rome, Venice, Vienna – were lovely, but also the worn-out husks of former empires which have not really survived the transition.

But English culture, from Shakespeare to pop, is absolutely ubiquitous. Even the Doge’s Palace in Venice is currently hosting a John Ruskin exhibition.

We may have no future as a symbolic gesture towards an imperial past (as the Leave campaign seems to envisage) or once again become the workshop of the world (which is how I interpret Corbyn’s position) – though we do need to return to manufacturing.

But we do have an economic destiny which we are beginning to fulful despite ourselves, and helped by the enormous success of English.

The question is whether we can begin to put our still sizeable resources towards the fostering of creativity on a scale we have not seen before.

We will have to stop, for example, destroying the love of reading and writing that most children start with by giving disconnected comprehension passages and then getting to focus on adjectival clauses and other guff – thank you, Michael Gove, for that.

Is there a political party capable of making that intellectual leap? Both Labour and Conservative have attracted a combination of support from people who are both angry and backward-looking which doesn’t bode well.

Which leaves the Lib Dems. And I speak both as a Lib Dem and a free marketeer (in its original Liberal sense) when I say how frustrated I am. My fear is that the party has transformed itself from its central purpose (the radical devolution of power) to a limp version of itself, committed to compromise in all things. Except possibly on the EU, which is hardly about devolution.

They have not yet grasped, any more than Labour has, how the world has changed. And if we are going to avoid an authoritarian future, they will have to take the lead in unravelling the hand-wringing, do-nothing cult dressed up as economics, which has led us to this impasse. I mean the idea that anything about the market is objectively true and unavoidable.

When Joseph Chamberlain seized Birmingham for the Liberals in the 1870s, he first had to eject those who had run the city – a group of councillors dedicated to spending as little as possible, and calling themselves ‘The Economists’.

It is time we ejected them again and persuaded the voting public, not just than something can be done after all, but that it also will be done.

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Friday, 30 March 2018

Why do voters hate the centre left?

A version of this blog post first appeared on the Radix website...

What is a progressive these days? I find myself asking this question constantly for a range of reasons which those who know me will understand. It isn’t that I don’t know the conventional answers. It is that I’m not sure why I find them now so annoyingly familiar.

It could be something to do with turning sixty shortly, were it not for the fact that it clearly isn’t just me.

I look at the rise of intolerant forces. Then I look at the progressive political forces ranged against them, using the same old language they have always used, and the political defences for civilisation don’t seem very strong or convincing.

These are urgent questions now that every set of conventions, economic and political, seem to be in a state of flux.

The problem appears to be that, facing voters, there is no political force so battered and defeated across Europe as the centre left. For some reason, voters have turned their back on them without mercy. They are still in power in Sweden but hardly anywhere else.

Why? We badly need an answer. They have hardly been responsible for the shape of the economic doctrines that have dominated politics for the past four decades. It isn’t their fault – or is it? Here are my very tentative answers:

  • They compromised fatally with the vacuous and technocratic economic orthodoxy which has been allowed to undermine communities and lives.
  • They led the charge for the New Public Management of targets and other tacit forms of centralisation, which have hollowed out our services and institutions and set them against us (if you doubt me, try applying for benefits, attending an obesity clinic or phoning HMRC – just not at the same time…).
  • They have led a kind of handwringing style of politics that prefers symbolic gestures to real solutions that will actually change anything – not because they are cynical, but because they no longer believe in the practical possibility of change.
  • They abandoned families to their fate by embracing zero hour contracts just to bring down the unemployment figures – and remain stuck in a Fabian attitude that nothing business does matters very much as long as they burnish the welfare state.
  • Centre left political types are mainly behind the scourge of political correctness, which seems to have developed as a kind of language for the cognoscenti - again it is a substitute for effective action (take down the statues of historic slave-owners because you can't touch the modern ones).
Is that an adequate explanation? No, it isn’t, but it goes some way to explaining my own feelings at least.

The real problem emerges when I start to wonder what we can do about it, given that the centre left is in free fall. Because it implies a huge pressure on the fissure inside the Lib Dems.

My party represents a merger between Liberals and the very forces that are in free fall. It isn’t an answer to say that the differences between the two ideologies of social democracy and liberalism have now disappeared, because that is precisely the problem. Three decades after the merger, the party speaks social democrat very well – it is easier, after all – and has begun to forget how to speak liberal.

I wrote a blog about the continuing distinction between them here (I was told by one correspondent that I was ‘off message’, which I was quite proud of).

Over recent years of blogging, I have tried to set out a little of what being a Liberal now needs to mean, but I’m not sure I have had the slightest influence.

It is now getting late and urgent that they remember their radical roots, and slough off some of the old technocratic Fabianism which is dragging them down – before the waves finally close over the centre left.

I hope they do.

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Tuesday, 13 March 2018

Columbus and Amazon: one objective

This blog first appeared on the Radix site:
Ten years ago, my book about the rivalry between Columbus, Cabot and Vespucci was published (Toward the Setting Sun, still available!). And for me, two facts became pretty apparent – first, the circumstantial evidence is pretty strong that Columbus and Cabot worked together and then fell out. Second, their respective contracts with the monarchs of Spain and England were revolutionary and remarkably similar.

I won’t go into the details here but I have done elsewhere: what the contracts do is give them royal protection to take a slice of every shipment from the new lands they discovered. What they wanted to do was become the ultimate rentiers, extracting money from trade from the New World in perpetuity.

They nearly succeeded too. Cabot disappeared, at least from history. The court case that covered Columbus and his family’s claims was not settled for another two centuries – Jarndyce versus Jarndyce was but a pale reflection of reality.

Every generation or so someone attempts this kind of heist and we are in the midst of another one now. The campaigner Stacy Mitchell is no longer a lone voice in the USA on the threat that Amazon poses to the economy. Her new article in the American political journal The Nation now carries the headline ‘Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market’. That is what reminded me of Columbus.

When you allow any institution, public or private, to be the market, you give them unprecedented power, politically and economically. And you inevitably raise transaction costs for everyone.

It also corrodes those businesses which use it. This is how Stacy puts it:

“Setting up shop on Amazon’s platform has helped Gazelle Sports stabilize its sales. But it’s also put the company on a treacherous footing. Amazon, which did not respond to an interview request, touts its platform as a place where entrepreneurs can “pursue their dreams.” Yet studies indicate that the relationship is often predatory. Harvard Business School researchers found that when third-party sellers post new products, Amazon tracks the transactions and then starts selling many of their most popular items itself. And when it’s not using the information that it gleans from sellers to compete against them, Amazon uses it to extract an ever larger cut of their revenue.”

It may not seem so yet on this side of the Atlantic, where we tolerate tyrants in peculiar ways, but in the USA it is increasingly clear that Amazon’s days are numbered.

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Tuesday, 27 February 2018

The problem with imperialist public services

This post first appeared on the Radix blog...
I haven’t ever given a lecture to nursing students before, and thoroughly enjoyed doing so last week. but it was also a bit of an eye-opener. I know the NHS is formally committed to ‘co-production’ in theory – though I’m not sure how they define it – but I don’t think I had realised quite how far it has moved away from it in practice.

I’m sure this is not the case everywhere, but it was a shock to someone like me who has spent most of their so-called career advocating closer, more human and more flexible relationships between professionals and patients.

I give a similar talk regularly to doctors and they seem to understand where I am coming from and, up to a point, support it. But it was clear to me that some of the nurses did not see human relationships that are encouraging as practical in their corners of the NHS.

Welcome to the world of ‘patient-centred care’.

This is the philosophy behind the way patients are treated, not everywhere, but especially perhaps in specialist centres. It means you certainly can’t challenge patients, or ask them for their help. Nor can you encourage them. And if they don’t respond to the process you offer them, you simply strike them off for being ‘non-compliant’.

It is of course precisely the opposite of patient-centred care. Doublethink, as Orwell would have put it. It is an idea borrowed partly from the economists’ version of public service choice which used to frown on encouragement from doctors in case they imposed their ideas and preferences on patients.

In fact, what I know from being the independent reviewer on choice at the Cabinet Office some years ago, the main choice people want to make in healthcare hasn’t got anything to do with where they want to be treated. They want a doctor who will answer the question”what would you do if you were me, doctor?” – the very question the economists hate most.

But patient-centred care owes itself to a dubious Treasury-inspired view of efficiency, imposed on public services as if they were imperialist outposts administering to an unreliable race, a view that also owes something to the idea that sparing the rod will spoil the patient.

The same approach to sanctioning ‘non-compliant’ service users started in benefits and now seems to have spread to the NHS. How else should we understand today’s story of the five-year-old girl who died of an asthma attack after being turned way from an emergency appointment for being more than ten minutes late. Would that have been possible if there had been a human relationship between patient and professional.

Since the days of Blair and Brown, service have teetered on the brink of an imperialist model and, if we are not careful, they may be now tumbling over. It is not at all efficient, in fact, because it is so ineffective.

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Tuesday, 13 February 2018

The strange rebirth of Liberal economics

This post first appeared on the Radix blog...

Once upon a time, I was a member of the Lib Dem's federal policy committee. I used to irritate Danny Alexander and other luminaries by claiming that Liberals had made no contribution to economic debate since John Maynard Keynes had breathed his last in 1946. In retrospect, this wasn't terribly helpful of me, but I believe it to be true.

I don't include in this stricture, of course, the so-called 'neo-liberals', who are not Liberals in any sense of the term. Their main contribution has been their scepticism about the dangers of monopoly power - which makes them the reverse of Liberals. In fact, for some reason - and for discussion in another column - the Liberals allowed their central idea of free trade to be hijacked, turned inside out and made to mean the precise reverse of what it originally meant.

A doctrine that allowed the weak to challenge the strong has been allowed to bundle up the economically weak, and hand them over bound and gagged into the arms of the monopolies.

So what is changing? Well, absolutely nothing in the UK I'm afraid. But last summer, Barry Lynn, working on open markets at the New America Foundation and was sacked for criticising Google. He became a cause celebre, and has a head of steam behind his campaign against the emerging monopoly power in the USA, especially among the tech companies, Facebook, Amazon and Google.

I met him again a couple of weeks ago and he believes action will soon be taken. Among the people he saw in London was Vince Cable.

The central idea in the way of reform is that idea that, if the government gets out of the way - and businesses get as dominant in the market as they can - then consumers will always benefit. Research in the USA suggests this isn't actually the case.

Economists Jan de Loecker and Jan Eeckhout have found that prices are now 67 per cent above costs when they used to be just 18 per cent, and other evidence that consolidation is driving up prices. German Gutierrez and Thomas Philippon have also found that business investment as a share of GDP has been falling – probably because of the increasing market power of companies. See how Bloomberg reported the issue.

Ever so slowly, and not so far in the UK, the tide is turning - and researchers are waking up to the great fallacy we have been living under for the past generation. But the shift still needs to conquer the regulators, who remain largely in thrall to the old fantasies of the industrial age - of economies of scale and the other temporary truths of assembly line organisation. Even in 1994, the US Department of Trade opened 22 investigations into monopoly power. In 2015, it was three. In 2014, they didn’t open any.

Still, history is sweeping back into the economics of liberalism. It is time Liberals dusted down their own explanations before it sweeps past them.

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Wednesday, 7 February 2018

How to know if services work - do they give good help or bad?

The post first appeared on the Radix site...

I was a little late last night and nearly missed the Nesta event in London to launch the report they wrote with Osca. But I’m very glad I went, because I believe this one of those reports we will look back on as important.

It is called Good and Bad Help: How purpose and confidence transform lives.

This is the kind of territory that I’ve been working in for a couple of decades, about why public services succeed and why they fail. In fact, in 1990, I linked up with two friends to launch a ginger group called the Self-Esteem Network, dedicated to making self-esteem a political issue. Not a million miles from Good Help.

I can’t pretend it was exactly a success. I met some fascinating people and enjoyed singing some of the songs from the California state primary schools (“I’ve got self-esteem/Do you know what I mean?”) But I don’t think we cracked the two fundamental questions – what policies will effectively drive up self-esteem when it is lacking, and how do you know they are working?

The term is now dead. John Vasconcellos, the California assembly member behind the California task Force for Self-Esteem, has been discredited – quite unfairly. But the basic issue remains and the new report sets it out well.

It is this. If public services fail to treat those they are helping as people who might, with some help, drag their own lives back together, then their workload will get heavier and heavier.

What is inspired about the report is that its title sets this dilemma out clearly. Good help works, bad help doesn’t work – and we know a great deal about the difference. But most public services are not set up to provide good help.

The apotheosis of inflexible service delivery was reached, it seems to me, under Blair and Brown. I was disappointed that the coalition failed to grasp this nettle, though actually they failed to see it at all. So we now still live in the world of impersonal, digital-by-default, PBR services, delivered by impersonal, lobotomised – and possibly also bankrupt – outsourcing giants. Neither show much signs of being able to provide the Good Help we know works.

It is the same unfortunately the world over – increasingly expensive services that don’t work – and one of the reasons voters are so cross. I proposed a way of injecting flexibility into existing services in my independent review on barriers to choice in 2013, and something along those lines is going to be needed if we are to ever to forge an effective public sector again. And we have to if we are going to provide people with the Good Help they need. We know what to do – we’re just a bit hazy still about how to shift the existing system.

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