Most popular posts of 2018

This is the first of a couple of regular seasonal posts – the look-ahead to 2019 books will follow at the weekend. Traffic to this blog was up just over 3% in the past 12 months, so a big thank you especially to regular readers, and especially as I posted less frequently than in previous years thanks to my new job.

The most popular posts were:

  1. More Classics (and other novels) for economists, which followed the previous day’s post on Classics for economists).
  2. Review of Exact Thinking in Demented Times
  3. Review of Republic of Beliefs
  4. Review of The New Enclosure
  5. The look-ahead to books being published early in 2018
  6. Review of Unelected Power
  7. Review of Forging Ahead, Falling Behind and Fighting Back
  8. Taking time seriously in economics (I have a working paper with Leonard Nakamura on this out soon)
  9. Economies in space and time
  10. Review of The Moral Economists

An interesting mixture of lists (always popular), reviews and reflections.

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The matter of England

A few days of quiet reading time, in between seasonal socialising, are more welcome than ever after a busy 2018. Later this week I’ll be doing my two usual seasonal posts: the most popular posts of 2018, and a forward look to books of interest being published in the months ahead (always, indeed, one of the most popular posts of the year).

Meanwhile, I’ve been dipping into a new book co-edited by my colleague Michael Kenny, Governing England: English identity and institutions in a changing United Kingdom, the result of a British Academy research project.

It always used to amuse me that whereas most English people I know described themselves as British, many of the French and Americans I know tended to describe all British people as English, blithely unaware of all the local sensitivities. In my days on the BBC Trust we spent much time debating the right balance between programmes aimed at the whole nation, given the BBC’s role as a national institution with a sense of the responsibility to unify, and those reflecting its constituent parts to relevant audiences. For example, the debate about whether or not Scotland should have a separate main news bulletin with a different editorial agenda went on for years, with the BBC’s management very reluctant (overly reluctant)  to cede the principle. Only certain drama series seemed to manage universality through authentic reflection of a specific time and place – Life on Mars, Last of the Summer Wine, Call the Midwife – although I always thought there was far more scope than the senior managers believed to interest people in other parts of their country. The BBC’s debates paralleled the wider political debates about national identity, of course. Public service in general, and in that context of one of the UK’s most important cultural institutions in particular, makes one super-sensitive to the issues debated in the book.

I’ve dipped into the book & particularly appreciated the two historical chapters, one on the relation between England and Britain, one on English nationalism, and also a chapter by my former Manchester colleagues Rob Ford and Maria Sobolewska on UKIP’s claim to English nationalism. Tony Travers’ chapter on London is interesting too. The essay on Manchester is, unfortunately, rather tendentious and seemingly written without having spoken to anyone involved in its devolution deal (I had a very marginal role in the process). But collections are always a mixed bag.

It’s a pricey book unfortunately (OUP for the British Academy – priced for libraries). Still, I’m sure it will be a must-read for all political scientists preoccupied with our national identity and governance questions, which the Brexit process is bound to affect, however it turns out.

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The invisible privatization

Brett Christophers’ new book The New Enclosure: The Appropriation of Land in Neoliberal Britain is eye-opening. Or perhaps jaw dropping. Its subject is the privatization of publicly-owned land in Britain since the 1979 election of Margaret Thatcher. Christophers, a professor of economic geography at the University of Uppsala is a consistently interesting thinker. For instance, he was one of the first people to focus on the absurd way the contribution of the financial sector to total GDP is measured, in his Banking Across Boundaries. This new book demands attention for a remarkably little-debated aspect of the Thatcher revolution, the sale of around half of the land owned by th public sector when she was first elected.

The figures are startling in two ways. One is scale: around half of all land owned in the public sector in 1979 has been sold to private owners – including the land under council houses but much more from MoD and NHS land to school playing fields and parkland. The sum is probably more than £400bn. The other reason to be startled lies in that ‘probably’: there is scant data on what has been sold, to whom, at what price, and what remains. No figures, no debate.

One of the themes that stood out for me is the fact that the process has been a Whitehall (Treasury and Cabinet Office, assisted by the National Audit Office, whose idea of value in value for money excludes public value and public goods) assault on the wealth and power of local authorities. Christophers estimates that around 30% of the 1979 land holdings by central government and national bodies has been sold but 60% of the original holdings of local government. This means allotments, school playing fields, leisure centres, local museums, playcentres, town halls, bowling greens and so on – all formerly part of the fabric of community life. This evisceration of local assets ties in with the extraordinary burden of ‘austerity’ on local government. Surely a large number of local authorities are close to not being able to function, and so unable to deliver the services that are among those closest to people’s lives.

The book assesses the process as wholly ideological, generating none of the private sector efficiency benefits it was supposed to unleash. And, as it points out, the public sector should not be expected to behave like the private sector anyway. Why should its land be expected to generate the same financial return it could get in private hands? The public sector should be using public land to provide public goods.

The move to accrual accounting is pinpointed as a potential turning point: “Different accounting systems represent different ways of seeing: something visible under one system may not be visible under another, something accorded significant value under one system may be valued much less highly under another.” Accrual accounting makes it more likely that the value of public land will be recognised, and so bargain basement sell-offs less likely. For instance, many councils were valuing parks at £1 each. On the other hand, recognising their true worth – say £100m – makes them an even more tempting target for the Treasury to require to be sold.

As the book concludes, there is no evidence the privatization of land has delivered any significant benefits, but equally almost no serious study of the process at all. The lack of data no doubt explains why, so we owe Christophers thanks for assembling all the evidence he has managed to find.

My one quibble is the use of the term ‘neoliberal’. I think it obscures more than it enlightens, not least because those who deploy it often seem to believe all of economics is neoliberal – I still remember being gobsmacked by Wendy Brown’s bracketing of Joseph Stiglitz and Robert Lucas as essentially the same in their ideology. What’s more, the virtue-signalling to many social scientists in universities is likely to put off some other readers who would otherwise be sympathetic to the book’s argument. Michael Sandel managed to explore ‘neoliberalism’ in his bestseller What Money Can’t Buy without ever using the word, and was all the more influential for it.

Having said this, the book doesn’t massively overuse the adjective, and is well worth reading for the light it does shine – perhaps even on why Britain voted for Brexit, looking for somebody to blame for this huge but virtually unnoticed depletion of public wealth.

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Vision and serendipity

As the year hurtles toward its end, and what looks sure to be a tumultuous 2019, I’ve been retreating under the duvet with Mitchell Waldrop’s The Dream Machine, published in a handsome edition by Stripe Press. The book is a history of the early years of the computer industry in the US, centred around JCR Licklider and his vision of human-computer symbiosis.

It has therefore quite a narrow focus, being a detailed history of the people involved in a small slice of the effort that went into creating today’s connected, online world. Licklider played a decisive role at DARPA in prompting and funding the creation of the Arpanet and hence ultimately the Internet. I got quite caught up in the detail – the triumphs and setbacks of particular researchers, their job moves, who fell out with whom, and so on. (Better than the painful minutiae of our Brexit humiliation, for sure.)

One of the striking aspects of the tale is how serendipitous the outcomes were. There are some popular Whig interpretations of digital innovation, as if the creation of the personal computer, GUI, Internet etc were purposive. It wasn’t like that at all. Licklider for sure had a vision. It might or might not have worked. It was sort of chance that he ended up in DARPA with his hands on a suitable budget to fund the networking. It certainly wasn’t an intentional US government industrial strategy, as some accounts would have it. The Dream Machine was a Heath Robinson contraption. There are lessons in such histories both for scholars of innovation and for would-be industrial strategists.

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Too big, full stop

No sooner has summer ended than it’s almost Christmas – how has this happened? In between meetings and paper-writing, I have managed to read a few things. Two thrillers on journeys to and from a family visit last week, John Le Carre’s A Legacy of Spies and one of the outstanding Mick Herron Jackson Lamb series, Spook Street – highly recommended if new to you.

On more serious matters, I’m half way through the handsome new Stripe Press edition of Mitchell Waldrop’s The Dream Machine. And I’ve finally read Tim Wu’s The Curse of Bigness. This is a very interesting, and commendably concise, history of US anti-trust legislation and enforcement. The argument in a nutshell is that anti-trust was born out of a power relations confrontation between the original trusts – Rockerfeller, Carnegie etc – and the US government: Theodore Roosevelt determined on trust-busting to establish the primacy of government power. To some extent this tradition continued after the second world war with landmark cases against AT&T and IBM. But, Wu continues, the Chicago school and especially Robert Bork defanged US anti-trust enforcement by embedding so thoroughly an economic test based on a consumer welfare standard as measured only by consumer prices. Today, with digital giants so often charging zero or low prices, this is less appropriate than ever. The time has come to reaffirm that the government, not rent-extracting monopolies, runs the country.

This is an interesting and persuasive account. It is also a specifically American one. Although the underlying economic analysis concerned crosses the Atlantic, there has never been such a narrow interpretation either of consumer welfare or of how to measure it in Europe. The test in UK law is a ‘substantial lessening of competition’ with reasonably wide discretion for the competition authority, and the guidance sets out other dimensions of welfare such as quality, range, innovation – although of course price is the easiest to measure. We have had prominent cases looking at monopsony power, such as the inquiry into supermarkets. Nor has there ever been on this side a routine acceptance that the benefits of vertical integration or horizontal merger can be assumed to be passed on to consumers – in my cases we always asked about the incentive as well as the scope for efficiencies to be passed on. And, as Wu notes at the end of the book, the UK’s market inquiry tool can be very powerful.

Having said all this – and cautioning against translating Wu’s account and other influential authors such as Lina Khan – to non-US contexts, this does not mean the question of monopoly power is not a pressing one here too. The UK has an inquiry into digital competition under way (chaired by Professor Jason Furman – I’m a member). In other markets from insurance/banking to pharma there are very powerful and profitable firms sustaining their position over long periods and scant sign that new entry is possible. As I’ve written in a forthcoming paper, the competition authorities need tools to assess dynamic, Schumpeterian competition as well as their everyday static toolkit.

Behind the technicalities, there is also the issue of political power highlighted by Wu’s book. Most economists would be hesitant to re-politicise competition policy after the dire experiences of big companies using their lobbying power to protect themselves before the present regime came into force. Two former DGs of the UK’s Office of Fair Trading, John Fingleton (here) and John Vickers, have rightly pointed to the vast expansion of arbitrary ministerial say-so over mergers in proposed UK legislation. This is a route sure to make consumers worse off.

At the same time, there are valid political questions. Some companies in a number of sectors have become simply too powerful. Paul Tucker’s recent book Unelected Power highlights these, arguing for a tilt in the balance away from technical economic analysis toward political choice. I’m not persuaded that the problem stems from the use of economics in competition policy, such that dethroning economic analysis would fix the pwer imbalance. However, there do seem to be some unresolved tensions between the economic standards for assessing competition in a market, the legal interpretations, and the politics.

Much food for thought in a short book. The Curse of Bigness is a great stocking filler for the economists and lawyers in your life.

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