There is a lot I liked in Stewart Lansley’s new book, A Sharing Economy – not least that it’s one of another new series of concise, policy-relevant series, this time Policy Press Shorts. There are now several of these, a welcome publishing innovation that I like so much I’ve joined in with the Perspectives series. (Just out – our Bad Habits, Hard Choices by David Fell and A Better Politics by Danny Dorling.)
A Sharing Economy is not about ‘the sharing economy’, rather confusingly, but instead is an argument for an idea I like a lot, namely ‘social wealth funds’. As the book points out, many other countries have versions of these, ranging from Norway’s fund into which past governments invested its oil revenues, to a number of Asian sovereign wealth funds, to examples in other European countries such as Austria and Finland. The OECD has established guidelines for the better management of state assets, and a recent book by Dag Detter and Stefan Folster, The Public Wealth of Nations, have pointed out the huge opportunity for increasing returns by managing public assets consciously as a portfolio with appropriate governance.
The idea should be a no-brainer for governments. The time horizon of politics in the UK (and some other countries) has become ever more short term, however, so any trade off between present and future has become nearly impossible. There is ideology, or perhaps cargo-cultism, in it too: is there an economist who does not think it bananas that the government is failing to borrow at such low interest rates to invest in key infrastructure? Yet the combination of a focus on total (current and capital) spending combined, plus the belief the public sector should own as little as possible as an article of faith, make it unlikely the present government will explore the idea of managing public assets efficiently with a view to longer term returns. Yet how mad is it that we have no consensus that it is better to manage public assets well than to manage them badly?
The book suggests a number of possible sources of funds for a social wealth fund, and a number of possible structures, of varying radicalism. Some versions are not radical at all; countries like Austria and Singapore are after all not hot beds of anti-capitalism. It also suggests the steps needed to move toward implementation.
An additional chapter advocates a citizen income or basic income, which fits into an overall framing of the argument for a social wealth fund as a means to address inequality. The arguments from common sense appeal more to me, as I’d rather tackle inequality more directly (eg by legislating if necessary against the corporate governance that has created boardroom excess, by suitable property taxation etc). The idea of a basic income has re-emerged with every wave of anxiety about automation destroying jobs, but there are good counter-arguments – Emran Mian of the SMF covers them here.
But the case the book makes for the nation managing its assets properly and with a view to financial and social sustainability is very welcome.