Tag Archives: history

The end of progress?

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Carl Frey’s How Progress Ends: Technology, Innovation and the Fate of Nations is the kind of book that is exactly my cup of tea. I did have the opportunity to read it before publication and part of my blurb comment was: “How Progress Ends is a fascinating account of the way culture and institutions interact with new technologies.” The major part of the book consists of the history of some major technological advances along with some significant innovations in societal models (the American Revolution, Soviet central plannng) exploring exactly this interaction.

The thing that makes institutions and culture matter is that general purpose technologies – printing, steam, electricity, telecommunications – is their disruptive character. The affordances of the technologies enable challenges to the established economic or political order. Sometimes the incumbents can resist successfully – as in China’s ‘reversal of fortune’ following the formation of the Qing dynasty, or in the Soviet elite’s resistance to reform until it was too late. Sometimes the character of technology means political competition enables it to advance faster than if there were political centralisation – and sometimes the other way round.

States can therefore play a decisive role in whether their societies experience and (eventually) benefit from technological progress. The book ends with some reflections about the present. Frey is pessimistic about both the US and China (a bit of an echo of Dan Wang here). In the US he sees the incumbent AI companies and their relationship with the government as freezing out innovation: “Reaping the benefits of technological change requires institutional support to make space for exploration.” In China he sees future innovation as falling victim to cronyism and the assertion of control by the central government. “The decline of either China or the United States is by no means inevitable,” he writes, although one senses he thinks it is.

Who knows. What does seem clear is that the path taken by technology cannot be divorced from the politics, which is highly uncertain everywhere. The historical lessons are well worth pondering. How Progress Ends is well worth reading alongside for example Carlotta Perez (Technological Revolutions and Financial Capital) and Bill Janeway (Doing Capitalism in the Innovation Economy) to reflect on the current moment.

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From toffs to asset strippers via buccaneers and fat cats

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I’d read The CEO: The Rise and Fall of Britain’s Captains of Industry by Michael Aldous and John Turner in proof form, to provide a quote and I just re-read it in physical form. It’s a very entertaining read, rooted in an impressive database the authors have compiled about the background and characteristics of chief executives – almost all men, though time and still now.

The book is then structured broadly chronologically, using the data to characterise waves of approaches to management and corporate governance. In the earliest days of the corporation as it emerged in modern form, aristocrats were generally in charge, with varying degrees of success. This gave way to founder- and family-led firms. Postwar came the managerial revolution, when at a time of increasing social mobility talented men were able to rise from the shop floor to the boardroom. The chapter on the 1980s is titled ‘The Buccaneers’ and then the book moves on to the Fat Cats, featuring the privatisations of the 90s (many people my age will remember Cedric the pig), and the subsequent attempt to introduce higher standards of corporate governance through the Cadbury code. Each chapter is shaped round characteristic examples, be it British Leyland or Slater Walker.

The authors are sceptical that such codes have done anything to moderate boardroom excess, and scathing about the spread of financialisation and the private equity asset-stripping model. So this is far from a tale of progress – more a story of how British companies managed to fail in every era. For example, UK plc remained highly sceptical about having graduate managers and lagged far behind the educational qualifications of German, Japanese or US executives. The same for specialist management education – Wharton was founded in 1881, Harvard Business School in 1908, but London Business School not until 1964 and Manchester Business School in 1965.

Along with this historical panorama there are many wonderful facts. Who has heard of John Ellerman, shipping magnate, who died in 1933 worth £13.8bn in today’s money? Who knew that James Hanson had been engaged to Audrey Hepburn, before she broke it off after filming Roman Holiday? So this is a very enjoyable book as well as raising serious questions about management quality in the UK, which seems to be a consistent problem.

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The power of ideas

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Some years ago I read Masters of the Universe by Daniel Stedman-Jones, a history of the Mont Pelerin Society with a focus on how it came to have such a profound influence on policy, first in the UK and US through Thatcher and Reagan, and subsequently on the whole western world. It made a big impression on me, opening my eyes to the Milton Friedman assertion about how important it was to make sure the ‘right’ ideas were around, in the air, when a moment of crisis created political opportunities. The Mont Pelerin economists had kept the free-market faith from 1945 onwards, working at building their institutional network (mainly via Chicago) and seeding their ideas.

I’ve now read The Great Persuasion by Angus Burgin, which covers the same history from a slightly different perspective. Its emphasis is less on the practical politics, more on the evolution of the ideas of the Society’s members (including its internal rifts). One of the same points about Hayek and his colleagues jumps out, though: “In adopting this strategy [avoiding policy engagement], they demonstrated an extraordinary faith in the capacity of abstract ideas to generate substantive political change,” Burgin writes.

Indeed Milton Friedman, a great communicator, was one of the first leading lights to embrace public engagement much more actively – his most influential article was probably a New York Times essay, on maximising shareholder value, still distorting our economies. The book also underlines how much the core ideas of the Society shifted over time, from an initial postwar insistence on the importance of government and rebuttal of ‘Manchester’ laissez faire, with the shift from Europe to Chicago and the growing influence of right wing American donors – and of the dominance of economists as opposed to philosophers.

The two books are good complements, along with Quinn Slobodian’s books on neoliberalism. I haven’t yet read his latest, Hayek’s Bastards, but the earlier Globalists is well worth a read.

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The social life of ideas

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I re-read a book I first read in 2002 when the first UK paperback was published, Louis Menand’s magnificent The Metaphysical Club: A story of ideas in America. It takes a sweeping view of the reshaping of the climate of ideas in the US after the Civil War, when pre-war traditions were replaced thanks to a combination of influences: the professionalisation of intellectual life in universities, the impact of scientific discovery particularly Darwin, and indeed the consequences of the Union victory. By the late 19th century the broadly defined pragmatist perspective that lasted until the 1960s – including an accommodation among White Americans over the status of African-Americans – was in place. The story is told though the intertwined histories of William James, Charles Peirce, Oliver Wendell Holmes and John Dewey.

The book lived up to my memory of its excellence, although newly poignant as the idea of an intellectual life among the new US ruling class seems increasingly like a contradiction in terms. I picked out moments that speak to my current preoccupations. For example, on the impact of The Origin of Species, that it emphasized difference or variation as an organising principle, not common characteristics. Some quotes that seem particularly relevant now: Everything human beings do by choice rather than by instinct, and course of conduct they choose when they might have chosen differently, is a moral action.”

William James arguing that society is the fact of life, and the idea of a non-social individual is pure abstraction, while Dewey agreed that there are no individuals without society: “Dewey taught that doing is why there is knowing.” Holmes meanwhile argued that experience – which defines the practice of justice – “is social, not psychological”, his construct of how the ‘reasonable man’ would judge being defined with respect to society.

Menand concludes: “Everything James and Dewey wrote as pragmatists boils down to a single claim: people are the agents of their own destinies. They dispel the fatalism that haunts almost every 19th century system of thought. … What Holmes did not share with those thinkers was their optimism. He did not believe that the experimental spirit will necessarily lead us, ultimately, down the right path. Democracy is an experiment, and it is in the nature of experiments sometimes to fail.” As he had seen it fail as a combatant in the Civil War.

Of course it won’t do to project today’s angst directly onto a 20+ year old book. But it is a brilliant and highly relevant read.

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Always and everywhere a political phenomenon

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I was quite excited about Carola Binder’s Shock Values: Prices and Inflation in American Democracy, as I expected something similar to Thomas Stapleford’s (2009) The Cost of Living in America. It isn’t about price indices, however, but about monetary policy and inflation. Macroeconomics is so much not my area that I feel unable to comment on the argument of the book, except to wholeheartedly agree that inflation is always and everywhere a political phenomenon. I’ve written (in my forthcoming book, The Measure of Progress) about the scarring experience of the late 1970s inflation for my working class family.

Anyway, Shock Values is a very readable monetary history of the United States, from the Revolutionary era to the 2020s. The theme throughout is the question of the political legitimacy of prevailing monetary arrangements, particularly the role of the state in aiming to stabilise prices. As the final chapter notes, the current episode of inflation has combined with broader US political instability and the arrival of crypto to raise new questions about that legitimacy – the book borrow’s Paul Tucker’s concept of legitimacy as set out in his book Unelected Power.

I knew less about the early (19th century) period and so particularly enjoyed that; perhaps I was the only audience member to leave Hamilton wishing there had been more about the formation of the first federal banking system. The sections on wartime price controls are also very interesting. If you’re already steeped in monetary history there might not be much new in the book, but I found it an excellent overview and it didn’t seem to be ideological – politely ignoring MMT and casting justifiably measured doubt on crypto assets.

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