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Reasons to be cheerful – even if American

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A few days ago I reviewed Josef Joffe’s new book, [amazon_link id=”0871404494″ target=”_blank” ]The Myth of America’s Decline[/amazon_link]. It’s partly a history of declinism in the US and partly an argument about the near future based on a compare and contrast between the US and (mainly) China. The new insight I took from it was about the way the threat of decline is used as a promise of political redemption in election campaigns.

In a mildly random way, I followed it up with Charles Kenny’s [amazon_link id=”0465064736″ target=”_blank” ]The Upside of Down: Why the Rise of the Rest is Good for the West[/amazon_link]. I thoroughly enjoyed his previous book, [amazon_link id=”0465020151″ target=”_blank” ]Getting Better[/amazon_link], a cheerful survey of the many ways and many places things (life expectancy, incomes, access to technologies, women’s emancipation….) have improved in many countries in recent decades. There is a similar chapter in the new book, and it made for equally uplifting reading.

[amazon_image id=”0465064736″ link=”true” target=”_blank” size=”medium” ]Upside of Down[/amazon_image]

One of the most telling sections looks at the Democratic Republic of Congo. As Kenny reminds us, it was the setting for Conrad’s [amazon_link id=”1853262404″ target=”_blank” ]Heart of Darkness[/amazon_link], having suffered the depredations of Belgian colonial rule (now there’s a real example of decline from imperial might!). DRC suffered through Mobutu’s rule and a decade-long civil war that killed millions of people. Rape was rife, HIV infection ran amok. This is not a good news story. Even in DRC, though, infant and maternal mortality rates of declined, as has the prevalence of HIV. Two-thirds of children have been vaccinated against diptheria, pertussis and tetanus, and about 40% with symptoms of malaria or pneumonia get medication. School enrollment has risen to match the 1980s level in Kuwait or Honduras. All this on public spending on health and education of $9 per person per year.

The rest of the book moves from the evidence of progress around the world to consider its implications, especially for “us” in the old west. Kenny wants to persuade others that the march of progress is a positive sum game, not least because of the self-fulfilling nature of global economic relations – the belief that flows of goods, capital and people are mutually beneficial is part of what makes them so. I for one agree that we need to think about the global economy in this dynamic, interlinked, increasing returns, non-linear manner, where the choice is broadly speaking between joint contraction and joint expansion over time. So it wasn’t hard for the book to persuade me that western economies will benefit from growth in emerging markets or BRICs, or of the “Folly of Fortress Thinking”, to cite one chapter title. No doubt other readers will be nore inclined to stick with the global race metaphor, where your country is a winner or loser.

I had the most doubts about the chapter on the environmental impact of global growth. The conclusion is upbeat: “With bold but plausible and affordable action, the planet can enjoy continued global growth, convergence in living standards, and two billion more people, all while preserving the global commons.” The chapter ticks off one by one potential environmental limits, and some are less worrying than others. The depletion of minerals for instance, or the scope for agricultural productivity gains and cutting meat consumption. But, thinking back to Mark Lynas’s [amazon_link id=”0007375220″ target=”_blank” ]The God Species[/amazon_link], I think Kenny skates over the question of water too quickly, and is just a bit too cheerful about climate change risks. Of all the environmental questions economics needs to address, the interaction between energy and growth is surely the key one. One aspect of this chapter I did enjoy, though, was the mischievous characterisation of environmentalists: “Once you’ve convinced yourself that the world is on an inevitable course to disaster if … India builds another car factory, then the only logical thing to do … is to sit back, put your TOMS-shod feet up on the couch, and drink microbrewed herbal tea until civilisation collapses.” Fun – but maybe too dismissive of some genuine concern.

Will either this book or Joffe’s persuade Americans and other westerners not to be pessimistic? Doubtful. The emotional power of the narrative, and perhaps its political usefulness as Joffe argues, will sustain the declinists. I’m sure people will read [amazon_link id=”0465064736″ target=”_blank” ]The Upside of Down[/amazon_link] but often to argue with it – the narrative of Anglo-Saxon cheerfulness when the dynamism in the world has moved to Asia has an uphill struggle.

 

 

 

The uses of declinism

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The title of Josef Joffe’s new book tells you the argument: [amazon_link id=”0871404494″ target=”_blank” ]The Myth of America’s Decline: Politics, Economics and a Half Century of False Prophecies[/amazon_link].

[amazon_image id=”0871404494″ link=”true” target=”_blank” size=”medium” ]The Myth of America’s Decline: Politics, Economics, and a Half Century of False Prophecies[/amazon_image]

The first part of the book sets the scene with an entertaining history of American declinism through the decades, starting with the Sputnik shock and fear of the Communists in the 1950s, through the upheavals of the 60s, the impact of Vietnam and dire economic situation in the 70s, the Japan-bashing of the 1980s, a 1990s hiatus thanks to the end of the Cold War and the New Economy (as Joffe writes, “It doesn’t take much to vault from declinism to triumphalism when the geopolitics is right”), and the 2000s angst about the rise of China culminating in what the Chinese call the North Atlantic crisis of 2008.

The most interesting aspect of this first section is Joffe’s analysis of the political uses of declinism. For he convincingly shows it is used as a prelude to the promise of redemption. Ronald Reagan for one, John F Kennedy for another, used the claim of present decline very effectively in election campaigns to promise a brighter future. Joffe writes that declinist prophecies are intended to be self-averting: “Declinism is a political programme even though it comes in the guise of an empirical exercise such as counting guns or measuring growth.” He contrasts the 20th century declinist political philosophy with the Enlightenment tradition of optimism about the possibility progress, noting how feted pessimistic pundits are these days. (Though there are some optimistic ones – Matt Ridley’s [amazon_link id=”0007267126″ target=”_blank” ]The Rational Optimist[/amazon_link] is one, Mark Steven’s [amazon_link id=”1846683572″ target=”_blank” ]An Optimist’s Tour of the Future[/amazon_link], Charles Kenny’s [amazon_link id=”0465020151″ target=”_blank” ]Getting Better[/amazon_link] – and his new one, [amazon_link id=”0465064736″ target=”_blank” ]Upside of Down[/amazon_link]).

The next section of Joffe’s book turns to the empirical matters when it comes to comparing the US now with the challengers, especially China. He argues that direction of travel is irrelevant – the BRICs have grown rapidly but from such a low base that there is no challenger to the US: “It is size and weight that count.” A lengthy section runs through all the by now well-known arguments about China’s prospects. He is dismissive of the BRICs concept, arguing that the countries are too dissimilar to be relevant to each other, and a neat acronym has had too much purchase. It’s true they are not at all alike but I think this greatly underestimates the impact the concept has had in drawing attention to a genuine shift in the world economy – as I noted here recently writing about Jim O’Neill’s [amazon_link id=”1907994130″ target=”_blank” ]The BRIC Road to Growth[/amazon_link] and Danny Quah’s work.

The final section considers America’s prospects and status in the world, especially vis a vis China. Joffe concludes that if America’s relative decline continues, it will be self-inflicted. America’s demography is in its favour, he argues, its military might is vastly ahead of its rivals, it is still the most innovative country with free and flexible markets to bring innovations to fruition. He seems to think this will outweigh problems such as the disintegrating infrastructure, inequality and social problems and so on, but is it possible to predict how relative global growth rates will play out when there are such uncertainties on both sides of the Pacific? Writing in a country which did have the world’s leading empire and then did decline (the flavour so well captured in Corelli Barnett’s books such as [amazon_link id=”033034790X” target=”_blank” ]The Audit of War[/amazon_link] and [amazon_link id=”0330346393″ target=”_blank” ]The Lost Victory[/amazon_link]), but I’m not sure.

Inevitably, Joffe is selective in his evidence and fails to address the kind of questions many people have now about the American model. The gross inequality of income and wealth, and consequent accumulation and abuse of power, is just one aspect of it. There are questions about the US tradition of freedom, post-NSA revelations. In a time of generally polarised party politics, American politics stands out as particularly grotesque. Many people would also challenge’s Joffe’s rather positive view of how America is currently exerting its military power overseas.

It is interesting to hear his rather contrarian view. I would have preferred, though, more on the politics and philosophy of declinism, and the use to which it is being put, which is the best part of this book.

Enlightenment values

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I’ve thoroughly enjoyed reading Anthony Pagden’s [amazon_link id=”019966093X” target=”_blank” ]The Enlightenment and why it still matters[/amazon_link] (a present from Son 1 for Christmas along with home-made biscuits and sweets – how well I brought him up). The ‘why it still matters’ argument is that we’ve inherited from the Enlightenment’s ‘science of man’ the values of common humanity, universality, a ‘global civic ethic’; and that these are values well worth defending against narrow nationalism and exclusive communities.

[amazon_image id=”019966093X” link=”true” target=”_blank” size=”medium” ]The Enlightenment: And Why it Still Matters[/amazon_image]

The book concludes:

“Nothing in the future will ever be achieved by shutting ourselves up in communities, by measuring out our lives by the horizons of what our fathers and forefathers have set down for us …. Much of what modern civilization has achieved we obviously owe to many factors, from increased medical knowledge to vastly improved methods of transport, which although they are an indirect legacy of the Enlightenment, and the revolutions in science and technology which both preceded and followed it, have no immediate of direct connection to its ideals. But our ability to even frame our understanding of the world in terms of something larger than our own small patch of ground, our own culture, family or religion, clearly does.”

The book is excellent on the intellectual restlessness that drove Enlightenment thinkers – something that Hobbes attributed to all of us, “the general inclination of mankind.” He argued against the Aristotelian idea of the ultimate good or greatest good: “There is no such Finis Ultimus, no summum bonum as is spoken of in the books of the old Moral Philosophers. Nor can a Man any more live, whose desires are at an end, than he whose senses and Imaginations are at a stand. Felicity is a continual progress of the desire from one object to another.” ([amazon_link id=”0199537283″ target=”_blank” ]Leviathan[/amazon_link] 70 I xi)

Hobbes was at the most radical end of the spectrum, but Kant agreed – sadly, finding a pithy quote from Kant is difficult, but he emphasised the ‘proceeding and growing activity’ rather than the end-state of happiness, which seems to me similar to Czistalmilhalyi’s ‘[amazon_link id=”0712657592″ target=”_blank” ]flow[/amazon_link]’. Kant was also firmly against state paternalism: “A government established on the principle of benevolence towards the people, like that of a father towards his children – that is, a paternalistic government – … is the greatest despotism thinkable.” So it’s clear what he would have made of the current vogue for governments ‘nudging’ us all to be ‘happy’!

Pagden is – like me – a big fan of [amazon_link id=”0140432442″ target=”_blank” ]David Hume[/amazon_link]. (Incidentally, I learned that Hume might have been the first philosopher in Britain to earn a living from writing – not that it can be a crowded field.) He writes that part of Hume’s importance stems from his appreciation that in the study of humankind, the object and the subject doing the observing are the same – and putting that into practice in his own writings. As Diderot phrased it: “It seems to me that one must be at once inside and outside oneself. One must perform the roles simultaneously of the observer and the machine that is being observed.” (I wish I’d read this before giving a lecture last summer!)

Pagden is of course alert to the negative aspects of the Enlightenment and its consequences, perhaps best encapsulated in Edmund Burke’s opinion that it combined: “Benevolence to the whole species, and want of feeling for every individual with whom the professors come into contact.” Isn’t that combination still found on the trendy, universalist left, those who eat organic quinoa but won’t send their children to the local state school because it’s full of poor people? More seriously, communitarian thinkers of course reject the individualism they trace to the Enlightenment, and the pace of change and loss of traditional identity. This is not a set of concerns to be dismissed lightly. Similarly, the Aristotelian theme of virtue has – quite rightly – enjoyed a revival post-crisis, when the loss of moral compass in the modern global economy became so apparent. (This review of David Caute’s new book on Isaiah Berlin, [amazon_link id=”0300192096″ target=”_blank” ]Isaac and Isaiah: The Covert Punishment of a Cold War Heretic[/amazon_link], indicates that Berlin – an evangelist for Enlightenment values – was also well aware of their negative aspects too.)

Yet progress is a bit out of fashion – we fear the robots rather than embracing them. So a reminder of the achievement of the Enlightenment at a time when there seems to be an inclination to pull up the drawbridge and turn away from the world is timely. As Mary Wollstonecraft put it: “The more I see of the world, the more I am convinced that civilization is a blessing not sufficiently estimated by those who have not traced its progress.”

The book is not chronological; rather, each chapter covers a theme, with as a thread running through it the debate about the role of government – in the historical context bookended by the English Civil Wars and Treaty of Westphalia in the mid-17th century and the French and American Revolutions in the late 18th century. Over the years I’ve read many books about the subject – Roy Porter’s [amazon_link id=”014025028X” target=”_blank” ]Enlightenment: Britain and the Creation of the Modern World[/amazon_link] is still a favourite. This is a worthy addition to the shelf.

[amazon_image id=”014025028X” link=”true” target=”_blank” size=”medium” ]Enlightenment: Britain and the Creation of the Modern World (Allen Lane History)[/amazon_image]

My one quibble is the number of typos in this book – from the minor like missing commas to frequent substitutions like ‘palette’ for ‘palate’ and ‘Chaplin’ (as in Charles) for ‘chaplain’, as if dictated to word-recognition software. There are one or two per page. Surely OUP could have run to a copy-editor?

The challenge of doing what’s obvious

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Naturally I was very interested when the LSE’s Growth Commission report on the UK economy was published back in September. I’ve just looked through the book of the report, [amazon_link id=”1909890022″ target=”_blank” ]Investing for Prosperity: A Manifesto for Growth[/amazon_link], edited by Tim Besley and John Van Reenen. It’s a very impressive publication, summing up concisely a vast amount of evidence on the long-term weaknesses of the UK economy.

[amazon_image id=”1909890022″ link=”true” target=”_blank” size=”medium” ]Investing for Prosperity: A Manifesto for Growth[/amazon_image]

As the preface underlines, the report is not about the demand side issues and short-term growth, but rather about the supply side and the UK’s long term potential. The problems are hardly unknown. The individual chapters cover three main areas: infrastructure, skills, and private investment and innovation. The policy recommendations correspond to these, including a shopping list of proposals to improve primary and secondary schooling; an independent infrastructure infrastructure – a strategy board, a planning commission to deliver the strategy and a bank to finance it; and measures to support investment in innovation by the private sector centred on increasing competition in the banking sector.The chapters give a very useful summary of the state of the evidence in each of these areas, very handy for students – there are terrific lists of references too.

The recommendations are all deeply sensible. However, I think the book serves to underline two problems with the task the Growth Commission set itself. One is that any policy measures to address an area of concern are either rather motherhood and apple pie – ‘improve standards of primary education’ – or extremely detailed, because once you get down to thinking about actual measures to implement, they have to be. The report is surely right on the big picture, but patchier on the detail – inevitably in a 300 page book. The infrastructure sections are the strongest, the education ones the least persuasive – but maybe that’s because I’ve been closely involved in primary education as a governor helping turn around a school.

The other problem is that the book does not, for me, meet the challenge it describes in the preface: ‘If your ideas are so good, why haven’t they already been done?’ It is excellent on the economic analysts but doesn’t really tackle the difficulties of political implementation of “structural reforms”.

Take transport infrastructure. We surely know the London area needs more airport capacity; but a political decision on location is needed. However, early on the current government kicked this can down the road beyond the next election to wait for a later government. Yet any decision taken now would be much better than further delay – so argues Bridget Rosewell persuasively in her book [amazon_link id=”1907994149″ target=”_blank” ]Reinventing London[/amazon_link], and she writes as a firm supporter of a new airport to the east of London.

[amazon_image id=”1907994149″ link=”true” target=”_blank” size=”medium” ]Reinventing London (Perspectives)[/amazon_image]

Or take HS2. [amazon_link id=”1909890022″ target=”_blank” ]Investing for Prosperity[/amazon_link] does not have a view on this, perhaps because economists are divided on this issue as they are not on airport capacity. It’s not at all clear how an Infrastructure Strategy Board would navigate the politics of this project, although it’s plain as daylight that the amount of investment in infrastructure in general has been too low over a long period.

Still, it’s not the job of economists to deliver the politics, but rather to point out the uncomfortable realities. I ended the report feeling rather optimistic because, as it argues, the UK has a lot of assets that will support a stronger potential growth rate and future prosperity. The Commission argues for measuring progress in terms of median income rather than GDP per capita, to take account of the distribution of the gains, which seems entirely sensible. The economy’s problems may be long-standing but the counterpart of that is that we know what to concentrate our reform energies on.

Shambles, from mini to omni

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[amazon_link id=”1780742665″ target=”_blank” ]The Blunders of our Governments[/amazon_link] by the distinguished academics Anthony King and Ivor Crewe is a deeply fascinating, compelling book, one that deserves to be widely read by politicians, officials, policy wonks, journalists, students and for that matter citizens).

[amazon_image id=”1780742665″ link=”true” target=”_blank” size=”medium” ]The Blunders of Our Governments[/amazon_image]

Its claim is that the system of government in the UK (by which they explicitly mean that centred in Whitehall and Westminster) is so flawed that successive administrations preside over policy blunder after policy blunder, to an extent far beyond the experience either of pre-1980 UK governments or many overseas governments. By ‘blunder’ they mean cock-ups that fall far short of the objectives, and greatly over-run the intended cost or fail to deliver expected savings, but they exclude both judgement calls that went wrong and scandals. Examples in the book range from the huge and prominent (the poll tax, Britain’s ERM entry and exit, the Millennium Dome, the infamous NHS IT project) to the smaller and/or less well-known (Individual Learning Accounts, the Asset Recovery Agency, the London Underground ‘public-private partnership’).

The longest section of the book is a series of case studies covering a a dozen blunders from 1979 on. These occurred in both the Thatcher and Blair/Brown governments. The accounts are based on extensive reading and also personal interviews with participants conducted by the authors. It is both highly authoritative and absolutely jaw-dropping. “How could they have been so stupid?” you think.

The final two parts of the book try to answer that question, dividing the explanation into ‘human errors’ and ‘system failures’.

The former include the fact that people in the world of policy making – as any other world – bring their prejudices to their decisions. They are as prone as anybody to group think. Importantly, there is a ‘cultural disconnect’ between people in policy and politics and many other citizens, especially in the field of welfare policy. The clever middle class folk who go to university, read books, take foreign holidays, manage their money, and lead reasonably orderly and law-abiding lives, have no conception of other ways of life in their own land. This is certainly true: I have come across this innocence fairly frequently in my brushes with the policy world, and it is extraordinary that it is possible for people to spend a career in politics or the civil service with no other experience at all. This also helps explain another of the book’s list of  typical errors, namely the absence of any experience relevant to implementing policies, which are developed in an abstract, analytical way with no thought given to how they might be put into practice, in an ‘operational disconnect.’ Implementation is, it seems, scarcely thought of in policy debate. In addition, for various reasons, symbolism and spin have come to play a big part in modern politics.

Among the ‘system failures’ are: the lack of common purpose between Whitehall departments and excessive influence of the Treasury in distorting policies from elsewhere; the massively under-resourced role of the Prime Minister (I hadn’t realised how much of an outlier the UK is in not having a prime minister’s department); the extreme frequency with which ministers change jobs (the Federal Republic of Germany has had 15 ministers of economics since 1949; the UK has had 35); the related absence ways to hold specific invividuals accountable for what happens when policies go wrong; the lack of relevant expertise in Whitehall on project management; no genuine scrutiny role for parliament, and undue speed without proper deliberation of major policy initiatives.

The overall diagnosis is of a government system populated by people who lack relevant expertise, have dysfunctional relationships (especially between civil servants and ministers), where there are no proper checks and balances, and where an extreme fear of being seen to do a u-turn paralyses sensible changes. “The truth is that, looked at close up, British government turns out to be more chaotic than dictatorial,” the authors conclude. The burdens on ministers’ time are intense; they are doing constantly. This makes the loss of trust between ministers and civil servants, on whom they used to lean, all the more damaging.

The book has some suggestions. On the ‘human errors’, there are some obvious steps. People who fancy going into politics could do another job first, in between student politics and their first think tank job or between their think tank and their first constituency. Civil servants could be required to work in local government or the health service or the private sector for several years if they want to get to the top jobs. Ministers could chair their meetings using known techniques for overcoming group think and bias – for example, creating a formal ‘devil’s advocate’ moment when the group is asked to critique a decision. Profs King and Crewe suggest greatly expanding the role for parliamentary scrutiny, especially at the pre-legislative stage. The Project Manager should become a key figure in Whitehall (and many other organisations, public and private, for that matter).

The postscript indicates that the systemic failures continue with the present government. Although the Olympics and Paralympics avoided the errors of the Millennium Dome, we have had the pasty tax and ‘omnishambles’ budget of 2012, and the Universal Credit is showing every sign of shaping up to be a blunder, the authors write.

The thing about system failures is that nobody has a strong incentive to do anything about them. The risks are high, the potential rewards minimal. They are hard to sort out because it takes a long time and involves getting a lot of people to agree to change things in ways that make their lives a bit more difficult. There is no personal risk in continuing with things they way they are now.

British political culture is not conducive to reasoned reform: Punch and Judy are the role models for debate, any sensible change of mind is pilloried as a ‘u-turn’, policy pilots and experiments have to get past the hurdle of accusations of ‘postcode lottery’ and the demand for instant results.  For all that every policy looks like a shambles, whether mini or omni, it is also hard for diligent ministers to get anything done at all – see Chris Mullin’s superb account in the first volume of his diary ([amazon_link id=”1846682304″ target=”_blank” ]A View from the Foothills[/amazon_link]) of his repeated failure as a junior minister to introduce a modest measure tackling the suburban blight of overgrown leylandii.

So it would be easy to read [amazon_link id=”1780742665″ target=”_blank” ]The Blunders of Our Governments[/amazon_link] and despair. And yet the latest survey evidence suggests that Britons are divided between anger and boredom (47% fury, 25% boredom, 16% respect, 2% inspiration) when they think about politics. Surely Something Must Be Done? I take some hope from the fact that most of the politicians and officials I’ve met over many years have been sincere in their sense of public service, no matter how clueless or ambitious or plain unpleasant they’ve been. That means there is potential for a coalition for system reform.

Another ray of hope comes from the universal lip service paid to the idea of “what works” or “evidence-based policy.” (This does of course make you wonder what previous policies were based on.) I predict some tumult ahead when politicians discover that the evidence does not in fact support their prejudices, but meanwhile, the system has created some machinery for pointing out when policy proposals are blunders in the making.

I would hope that devolution in the UK could offer another perspective on the system failures. The book notes that officials in Scotland challenged the poll tax, on the basis of how impractical it would be to implement, as their counterparts in England did not – and were ignored. In the devolved arrangements we now have a variety of experience and some natural experiments. Of course, the devolved powers vary in different areas of policy, and the social, cultural and political context of each nation is different; but if comparable officials from each of the four nations could meet to discuss policy problems, what a great forum that could be for testing proposals and sharing experience.

It also seems to me worth thinking about the training we give our politicians and officials. I don’t know how many degree courses in government or economics or public policy contain modules on policy assessment and implementation, or project management skills, but suspect the answer is not enough.

A modest start would be to put this book on all relevant reading lists.