Tag Archives: review

The invisible privatization

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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

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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.

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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.

Too big, full stop

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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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Humanity’s future…

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I read On the Future: Prospects for Humanity on the train back from the Festival of Economics. (See the #EconomicsFest hashtag – recordings will go online soon.) This short and compelling book by Martin Rees, the Astronomer Royal (and a Cambridge colleague), was a bit of a dampener on my good cheer. Our prospects are not great. It turns out that the risk of a large asteroid causing mass extinction is one of the lesser worries about our future. Other existential risks have a higher probability with the same mass death/end of civilisation impact.

Take biotech terrorism: “Whatever can be done will be done by someone, somewhere,” the book calmly states in passing. Even more exotically, another: “Scary possibility is that the quarks [produced by high energy physics experiments] would reassemble themselves into compressed objects called strangelets. That in itself would be harmless. However, under some hypotheses, a strangelet could, by contagion, convert anythign else it encountered into a new form of matter, transforming the entire Earth into a hyperdense sphere about a hundred meters across.” I gather this is a remote prospect indeed, but it takes some of the gloss off the Large Hadron Collider. Strangelets, eh.

The early scientists (natural philosophers, as they called themselves) were considered ‘merchants of light’ yet science and technology have come to seem pretty scary. This book is a perfect antidote to worrying about Brexit or Donald Trump or neo-fascism, as it offers so many much bigger problems to worry about.

It tries to strike a positive note by saying science and tech offer potential solutions too. Martin Rees thus ends by calling for scientists to engage more with philosophy. I think they should be engaging more with social scientists. The barriers to taking action to safeguard humanity from any devastating effects of climate change or AI are not mainly about science and technology, but rather about what people believe and how they behave.

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Gods and Robots, myths and machines

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In one of those lucky dip moments I picked Adreinne Mayor’s Gods and Robots: Myths, Machines and Acnient Dreams of Technology off the pile. What a good move. I know nothing about ancient Greek mythology but it turns out that not only are the myths rip- roaring tales of sex and violence, they are also stuffed with automata, robots and cyborgs. Pre-digital, clearly, but vividly imagined. And even in some cases (simple automata) possibly even real.

Mayor writes: “Homer’s myth reminds us that the impulse to ‘automate’ is extremely ancient. … The myths demonstrate that automata were thinkable, long before technology made them feasible.” And even in the time of Homer and Hesiod raised questions about free will and the difference between humans and not-humans, nature and artifice. Myths were sort of the sci-fi of their day.

Mayor concludes by suggesting the myths provide food for thought today as we grapple with the same questions as raised by AI. Indeed, all the more so as the day approaches when technology brings some of the things dreamt of by the ancient Greeks out of the realm of myth and into reality.

Brilliant book.

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