We are probably going to get a new government this year, and it’s probably going to be a Labour one. This is a natural time to turn our thoughts to how the country can be improved. There is an incredible consensus in politics now about what wrong (mostly that productivity growth has been terrible for thirty years, and, for some, that median real hourly wages haven’t budged since the 1970s, which is in some ways related).
The reality is that the UK economy is enormous and very stable. GDP per working age person has been going up slowly (less than 1% pa) but steadily for ages. Nothing that Thatcher, or Blair, or Major, or Brown, or Cameron, or May made any difference. Every government wants to ‘reform’ the NHS, even though this is clearly impossible as the repeated failure of all previous attempts makes clear.
It’s not that it’s theoretically impossible. It’s that it’s practically, and politically, impossible. But Wes Streeting is willing to give it a go, because, well those who fail to learn from history are doomed to repeat it.
Everyone wants to reform benefits. But, look what happened to Universal Credit. And Immigration — need I say more? And improving the management of megaprojects. And cutting waste, and plugging tax loopholes, and improving efficiency of public services, like nobody has ever thought of that before.
And growth the magic ingredient that will allow more public spending without increased debt or higher taxes. Do the political class believe this crap? Or do they just have to say it so they don’t look stupid when interviewers ask them how they are going to pay for the voter bribes? It’s a tough call.
Weirdly, or maybe not, the one thing that would turbocharge growth painlessly, joining the single market and customs union, is out of the question, under a sort of peace treaty agreed by the major parties. But even that wouldn’t really work, because we’d end up with UKIP Mk2, which would surely be worse than the Conservatives and Labour.
A sort of consensus about Jeremy Corbyn was that he was hopelessly ideological, with his ideas of nationalizing BT and imposing a land-value tax. But these ideas, frankly, seem a lot more grounded in pragmatism than thinking that Wes Streeting will fix the NHS without spending much money or sacking all the doctors and administrators, which of course he can’t do.
A few years ago, I compiled a great long list of policies to fix our broken society. I think I’d just read “Radical Markets” by Glen Weyl. I thought it was just a matter of looking at society, understanding where it was broken (e.g. tax policy) and fixing it to push behaviour in the right (productive) direction. I now tend to think that, actually, most people, and politicians act rationally, and in their own interest, and that the structure of institutions we have is an emergent outcome of everyone acting in a fully rational way. The idea that people will be willing to change their behaviour ‘for the common good’ is about as foolishly idealistic as it’s possible to be.