Is “radical tinkering” enough?

Mike Phipps reviews When nothing works: From cost of living to foundational liveability, by Luca Calafati, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams, published by Manchester University Press

AUGUST 31, 2023LABOUR HUB 

In a recent poll, 57% of the British electorate – including half of all Conservative voters – agreed with the statement ‘”nothing in Britain works anymore”. Only 19% disagreed. The verdict of course is vague: it covers NHS waiting lists, transport infrastructure, our education system, the state of our parks, the energy sector and much else. Right wing tabloid journalists compile a different list, from the criminal justice system to immigration controls.

The authors of this book trace the origin of the problem to the UK’s  pursuit of “a fantasy of market citizenship” which resulted in low wages and the rise of in-work benefits for an increasing proportion of economically active households who now receive more in benefits than they pay in taxes. At the same time, “state underfunding has slowly undermined and distorted essential service provision.”

In a case study, the authors examine the NHS, where underfunding and wage cuts exacerbate a recruitment and retention crisis – as in many other parts of the public sector – but where additionally privatisation and reorganisations have “reconfigured key parts of the NHS so that they are unfit for health system purposes.”

A root cause of these failings is the shift in the balance of power between labour and capital in favour of the latter over the last fifty years, caused by the cumulative impact of weakened trade unions, growing privatisation and outsourcing and deregulated finance – “a rentier machine for rationing investment and extracting cash”.

“Britain needs a pay rise,” says the Trade Union Congress. But for low income households, this is only part of the solution, suggests this book: “Each extra one pound of wages turns into about 30 pence of disposable income for those who not only pay tax on their wage increase but also lose Universal Credit.” A reform of the “predatory” tax and benefit system is also required, plus big improvements in Britain’s social infrastructure. An immediate priority is reversing the austerity cuts of the 2010s in central government grants to local authorities.

“Quagmire politics”

This book proposes a new economic diagnosis and political approach to the UK’s problems: a break from the consensus “quagmire politics” and its objectives of faster growth and higher wages. In fact, faster growth is unattainable, argue the authors, “because the UK’s growth rate is declining and there is no evidence that technocratic centrist or free market supply side economic policies can shift the country onto a higher growth trajectory.”

But the aim of faster growth is not just unattainable, without a fundamental break from mainstream policies; it is also misconceived, insofar as faster growth aggravates the climate emergency. This is true even of ‘green growth’, claim the authors: the evidence suggests it’s simply not possible to decouple economic growth from environmental damage. The conclusion is inescapable: to achieve the necessary reductions in emissions, we will need to scale down aggregate economic activity. Fearing the electoral unpopularity of this message, few mainstream politicians are willing to articulate it.

On the face of it, the empirical evidence for this is insurmountable. Research suggests that every percent of growth raises emissions by a percent, because of the energy required to generate economic activity. But understanding this also indicates a potential solution: not all economic activity is equally energy-guzzling, and not all energy sources contribute the same amount of carbon emissions. In short, as one study puts it, “Clean up first, and then invest in development.”

A new framework

To address all these problems, the authors propose a new “foundational liveability framework”. This would end the focus on gross domestic product as the key measurement and would use instead household living standards as the basic unit of analysis. Liveability, argue the authors, “has been undermined by the crumbling of each of its three supporting pillars: essential services, social infrastructure and residual income. This is the result of the failed market citizenship project which has attempted to boost individual consumption at the expense of collective provision.”

This re-framing puts centre-stage a debate about universal basic services, universal basic income and even universal basic infrastructure which have been separately canvassed in the last few years.

The authors rightly bemoan the existing political consensus, but then suggest that several  constraints on an incoming Labour Government are likely to prevent a radical policy departure. “The room for fiscal expansionism will be limited by trade deficit and the debt to GDP ratio, while an independent Bank of England with a narrow remit will control monetary policy,” they argue. Some privatisation could be reversed, but the state has lost the capacity to run large-scale infrastructure projects and anyway regulation would be cheaper. An incremental approach would apparently work best, especially as voters are supposedly slow to grasp big economic ideas.

Thus the authors focus on “adaptive reuse which delivers slow, steady progress” and “starter and stealth policies.” These, they admit, “could be disparaged as tinkering, but sustained, purposive, broad front, radical tinkering is what adaptive reuse is all about.”

I’m not so sure. Of course, there is a sound logic to, for example, taking the best from local and regional government and rolling it out nationally. But the pragmatism and innovation that produced some excellent local initiatives were born of necessity amid severe financial constraints: a national government with a strong mandate should not be hamstrung in the same way. The caution advocated here could well backfire at a subsequent election, when a Starmer government, like New Labour before it, starts to lose the goodwill of voters increasingly impatient for change.

“Paradigm change is beyond this team of authors,” they declare in the Introduction. But if nothing really does work in contemporary Britain, isn’t that precisely what is needed?

Mike Phipps’ book Don’t Stop Thinking About Tomorrow: The Labour Party after Jeremy Corbyn (OR Books, 2022) can be ordered here.