What joy Sunday mornings brings us with a Willy Hutton column to consider. Today it\’s that because we can plan how to win gold medals at the Olympics then we can and must plan the economy.
Everyone has marvelled at the success of Team GB, but the best haul of medals in 104 years is no accident. It is the result of rejecting the world of public disengagement and laissez faire that delivered one paltry gold medal in Atlanta just 16 years ago. Instead, British sport embraced a new framework of sustained public investment and organised purpose, developing a new ecosystem to support individual sports with superb coaching at its heart. No stone was left unturned to achieve competitive excellence.
The lesson is simple. If we could do the same for economy and society, rejecting the principles that have made us economic also-rans and which the coalition has put at the centre of its economic policy, Britain could be at the top of the economic league table within 20 years.
Gaining gold medals isn\’t that tough. Go out and find the higher, stronger, faster peeps, give them a bit of money so they can train and see what happens.
We\’ve a clear goal, a clear timetable and a fairly simple method of getting there.
So, what\’s the goal with the economy? Anyone?
More economic growth? Could be. But maybe it\’s more leisure time. Maybe the real goal is an increase in aggregate utility (that\’s actually what it is in fact)? Or is it less inequality? Lower CO2 emissions?
So we have a problem right at the start here. We don\’t actually have a clear goal.
Then we\’ve a scale and information problem. Within each of the sports we\’re talking about it\’s a pretty small world. Some hundreds to perhaps a couple of thousand potential Olympians in any one of them. Those people almost certainly already inside one of those networks and known to those involved.
So our selection problem isn\’t all that difficult.
Try this again with the entire economy. 65 million of us. And what we\’re actually looking for is that weirdo in a shed in Melksham who has this strange, strange, idea about how to build a better vacuum cleaner. Anyone want to try and build a selection mechanism that would pick up James Dyson? More importantly, can anyone even think of a government run selection system that could conceivably do so?
And then we come to that really rather serious problem. That of uncertainty. We\’re around and about at the technological frontier in this country. The future path of growth depends upon technologies and innovations as yet unknown. Their interaction with a human society as yet unknown, their interaction with other as yet unknown technologies and innovations (not much point in the pneumatic tyre before the bicycle, the light bulb before electricity etc).
So, given that we know fuck all about what is going to succeed then how can we select those things to aid in succeeding?
And then the bureaucracy thing. Years back there was a scheme to get people rolling around the ex=Soviets and \’Stans. Go out, see what\’s happening, see if you could build a business on it. Government would kick in a few thousand pounds, up to 50% of your costs, for going having a look see.
Not a bad idea on the face of it. No one knew sod all about what was going on, not even the people on the ground who were running the economies. The only way to do anything really was to go and potter about and kick the tyres.
So, what was the actual scheme? Well, firstly, it was only for small businesses. That\’s OK. Secondly, you got the money 3 months after your return and after you\’d filed a report. Not so useful, really didn\’t help with the cashflow issues which are the reality of every small business. And finally, you had to file a report stating what you intended to find out before you went to be eligible.
Yes, you had to know the results of your research trip before you made your research trip. An early example of policy based evidence making.
That\’s what any government run scheme will end up being like. I\’ve seen it again in all of this carbon investment stuff. It is simply a truism that solid oxide fuel cells are a potentially fabulous technology. And it\’s also true (a result from some British university work which I helped subsidise) that scandium oxide is a somewhere between vital and very useful part of that technology. Certainly as important as better gearboxes are to windmills. Scandium is also potentially a way of making windmills themselves more efficient.
So, given that the nation is pissing tens of billions into this renewables pot there would be the odd £100k floating around to investigate new and secure sources of scandium, right?
No, obviously there wouldn\’t be. For the planners have plans and they don\’t include plans for things the planners haven\’t thought about.
Which really ain\’t the way that you advance in new technologies.
Any system of planning can only aid with our known knowns and our known unknowns. And that\’s just not how an economy advances: something which is much more to do with our unknown knowns and unknown unknowns.
And don\’t forget, this is entirely without facing the problem of having some fuckwit like Willy trying to do the planning.