Aberration or just extreme example?

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A few days ago, the press carried a picture of a small child in tears wearing a lifejacket wading ashore from a small boat in the Channel. It was graphic, but different people will have seen different things as they interpreted the picture to fit their own views. I saw a small and vulnerable human who was absolutely terrified and in desperate need of care and protection. I don’t know what horrors that child had suffered or witnessed, and struggle to imagine the desperation that parents must have felt to have undertaken such a perilous journey with children. I know, though, that others will have seen something quite different. They will have seen a threat to ‘our’ way of life; potential future competition for housing, jobs or health services; someone who is not ‘one of us’ and should be immediately returned to the country of origin; or even maybe a potential future terrorist.

The gulf between those two views is enormous, and it cannot be bridged by rational argument or mere fact, because it is based, ultimately, on deep-seated prejudices and attitudes. To be fair, there is a natural human tendency to divide the world into ‘us’ and ‘not us’, and none of us are immune from it; trying to pretend that it is not so is futile. The best we can hope for is to reduce it to a question of which team to support on the field of play, rather than a basis for treating large groups of our fellow humans. Over time, the group considered to be ‘us’ has grown in size: from tribe to town to nation. There is a sense in which the EU can be seen as part of that process – an attempt to create a common feeling of being ‘European’ whilst continuing to host and nurture a diversity of cultures and languages. It’s an aspect of the EU from which the UK has always been semi-detached, and which it has noticeably tried to reverse over the past five years, retreating to a smaller and more insular definition of ‘us’. But even the EU’s best efforts still leave plenty of scope for the rest of the world to be considered as ‘not us’.

However, all the world’s really big challenges can only be solved when we start to recognise that ‘us’ is the whole of humanity; that it is only by working together that we can address climate change, war, hunger and poverty. It’s no coincidence that that list matches pretty well the list of causes which lead to people becoming migrants and refugees. If we choose instead to keep part of the world in poverty so that the other part can enjoy an unfair share of wealth or, to put it another way, to look after ‘us’ and leave ‘not us’ to their own devices, those problems will never be resolved. And for the remainder of the shortened lifespan of humanity which will result from such a decision, all of those problems will still be with us.

Taking a wider view of ‘us’ doesn’t mean an end to diversity or difference, but it is the key to our collective future. Whether it’s achievable or not is an open question. If the UK can’t even manage to accommodate a few desperate refugees, I doubt that it can adapt sufficiently in the time available. When I see the sort of hatred of ‘not us’ which is evidenced by the recent incident in which people attempted to prevent the launch of a lifeboat, and the PM doubling down on his unlawful and immoral plan to push boats back into French waters, I can only take a pessimistic view. Our best hope is that the UK under its current regime is simply an aberration. Whether the UK is indeed just an aberration, rather than a particularly egregious example, only time will tell.

Can the state choose winners anyway?

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One of the issues at the heart of the failing trade talks with the EU is the question of state aid to industries. It’s a long-standing myth that the EU forbids such aid; it does not, it merely insists that all member states follow a common set of rules so that no member state can give an unfair competitive advantage to companies based in its territory. And that ‘level playing field’ is a key precondition of allowing tariff and quota-free trade across borders. Despite the way in which the Brexiteers have presented the issue, the EU is not, as I understand it, insisting that the UK abide by the precise same set of rules, merely that the rules are sufficiently equivalent that they do not confer an unfair advantage. The obstacle in the talks is that the UK a) is unwilling to share its proposed new rules, and b) takes the position that allowing the EU any oversight of such rules is an infringement of absolute UK sovereignty. The second point is undoubtedly true; absolute sovereignty is necessarily restricted by any requirement to agree changes to any rules with a trading partner, but that does rather overlook the fact that the same will be true of any trade agreement with any country or bloc. All trade agreements involve some degree of common rule-setting and any party which then unilaterally changes the rules (which is what the UK is insisting it has the right to do) can expect the other party or parties to retaliate by restricting trade in affected goods or services.

The first point is the more curious one. It’s possible that the UK’s reluctance to share its proposals is simply down to the fact that the government doesn’t itself have a clue about any proposed new regime. Given the levels of incompetence shown to date on other issues, that is certainly a strong possibility. Another suggestion is that there will be no strategy other than responding to events and opportunities as and when they arise. Again, the ‘seat of the pants’ approach to government which we’ve seen to date makes it impossible to rule that out. What is certain is that no sensible trading partner is going to sign up to a tariff and quota free agreement with a state which insists that it can unilaterally start giving out subsidies on a whim. 

Tom Peck suggests that “The Brexit we appear to be gearing up to receive is one which liberates Dominic Cummings to invest vast amounts of public money in risky tech start-ups; this was always the entire point of Brexit”, and that Cummings believes that “...in the future, only countries at the forefront of the fourth industrial revolution will be able to shape the future”. It’s a credible suggestion, and if that’s the aim, no-one should be surprised if the rest of Europe is unwilling to conclude a trade agreement with a country using state aid in pursuit of dominating the technologies on which they all depend. There are, however three problems with such an approach, regardless of the EU's attitude towards it.

The first is that it depends on Cummings and his ilk being better at identifying winners and losers than anyone else. The only person who believes in his omniscience is the man himself, but there is no credible evidence to back it up. And, as Richard Murphy points out here, the idea that the state is best placed to pick winners is complete anathema to traditional Conservatives in any event. It’s also contradicted by decades of experience.

The second is that, although the ‘UK’ has a very good record in science and technology, many of the scientists and technologists working in the UK are either themselves non-UK citizens or else are working in collaboration with international teams. Whilst the government ‘bigs up’ developments achieved in UK universities, for instance, it seems to overlook the underlying international nature of many of those achievements. Making it more difficult for the UK to attract EU citizens and cutting the UK off from some significant sources of collaborative funding don’t look like decisions that a country which seeks to be at the forefront of technology would take.

The third is simply one of size. China, with a population of 1.4 billion, could put 60 million people (equivalent to the entire population of the UK) to work in the same fields, and even if they were only 10% as effective, they would still achieve more. The idea that a small offshore European island can ever compete with that is a silly one; the only way that the UK can hope to compete is in co-operation with others.

And that brings us to the heart of what Brexit is about. The world’s past was all about competition and rivalry; the future, with issues such as climate change to deal with, has to be about co-operation and teamwork. The EU is a far-from-perfect vehicle, but at its heart is the idea that countries which competed with, and fought, each other in the past can build a better future by acting together. Brexit, on the other hand, is based on reviving old rivalries and conflicts, to the ultimate detriment of all.

It shouldn't be about nationalism

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The study by a team of scientists at Oxford University which led to the discovery that a cheap and commonly available drug can significantly reduce the risk of death in patients suffering a serious case of Covid-19 is good news. Not as good as discovering a cure or a vaccine, but nevertheless a major step forward in reducing the mortality rate from the virus. Whether it’s entirely accurate for the PM to describe it as a “great British scientific achievement” is a slightly different question; the team which organised the trials might be based in the UK, but like all such teams, the members of the team at the Nuffield Department of Population Health come from a range of nationalities, and had the current government’s approach to immigration been in force for some years it’s more than a possibility that some of the team wouldn’t even be here. And whilst I don’t want to take anything away from the success of the team, which will have done a great deal of desk-based research before deciding which existing drugs were worth trialling, there is inevitably at least an element of luck involved in finding that one of those worked as early as this in the trial process.

Continuing the nationalistic drum-beating theme, the English Health Secretary claimed, on the basis of little more than assertion, that “… the UK is leading the way in the global fight against coronavirus – with the best clinical trials, the best vaccine development and the best immunology research in the world”. The demand that we all accept that anything the UK does is ‘world-leading’ or ‘the best’ tells us more about the mindset of the politicians making such statements than about the true state of British science, which is facing a loss of talent, funding and collaborative opportunities as a direct result of decisions taken by those same politicians. And to make it worse, whilst one of the leading investigators is proudly and correctly noting that “…it is fantastic that the first treatment demonstrated to reduce mortality is one that is instantly available and affordable worldwide”, the UK Government, as of yesterday, quietly added the drug to the list of those which are banned for export from the UK. Given that the drug is, apparently, already widely available, that decision looks not just petty but unnecessary – but imagine the outrage which government ministers (to say nothing of the tabloids) would express if any other country banned the export of a drug which could save lives here.

There’s nothing wrong with taking pride in the success of talented people in tackling global problems but finding solutions to the pandemic isn’t some sort of international competition with winners and losers, especially if the ‘losers’ are then potentially denied access to the drugs or treatments discovered. Scientific advance depends more on co-operation and collaboration, both of which seem to be alien concepts to the Anglo-British nationalists now running the UK.

Competition is ideological

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Economists can face difficulties in analysing what happened in the past before records became as detailed as they are today, and often depend on extrapolation from other data.  Despite that, there is a general agreement that India was responsible for around 25% of the world’s industrial output in 1750 and that the proportion fell to around 2% by 1900.  If the detail of the figures is inevitably subject to debate, the cause of the fall is even more so (there’s an interesting analysis of both the figures and the causes here).

But as the history of the British Empire shows, globalisation of trade is not as new as it sometimes appears, and the balance can swing from one country or region to another over time.  For India, the imposition of Imperial rule, at the same time as the Industrial Revolution in Britain, coincided with a switch of manufacturing from India to Britain as the Indian economy became one supplying raw materials rather than finished goods.  It's not hard to see a causal relationship there.

In short, India lost much of its industry and the key economic decisions leading to that were taken elsewhere.  It’s tempting to see last week’s announcement on the future of steel-making in the UK as a sort of mirror image of that process – de-industrialization of the UK as a result of decisions taken in India.  That’s a bit over-simplistic, of course, but there is a more general parallel.  In the 18^th and 19^th centuries, there was a flow of economic power from places such as India and China to Western Europe in particular – and that flow is now increasingly moving in the opposite direction.  And just as others seemed to be powerless to prevent the flow in the past, governments here seem to believe themselves largely impotent in the face of the reverse threat today.

Does it have to be so?  The rebalancing of the world’s economy, with wealth shared more equally, which is underway is certainly long overdue, and those of us supporting such a move have to recognise that any such readjustment is likely to involve a certain amount of pain.  But that pain is exaggerated by the insistence – shared by all parties – that the size of the respective shares must be decided by competition rather than by co-operation.  Our politicians seem mostly unable to conceive of a world where countries and peoples work together for a fair distribution of the world’s finite resources rather than a world full of cut-throat competition in which all participants seek to maximise their own share.  But that’s an ideological driver, not an economic one.

Right problem, wrong solution

Tweet In his New Year's message earlier this week, the Prime Minister said that the UK is competing against countries like China and India for jobs, and his implication was that those seeking the jobs need to bear that in mind and lower their expectations in terms of their pay and conditions. His statement demonstrated to me that he understands the underlying problem at some level, even if he's only dimly aware of that understanding; what he's unable to understand is that there is more than one way of responding to it.

The problem, which is implicit rather than explicit in his words, is that the current economic structures are simply unable to provide enough employment at a decent level for all those in the world seeking it. I agree; but it doesn't mean that the only response is some sort of a race to the bottom, that we have to compete with lower-wage economies for such employment opportunities as might be available.

If the pie isn't big enough to go round, fighting over the crumbs is far from being the only possible response. Indeed, whilst some might try to suggest that it is the only possible response, in the long term it's a response which helps almost no-one. Making the pie bigger would be a better response, and sharing the pie out more fairly would be a pretty good one too. Both are better than merely trying to redistribute the pie – particularly in the direction which Cameron seems to be proposing, whish is, on a global scale, from the have-nots to the haves.

Both of those alternative responses, however, require a co-operative approach rather than a competitive one towards the allocation of resources between people and countries. That's not an approach which we are going to see any time soon from politicians such as Cameron, unfortunately. Competition is almost a fetish for many of them; it's all that they understand. For the winners (and Cameron, like most politicians, is amongst life's winners), competition works of course. But it doesn't – and never can – work for everyone. A system based at its heart on allocating access to finite resources through a process of competition will always have more losers than winners.

And that's the problem with what Cameron said – his world view depends, ultimately, on most of us losing so that a minority can win.