10 May 2020

New Statesman: Capitalism after coronavirus

We should remind ourselves that only a year ago we faced the daily nightmare of Jeremy Corbyn versus Theresa May: the two worst party leaders since 1940. The transformation for the better in British politics is extraordinary. In the Labour Party, the hard left could not avoid responsibility for Labour’s crushing electoral defeat, and its ringmasters have been swept away. Not only is the party expecting change, but with his decisive leadership victory, Keir Starmer has the power to deliver it. Similarly, the Conservatives first ejected Theresa May, followed by Boris Johnson’s high-risk strategy of ousting the established order of Philip Hammond and Jeremy Hunt, which was rewarded with a decisive election victory. Both parties had been bitterly divided, and in both, the internal opposition has won an election. [...]

To guard against the strong tendency to interpret the crisis through a lens of understanding that inevitably reinforces existing beliefs, a good discipline is to start by asking: “In what ways have events not been consistent with what I would have predicted given my prior beliefs?” Applying this discipline, I think one awkward fact really does bear political attention and, as it happens, it is deeply rooted in both left and right. While it can doubtless be spun away into the deep grass, it is sufficiently surprising to mainstream thought that it should shift ideas: Britain is heavily over-invested in its belief in the efficacy of centralised state direction. Underpinning this belief are two fallacies. One is that the top knows what to do. It knows best, because it is staffed by those of the highest calibre and they draw on the finest expertise. The other is that central control is necessary for coordination. These sound – at least to the people to whom they are congenial – obvious. Indeed, anyone hearing them would judge them to be common sense. How could either possibly be wrong? [...]

When Britain’s health outcomes are properly measured beyond the privileged zone of London and its region, its health system is not even ranked within the Western European pack – according to medical journal the Lancet, British outcomes look more like those of eastern Europe. The rest of western Europe has “the best health systems in the world”. Why don’t we learn from them? And no, it isn’t just a matter of money. Coronavirus fitted this pattern: we could have learnt from the responses in east Asia, but instead, public policy – though set by scientists – was based on a British model with assumptions about critical unknowns. [...]

We need compromise, mutuality, long-term perspectives and mediators: exactly the properties that bonus-hungry bankers and aggression-fuelled lawyers are trained not to possess. Returning to the unrepresentative nature of our political parties: depressingly the Tories are overloaded with bankers, and Labour with lawyers. We need to devolve the power of decision from Whitehall, but to where and what? To communities. The right political community, at which many decisions should be exercised, is the region. Whitehall, staffed by people whose daily life is the weirdly atypical experience of professional London, is both too remote and too exceptional to be the locus of many decisions. London is less “the capital” than “the outlier”. But the term “region” begs the question of appropriate boundaries, especially after what coronavirus will do to our economy.

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