Where is Britain headed?

The 'quick-fix' strategies of politicians of the past century have led the country into a deep economic malaise.

    Where is Britain headed?
    Dark clouds continue to loom over the British economy, say analysts, threatening a torrential storm [AFP]

    London, United Kingdom - Dan Atkinson is the economics editor of the UK's Mail on Sunday, a conservative weekly newspaper. He and Larry Elliott, economics editor of the left-leaning Guardian, have written four books together, the most recent of which, Going South: Why Britain will have a third world economy by 2014, comes as a stark warning that, after a century of drift and quick fixes, the country is in the process of "de-developing".

    Their former editor, author Dan Hind, spoke with them last week about the nation's prospects.

    Q: In Going South you show how successive administrations in Britain have set out on different, often short-lived and contradictory projects to restore national prosperity. Do you think the public had much of an idea of what was going on, beyond a few phrases such as 'the white heat of technology'?

    A: Possibly not. Most people were aware, for example, that the Seventies were very different from the Sixties. Some may even have had a sense that the latter decade was some sort of payback for the first. In general, we would guess that people remember good times and bad times, probably fairly accurately, but may well not relate them to any sort of political project.

    To an extent, this is eminently sensible. Why clutter up your mind with all that guff about putting the Great back into Britain when the same mental space can be more fruitfully occupied with thoughts of loved ones, memories of happy occasions and even of long-ago football scores? We hope we have been careful to focus on distinct policy periods and not become side-tracked by ephemera on the social and political scene in past decades.

    "Why clutter up your mind with all that guff about putting the Great back into Britain, when the same mental space can be more fruitfully occupied...?"

    - Atkinson and Elliott

    Q: If a reckoning with reality is overdue, can we have it using the existing communications regime? If the coalition of private and public service media weren't able to convey the substance of what Wilson, Heath, Thatcher, Blair, and so on were doing, can they be expected to persuade the British that a reckoning is needed? Can the system save itself, in other words?

    A: The media did not cover itself in glory during the boom years of the late Nineties and most of the Noughties, but we are not sure that the performance of press and broadcasting (and currently new media) has been uniformly bad. Earnest "what's wrong with Britain"-type features have been a staple of broadcasting and the weightier print media for decades.

    You may say that the analysis was often faulty. You may even say that some of the analysis, such as that of the early Sixties, provided the groundwork for the next switch to the next failed policy - such as Wilson's technological revolution. But much of this is simply hindsight. From the perspective of 1970, it was presumably all too obvious that a Labour government with strong links to the trade unions was in no real position to lead the charge on automation, for example, even had there been plenty of money to pay for a "technology push", which there wasn't. It was far from obvious, however, six years earlier.

    Q: Do you have any sense that the political class, the senior managers of British industry, the decision-makers in the media and so on, what we used to call 'The Establishment', register the scale of the problem? Are they willing to entertain the need for a thorough re-evaluation?

    A: There is very little sign that we can see of any real understanding of the scale of the problem. Is this not why Michael Gove seems such an odd fish, regardless of whether or not one supports his changes to the education system? Here is one minister who stands out from the cross-Whitehall, cross-party consensus - one that says that with a little bit of tweaking and tinkering and some feel-good leadership from the top of politics we can get Britain back in the global champions' league.

    Were Gove to have fallen in with this "thinking", there would have been some fiddling with budgets and with the exam system and a lot of talk about how well the pupils (sorry, "students") were doing, and that would have been about it. Instead, he scarcely bothers to disguise the fact that he considers the school system to be failing badly and for time to be of the essence in terms of fixing it. Liam Fox may have adopted a similar approach at the Ministry of Defence.

    Elsewhere, on both sides of parliament, all talk of tough choices and serious problems is quickly smothered with the reassurance that Britain's people are amazingly talented and creative, that we lead the world in lots of things and that all will be all right on the night.

    Q: In your description of the options available to Britain, you concentrate on the social democratic and free market models. But don't the country's problems take their place alongside much deeper problems in the structure of the global economy? Isn't the whole world going to have to change course, to avoid environmental catastrophe, and to secure general prosperity and security?

    A: That is a very fair point. We don't really address the "green" agenda and our overview of the options is really based on the notion of re-creating a successful conventional economy. Our two polar-opposite models, the social-democratic and the free-market, share this one identical goal. But we are not sure this is as great a handicap as it may appear. Of course, if one means by a "green economy" a qualitatively different way of economic life, then it is a very great drawback.

    Normally, however, the green economy is usually envisaged as a more responsible, more sustainable version of the one we have. Assuming that green economics would simply rule out of bounds various types of activity, whether in terms of pollution, or in terms of resource use, or in terms simply of protection of the physical environment, then either of our economic models would simply have to take this into account. If the whole of East Anglia disappeared under the sea, it would cause huge ructions both economically and socially, it would change radically the availability of land and resources within the economy - but would not, of itself, require a new economic model to be developed.

    Q: What are the economic prospects for Britain in the near term? A series of downgrades have been announced for the country's banks - what should we make of that?

    A: On the face of it, the return to recession in the winter and early spring of 2011-2012 is merely the latest expression of the British economy's almost limitless capacity to disappoint. But we fear matters are much more serious than that. We cannot find work for all our people, and import skilled foreigners to make up the deficiencies in our own workforce. We have run a balance of payments deficit every year since 1983. Government and the public are burdened by debt. State support for the banking sector is roughly 100 per cent of GDP. The quick fixes are all used up. Near term, we fear the danger is a move from conventional recession into a long-running depression, with chronically high unemployment, falling living standards and, eventually, interruptions to energy supplies.

    "Most of what one may call the establishment is in a state of denial. Indeed, being so is practically a condition of high office."

    - Atkinson and Elliott

    Q: Can Britain re-develop while remaining in the EU in its current form? Can any of the countries that need to reform - Spain, Greece, Ireland, Portugal, and so on - do so?

    A: Bluntly, no. We first sounded the alarm about EU membership and its consequences for an independent economic policy in our first book, in 1998. At the time we were told either that the EU did not stop countries pursuing their own economic strategy, or that the EU's own economic policies would be the sort of which all right-thinking people (we think we were in this category) would approve, ie: social democratic and productive, with an emphasis on both workers' rights and efficient management. Germany writ large, in other words.

    This seemed to us to be an anti-democratic outrage. All these years later, it seems we are not alone - the people of Greece and Italy have had technocratic governments imposed upon them in order to ensure that the "right" economic policies are followed. Economic policy is one of the most intimate expressions of a nation's character and priorities. It should not be handed over to an external authority, whatever the inducements.

    Q: Many of the people reading this will be living outside the UK. Are there lessons they can learn from Britain's trajectory over the past century or so?

    A: Yes, although no two countries' circumstances are ever exactly the same. Britain's fundamental errors since 1914 boil down to two. First, the pursuit of an unrealistic international status to which domestic policy is subordinated and, second, the inability to stick with a realistic economic strategy for the long haul, preferring instead to seek quick fixes. These errors can stand as a clear warning to various countries: both Russia and the United States come to mind.

    Q: In your book, you try hard to separate the 'noise' from the 'signal', the crackle of static from the meaningful data. Why can't the British state seem to do the same? Is it really that they can't bear to face up to reality, or is there something else going on? After all, lots of people have done terrifically well out of national decline, and continue to do so. Have we just allowed ourselves to be conned by the same crooks who ran the Empire? Or is that too simple, do you think?

    A:Most of what one may call "The Establishment" is in a state of denial. Indeed, being so is practically a condition of high office. The official doctrine is that Britain has a great future and an important global role to play, thanks to the innate genius of its people. True, there are people who have done well out of Britain's decline, whether "consultants" who have earned vast sums from advising Whitehall, or those who own or manage the privatised utilities. Our guess would be that very few of these individuals are consciously aware of what they are doing in terms of profiting from and accelerating our descent to "Third World" status.

    "The key reason to be cheerful is that the looming reality check - however painful it will be - will change everything."

    - Atkinson and Elliott

    Q: Do you see any reasons to be cheerful about the future? Are there people in Britain who are thinking in a sustained way about what kind of changes are going to be necessary?

    A: The key reason to be cheerful about the future is that the looming reality check - however painful it may be - will change everything. Once we are on the other side of it, there will be no going back. Imagine a very badly run company, with appalling management and a sub-standard workforce. The arrival of court-appointed administrators will be a terrible shock. The surgery they undertake to rescue the viable bits of the business will be unpleasant. Parts of the business may be sold off or simply closed down. But is that really worse than what went before? And even if the answer is yes, it makes no difference. Things could not continue as they were and, indeed, they have not.

    Q: Is there anything that has happened since you finished writing the book that has surprised you, or confirmed your thesis?

    A:  The double-dip recession in Britain is a post-book event that did not surprise us, but rather confirmed what we had been forecasting. The ever-more shambolic nature of the current government also serves to confirm our analysis, but I think it is fair to say that the post-book unravelling of so many of its positions and policies has been a surprise. Ed Miliband's development is intriguing: we are not political pundits, but there is a chance he may emerge as the first post-"reality check" party leader. The odds, admittedly, are that he will prove to be just another of the plausibly young men (Blair, Cameron, Clegg and so on) who have brought us to our present impasse. But we watch him with interest.


    Dan Hind is the author of two books, The Threat to Reason and The Return of the Public. His pamphlet Common Sense: Occupation, Assembly, and the Future of Liberty, was published as an e-book in March. He is a member of the Tax Justice Network.

    Follow him on Twitter: @DanHind

    SOURCE: Al Jazeera



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