For many years, in the UK as well as other countries, progress across a wide range of issues seemed to be the natural order of things. Almost every year, the economy would grow a little and people’s real (inflation-adjusted) wages would grow with them. Almost every year, in other words, most people would become just a little better-off. Science and technology would move forward, and normal people would, gradually, feel the benefits. The rights of minorities would gradually be recognised, and it would become increasingly possible to live a happy and fulfilled life without being able-bodied, straight, white, or public school educated. Over the course of a generation, those little improvements would add up and each new generation would have noticeably better opportunities than its parents’ generation.
Over the last 12 years, in the UK unlike most other developed countries, progress has gone into reverse. Even before the recent cost of living crisis, most people’s wages had failed to keep pace with inflation – each year most of us have been getting poorer. And because of the way we have handled the cost-of-living crisis, the UK now has the highest electricity prices in the world and the Office for Budget Responsibility has warned of the steepest fall in living standards since records began.
Investment has plummeted and with it, business growth. Racism has become bolder – and even been stoked by some members of the government. The NHS is in crisis and most other public services are struggling.
The UK is on track to become the first formerly-developed nation.
Why is this happening to us?
The reason all this has happened to the UK and not to most other developed countries is that our policies have been more damaging; and our policies have been more damaging because they have been guided by ideology rather than rationality:
- Ideologues interact with the world in a completely different way from rational policy-makers;
- The UK is manifesting all the symptoms of ideology-driven decline; but, fortunately,
- There are rational policy-makers in other countries from whom we could learn.
Ideologues interact with the world in a completely different way from rational policy-makers
An ideologue is one who blindly follows an ideology:
In the case of the UK, the ideology is Market Fundamentalism. Rational policy-makers accept that policy-making is a skilled and difficult task. But if you accept as an article of faith that “markets are the best way to allocate resources” then policy-making becomes extremely simple. All resources, money, education, healthcare, food, housing, etc should be allocated by the market. That means that any other way of allocating resources – for example, state pensions, state education, state healthcare – is sub-optimal and should be abolished, to be replaced by market-based solutions. The policy changes needed are therefore to cut taxes and reduce public spending. Increasingly, during the age of market capitalism, the direction of travel has been driven by this ideology, and the results have been poor.
And this is where the difference between rational policy-making and ideology becomes most visible.
Rational policy-makers make mistakes, as all human beings do. But they collect evidence of the performance impact of their policies and adjust accordingly. If a policy has worked, they do more of it until it stops working; if it has not worked, they work hard at it until they find an approach that does work.
In many areas of science, progress is driven by experimentation; recently this has become true (in some cases) of economic policy. The 2019 Nobel Memorial prize for Economics was won jointly by three economists: Abhijit Banerjee, Esther Duflo and Michael Kremer. The prize was awarded “for their experimental approach to alleviating global poverty.” All three have been affiliated with The Abdul Latif Jameel Poverty Action Lab. The Lab describes itself this way:
“The Abdul Latif Jameel Poverty Action Lab (J-PAL) is a global research center working to reduce poverty by ensuring that policy is informed by scientific evidence. Anchored by a network of 194 affiliated professors at universities around the world, J-PAL conducts randomized impact evaluations to answer critical questions in the fight against poverty.”
Some countries, such as Finland, have regularly used pilot studies to determine which policies work in practice: these have covered issues from prison design to universal basic income. Finland uses the scientific method to determine what is sound policy.
For ideologues, in contrast, evidence from the real-world is a distraction: they know what they want to do (reduce public spending and cut taxes), and they do not want to be pushed off course by naysayers. So where performance is good, they are happy to embrace it as evidence of the success of their policies – in the UK, for example, the government repeatedly claimed that we had the “fastest growing economy in the G7.” Even at the time they made the claim, it was clearly not representative of the true picture; now we see that it was completely untrue. In fact, the UK has one of the worst growth rates of all developed countries.
If they cannot present the results as being positive – for example the growth in poverty in the UK – they resort to saying “I do not recognise these numbers.” This level of denial was a source of immense frustration to the UN Special Rapporteur on extreme poverty and human rights in his report on the UK. And if denial is not plausible, distraction is always a good bet: a trip to the Ukraine has been a popular tactic.
Where, as with the economic effects of Brexit, they cannot deny that the results are negative or ignore them, they blame the failure on having been forced to implement a “Remainers’ Brexit” even though the Brexit we have is far harder than the Brexit promised by the Leave campaigners (and hence far more damaging).
But by far the most damaging feature of the ideological approach is the failure to adjust policies when they are clearly taking the country in the wrong direction.
The UK is manifesting all the symptoms of ideology-driven decline
The reversal of progress is not merely economic: we are going backwards in terms of health, wealth and human rights.
Here, for example, is what has been happening to our life expectancy (which used to rise as it does in other countries):
Here, based on research by the Financial Times, is what has been happening to our incomes:
Not only are our poorest now far poorer than their equivalents in countries that we used to see as our peers, they are behind their equivalents in Slovenia. On current trends, the median British household will be poorer than the median Slovenian household within a very few years.
And here is what has been happening to our human rights and democratic safeguards:
Systematically, any means by which the public might impede the ideological juggernaut are being removed. We no longer have the right to peaceful protest, and even our voting rights are being restricted.
There are rational policy-makers in other countries from whom we could learn
It does not have to be like this. There are over 200 countries in the world and they each take a different approach to policy-making. Many have done a worse job for their populations than the UK. But quite a few have been doing far better. We could learn from them.
We saw above how UK per capita GDP has been drifting away from (below) our peers; the chart below indicates the impact that has on the happiness of the population as measured by the World Happiness Index.
And the countries which are shown as high performers in the chart above are also the best on a wide range of other measures: they have higher median incomes, lower rates of poverty, higher life expectancy and better social mobility.
None of the countries listed as top performers has followed (anything like) the market fundamentalist agenda that has driven the UK.
Conclusion
This is good news – in essence, it means that our relative failure in recent years is caused by a pattern of irrational policy-making, rather than being in any sense inevitable. If we abandon the ideology and start to formulate rational policy in the UK, we could realistically expect to return to progress, where each year, on most dimensions, things get a bit better. And over the course of a generation, the improvement will be startling.
We need a change of government, and we need the new government to commit to rational policy-making on behalf of the entire population. These five steps will help to ensure that they do so.
If you would like to help ensure that the UK returns to rationality, take a look at the 99% Organisation and join us.