A rousing defence of private property in The Guardian of all places

This is all rather Dr. Johnson in a way, as with seeing a woman preacher. It's that thing with a dog walking on its hind legs: not to see the thing being done so well but to see it being done at all. So it is with Aditya Chakrabortty and his tale of how some council house tenants in East London are being railroaded.

What is powerlessness? Try this for a definition: you stand to lose the home where you’ve lived for more than 20 years and raised two boys. And all your neighbours stand to lose theirs. None of you have any say in the matter. Play whatever card you like – loud protest, sound reason, an artillery of facts – you can’t change what will happen to your own lives.

Imagine that, and you have some idea of what Sonia Mckenzie is going through. In one of the most powerful societies in human history – armed to the teeth and richer than ever before – she apparently counts for nothing. No one will listen to her, or the 230-odd neighbouring households who face being wrenched from their families and friends. All their arguments are swallowed up by silence. And the only reason I can come up with for why that might be is that they’ve committed the cardinal sin of being poor in a rich city.

It's as if the assembled plutocrats of the planet are descending to feast upon the bones of good honest working class Brits, isn't it? So, who are the villains here?

Sonia lives in one of the most famous landmarks in east London. The Fred Wigg and John Walsh towers are the first things you see getting off the train at Leytonstone High Road station; they hulk over every conversation on the surrounding streets and the football matches on Wanstead Flats. Since completion in the 1960s, they’ve provided affordable council homes with secure tenancies to thousands of families. Named after two local councillors, they are a testament in bricks and mortar to a time when the public sector felt more of a responsibility to the people it was meant to protect, and exercised it too.

And so they must go. Last month, Waltham Forest council agreed on a plan to strip back the two high-rises to their concrete shells, rebuild the flats, and in effect flog off one of the towers to the private sector. In between Fred and John, it will put up a third block.

Difficult to think of a more rousing argument in favour of private property and against council housing really, isn't it? If you owned the home you lived in, or if the tenants collectively owned the building (as is common enough in buildings of flats) then they, the people who lived in that housing, would be able to control what happened to that housing.

Given that they don't, that it is owned by the local council, they have no such rights. They are subject to the whims of whatever turnips in red rosettes the local Labour Party put up for election. This isn't an argument in favour of "democratic control" of housing or anything else, is it? It is however a very strong argument in favour of private ownership, that private ownership which protects property from such "democratic control".

Chakrabortty doesn't quite manage to spot that logical conclusion to his argument, so we cannot say that he's done it well. But it is still interesting to see this argument in The Guardian, as with the dog on two legs.

Today's prize for economic illiteracy goes to Aditya Chakrabortty

This is painful, even for The Guardian, even for the history graduate that writes their economic leaders:

This is what the Centre for Research in Socio-Cultural Change terms “social licensing” in its latest book, The End of the Experiment. The academics’ suggestions have been followed by one council in north London, Enfield. Officers and researchers sat down and worked out how much money its 300,000 residents sent the way of big businesses: 11 Tesco stores, for instance, provided the PLC with around £8m of its annual profit. And what did the area get back? Not very much, but the highlight included a community toilet scheme and some charitable giving from the supermarket’s corporate social responsibility department.

And so the council has started asking big businesses, such as utility firms, what they had done for Enfield recently. They’ve begun hassling banks to lend more to local businesses, the likes of British Gas to give more of their local work to local contractors with local staff – or run the risk of being named and shamed in the local press. It may sound small, but imagine if the same approach were taken by Holyrood or Cardiff – or by Westminster.

What?

To take that example of Tesco, so what did Enfield get back in return for that £8 million of profit? Given supermarket profit margins it got a couple of hundred million pounds worth of groceries. Something that's rather more important that piddling around with the community lavvies you might think.

This idea that the value to us of what an organisation does is in what it does not produce is simply insane. The value to us of a producing organisation is in what it produces. The value of Google to us is that we get to Google, the value of Starbucks to us is bad coffee and the value of Tesco in Enfield is that people have somewhere to buy their loo roll and something to eat. And it's absolutely no use trying to insist that a supermarket isn't providing value: if it wasn't the good people of Enfield wouldn't be spending £200 million a year there, would they?

Try to think about this rationally for a moment. The NHS provides absolutely nothing towards local loos for local people, pays not a bean in taxation and yet most would agree that it does provide something of value. Perhaps not as much value as the same amount spent in another manner would but we do indeed value the fact that it occasionally manages to treat patients. The value to us of the NHS is in what the NHS produces: medical treatment. The value of Tesco to Enfield is in what Tesco produces. Why is this so difficult for people to understand?

No, Britain isn't a developing country

Britain is a developing country, says Aditya Chakrabortty. He bases this largely on the fact that it is below some poor countries on a number of international rankings. (Never has an article owed so much to Wikipedia’s “List of countries by” pages.) Some of the rankings seem obscure: is Barbados's superior ‘ground transport’ system worth caring about? Does Mali beating the UK in terms of business investment tell us anything? Others rely on the reader not knowing much about the country Britain does worse than: the UK may have a worse road network than Chile, but Chile's Public-Private Partnership roads have made it a regional leader in infrastructure.

One thing that Chakrabortty is particularly concerned about is graphene, a super-strong substance first isolated in 2004 and pioneered by scientists at the University of Manchester. What worries Chakrabortty is that South Korean firms are bringing graphene to market much more quickly than British firms. This, he says, is emblematic of “a familiar pattern of generating innovations for the rest of the world to capitalise on”.

I guess that’s supposed to be a bad thing, but it doesn’t sound like it to me. It’s good when inventions spread beyond their birthplace: to use Matt Ridley’s metaphor, the ideas ‘have sex’ and mutate more quickly. Overall, the world – and Britain, if for some reason that’s all you care about – has done well from Tim Berners-Lee’s world wide web being capitalised on by non-Britons in Silicon Valley. Germans are better off that Japanese firms make cars as well as Volkswagen, and Finns are better off that Californians tried to make mobile phones better too.

Chakrabortty might object that he doesn't mind South Koreans doing well with graphene, he just wishes Britons were too. But why graphene in particular? Chakrabortty’s counterpart in Seoul could write an identical piece worrying about South Korea’s relative weakness in finance, tourism, the cultural arts, or telecommunications. When firms in different countries specialise in different areas it is pointless to look at any single product or sector to judge which country is healthy.

There’s not much point in comparing the growth of rich and poor countries – poor countries are playing ‘catch up’ and can grow quickly by applying innovations already developed elsewhere. But if Britons should be worried about something, it’s the UK’s centralised public sector, which, lacking the profit motive as a crucible for new ideas, is less innovative than international equivalents. For instance, the British health system essentially free rides on innovations in America.

Chakrabortty asks “How can any nation that came up with the BBC and the NHS be considered in the same breath as India or China?”. Good question.