Why we shouldn't believe a word of Philip Alston's UN report on poverty in the UK
Philip Alston is the UN’s special rapporteur on extreme poverty. He’s done a report on poverty in the UK. A report that we simply shouldn’t believe a word of. Including any use of then words “and “, “or” and the like. For it actually is pretty terrible. Not that the headlines discussing it point this out but you know, any stick to beat with.
The report is here.
The bottom line is that much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos. A booming economy, high employment and a budget surplus have not reversed austerity, a policy pursued more as an ideological than an economic agenda.
A budget surplus? ONS doesn’t think so. Even The Guardian doesn’t think so. Nor does Spreadsheet Phil:
As a share of economic output, the deficit fell to 1.2 percent, its lowest since the 12 months to March 2002 and down from nearly 10 percent during the depths of the global banking crisis a decade ago, the Office for National Statistics said.
Following publication of the figures, Hammond said the government looked on track to meet its goal of reducing overall government debt levels as a percentage of the economy by 2021 and keeping the core budget deficit below 2 percent.
A deficit of 2% of GDP is not a surplus. And this is the level of accuracy throughout the report. You know, not accurate at all.
The United Kingdom, the world’s fifth largest economy, is a leading centre of global finance, boasts a “fundamentally strong” economy and currently enjoys record low levels of unemployment. But despite such prosperity, one fifth of its population (14 million people) live in poverty. Four million of those are more than 50 per cent below the poverty line3
Footnote 3 is this:
Social Metrics Commission, A New Measure of Poverty for the UK, September 2018, p. 97
Which leads to this. Which is an entirely new method of measuring poverty, one entirely made up by a self-appointed group of possibly worthies. You know, maybe not a useful method of measuring poverty and most certainly not an official one.
and 1.5 million experienced destitution in 2017, unable to afford basic essentials.4
Destitution, eh? Footnote 4 is this
Suzanne Fitzpatrick and others, Destitution in the UK 2018, Joseph Rowntree Foundation, pp. 2–3.
Which leads here.
Which describes destitution as being:
Definition of destitution People are destitute if: a) They have lacked two or more of these six essentials over the past month, because they cannot afford them: shelter (have slept rough for one or more nights) food (have had fewer than two meals a day for two or more days) heating their home (have been unable to do this for five or more days) lighting their home (have been unable to do this for five or more days) clothing and footwear (appropriate for weather) basic toiletries (soap, shampoo, toothpaste, toothbrush). 3 To check that the reason for going without these essential items was that they could not afford them we: asked respondents if this was the reason; checked that their income was below the standard relative poverty line (ie 60% of median income 'after housing costs' for the relevant household size); and checked that they had no or negligible savings. OR b. Their income is so extremely low that they are unable to purchase these essentials for themselves. We set the relevant weekly 'extremely low' income thresholds by averaging: the actual spend on these essentials of the poorest 10% of the population; 80% of the JRF 'Minimum Income Standard' costs for equivalent items; and the amount that the general public thought was required for a relevant sized household to avoid destitution. The resulting (after housing costs) weekly amounts were £70 for a single adult living alone, £90 for a lone parent with one child, £100 for a couple, and £140 for a couple with two children. We also checked that households had insufficient savings to make up for the income shortfall.
The problem here is that they’re measuring incomes according to something higher than that normal relative poverty measure of 60% of median household income. Instead, they’re using their own higher estimate, the one that leads to the living wage numbers. Apologies, we got bored checking footnotes at this stage, the point being we think well made.
And yes, it gets worse than that. If we plug that £70 a week number into the global income distribution then we find that this apparently abject destitution is in the top 25% of all such global incomes. Note that this is the post housing paid for income, while that global number is a pre-housing one. Adding in a modest £100 a week for housing costs puts that destitution level up into the top 16 or 17% of global incomes. And that’s before we even consider the free at the point of use health care, education and so on that the British state provides.
Britain is a place where some have more than others, most certainly. That’s known as inequality. Britain doesn’t actually have any - at all - of what we globally call poverty and it most certainly doesn’t have any destitution. As actually checking the footnotes of Philip Alston’s report shows. Which is why we shouldn’t believe anything the report says.
A good date for space travel
By coincidence, May 25th has been a significant year for space travel in several years. On that date in 1945, Arthur C Clarke (later Sir Arthur) began circulating to his friends a proposal he later published in Practical Wireless. It suggested that TV signals could be beamed down to Earth from satellites in geostationary orbits, 26,000 miles high, so they would match the rotation of the Earth and appear to remain at a fixed point in the sky. The idea later became the basis for Intelsat and its successors.
It was the date on which President Kennedy announced in 1961 America’s goal of “landing a man on the moon and returning him safely to Earth before this decade is out.” NASA achieved that goal five months ahead of the target date. It was a remarkable and ambitious target to set, since Alan Shephard had flown his suborbital flight as America’s first man in space only 20 days previously.
It was on May 25th, 1977, that cinema goers had their minds blown by the premiere of "Star Wars." The movie quickened the pulse and inculcated a new eagerness for space among young and not-so-young people worldwide. It started the franchise that became a cult, filling the screens with adventures of space travel.
And it was also on May 25th, in 2012, that Elon Musk’s SpaceX docked its Dragon capsule with the International Space Station. It was the first private sector vehicle to achieve such an accomplishment, and opened up a new era of private participation in space exploration. Indeed, of the four space anniversaries that took place on May 25th, only President Kennedy’s announcement concerned a public sector event.
Space Travel is far from the "utter bilge" it was characterized as by the Astronomer Royal, Sir Richard van der Riet Woolley, just before Sputnik I was launched. It has proved its importance economically, militarily, scientifically and psychologically since then. The new element recently has been the incorporation of private sector initiatives into developing and testing new techniques, into experimenting with novel and cheaper ways of achieving space goals.
While much public money is spent on space exploration, the increasing commercial use of space means that entrepreneurs will invest resources and effort into gaining increased value from it, value that customers on Earth will happily pay for if it adds value to their businesses and enables them to provide better services to their customers.
Why we don't want to use wellbeing as a measure of national performance
It’s entirely true that there are problems with GDP. It doesn’t measure unpaid labour, or indeed most non-market transactions. It doesn’t detail the distribution of incomes. It is, however, a measure of possibilities. The more value we are creating then the more aggregate income there is that can be consumed. That’s a useful measure in itself.
But there’s a much more important point to it too:
Personal wellbeing rather than economic growth should be the primary aim of government spending, according to a report by the former head of the civil service and politicians.
Launching a report urging a sea change in thinking from ministers, Gus O’Donnell, who served as cabinet secretary to three prime ministers, said Britain could lead the world by making wellbeing the goal of government policy.
The call to unseat growth as the main measure of government success comes as the Treasury gears up for a three-year spending review, due this summer, which has been scheduled despite the Brexit turmoil gripping the Tories.
Wellbeing is an amorphous thing. For example, Bhutan claims to be run on the basis of gross national happiness, something which involves banning tobacco. Many think that entirely right, many others don’t - so we’ve proof that a move to this more subjective measure is going to smuggle in some, well, subjective goals.
Such national wellbeing usually does include such subjective matters too. Most oft mentioned is “equality” as a goal to be pursued. By which is meant not that equality which we fully support, that of opportunity, but of outcome. It will be measure by the likes of the Gini, Theil and other such indices. That is, obviously, to smuggle into our definition of the good life entirely subjective definitions of what that good life constitutes.
Which is to end up with that crowning glory of GDP as a useful target or measure. It’s objective. It isn’t subject to varying interpretations, it’s a plain number that we can observe. Which is why, if we’re to have a measure of our success at all, it’s so useful. And presumably why those who are judged by it would prefer something else.
“Leaving? Didn’t know you’d started”
I think I’m leaving the Adam Smith Institute. But nobody leaves. Ever.
But Ananya, what do you mean nobody leaves? Ever? Is this a case of indentured servitude? Well, not quite.
Today is sadly my last day at the ASI. And unlike other people who have left their jobs today (ahem, Theresa May. Ahem, the goddamn First Lord of the Treasury herself) I have had a wonderful time.
What is most striking, yet perhaps also unsurprising, is that what you learn at the ASI, they really don’t teach you these things at school (hint - there isn’t actually a difference between port and policy). The gap year internship scheme run by the ASI is truly invaluable to those who have the opportunity to make the most out of the seemingly infinite cups of tea in the kitchen. Oh and also the radio shows. The newspapers for which you get to write. The MPs you get to wing woman. The news channels on which you get to appear. You get the drift.
Never would I have imagined that the highlights of my formative years would include dancing to Carly Rae Jepson from a rogue Spotify playlist at the ASI Christmas party and learning how to send 500 emails at once using fancy excel spreadsheets.
Some things, of course, will always remain a mystery. Like, why are paragraphs in op-eds always super short? Why does the franking machine have a personality of its own? And of course, why does the dishwasher always have an upset tummy? But this is where critical thinking skills come to play. The brains I got to pick, the minds I got to pirouette around, are one of the most brilliant in the world. Accordingly, I learned things I would have never come across or thought to consider - anyone lucky enough to have the same opportunity will undoubtedly experience the same.
The come down from the city slicking, tweed-clad lifestyle I’m sure will be an interesting one. The thought of sheer bewilderment on people’s faces when I joke about the argumentum ad temperantiam fallacy, or Smith’s Theory of Moral Sentiments for the 17th time will be undoubtedly be difficult to deal with at first, but I think I’ll just have to get used to it. And if there’s one thing that I’ve learnt during my gap year is that grit is an invaluable trait and bubbles are bad.
Madsen Pirie, President of the Adam Smith Institute, often says that “the question is not whether our gap year students are ready for the world, rather, whether the world is ready for them”. While I concede that Madsen is usually right about most things, if the world isn’t ready for a bespectacled, socially out of step, Viking enthusiast then the world probably better toughen up.
So toodles! Farewell! Hasta la vista! And I look forward to my retirement.
The bottle shock that shook the world of wine
An event that shook an industry and a country took place on May 24th, 1976. A British wine merchant organized a blind tasting in Paris between French and California wines. The judges were nine top French connoisseurs, plus the Englishman and an American. The California wines came out ahead of their French counterparts in every category, stunning the French, and even the English wine merchant, Steven Spurrier, who had hitherto only sold French wines.
For his efforts, Spurrier was banned by the French from their prestigious wine-tasting tour for a year. The tasting was initially ignored by the French press, but three months after it, Le Figaro published a sneering article to mock it, as did Le Monde after a further three months. But the story reverberated internationally, hugely boosting the developing New World wineries, and damaging the reputation of the French ones. The tasting became known as “The Judgement of Paris,” in a nod to Greek mythology.
There were follow-up tastings ten years later by the French Culinary Institute and the Wine Spectator. The American wines outscored the French in both. Spurrier organized am anniversary tasting 30 years after the 1976 one, with a similar result. As the Times reported, "Despite the French tasters, many of whom had taken part in the original tasting, 'expecting the downfall' of the American vineyards, they had to admit that the harmony of the Californian cabernets had beaten them again.”
The French has simply assumed that only France could produce wines of the finest quality, and had rested on their laurels as the New World vintners crept up and overtook them. Wine connoisseurs used to prattle snobbily about the “terroir” and the “minerality,” while the New World producers mastered the ability to produce consistently reliable quality wines. What in France had been an industry suffused in mystique became in the New World an industry reliant on technique.
It changed British habits. Wine drinkers, of which there were not many, had graduated from appallingly sweet fortified ‘port’ and ‘sherry’ types to appallingly sweet German wines with names like Blue Nun and Black Tower. Now they came increasingly to appreciate the drier varieties from the new producers, and began to order wines not by their vineyard, but by their country and grape type.
It typifies the ability of markets to punish backsliders. A producer who relies on their past, feeling comfortable in an established position, is always at risk from upstart newcomers who innovate and offer the public new things that resonate with them. The brands that dominate in one period often themselves become period pieces as new ones come to supplant them. It is one of the virtues of markets that they respond to changing public tastes. Monopolies, be they state or private, do not allow the public to shop elsewhere for better products and services, and are thus not agents of improvement. On the contrary, with captive consumers they will tend to deteriorate as producers capture them to serve their own interests instead of those of their customers. Modern day advocates of nationalization should take note of that.
We can answer Owen Jones' question
With respect to Philip Alston’s report for the UN on British poverty Owen Jones asks us the following:
How did Britain in 2019 – one of the wealthiest societies that has ever existed – end up being damned by a United Nations report for condemning the poor to lives that are “solitary, poor, nasty, brutish and short”?
The report was produced by using a propagandist who then ignored any actual evidence and thereby was able to paint that picture.
These are the words of the 17th-century philosopher Thomas Hobbes; another British literary great conjured up by Prof Philip Alston – the UN’s special rapporteur on extreme poverty and human rights, and a bete noir of our crumbling government – is Charles Dickens and his vivid description of the 19th-century workhouse now being brought back in “a digital and sanitised version”.
Anything like Dickensian poverty simply does not exist in Britain today. Henry Mayhew’s work on the London poor which did so much to inform Dickens - and others - should perhaps be read again for moderns to see what that poverty actually was.
Britain most certainly has inequality, some have much more than others. But actual poverty? Real destitution, that modal experience of humanity over the millennia? Absent significant addiction or mental health issues - even there the UK doing very much better than some other rich countries - it simply does not exist. As Barbara Castle pointed out back in 1959:
The poverty and unemployment which we came into existence to fight have been largely conquered
That’s how Britain is so described - by ignoring reality.
No to No-Platforming
Universities are institutions dedicated to academia, intellectual enlightenment and cutting-edge research. Such goals can only be achieved in a climate of free discourse, debate and disagreement. However, as of late, it has become clear that there is a growing prevalence of intolerance on university campuses, with student bodies campaigning against academics such as Noah Carl, as well as prominent public figures such as Milo Yiannopoulos. This has resulted in University faculties cancelling talks and fellowships, and promoting a policy of 'no platforming'; whereby individuals holding views deemed offensive or unacceptable are prevented from contributing to a public debate. The case for free speech has been made time and time again, but in the current climate, we would do well to reiterate such arguments in order to prevent the degeneration of our higher education system, which would be to the detriment of both students and society at large.
I am no fan of Milo; agent provocateur and internet antagonist that he is. His views on several issues are misplaced, and personal attacks on individuals such as Leslie Jones are cruel and unnecessary. Yet hypothetically speaking, even if his views were supported by no one other than himself, would we be justified in silencing such views? Shutting down ideas cannot be justified simply by reference to their complete lack of support. To think otherwise is to assume our own infallibility. To silence an argument is to pre-suppose its failings. Only the airing of such views, and their rigorous interrogation would truly discredit them. Vocalising such views would ensure that those opposed are forced to reiterate and refine their arguments against; arguments that wouldn’t be made if such views were simply silenced.
With reference to the current ‘no-platforming’ that is currently taking hold of university campuses, it is clear that this basic principle is being forgotten. It can certainly be shocking to hear radical, extreme views we haven’t been subject to before - but this is simply all the more reason to hear them. Not least because to make a rational, well-thought-out decision on important issues we have to hear all sides of the argument.
University can be one of the most informative times for individuals, and thus when students are formulating their views on a range of issues, across a wealth of disciplines, it is imperative they have the tools with which to do so. Any argument to the contrary resting on the idea that students should be protected is misplaced; university should widen horizons not narrow them. Universities should actively be inviting academics and intellects who possess radical views to discuss them. They should be at the forefront of questioning the boundaries of the Overton window. This may result in issues that are lacking in evidence or sound arguments being publicly undermined – e.g. racism – yet wouldn’t this be a refreshing change? Sunlight is the best disinfectant. From seeing speakers who possess these views spout uncontested drivel on the internet with no accountability, to challenging them critically on a public platform. Inviting such speakers would allow reason to hold them to account and undermine any legitimacy their authors claim to possess. Such evidently misconceived arguments will fall prey to sound logic and evidence in opposition, yet this would not be possible when such arguments, speakers or ideas are not given a platform with which they can be interrogated on.
A popular argument against letting prominent academics or personalities speak is that giving them a platform would legitimise their views, with negative consequences. Simply letting them speak – so the argument goes - with no ability to retort, rebut or question their argument provides a mechanism with which to spread unsound arguments and ideas. I have a degree of sympathy for this argument – yet there is an obvious solution. Rather than, or alongside, universities providing a platform from which to simply give a speech, universities should require speakers to partake in genuine discourse alongside other academics, personalities or students who possess a wide variety of views on the issue being discussed. The likely outcome is a desired one; people developing ideas, promoting well-reasoned thought while simultaneously questioning hidden assumptions and logical fallacies of faulty arguments, allowing students to hone their positions on interesting issues.
If students who are at the heart of this endemic backlash against free speech cannot get behind this policy, we should question why? Are they not willing to have their views questioned, probed and tested? Surely they wouldn’t want to give credence to that accusation and would vehemently deny it, ensuring they are held to the same standards as those they oppose. They should relish the opportunity to highlight the erroneous views of speakers they disagree with. Or so we hope. To do otherwise is to admit the weakness of their position. Inviting a plethora of speakers, with diametrically opposing views, in the format laid out above, would allow contentious issues to be discussed at length and examined rigorously.
This does admittedly only serve to eradicate de jure ‘no platforming’, and would do little to eradicate de facto ‘no platforming’ which results from the intimidation and social stigmatisation that proponents of radical views from all sides of the political spectrum are subject to (think Pankhurst, King and countless others). However, big changes all need to start somewhere. Ending ‘no-platforming’ would be that start. A penchant for ignorance over knowledge shouldn’t be defended, least of all by institutions dedicated to the pursuit of such knowledge.
The Wealth Explosion: The Nature and Origins of Modernity by Dr Stephen Davies, a review.
Throughout human history, the Industrial Revolution stands out somewhat. From millions of years of subsistence existence, a few thousand of basic civilisation with widespread poverty, suddenly an explosion of wealth that at first glance comes from nowhere. It is economic history’s ultimate child prodigy.
As a person, it would be the woollen jumper-clad, floppy-haired and bespectacled young individual who single-handedly makes Esperanto the world’s mother tongue, builds a time machine and solves Brexit all in the same evening. Or at least we think - time travel, remember.
Dr Stephen Davies’ latest book examines how this bright young thing came to be and how it created what we call ‘modernity’. So, what is ‘modernity’? Davies attempts to provide some clarity.
He makes clear that one of the defining characteristics of modernity is innovation, a familiar echo of the ideas espoused by the likes of economic historian Deirdre McCloskey. Nonetheless, he is quick to point out that while McCloskey claims it was a culture of entrepreneurship that brought about the Industrial Revolution, such high regard for business was not exclusive to 18th century Britain.
Exclusivity to 18th century Britain is a natural line of inquiry for anyone reading about this phenomenon and most history books on this topic are based on the question of why Britain and why the late 18th century.
His focus on the ruling class makes clear and reminds us that for most of history, those who ‘gain resources through predation of various kinds’ often rule over those who ‘gain resources through production or trade’. This distinction is seminal to the whole book.
Throughout human history, the Industrial Revolution stands out somewhat. From millions of years of subsistence existence, a few thousand of basic civilisation with widespread poverty, suddenly an explosion of wealth that at first glance comes from nowhere. It is economic history’s ultimate child prodigy.
As a person, it would be the woollen jumper-clad, floppy-haired and bespectacled young individual who single-handedly makes Esperanto the world’s mother tongue, builds a time machine and solves Brexit all in the same evening. Or at least we think - time travel, remember.
Dr Stephen Davies’ latest book examines how this bright young thing came to be and how it created what we call ‘modernity’. So, what is ‘modernity’? Davies attempts to provide some clarity.
He makes clear that one of the defining characteristics of modernity is innovation, a familiar echo of the ideas espoused by the likes of economic historian Deirdre McCloskey. Nonetheless, he is quick to point out that while McCloskey claims it was a culture of entrepreneurship that brought about the Industrial Revolution, such high regard for business was not exclusive to 18th century Britain.
Exclusivity to 18th century Britain is a natural line of inquiry for anyone reading about this phenomenon and most history books on this topic are based on the question of why Britain and why the late 18th century.
His focus on the ruling class makes clear and reminds us that for most of history, those who ‘gain resources through predation of various kinds’ often rule over those who ‘gain resources through production or trade’. This distinction is seminal to the whole book.
Necessary, but not sufficient.
It is not an easy task to get one’s head around one of the most important historical phenomena in history, but by using the idea of the nuclear reactor The Wealth Explosion provides a rather accurate analogy.
Only once there is enough fuel will a chain reaction occur, and control rods exist within to manage the rate of reaction. This analogy can be extended to the Industrial Revolution insofar as fuels are the contributing factors, and the control rods are the various ‘checks’ which prevent sustained economic growth, a key tenet of the Industrial Revolution. But unlike a nuclear reactor, removing ‘control rods’ would not result in a nuclear meltdown. Instead, we would experience sustained economic growth which would be, well, rather nice actually. The reason why sustained economic growth was able to continue unchecked was because 18th century England did not suffer from these ‘checks’ that similar societies with the necessary conditions did.
You may be thinking, isn’t this tautological - surely sustained growth means there were no countervailing forces? While it is easy to think that the way things happened was the way they had to happen or at least that the actual outcome was the overwhelmingly likely one, this is not the case. Once we put aside metaphysical caveats, we realise that ‘what ifs’ are a large part of what history is all about.
What if other societies in another part of the world, at a different period in history, had the necessary conditions for sustained economic growth and at least started to make the revolutionary progress we did in the 18th century? Davies makes some claims of the necessary conditions (uranium in the nuclear reactor for example) that are required for a society to become something like the modern economy we have today. Among these are a sufficiently large population and density in a significant part of the planet, a system of trade and division of labour that covered a large enough portion of the planet, and a population with an integrated economic activity in that area.
Nonetheless, this is not sufficient. Strikingly, this is illustrated by the problematic case of 13th century Song China which, according to current historical evidence, was not so different from 18th century Britain.
Song China - a sweet, sweet tune.
12th century Song China had surprisingly sustained economic growth. Agricultural output more than doubled from 96 to 1260, surviving restaurant menus offered a wide range of cuisine. This was bolstered by peasants being given full property rights (including the right of sale) by the previous Taizu and Taizong rulers leading to specialisation in producing various cash crops and even eventual commercialisation of agriculture.
It was a monetised economy based on markets rather than subsistence, taxes were paid in money rather than forced labour. The number of coins minted per year went up more than sevenfold in 88 years and, since this was not accompanied by inflation, the assumption is that it was matched by an impressive increase in production.
Song China had rapid and sustained technological innovation (e.g. mechanical spinning of silk and an advanced windmill) centuries before the 18th century. Most remarkable was the scale of manufacturing; as early as 1078 China produced on average at least 127,000 tonnes of iron per year, a level that would not be reached anywhere else until 18th century Britain.
Internal and external trade was both extensive and intensive; the lifting of internal controls brought about economic integration and made it the largest market in the world at the time. Chinese merchants’ supreme naval fleets (mostly privately owned) were sophisticated well beyond anything in the world for several hundred years, which led to trade as far as Africa, India and the Middle East.
All this was made possible due to the fact that by 1190, the population of China was 73 million and urbanisation was rapid and extensive. More people meant more innovation, production and wealth, rather than just more mouths to feed.
Get checked, get rekt.
Why did this fail to continue in the long term? Davies explains that certain checks prevented the revolution of modernity. Confucianism's unmeritocratic, hierarchical limitations on social organisation, the lack of access to energy to fuel mechanisation and the worldwide slump in economic activity in the 14th century are reasons put forward by economic historians for the lack of progress. Another (rather unconvincing argument) is that Song China had reached a ‘high equilibrium trap’ where supply met demand and there was no incentive for further innovation. This would have been only likely for a small sliver of time from the 14th to the 18th century.
The most plausible, however, is that it was the invasion of the Mongols by Genghis Khan in c. 1205. This scarred the society in a material and psychological way. The entire way of life including the rapid and extensive growth of Song China was associated with defeat and a new set of rulers took power which sadly halted growth.
The Military Revolution and The European Divergence.
Perhaps surprisingly, Davies argues that it was the 16th century military revolution that changed international relations catalytically to produce the revolutionary growth of the 18th century. ‘Gunpowder’ empires, the increasing use of infantry, artillery, and decline of cavalry led to powerful empires and military powerhouses.
Hegemonic powers such as the Ottoman, Chinese, and Russian empires didn’t exist in Europe. The Habsburgs failed, the French started warring over religion and the Dutch revolted. No country in Europe gained a decisive advantage early enough so, through competition, the powers were broadly balanced.
Therefore, in Europe, the ruling classes were incentivised to acquire greater resources. Consequently, these states now had a powerful incentive to actually encourage innovation which was bolstered by the citizenry who benefitted from the increase in innovation.
In the 18th century the changing of incentives (to win wars and emerge victorious from conflicts with other ruling classes), as well as the looming Malthusian conundrum, encouraged - or at least allowed - innovation. Davies argues: ‘simultaneously powerful social interests that gained from innovation were able to win the intense political conflicts that this caused and so the process was not aborted but sustained’.
Other arguments for the supposed ‘European exceptionalism’ include slavery and institutional factors from the Glorious Revolution of 1688 which were conducive toward innovation. The former can be debunked by the fact that no more than 10 per cent of the capital invested in early industry came from the slave trade, trade with India was more important as a source of capital and most profits came from saved profits via domestic agriculture. The latter is an insufficient explanation since most of the institutions mentioned in the analysis have been around for hundreds of years prior. Such explanations are used more as political weapons for the left and right, respectively.
Are we still living in Western Civilisation?
Davies posits a question which is both relevant in the sweeping culture wars between the left and right and the more academic areas of philosophy, theology and, of course, history. Despite its fairly academic nature, The Wealth Explosion is highly relevant to the cultural debates which often litter contemporary magazines about western civilisation and its supposed ‘Judeo-Christian values’, sadly often equivocated with modernity.
Indeed, the world today may be profoundly different from the way it has been for most of recorded history but does this amount to another civilisation, starkly different to the world before the Enlightenment? Progress as we understand it in the context of modernity evidently does not necessitate religious values but that doesn’t mean modernity has brought with it an inescapable Faustian pact, as Davies points out. Though there are some inescapable costs.
It is a testament to Davies’ intellectual honesty that he concedes some forms of human good and excellence are lost forever as a result of the modern world and its nature, much unlike many contemporary optimists such as Steven Pinker.
Is modernity fundamentally incompatible with human nature? Some, such as those subscribers to the Olduvai Hypothesis (which argues that the conditions of life for humans will revert to what they have been for most of human history) take the extreme view that it does indeed. There is always the possibility that it will, but the exciting thing about history - and economic history in particular - is that we are are the subject of our own study. So it is up to us to continue the promising trajectory and welcome modernity wherever it may lead us, albeit with a pinch of salt.
Socialism’s Great Leap Forward
One of the greatest tragedies of modern times began on May 23rd 1958, when Mao Zedong, Chairman of the People’s Republic of China, launched the Great Leap Forward. It was meant to turn China rapidly into a modern industrialized state. Instead it saw the production of much relatively worthless pig-iron and a drastic decline in agricultural output that precipitated a famine that killed millions. The lowest estimate is of 18 million deaths, but many, including Chinese historians, put it closer to 60 million.
The move was implemented by coercion. Peasant farmers were forced into collectives, while vast resources were diverted from agriculture to industrial operations. Peasants were forced to attend lengthy political meetings, and many were beaten into submission by zealous party cadres. Everyone competed to lie about production in order to please party bosses, with collectives sometimes quoting figures that were ten times those actually achieved. Believing the figures, central planners ordered more food diverted to the cities, leaving the rural population to starve.
To achieve the target for steel production, Mao ordered “backyard furnaces” into production. To fuel them, localities were stripped of trees, and wood from peasants’ doors and furniture was used. Agricultural implements were used as scrap metal to go into them, as were the pots and pans people used to prepare food with. As with food production, there was a mass cult of lying about steel production, with regional leaders telling the central rulers what they wanted to hear.
To instill revolutionary fervor into the masses, their local lifestyle was banned, derided as “feudalism.” Traditional ceremonies such as weddings, funerals, local markets and festivals were banned, replaced by party meetings and indoctrination sessions. Much that gave meaning to life in rural China was ruthlessly expunged. Many agricultural workers were diverted to steel production, as were those in many factories, schools and hospitals.
The violence intensified over time, as malnourished workers had to be forced to work punishing hours in the fields. Those who failed to meet standards were ritually humiliated or beaten. Many were simply murdered by being buried alive or thrown into ponds and rivers. Some estimates by historians suggest that, in addition to the deaths from starvation, at least 2.5 million people were beaten or tortured to death and one million to three million committed suicide.
The Great Leap Forward into socialism was in practice a great leap backward, as both agricultural and industrial output declined dramatically. Mao’s power within the party was diminished, and only reasserted in 1966 when he initiated his Cultural Revolution, a second tragedy in which millions more died. China’s agriculture and industry only accelerated after Mao’s death and the imprisonment of the Gang of Four by Deng Xiaoping. Deng’s abandonment of the collective farms and introduction of free markets and enterprise into the economy rapidly achieved in practice what socialism had failed to deliver. That so many lives were destroyed or blighted before the lesson could be learned was a tragedy for China and a lesson to the world.
If you tax everyone, send all the money through a bureaucracy, then....
…then you seem to get less of the output that you were originally trying to engineer in the first place. Leading to the conclusion that perhaps government and bureaucracy aren’t the answer to every problem:
Apprenticeships are falling despite the Government’s introduction of a new levy, the Public Accounts Committee has found. The number of apprenticeship starts dropped by 26 per cent after the apprenticeship levy was introduced, the report said.
In the 2017/18 academic year, there were 375,800 apprenticeship starts, compared to 509,400 in 2015/16, the last full year before the apprenticeship levy was introduced.
The apprenticeship levy forces companies with a wage bill of more than £3 billion to pay 0.5 per cent of it to the Education and Skills Funding Agency (ESFA), which is part of the Department for Education (DfE).
The companies have until April 2019 to draw down the funding, which they must use to take on new apprentices, or train existing staff.
The DfE has failed to make the progress it predicted when it reformed the apprenticeships programme two years ago, according to the PAC report.
It didn’t work under the first set of bureaucratic rules, it didn’t work under the second set of bureaucratic rules as reformed. Perhaps the problem is with bureaucracy and tax as a solution?
Which is to ask Thomas Sowell’s question again. “Compared to what?”
Perhaps it is true that there are insufficient apprenticeships in the country. This might be the manner in which all the Technical Colleges, which used to do the day release schemes, are now universities doing full time grievance studies courses. It is, theoretically at least, possible that the helping hand of government has been giving insufficient bureaucratic support to the endeavour to train Britain’s young.
Once you’ve stopped laughing at the back there we might just try observing reality. More government here has led to a worse outcome. The solution therefore is to have less of that government.
We’re often accused of having a slash and burn approach to government itself which is fair enough for we do have a distaste for it as an institution. Sometimes it’s necessary and we’ll put up with that. But we do also insist that the other side of the idea be given more of a hearing. Sometimes - often - government just isn’t the manner of gaining the end goal. Assuming that the goal isn’t just more government. Thus there are myriad tasks and problems we shouldn’t apply the government solution to. This apparently including how to teach the young of the nation to do something useful.
That is, the Telegraph article should read “Apprenticeships are falling because of the Government’s introduction…”