As Adam Smith knew, the experts think they know best, but what do the people say?

The high-powered experts who make up the LSE’s growth commission have proposed a blueprint for reviving Britain. To achieve its goals, though, we’ll have to get rid of those blasted MPs and councillors. What say we?

What makes economies grow? You could say it is the oldest question in economics: the complete title of Adam Smith’s foundational work is An Inquiry into the Nature and Causes of the Wealth of Nations.

It took Smith nearly a thousand pages to set out his formula. This past week, an independent “growth commission” convened by the London School of Economics provided a modern answer – albeit for the UK only – in a mere 36 pages.

Not that the LSE’s commission’s report ever risked being superficial. Its authors include a Nobel Prizewinner, a former chief economist of the World Bank and the first woman to become a deputy governor of the Bank of England. And its attempt to prescribe “the institutions and policies that should underpin growth for the next 50 years” is timely. For the past four years, the policy debate in the UK has been dominated by the question of how to escape from the slump induced by the financial crisis, yet few would deny that the UK needs a long-term economic strategy as well as short-term tactics.

So what is the commission’s answer to the question of what Britain needs to do to reinvigorate its economy in the 21st century? It identifies three critical determinants of prosperity in which the UK is deficient and which policy should therefore cultivate: skills, infrastructure and innovation.

On one level this sounds like a statement of the bleeding obvious. Can you win a Nobel Prize for working out that it would be a good thing if the workforce was better educated, railways and roads got an upgrade, and if private companies spent more on research and development? Where do I apply?

But we should cut the report’s authors a bit of slack. Yes, it is unfortunate that economists’ theories of growth are formulated at such an Olympian level of abstraction that by themselves they generate only the most platitudinous of conclusions. For this very reason, however, the test of a body such as the LSE commission is whether it is brave enough to advocate more specific policies – and on this score, it does not disappoint. The constraints it has identified may not come as much of a surprise; but the solutions it proposes are more controversial.

In secondary education, the authors endorse the academy model of more autonomy and greater centralisation of funding and accountability for schools. They advocate the creation of a National Infrastructure Bank. On innovation, they back proposals for an allowance for corporate equity that would remove the existing tax incentives to finance businesses with debt, and thereby encourage risky start-ups for which equity funding is the only realistic option. These are serious policy proposals, backed by detailed argument; they deserve a serious hearing from the government.

Unfortunately, the commission makes a further, overarching recommendation – one that is not just controversial, but positively dangerous. How, it asks, did Britain get into this mess in the first place? Why did it lose its historical lead in skills, infrastructure and innovation? The ultimate answer, it says, is simple: the root of our problems is politics.

The trouble with Britain is that it allows elected politicians to make policy. Worse still, we allow local politicians a say in things such as planning and schools. And, to cap it all, we have an unfortunate habit of changing our minds and electing different parties every few years. The result is a chronically unstable environment for long-term investment. Public priorities never stay the same for long enough to get anything done, and the private sector is at the mercy of Nimbys and the political cycle.

So, if we want to make Britain grow again, we need not only to make the right policy choices, but to take those choices out of the hands of politicians. We need a “new insti­tutional architecture” that can “put politics in the right place”. Only then will we bid farewell to interminable “flip-flopping”, the inevitable harvest of “political bickering”. Economic policy will at last be in the capable hands of independent experts: an infrastructure planning commission to decide, say, where nuclear power stations should be built, and a national growth council to dispense an industrial strategy.

It is a seductive view of what constitutes economic progress – one that has bewitched well-meaning technocrats down the ages, from enlightened imperialists such as John Stuart Mill, who argued for a “government of leading-strings” for Britain’s colonial possessions, to the socialist planners charged with the instant industrialisation of the eastern bloc’s developmental nation states. If only the benighted people and their annoying representatives would get out of the way, the impartial experts could get on with modernising the country.

The reality is that policies made by unaccountable experts are unsustainable – because they do not reflect what the people want. Only a democratic process, however flawed, can do that.

The LSE commission’s report was published in the same week as it was announced that it will take 20 years to complete the High Speed 2 rail link, in large part because of the need to follow time-consuming planning procedures. Such is the price of a democratic economy. No doubt unelected bureaucrats handing down compulsory purchase orders could do the job in half the time. But policy would no longer be reflecting people’s interests; it would be reflecting what the experts say their interests are.

It is a critical distinction – and, as it happens, one of which Adam Smith’s Wealth of Nations remains the original exposition.

Felix Martin is a macroeconomist and bond investor. His book, “Money: the Unauthorised Biography”, will be published by the Bodley Head in June

Adam Smith. Image: Getty Images

Macroeconomist, bond trader and author of Money

This article first appeared in the 11 February 2013 issue of the New Statesman, Assange Alone

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A glossary of football’s most hackneyed phrases – and what they mean

This is the time of the season when we all get tired. Time to break out the cliches.

This is the time of the season when we all get tired. The players, poor petals, are exhausted. The refs have had enough of being shouted at. The hot-dog sellers are running out of hot dogs. And the TV commentators, bless ’em, are running out of clichés. So, between now and the end, look out for the following tired old phrases, well-worn adjectives and hackneyed descriptions, and do feel sorry for them. They know not what they are doing.

It will go right to the wire. In the case of the Prem, this isn’t even true. Leicester are as good as there. It is only true of the Championship, where three teams – Burnley, Middlesbrough and Brighton – are on 87 points each, with the fourth team miles away. Now that will go to the wire. The phrase comes from those pre-war reporters in the US who telegraphed their copy. When it didn’t get through, or they’d never filed it, being too lazy or too drunk, they would blame the technology and say, “It’s down to the wire.”

Dead men walking. This is when the pundits decide to hold a seance in the studio, taking advantage of Alan Shearer having sent us all to sleep. It also refers to Pellegrini of Man City and Hiddink of Chelsea. They have known for ages they’re dead parrots, not long for this life, with their successors lined up even while their bodies are still warm. I think a moment of silence is called for. “Dead men walking” refers only to football. Must not be used in connection with other activities, such as media. When someone is sacked on a newspaper, they immediately get sent home on gardening leave, just in case they manage to introduce a spot of subversion into the classified ads, such as: “Five underpants carefully kept; make up; red dungarees; offers considered, Kent.” (The first letters of each word give it away, tee hee.)

World class. The number-one phrase when they can’t think of any other synonyms for what was quite good. As well as goals, you now hear of world-class throw-ins, world-class goal kicks, world-class haircuts
and world-class pies in the press room at half-time, yum yum.

He’s got a hell of a left peg. That’s because he borrowed it from his mam when she was hanging out the washing.

He’s got it in his locker. The fool. Why did he leave his left peg there? No wonder he keeps falling over.

And the sub is stripped off, ready to come on. So it’s naked football now, is it?

Old-fashioned defending. There’s a whole lexicon to describe brutal tackles in which the defender kicks someone up in the air, straight to A&E.

Doing the dirty work/putting himself about/an agricultural tackle/left his calling card. Alternative clichés that every commentator has in his locker for when yet another world-class, manic, nasty, desperate physical assault is committed by a player at Sunderland, Newcastle and Norwich, currently scared shitless about going down and losing their three Bentleys.

Opened up his body. This is when an operation takes place on the field, such as open-heart surgery, to work out whether any Aston Villa player has got one. OK – it is, in fact, one of the weary commentator’s nicer compliments. He can’t actually describe what the striker did, as it was so quick, so clever, and he totally missed it, but he must have done something with his body, surely. Which isn’t even correct, either. You shoot with your feet.

Very much so. This is a period phrase, as popularised by Sir Alf Ramsey. He got it into his head he must talk proper, sound solemn, or at least like a trade union leader of the times, so instead of saying “yes” he would say “very much so”. It’s having a comeback. Listen to Glen Hoddle – I guarantee that between now and the end of the season he’ll say it ten times, whenever someone has interrupted and he wants to get back to the aperçu he was about to share with us.

Most unpredictable Premier season ever. Or so Sky is telling us, on the hour, meaning “since last season”, which was the most unpredictable one since, er, the season before that.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism