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The real crisis behind British workers’ low productivity

Spurious figures based on outdated measures are still published, causing regular bouts of national gloom.

Britain, we are told, has a “productivity crisis”: our workers take five days to produce what a French worker produces in four. The real crisis, however, is among economists and statisticians who don’t have a clue how to measure productivity in post-industrial societies.

When manufacturing dominated the economy, productivity was easy to measure. It went up as workers turned out more and better cars, bottles of Coke or novelty hats per hour. As service industries grow, offering less tangible benefits, measuring productivity becomes far trickier. In many such industries, the public perceives increased “productivity” – through, say, fewer shop assistants per customer or shorter care workers’ visits to vulnerable elderly people – as a decline in quality.

How are we supposed to measure productivity in arts, media, sport and entertainment? In nail bars and food home delivery services? In taxi services and gyms? In education, health and social care, whether provided by the public or private sectors?

To be fair, economists are trying to develop better ways of calculating productivity growth. Yet spurious figures, based on outdated measures, are still published, causing regular bouts of national gloom.

Wage inflation

Like most members of the management class, the University of Bath’s former vice-chancellor, Glynis Breakwell, who this week agreed to step down at the end of the academic year, does little to boost the nation’s productivity. Her annual remuneration of £468,000 has provoked justifiable anger among the university’s staff, many of them on short-term contracts. However, I am amused that politicians (such as Andrew Adonis) have joined the condemnation.

For several decades, governments of all parties have called for universities to become more efficient, more competitive, more “responsive” to “consumers” (students, that is), more target-driven, and more self-reliant through selling research and consultancy services to business. They were instructed to operate like private companies. Now that most universities are, as disgruntled academics describe it, “neoliberalised”, they have naturally imitated the culture of big companies, which pay chief executives high six-figure salaries as a matter of course.

Crimes against humanity

In the late 1990s, the New Statesman – of which I was then editor – and the magazine’s former columnist John Pilger opposed Nato’s intervention in the affairs of the former Yugoslavia, and Tony Blair’s active support for it. So did Seumas Milne, then a Guardian columnist, now a senior aide to Jeremy Corbyn. Corbyn himself was among the two dozen or so Labour MPs who regularly praised Pilger’s and Milne’s columns, and he signed an early day motion in parliament backing their stance.

In the wake of the International Criminal Tribunal’s conviction of Ratko Mladic, the former Bosnian Serb commander, on charges of genocide and crimes against humanity, should we all now repent?

No. As Yugoslavia fragmented, terrible crimes were committed on all sides. Nobody should doubt that Mladic committed atrocities. Yet we should remain sceptical about the extent to which Western intervention, with what Milne described as its “reckless disregard for civilian lives”, was justified. Bosnia and later Kosovo provided Blair’s gateway drug for the Iraq invasion. That has led to more misery and more grisly deaths than anything the awful Mladic did.

Take it to the Bridge

In London’s West End theatres, with their eye-watering prices, you often come away with a sense of having been ripped off.

You sit with your knees almost under your chin and your elbows pressed into your ribs. The actors are frequently inaudible and often invisible too. The bars are as crowded as Tube trains at rush hour. If you answer a call of nature at the interval, you’ll probably miss the rest of the play.

Not so at the capital’s newest theatre, the Bridge, which is the brainchild of the former National Theatre artistic director Nicholas Hytner. When I first saw its garish red signage on the south side of London’s Tower Bridge, I thought it was a Burger King. But when we watched its first production – Young Marx, co-authored by Richard Bean of One Man, Two Guvnors fame – we enjoyed spacious and comfortable seats, audible and visible actors, and a bar where you could swing not just a cat but a couple of tigers as well. The lavatories are more than adequate; my wife reported women forming queues before they realised that several cubicles were unoccupied.

I know West End theatres struggle with Victorian and Edwardian buildings. But it’s hard to believe they couldn’t learn a thing or two from their upstart rival.

Head for numbers

According to Andrew Strauss, the former Test captain who is now director of English cricket, Jonny Bairstow, the England wicketkeeper-batsman, headbutted (or, as Strauss prefers, “bumped heads with”) an Australian opponent in a night-club in Perth because “it’s something he does with his rugby mates”.

One is reminded of the actress Winona Ryder who, caught shoplifting, explained that she was researching for a part as a kleptomaniac. But it is true that, in his youth, Bairstow played rugby and, after England’s last disastrous tour of Australia in 2013-14, considered returning to it and giving up cricket. Moreover, a friend with experience of the rugby-playing community recalls a prop forward whose party trick was to shatter large ceramic ashtrays with his head and a leading French rugby club where prop forwards headbutted each other before every home game, sometimes needing stitches.

Strauss’s story has one flaw. Bairstow wasn’t a prop forward. He was a fly half, usually the most cerebral player in a rugby union team and the least likely to take risks with his head. 

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 30 November 2017 issue of the New Statesman, The most powerful man in the world

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Thatcher’s long shadow: has the “miserablist” left exaggerated her legacy?

A new book argues that Britain is far from the “neoliberal nightmare” decried by Corbynites.

In the archives of Newsweek magazine is a 2,000-word article credited to Margaret Thatcher, published in April 1992, and headlined “Don’t undo my work”. It is an amazing thing: a vulgar rendering of the basic argument of Francis Fukuyama’s The End of History and the Last Man, mixed with the pain of a once-powerful politician who now had precious little to do with her time, and outrage at the European Union’s Treaty of Maastricht. “I set out to destroy socialism because I felt it was at odds with the character of the people,” she wrote. “We were the first country in the world to roll back the frontiers of socialism, then roll forward the frontiers of freedom. We reclaimed our heritage.” In its final flourish, she refers to herself in the third person: “Thatcherism will live. It will live long after Thatcher has died, because we had the courage to restore the great principles and put them into practice, in keeping with the character of the people and the place of this country in the world.”

Up – or down – in the hereafter, what must she make of the strange point reached by the country she once ruled? Britain’s exit from the EU is an essentially Thatcherite project, which may yet result in the kind of laissez-faire dystopia she and her followers always wanted. But at the same time, we have seen something they thought they had ruled out for ever: the revival of an unapologetically socialist Labour Party, which is seemingly backed by a convincing majority of people under 40, and is possibly on the verge of taking power. Meanwhile, no end of wider developments – from the crises of such outsourcing giants as Carillion and Capita to mounting public unease about corporate tax avoidance – suggest that a sea-change is coming. Perhaps, in the midst of Brexit’s mess, we might be starting to wake up from what some people see as the 40-year nightmare of neoliberalism.

But what if Britain was never that neo-liberal, and there was not much of a nightmare in the first place? This is the argument attempted by Andrew Hindmoor, a professor of politics at Sheffield University. He wants to discredit an oft-told story: that “Margaret Thatcher’s election in 1979 marked the start of a still-continuing fall from political grace”, manifested in “dizzying levels of inequality, social decay [and]  rampant individualism”, and the surrender to free-market ideology of the Blair-Brown governments.

His contention is that “neoliberalism has had a surprisingly limited impact on our collective understandings of the world around us” – and that the realities of inequality, privatisation, and the shrinking of the state have not turned out to be as awful as some people think. He wants to nudge Corbynite readers away from the idea that the New Labour era represented a long period of political drought. Britain, in his reading, has obvious problems but is hardly the scene of a disaster – and the people he maligns as left-wing “miserablists” ought to recognise it.

At a time when polarised argument on social media has obscured the fact that politics is usually cast in shades of grey, his nuanced case ought to be welcome. Indeed, as a trigger for thinking deeply about what has happened in and to this country – particularly since the mid-1990s – the book just about does its job. Part of its argument is based on a familiar script, and a list of (mostly) undeniable New Labour achievements: “significant public expenditure increases, the introduction of tax credits, a minimum wage, devolution, and freedom of information”.

Hindmoor also eloquently sets out evidence that public opinion, in so far as it is measured by pollsters and academic researchers, is now more socially liberal than it has ever been, and also full of the kind of left-of-centre thinking (redistribution of wealth, nationalised utilities) that Thatcher thought she had expunged. From time to time, all this skirts close to the blindingly obvious, but it’s at least built on solid facts about the country’s recent history. Hindmoor’s problem comes when he pushes his arguments into much more contentious areas, and everything threatens to unravel.

Whether his points are always sincere or sometimes part of an academic thought experiment is unclear. Among his other arguments, he underplays the severity of post-2010 austerity by citing both slight increases in real terms in overall public spending, and the Conservatives’ failure to convincingly cut the deficit. But neither detracts from millions of people’s experience of cuts, whether through the NHS crisis or the savaging of services provided by local councils – something he half-acknowledges before dropping a real clanger. “The costs of austerity have not been loaded on to the poorest and most vulnerable,” he writes, which is most of the way to being absurd.

Elsewhere, Hindmoor claims that in education policy, “academisation [sic] is not a form of privatisation”, on the basis that schools run by independent trusts are funded by government and subject to Ofsted inspections. He apparently refuses to entertain the idea that if schools are snatched away from elected local authorities and put in the unaccountable hands of often questionable organisations (some of which are now in grave financial difficulties), something significant has happened. In an equally flimsy treatment of the health service, he says that there should be an argument “whether the contracting out of NHS services to private companies is… tantamount to privatisation”, which is some logical somersault to attempt. And he has almost nothing to say about what has happened to the benefits system, in which a once collectivist, benign set of institutions and arrangements has been replaced by a machine that represents individualism – or, if you prefer, neoliberalism – at its nastiest.

A section about inequality is stuffed with graphs and desiccated numbers that ought to strengthen his case, but end up adding to its weakness. “The UK is a country in which a significant redistribution of income still occurs,” Hindmoor says, which is true, but still leaves open the question of whether “significant” equates to “enough”. His evidence for an upbeat verdict largely rests on a rather laboured concept – also used by the Office for National Statistics – which includes basic public services in its definition of “final income”. The problem there is that you end up trying to make a positive case for the state of the country based on the continuing availability of free roads, schools and hospitals, which strikes me as an argument built on somewhat lowly aspirations.

His reliance on macroeconomic statistics, moreover, cuts him adrift from reality. Inequality is not just about numbers but people’s sense of opportunity, having a stake in the future and connection to the rest of the country. In the end, even Hindmoor does not seem convinced. “Inequality did rise significantly in the 1980s,” he writes. “Wealth inequality is growing. Social mobility is poor.” The abiding impression is of someone needlessly tying themselves in knots.

Does believing that Britain has been repeatedly pushed in the wrong direction over the last three decades make you a “miserablist”? Not at all. Like many others I think Thatcherism wrought damage that has never been healed, and that New Labour swallowed far too much of its legacy and set precedents for subsequent Conservative politicians. The invasion of Iraq was probably the single biggest policy disaster in post-war history, and compared to the hallowed Labour government of 1945-51, the Blair administrations’ institutional legacy – beyond Sure Start centres, which are now being closed at speed – was pitiful. At the same time, I well know that Blair and his colleagues improved the country in lots of ways, and it would perhaps be nice to go back to the halcyon period of 1997-2003. But that is now impossible, thanks to a range of watershed developments that point to the need for something very different.

Hindmoor’s text only briefly touches on them, but in case anyone hasn’t noticed: wages have been stagnating for more than a decade, near-zero interest rates have not triggered any surge in investment, unsecured private debt is at its highest level since the 2008 crash, and the idea that profit-making corporations are the answer to the modernisation of the state looks increasingly threadbare. Put another way, an era that began in the early 1980s may well be in its death throes, a realisation etched on to the upbeat faces of the people who now crowd into Jeremy Corbyn rallies, and rarely look like “miserablists”.

For many reasons, their politics is not really my thing, but I can see why their movement fits its time, in a way that this book’s glossing-over of deep political and economic failures does not. Its author should maybe bear in mind the closing lines of Thatcher’s Newsweek piece: “You always have people who take the soft option. The apparently easy way out is the way that gets you into deepest trouble. The lesson is, you don’t soften fundamental principles. You positively push them forward into the future.” 

John Harris writes for the Guardian

What’s Left Now? The History and Future of Social Democracy
Andrew Hindmoor
Oxford University Press, 285pp, £20

This article first appeared in the 15 February 2018 issue of the New Statesman, The polite extremist