Britain's Brexit paralysis

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Brexit Growth Innovation Productivity Science UnPacked

Peter Franklin

March 14, 2019 4 mins

On Monday, James Kirkup asked what would be happening in British politics if Remain had won. Part of his answer was that, without Brexit, the Conservative Party would have had the opportunity to think about an “economic model that would work better for Leave-voters and their communities”. With the Conservatives “fixating on Brexit”, issues like “industrial policy, regional policy, skills, training, social mobility and the concerns and status of non-graduates” have been “largely ignored”.

What if Remain had won?

By James Kirkup

It’s hard to argue with that, except on one crucial point: Brexit may be the context within which these issues are ignored, but it is not an adequate excuse. Indeed, Brexit should be an inducement to think deeply about the country we want to become and its place in the world.

As we know, the process of exiting the EU is immensely complicated in itself and further complicated by the short-sighted self-interest of the various Parliamentary factions. But compare Brexit to what Britain faced during the Second World War – or rather don’t, because there is no comparison. Three-quarters of a century ago, we were locked in an existential struggle for civilisation (and I hope that even the most fevered Brexit-obsessive would not claim that today).

Nevertheless, as bombs were still raining down on London, there were enormously consequential efforts being made in Whitehall to prepare for peace. The great public policy thinkers of the time – most famously, William Beveridge – were laying the foundations of the post-war welfare state. In fact, key pieces of legislation, such as Rab Butler’s 1944 Education Act, were passed during the war.

Whatever the mistakes they made, no one can accuse the reformers of that generation of thinking too small. What they authored wasn’t just a series of reforms, but the blueprint of a post-war settlement that lasted for decades.

Their present-day successors are paralysed not by Brexit, but by a political culture in which consequential policy-making is centralised in Downing Street (and the Treasury) and fully subordinated to the ultra-short-term priorities of news management. A monomaniacal focus on ‘the narrative’ leaves little room for anything else, and if reform is pursued by ministers outside the inner circle, it is despite not because of the system – with any momentum lost as soon as the reformers are moved on or out.

This is a state of affairs that long pre-dates Brexit. One only has to look at the record of the five-year-long Coalition government or the 13 years of New Labour before that. Up until 2008, it was all about pumping more money into public services, and afterwards about managing the consequences of the financial crisis. In both phases, the underlying weaknesses of our economic and social structures were largely ignored – as they continue to be.

This week, Dominic Cummings, who served as campaign director of Vote Leave, published a blog post. It didn’t attract the attention it deserved because it wasn’t directly about Brexit – but merely concerned with the most important economic issue of our time.

That, by the way, is the diminishing returns of the investment we put into science and technology. The reason why this matters so much is that innovation is what drives improvements in economic productivity and therefore growth, wages and our general prosperity.

Cummings builds his comments around two recent pieces of research, one of which, by Michael Nielsen and Patrick Collison, I unpacked here. Writing about their work for the Atlantic, Nielsen and Collison don’t pull any punches:

“Productivity growth is a sign of an economically healthy society, one continually producing ideas that improve its ability to generate wealth. The bad news is that U.S. productivity growth is way down. It’s been dropping since the 1950s, when it was roughly six times higher than today. That means we see about as much change over a decade today as we saw in 18 months in the 1950s.”

Why we need to concentrate on science

By Peter Franklin

Cummings quotes another troubling statistic: while there are now 18 times more people working on transistor-related research than in 1971, the rate at which computers become more powerful (as described by Moore’s law) is, at best, holding steady. It’s a pattern that can be seen across many fields of research: more and more brains are required to maintain progress.

While the growing number of people involved in making each new discovery is taken as an indicator of declining productivity, it might also be part of the explanation. Cummings directs us to a paper in Nature by Lingfei Wu, Dashun Wang and James A Evans:

“One of the most universal trends in science and technology today is the growth of large teams in all areas, as solitary researchers and small teams diminish in prevalence.”

The authors investigate whether team size matters and find that it does:

“…we analyse more than 65 million papers, patents and software products that span the period 1954–2014, and demonstrate that across this period smaller teams have tended to disrupt science and technology with new ideas and opportunities, whereas larger teams have tended to develop existing ones.”

In other words, the tendency is for large teams to produce small advances in what is already known, and for small teams to produce the breakthroughs. There are many reasons why small teams tend to strike out in interesting new directions. For a start, fewer people need to be persuaded to take the necessary risks. Furthermore, if the risk fails to pay off, the embarrassment is contained. The upside (i.e. making a breakthrough) is big, while the downside (i.e. sending a few people off on a wild goose chase) is small.

Large teams, however, have more to lose. The larger the team, the greater the body of managers required to organise it and thus the more powerful the vested interest in maintaining institutional continuity (i.e. jobs for bureaucrats). It’s much safer for them to direct resources to tried-and-tested, if not especially exciting, avenues of research.

It’s not that gradual progress along these established avenues isn’t important, but we also need a research effort that can open up new ones. Which is why Wu and his colleagues say that “science policies should aim to support a diversity of team sizes”.

This is just a single aspect of the great productivity challenge of our time, but one that could be readily fixed by diversifying public investment in science and technology. Unfortunately, the government bureaucracies that ultimately make those decisions are themselves ‘large teams’ and thus prone to the same vices of risk-avoidance and self-preservation.

In the 20 years I’ve spent working in policy units, think tanks, government departments and new media, I can say without any doubt that all the genuine innovation I’ve ever encountered has come from small teams. And every time the products of that work have been ignored, diluted or suppressed, it’s always the doing of a bigger, more bureaucratic, system.

What Dominic Cummings says about science policy applies across the board:

“The politicians and officials don’t care so there is no force to push sensible experiments with new ideas. Almost all ‘reform’ from the central bureaucracy pushes in the direction of more power for the central bureaucracy, not fixing problems.”

Many people hope that Brexit will loosen the hold of Europe on our development as a nation. But unless we tackle the forces of inertia at home, it will be thoroughly pointless.

A system that does not empower change-makers will not achieve change.