We need a national renewal

Britain is not match fit for our age of global economic competition

Towering Columns

In The Times, Juliet Samuel says “engaging” with Beijing is no substitute for a proper industrial policy:

Unsurprisingly, trade is not driven by how many ministers you send to “engage” by mouthing platitudes at more powerful foreign potentates. It is about whether you make something someone needs at a good price. And if China wins the strategic competition with the US and the free world it will be because, despite all of its many problems, it is utterly focused on making things that are absolutely necessary for economies to function and it devotes proportionately fewer resources to consumer-market fripperies.

To be sure, there are major downsides, not least for the Chinese people, to Beijing’s maniacal focus on over-production and investment, whether it’s in steel, property or car batteries. But when it comes to installing 5G capacity for factories, automating production or building infrastructure that enables logistics to be enhanced by artificial intelligence (AI), China is firmly ahead. To Beijing, the race is not about who can build a phone that streams virtual reality pet videos faster but who can build an economy where everything from government surveillance to port construction is AI-enabled, more accurate and more efficient. As the US economic strategist David Goldman puts it: “China won’t beat us in chip tech for a long time, if ever. It doesn’t have to. It just has to produce chips fast enough to drive industrial [AI] apps.”

By contrast, the US and UK optimise their economies not for industry but for consumers, whether it’s in the way we auction spectrum to telecoms companies, regulate power prices to be lower for consumers, tax different investments or assign rights between households and businesses in the planning system. With startling regularity, the playing field is tipped away from manufacturing and towards consumption.

On his Substack, Rian Whitton says Europe rather than China may become the victim of US industrial policy:

The compact of the post-war period, often characterized as the liberal democratic order, rested on the U.S. allowing Germany and Japan to retain and rebuild their industries through access to the U.S. market. In return, these countries would forego geopolitical competition and accept being under the U.S. security umbrella. Similar compacts were made with resource-rich countries like Saudi Arabia. Countries like Britain and France, who were not occupied and had their own pretensions towards world power status, were ironically less well-placed in this American-led system. 

This order had one obvious casualty. The U.S. manufacturing base would have to compete with exports from jurisdictions with lower labor costs. Rather than remedy this when Japan and Germany recovered, the system was put into overdrive in 2000 with the opening up of trade to China. Global growth since 1945, to a large extent, has been determined by access to the U.S. consumer market.  This arrangement has become untenable, simply because export-led growth has turned China from an economic backwater into a scientific-industrial powerhouse that can seriously challenge U.S. geopolitical dominance. This is what is driving U.S. subsidies into its industry. But while aimed against China, U.S. industrial policy could more likely weaken its allies, particularly but not limited to Europe.

As an example, the U.S. has become increasingly worried about the Russian and Chinese export of nuclear reactors. It has stepped up efforts to help its primary reactor supplier Westinghouse sell reactors to Eastern Europe. This has included funding from the export-import bank and state agencies to Romania to help build nuclear plants with U.S. suppliers.

South Korea’s Kepco, another nuclear supplier, has built plants for under a third of the cost the U.S. has managed and is also courting potential clients in Eastern Europe. They are as a result being sued on technicalities by Westinghouse with the backing of the U.S. government. In trying to reassert its own technical leadership, American authorities are hampering allies, not opponents. The U.S. is in a difficult position. As it prepares for a multi-decade face-off against a capable opponent, it risks exacerbating stagnation amongst its allies. While the economic woes of Europe have more to do with bad domestic decisions than the White House, Gaullist criticism of undue American influence over European affairs could well become mainstream by the end of the decade.

In The Critic, Gavin Rice says a modern form of national service may help restore Britain to being a more “we” society:

The psychological evidence on the danger of aimlessness is abundant. Whilst our consumerist culture promotes the idolisation of “me”, with “my truth”, “my goals”, “my health”, “my career” and “my identity”, we lose our collective sense of “we”. The social scientist Robert Putnam, writing in the American context, drew together a swathe of economic and social evidence to show that America became both a more equal and a more culturally “we” society after the end of the Gilded Age, through the Progressive era and into the 1960s. This was a time of high growth, rising equality and increased American communitarianism, culminating in the “Ask not” speech. Following this, the combination of post-Sixties “I”-focused social liberalism and individualist economic philosophies pushed the country apart again. Could national service recapture in Britain that elusive spirit of “we”?

There are hazards. A civilian service implemented by the British state would run the risk of becoming a woke indoctrination exercise, with British youth taught to check their privilege and hate their history by low-grade community activists. This is not a problem with existing schemes, though, such as the Duke of Edinburgh award.

Depending on the model, the right material compensation for participants would help to ensure they enter university or the world of work with some savings. It might encourage people to make more informed choices about what education or employment to pursue next. The skills taught would need to be of practical use, though the main benefits would still be moral and social. As part of a wider national programme, there should be opportunities for older people to give back, too. Those who retired early during the pandemic could sign up to provide free community-based childcare, for example, or offer parenting classes, as already happens on a smaller scale through family hubs. A national service programme would need older adults to run it, of course.

A crucial distinction between conservative and libertarian stances on this question is the right of the state to ask a private person for a commitment of service. Conservatism, unlike Victorian liberalism, seeks a balance between the individual and the wellbeing of the community, especially the nation state that guarantees our freedoms. Whilst we all have rights, we have plenty of obligations that bind us even if they aren’t chosen — duties as citizens, as family members, as neighbours. We owe the safety and security from which we benefit to the wider national community and to those who have made sacrifices before us. Sometimes a push out the door is needed, too — I’d have hated to be made to do national service at 16 or 18, but in hindsight it would have done me a world of good. Liberty in a vacuum is often lost.

In The Telegraph, Martina Larkin says new technologies will help us make the online world safer:

We need to start by rethinking the technology much of today’s internet is built on. The current internet fuels the megalomania of big tech and the social media companies that seek to monetise individuals and their personal data. This – not regulation – is what erodes our civil liberties. It is written to get us hooked, to polarise and inflame, and to sell our attention for the highest price. If the consequence is a terrorist communicating freely, a child abuser planning their crimes uninterrupted, or a schoolgirl learning how to self-harm and even commit suicide, it is of little importance to these companies. And what’s worse, again and again platforms have failed to moderate themselves and adequately protect their users. 

We need a new model – an open internet where people are put first, not profit. This involves moving away from the closed and centralised “walled gardens” built by today’s social media companies, allowing them to hoard your data, use their algorithms against you, and keep you hooked to your phone. We need to adopt decentralised protocols that give users greater control over their online experience and how their data is used. 

Core to this new model are new innovative technologies, and one of them is a new open source internet protocol, the Decentralised Social Networking Protocol (DSNP), which is built in collaboration with partners around the world, that gives users ownership and control of their personal data and social graph. Social media apps built on this protocol give users control over their own data, including what they see, who they interact with and allowing them to transfer their followers and data to other platforms without losing access to their content. 

On UnHerd, Aris Roussinos revisits Robert Burton’s “Anatomy of Melancholy”, asking why depression seems to be gripping the UK:

[W]e could say the British state is, if not depressed, consumed by melancholy. Doom is sensed lying on the horizon but the exertion of will necessary to avert it is no longer seen as possible, or even desirable. The British state lies in bed staring at the ceiling, waiting for death. It cannot build houses, it cannot build railways; it cannot dig a hole in the ground and fill it with water; it cannot fix schools that are falling down. The simplest task is too difficult, and anyway, why even bother? There are always reasons to be found for why any exertion is pointless, why helplessness is sensible policy. No wonder, like children of a depressed parent, young Britons now yearn to flee the oppressive atmosphere of home. Yet Burton’s text, reissued for its 400th anniversary, reminds us that we have been here before.

Anatomy is most often read today as a pre-modern self-help book. Yet it contains within it, rarely-discussed, an astute reading of the nation’s political dysfunction that uncannily echoes the present. “Kingdoms, provinces and Politickal Bodies are subject in like manner to this disease,” says Burton, with the body politic exhibiting the same symptoms of what later writers would term “the English malady”. For where “you shall see many discontents, common grievances, complaints, poverty… cities decayed, base and poor towns… the people squalid, ugly, uncivil; that kingdom, that country, must needs be discontent, melancholy, hath a sick body, and had need to be reformed.”

Burton’s diagnosis is distressingly apt for modern Britain. According to ONS statistics, around one in six British adults suffered moderate to severe symptoms of depression last autumn, while 17% of British adults are taking antidepressants; but among those aged between 16 and 29, depression rates reach 28%, and for those under 24, up to 46%. Depression and anxiety are now the greatest drivers of long-term unemployment, and suicide is the single most common cause of death in young British men. Whatever the psychic wounds of postmodernity or social media, the most obvious cause is material: the insecurity built into Britain’s faltering economic model. Renters suffer depression at twice the rate of homeowners, while dwindling savings and growing debt strongly correspond with increased rates of mental distress, and homelessness is on the rise. The body politic and personal health are intertwined: Britain’s economic dysfunction is making people depressed, and deteriorating mental health is weighing down productivity. But how to reform such an unhappy polity?

Also on UnHerd, Wessie du Toit warns Britain may have more in common with South Africa, an increasingly failed state, than you might think:

The South African comparison also casts a revealing light on Britain’s social cleavages, though I am not talking about the kinds of ethnic tensions for which South Africa is infamous. It is true that the UK economy’s voracious appetite for immigration, an easy source of cheap labour and consumers, resembles South Africa’s habit of exploiting migrants from elsewhere in Africa. But one only has to look at the frequent anti-immigrant pogroms in South African townships to see that, for all the anxieties over integration, British society remains a relative picture of harmony.

The real issue is class. Brits often express shock that extreme inequality appears so normalised in South Africa, but an outsider to the UK could make a similar charge. In post-industrial Britain, working classes of all ethnicities are consigned to poverty wages in jobs such as cleaning, shelf-stacking and delivery driving, if they have not dropped out of the workforce altogether. London and its surrounding counties have become, like South Africa’s Western Cape, the luxurious facade Britain shows to the world; but other parts of the country are faring much worse, with healthy life expectancy trailing significantly in parts of Northern England, Scotland and Wales. Countless towns have fallen into abject poverty, regarded by polite society with little more concern than South African townships, their inhabitants ruled unfit for anything better by the very fact of remaining there. Social mobility, we are told this week, is at its worst in more than 50 years.

This wasted potential is tragic on its own terms, but it has wider ramifications, too. In South Africa, where 29 million people receive state welfare grants and only 7.4 million pay tax, the state is trapped in a doom-loop, with spending on social programmes hampering investment that could benefit the economy. But to look at projections for the British state’s ever-growing benefits, health care and social care bills, it seems we may be heading for a similar scenario.

Wonky Thinking

Onward published a new report, Great British National Service, looking to successful contemporary models such as France:

Young people are unhappy, unskilled and unmoored. Over one million people under 18 were referred to mental health services last year. Suicide rates amongst 15 to 19-year-olds are the highest in over 40 years. One in five 18 to 24-year-olds are economically inactive. The same age group is three times more likely to distrust their neighbour than the over 65s. Most young people (57%) say they are less patriotic than previous generations.

But there is cause for hope. Young people are the most likely to want to volunteer in their community: two-thirds of 18-34-year-olds say they want to help out in their area, ahead of half for 35-54-year-olds and around a third of people aged 55 or older. During the pandemic, three in four 16-24-year-olds were either already volunteering or wanting to volunteer to support the nation’s recovery. 

This is the motivation for revisiting national service. In the past, it served an important societal role. A study of Denmark’s draft lottery found it improved numeracy and literacy ten years after service, with the largest improvements for men with the lowest previous skill level. Studies of US college students who participated in military training and British army veterans found increased psychological resilience. 

Today, many other developed countries use civic national service initiatives to help grow and develop young people. France introduced its voluntary scheme, the Service Nationale Universel (SNU), in 2018 and the vast majority of participants say the experience gave them a greater sense of civic engagement and taught them new personal skills. Switzerland, the USA, and Germany also have national civic service schemes. New opinion polling commissioned by Onward shows that 57% of British people support national service versus 19% who oppose it. The most popular model included civil and military activities, with 53% more likely to support such a mixed programme. Crucially, three times as many young people support the idea than oppose it. But the majority of people oppose a mandatory scheme, including nearly two-thirds of young people.

For Works in Progress, Anya Martin presents a study of the success of Houston, Texas, and examines lessons Britain can learn from it:

Aside from the importance of setting up incentives well, Houston demonstrates a high degree of predictability and transparency in its planning decisions. It operates under what is called a ‘shall approve’ system; if something meets the requirements of the limited set of zoning-like rules in the Code of Ordinances, it will be automatically approved, and within a short timescale; as little as two months for a replat. These timescales are likely to be unachievable for discretionary-style systems. But there is a clear lesson for politicians and planners that these rules-based systems are not less palatable to the general public. Many fear that by removing endless opportunities for consultation and vetos, they will face backlash. But Houston deals out permissions quickly and predictably, and Houstonians have consistently rejected moves to full zoning via referendum, suggesting the status quo is not unpopular.  

Houston’s use of sunset clauses reveals a different understanding of the role of planning. Many see planning as being about finding the golden set of policies that maximise the goodness of a city – city-building games for real-life technocrats. But in reality, planning has always really been a process of negotiation between different interests, a fundamentally political process. By taking the technocratic understanding of planning, we assume that our policy decision should be permanent. But by understanding it as a political negotiation, we see it as more of a steady and changeable process of working out the best practical solutions to our spatial problems. 

For city authorities, another lesson is that you get what you plan for. Some, especially within the UK planning context, treat urban sprawl as something that developers inevitably push for, perhaps in response to public demand for car-centric lifestyles. But the Houston example shows that some of the most famously car-centric urban environments in the world are often a direct result of the planning policies imposed by local governments. Set large minimum lot sizes, open space requirements and parking requirements and you will get sprawl. Take them away and you get a much more natural pattern of development, with denser urban cores. 

For central governments, there is a lesson in ensuring that decision-making is made at the right level. The OECD has emphasised that land-use decision-making powers are best managed by metropolitan levels of government, rather than lower levels. This is because obstructive stakeholders are more likely to be able influence lower levels of government. But what Houston proves is that good land-use decisions can be made at lower levels, if they are low enough to generate the coordination opportunities discussed above. Houston’s limited rules are set at the metropolitan level through the Code of Ordinances, benefitting from a strategic citywide view, but also at block or small area levels, so that it doesn’t end up affecting the city as a whole – striking the best of both worlds.

Book of the Week

We recommend Danny Kruger’s new book, Covenant: The New Politics of Home, Neighbourhood and Nation, which argues that we must seek to restore the sources of virtue and belonging that underpin a good life:

There is nothing new in conservatism, though from time to time a new generation finds a fresh way to say the old things, perhaps with some discomfort for the generation which went before. In recent decades the familiar late-20th-century battle-cry against global communism and domestic socialism - and its early-21st century echo, exhorting the further march of liberalism at home and abroad - has been challenged by a different analysis and a different plan. We are witnessing a powerful popular and intellectual resurgence within conservatism, back to the fundamentals of the creed and forward to a meaningful engagement with the tech-driven challenges of the new century.

Today’s ‘new conservatives’ are less concerned with maximising opportunities for individual freedom than with shoring up the conditions which make freedom possible. These conditions are the institutions of social life: families, communities, nations, and the virtues that sustain them. We need to strengthen the economic, social and cultural forces that make good people. This represents a major challenge to the political orthodoxies of recent times. Yet the solutions to our difficulties lie in our history, and particularly in the history told by conservatives: the steady development and defence over centuries of the institutions which make the common life of the United Kingdom. And the eternal paradox of conservatism is that this deference to the past fits us for the future: a respect for institutions - and for the foundational institutions of family, community and nation most of all - is the best possible attitude with which to approach modernity. With this attitude we can make modernity safe and fruitful, respectful in its turn of the virtues and the institutions that we need.

I detect that across the old party divide which we still use to demarcate our allegiances, a bigger loyalty is growing. This loyalty is to what I call the ‘covenant’ on which Western politics is founded - a commitment to the relationships that exist in homes, neighbourhoods and nations. The covenant is threatened in this generation by a malignant growth within liberalism, which has already effectively killed that creed and is coming for the rest of us. Conservatives, communitarians, refugee liberals (those who actually believe in liberty), even socialists and anarchists all have a common cause: to defend the covenant, and restore the proper basis of freedom.

Quick links

Revised Government statistics showed the UK economy grew by nearly 2% more than was thought post-pandemic - though it remains behind the US, Japan and Italy.

A further 8% increase to the state pension will take the bill to £134bn per annum.

China unveiled the new Huawei phone in a major step forwards in its “tech war” with the US.

The Prime Minister has refused to offer new work visas as part of a future UK-India trade deal.

The UK will join the EU Horizon science funding programme under a new deal.

British bill payers may miss out on £1bn of savings from offshore wind after the Government set the administrative strike price too low.

Public sector net investment is set to fall from 3% to 2.1% of GDP.

The UK services sector shrank for the first time since January last month.

Sickness benefit claimants will be made to work if they can.

China will ban iPhones in government agencies.

Plans to ban gender transitioning in schools may be dropped.

Intergenerational mobility is not improving, and unearned sources of income now play a greater role.

Former Supreme Court Justice Jonathan Sumption said Britain should leave the ECHR.

The UK has the smallest average house size in Western Europe.

The new government of Niger has raised the price of Uranium - the country provides 25% of Europe’s supply.

Cambridge University is to end its relationship with a Chinese missiles company.

A dog trainer said American Bully XLs are a “mutant breed” and “too dangerous” - this week two killed 22 sheep.