A quick reaction to "Foundations"

Trams ideology

Back on the scene, I will just jot down my first reactions to “Foundations”, an important new essay by Sam Bowman and coauthors on the fix for Britain’s growth malaise. I am a big fan of Sam, who is providing some much-needed new thinking.

• You should definitely go read it. It’s great to see some new ideas finally coming out of, and about, the UK. One of the more depressing moments of my political life is listening to Theresa May at a local Conservative gathering, arguing correctly that Corbyn’s Labour had revived the bad ideas of the 1970s, and concluding triumphantly “and to defeat them, we need to make the arguments of the 1980s again!”

• In particular, what’s our take on the New Industrial Policy coming out of Biden’s America? Does Britain have the same problems? If so, can we use the same solutions?

The basic argument of the essay is that Britain needs to build more and better infrastructure: housing, roads, transport and (perhaps above all) power. We haven’t built this because we have effectively “banned” it by overregulation, including green belts, overburdensome environmental impact assessments, etc. Without this, the private sector could provide our infrastructure as it did in 18th, 19th and early 20th centuries.

• There’s lots of interesting history here, of housing, electrification and power. It’s a good example of how history can broaden our perspective on the space of possibilities, and the focus of the history also shows what they are paying attention to. In that sense at least the New Industrial Policy is winning already.

• There’s also just a lot of amazing, convincing and depressing stats about just how expensive it is to build stuff in the UK. Figures like ten times higher costs to build a mile of underground rail than Spain. Nuclear power costs five times higher than South Korea.

• Why not public investment? Singapore does it for housing, right? France does it for trains? I mean, by instinct I prefer private investment too, but why? The obvious answer is that public investment won’t respond to price signals. In fact, they make this case for some examples, like for public housing being built in the wrong places. In other cases, they seem keener on local governments being able to invest and having the right incentives so long as they’re allowed to keep more of the surplus.

• So you might think of this as an evolution of Conservative thinking, from “governments should get out of the way” — the basic instinct of the neoliberal era — to “governments should be able to keep the profits from their investments”.

• Now of course on some views this is quite hard to distinguish from corruption. It’s interesting that one historical example they use is turnpike roads. The deal with building a turnpike road in the 18th century was that you had to buy off the local MP to introduce a private member’s bill. That provided a way to internalize local people’s concerns in the decision to build, sure; it also provided a way for the local MP to get rich.

• I would think there’s a reasonable case that if local authorities could profit from housing, they would internalize the benefits of building more. They’re right that at the moment, private developers keep all the profit from housing developments, and this unsurprisingly leads to intense local opposition. Elsewhere, Sam’s made a clever argument for hyperlocal control over planning decisions, which I think relates to my idea of Coaservatism.

• I basically buy their diagnosis: slow growth 1945-1979, recovery 1979-2008, failure since then. OK, so some of the problems they describe, like the planning system, have been there since the 1950s. So why didn’t they stop us growing fast in the 1980s to 2000s?

• Think of this essay as in opposition to two alternative perspectives. One is the ideas that grew in the 1970s of “small is beautiful”, concern for the environment limiting grandiose modernist projects, beware “seeing like a state”, etc. The emerging consensus seems to be that these concerns became overweening and are now strangling our future in red tape. If these new ideas will win, which seems likely because they have a lot of idealism and energy behind them, it will be the death of the Small Is Beautiful era.

• The other rival perspective is place-based development. Because really the perspective here — especially with housing and transport — is about letting people move to growth by having more building in successful cities. So for the past 20 years policy-makers have been trying to turn unsuccessful places into successful ones. There’s always been an alternative perspective which is that you should just let people move to the successful places. These guys mostly embrace that and although there’s an emphasis on big infrastructure projects, their point is to enable growth in the rest of the economy, not (say) as a boondoggle which might anchor development in a local area. I think place-based development will die harder than small is beautiful, because people are attached to their local area and no matter how many people move to London, there are still going to be people left in e.g. the Northeast who vote and who want their local economy not to be left in the dumps. So there’s a question of whether the ideas here can provide not only growth, but relatively well-distributed growth.

• I think the evidence is strong that environmental concerns and NIMBYism can kill growth. And yet and yet, Britain is a very crowded country with a lot of beautiful and vulnerable countryside. We aren’t like the US, which I basically think of as a big box full of desert where you might as well build a new city. Regulation and NIMBYism exist for a reason.

• To give a concrete example of this. A few years ago Norwich council wanted to sell off Train Wood for development. Train Wood is a piece of woodland that was once a railway siding and which juts right into the centre of town. There’s a lot of local affection for it, and people got together and lobbied against the development. As a result I and many others can still walk our dogs along the river bank there. I think from a YIMBY perspective, Friends of Train Wood are probably baddies who kept housing expensive. I mean maybe so, but don’t tell me that the gains from having a nice piece of quasi-countryside in the centre of town are zero, and also those gains are not easily represented on any balance sheet. This is why I like the Coasean perspective, which focuses on enabling efficient bargaining, more than a simple “burn all the regulations” approach.

Last of all a political question:

• Will this be seen as “too Conservative” for the new Labour government? These guys recognizably come from a right-wing perspective, but they aren’t, I think, party hacks, so could they sugar the pill a bit by emphasizing the connection with Labour themes — like the National government of the 1930s, which built a lot of housing including a lot of council houses? The Starmer administration is quite growth-oriented, so there is a potentially receptive audience.

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If you liked this, you might enjoy my book Wyclif’s Dust: Western Cultures from the Printing Press to the Present. It’s available from Amazon, and you can read more about it here.

I also write Lapwing, a more intimate newsletter about my family history.