The Great Unger

The renowned Brazilian social philosopher and sometime politician, Roberto Mangabeira Unger, recently staged an interesting intervention in the UK's progressive discourse. In an essay in the New Statesman, he  combined the need to improve our poor productivity with a strategy of constitutional reform to preserve the Union: "The best reason for Brexit was always the desire for the United Kingdom to do something outside the European Union that would be harder to do inside it. ... The mounting restlessness of nations and regions within the UK suggests that the Union can be preserved only if these regions and nations begin to envision together a future that they cannot achieve apart. ... These apparently unconnected facts point in the same direction: to the need for a national project." His rationale for the linkage is that: "Without reforming the distribution of power between Britain’s central government and its nations and regions, any progressive agenda to reshape the economy is likely to lack the guidance that only decentralised trial and error can provide, and to be overwhelmed by the forces that are pulling the UK apart." 

This is a persuasive argument, though it's worth noting that the most credible route to such a national project - reforming the economy post-Brexit and preserving the union - would have been through the election of a Labour government in 2019. However, realistically this would have been undermined by its own MPs from day one. Even if Corbyn had been gently replaced by a more assertive and less divisive figure, the mild socialism of the manifesto would have been unacceptable to many of the PLP and their antagonistic attitude towards Scottish independence would have simply entrenched the constitutional stand-off. The SNP might have been persuaded to offset those defections in Parliament, but only by the promise of another independence referendum in a short enough timeframe to jeopardise the UK-wide project. In making his case, Unger is both outlining a programme of activist government that has little chance of coming about and hinting at what the failure of many British progressives to support Labour in 2019 has cost. Not surprisingly, those progressives have tended to react either grumpily or by suggesting that Unger's diagnosis merely confirms the rightness of their own beliefs.

The essay is accompanied by a number of responses from Britain's liberal (and liberal conservative) luminaries, which is notable for the mix of pessimism and platitudes. You'd expect the former from John Gray ("an overarching national project is unfeasible"), but it is also evident in the opinion of the Helen Thompson ("There are ... no alternative constitutional arrangements that are likely to keep Britain from breaking apart"). Andy Haldane, Jonathan Powell and Linda Colley respectively muster various arguments about the importance of the little platoons of civic and economic organisation, the need for bipartisanship to overcome political short-termism and promote common values, and the necessity of electoral reform to "forge the effective coalitions of the righteous and the reforming" (Colley even takes a swipe at party democracy, which she accuses of producing leaders who appeal to the membership's comfort zone, "rather than seeking out candidates possessed of high and proven competence and broad, potentially UK-wide appeal" - I wonder if she's seen the latest opinion polls). The overall tenor is one of polite derision for Unger's enthusiasm and scepticism that the UK might have anything to learn from Brazil.

Unger isn't arguing for federalism, which would encourage divergence for its own sake, but for regions to bid for bespoke powers from the centre: "one part of a country can bargain for much wider rights of divergence from the established rules and policies than other parts". This would be focused on building "a set of institutions and policies that create a basis for a rise in productivity and give the majority of ordinary Britons, especially the young, access to good jobs". I think his point about trial and error is a good one - we don't know for certain how best to increase productivity so experimentation makes sense - but I think regional devolution is the wrong way to go about doing this. The minor divergence of Scotland and Wales since devolution, which is as much the product of caution as constraint, also calls the value of a regional approach into question. Local government, where "best practice" tends to be more ideological (e.g. Barnet and Preston), might be a better level. That said, resource constraints mean there is a structural bias towards financial engineering (e.g. Northamptonshire and Croydon) and property  speculation (e.g. Liverpool). Any UK national project would have to start with the empowerment of local government, which in practice means that experimentation would be led by the left-leaning metropolitan cities, a good enough reason for the Tories to oppose it and another reminder of the missed opportunity of 2019.

His sensitivity to a more fine-grained empowerment is clear, even if it runs through the agency of the state: "The alternative order must seek both to protect and to empower ordinary people. It must provide a haven to the individual worker and citizen – a haven of safeguards against governmental and private oppression as well as of capability-assuring economic and educational endowments. But the individual should be safe and equipped in that haven so that all around him there can rage a storm of experiment and innovation". This haven has a number of aspects, from civil rights to educational access, but the core of it - the safeguard against "private oppression" - sounds a lot like a universal basic income. His reticence in using the term UBI probably owes something to the New Statesman audience's prejudices, but it perhaps also reflects a reluctance to draw parallels with Brazil's Fome Zero and Bolsa Familia programs, which have been framed by British media (when mentioned at all) as poverty relief rather than social security. There's a current willingness to consider the productivity benefits of partial homeworking, but the more radical idea that national productivity depends on generous social security is some way beyond the Overton Window.

Unger sees plenty of innovation in the UK economy, but largely confined to the margins. What distinguishes these "vanguards of production are practices – new ways of working and producing – rather than cutting-edge technologies". This is correct. Advanced technology is now ubiquitous, and new breakthroughs are quickly disseminated globally. The old idea of a technological monopoly, or at least first-mover advantage, no longer applies. This is why every major economy talks about native AI investment and why developing economies like India have space programmes. High valued-added economies are typically characterised by experimentation in working practices. China, for example, has invested heavily in technology and education over the last quarter of a century and seen rapid growth as a result, but it remains some way short of leading economies in terms of productivity because its working practices are still relatively underdeveloped. In the UK, one reason we have low productivity growth is the heavy bias to services in which poor working practices are offset by overtime and low wages. A true knowledge economy would have a larger manufacturing base.

Unger gets this, even if he does subscribe to a simplistic history: "Its once vaunted strengths in making things – cars, motorbikes, trains, planes and ships – have largely wasted away. ... The vast majority of activity in the UK’s service economy, meanwhile, remains confined to personal care, bricks-and-mortar retail, or 19th-century-style professions and trades, such as the plumbing, electrical, and building trades, disconnected from the front line of production." In fact, the UK has been predominantly a service economy since the late-19th century, and the preceding period of high industrialisation was historically unique: a combination of first-mover advantage and extensive empire. Calling plumbing and electrics "19th-century-style" is also bit odd, as both only really developed as significant employment sectors in the 20th century. He also subscribes to some popular myths: "Enhancing Britain’s productive apparatus requires dealing with two distinct realities: the uplift of the small and medium-size businesses that generate most of the country’s output and the majority of its jobs, and the reskilling of the part of the labour force that is precariously employed or self-employed, with tenuous or temporary links to companies". 

SMEs generate slightly more than half of the ouput and jobs in the economy, but this obscures that the bulk of that contribution comes from medium-sized firms (50-249 employees). It should also be recognised that many of those small businesses are really just auxiliaries to the medium-sized and large. Policy aimed at small employers and the self-employed is largely a waste of time. It is the success of medium and large businesses that fuels the prosperity of smaller ones (this is where trickle-down actually works). Small businesses are extremely inefficient in aggregate, so their growth as a sector (absent expansion elsewhere in the economy) leads to worsening productivity, and those with zero employees significantly overlap with the precariously-employed and self-employed. It's also not true to characterise the precariously-employed as lacking in skills. Many of them are poorly-paid graduates (and not because they studied the "wrong" subject or went to the "wrong" university). The more fundamental issue is that in a flexible labour market, employers are less likely to invest in apprenticeships, while outsourcing has led to a reliance on skilled temps in the wider gig economy (the point where these two realities intersect is the poorly-paid graduate tutor helping the children of the rich prepare for Oxbridge entrance). 

In his desire to encourage a more systematic approach, while avoiding too many direct parallels with Brazil, Unger uses the example of the state direction of agriculture, but in a more acceptable setting than Soviet-style collectivisation: "To raise up backward business and bring it closer to the frontier of the knowledge economy, the UK needs a 21st-century equivalent to 19th-century agricultural extension, as it evolved, for instance, in the United States. That system created family-scale farming with entrepreneurial characteristics – the most efficient agriculture that the world had ever seen." This ignores the dustbowl of the 1930s, caused by more intensive ploughing, not to mention the eventual decline of family-scale farming in favour of the large factory farms of today, with all their associated issues of poor product standards and animal welfare. You can see the relevance of this to Brazil, where agricultural extension has been a successful policy (if you ignore burning down the Amazon to plant soya) but it has little relevance to the UK, even as a metaphor.

For all his sometimes odd digressions, Unger does keep the larger economic picture in view and particularly its revolutionary reconfiguration of labour markets: "We cannot abolish by decree the arrangements that have emerged in the aftermath of the decline of industrial mass production: a system of outsourcing and subcontracting on a global scale. But we must not allow ­labour-market flexibility to serve as a pretext for the abandonment of the labour force to economic insecurity." But it's at this point that politics should intervene in the form of the question, Why can't we abolish it by decree? Those "arrangements" didn't arise spontaneously. They were the consequence of actual policy: the creation of institutions and regulations as well as deregulation. Unger pitches his prescription as "an approach to the supply side of the economy that will significantly moderate inequality in the distribution of economic advantage and opportunity. Without such supply-side reforms, the demand-oriented policies that have monopolised the attention of progressives – fairer taxation and generous social spending – fail to reach their goals." 

Given the history of neoliberalism in Europe, it is obviously incorrect to claim that progressives (including ostensible social democrats) have lacked a supply side agenda. New Labour was always stronger on this than the demand side, even in areas where public spending was the dominant issue, such as the NHS and education. Ultimately, Unger's prescription fails not just because the window of opportunity has been firmly shut by a Conservative government that will pay only lip-service to improved productivity and parity between the UK's nations, but because what he is proposing has too many uncomfortable echoes of the ambition (and hubris) of New Labour, notably the sacrifice of local government and public services to the interests of the City and the misguided academisation and focus on league tables in education. Unger may come from a more socialist-oriented background, and his focus on supply-side reform may make more sense in the context of Brazil's current stage of development, but in the jaundiced view of too many British progressives, he is merely reminding them of the roads not taken over the last 25 years.