Breaking Point

All of the developments that have apparently taken the government by surprise during the Covid-19 pandemic were predictable and probable, and I don't just mean exams and public holidays. As early as late January, when the first cases were recorded in the UK, we knew that the virus could spread rapidly: that was the lesson of China where Wuhan was locked down on the 20th and 6,000 cases were recorded nationally by the 29th (the UK Foreign Office advised against all but essential travel there on the 23rd). By the end of the month, 27 countries had confirmed cases. Though it was slow to react, the World Health Organisation declared the Covid-19 outbreak a global public health emergency on the 30th. Given that recorded cases lag actual infections, and considering the rapid spread already seen and the time of year (the flu season), it was likely that this would be a much more serious outbreak than the 2009 Swine Flu pandemic (which hit in the summer, with a second wave in autumn) and that the conditions were already in place for the outbreak in the UK to spread rapidly. It was clearly time for prompt action.

But something changed in offical thinking. The initial moves to quarantine cruise ship passengers and travellers from Wuhan gave way during February to a more laissez-faire approach in which people returning from skiing holidays in Northern Italy were waved through passport control and merely advised to self-isolate if they developed symptoms. By mid-March we started to hear about "herd immunity" and "cocooning". In practical terms, the strategy was supposedly to allow 60% of the population to become infected while protecting the 40% deemed vulnerable due to age or underlying health conditions. At the same time, the government announced that testing outside of hospitals would come to an end. Though the "herd immunity" phrase was soon banned from official communications, it is clear that the government's strategy was based on the assumption that a gradual spread through the population could be tolerated until such time as a vaccine was developed and that its immediate focus should be on slowing the spread, i.e. "flattening the curve". When the measures taken proved insufficient, we entered the first lockdown. This marked an escalation in management but not a change in strategy.

At no point does the government appear to have seriously consided eradication, which would have entailed strict quarantines for travellers, extensive testing and tracing, and repeated lockdowns (though we've ended up pursuing some of these measures anyway). The assumed trade-off for eradication is damage to the economy, though the quid-pro-quo is the potential of a more rapid recovery due to popular confidence. But it's also likely that worries about the state's ability to successfully implement such a strategy also informed the decision. This was excused at the time in terms of the population's anticipated "fatigue", but the claim that such measures would have been alien to a British society raised on tales of wartime fortitude are as risible as the idea that they would have been in conflict with the Prime Minister's "libertarian instincts". The thinking appears to have been: let nature take its course. But there must be more to it than an ideological aversion to state intervention or a belief that plague is a judgement on the undeserving. The government's progress has been characterised by the media as a series of u-turns, but that's just a lazy frame. It would be more accurate to say that the government's handling has been reactive rather than proactive. But why, given that so much was predictable?

Is this simple dither and delay? While Boris Johnson is clearly lazy and reluctant to take difficult decisions, I don't think we can attribute the government's slowness to act solely to the shortcomings of one individual. If that were the only issue, and if other Tory politicians had been urging "action this day", then we would have seen a party coup by now, or at least the first stirrings of one. The previous Conservative Prime Minister faced an internal vote of no confidence and was obliged to promise not to lead the party into the next general election before she was finally pressured to resign. To date, Johnson has faced no serious internal opposition and not even a sustained whispering campaign in the media. If anything, backbenchers and "sources" have been keen to find excuses for his dilatoriness. This indulgence may have been attributable last year to the imperative of "Get Brexit done", and could therefore change in the next few weeks, but while I expect the criticism to mount, I doubt it will coalesce into a clear policy alternative, despite Labour's noticeable absence from the field making it possible for the Covid Recovery Group or others to punt one without fear of benefiting the official opposition. 

Is the government's poor performance due to short-termism? This is more plausible in that there is clearly a lack of vision in Number 10, but I think there is a risk here of interpreting reaction to events as the absence of a strategy. If the purpose all along has been to implement the minimum measures consistent with keeping the NHS just this side of collapse, then trimming policy in response to the pandemic's course is what you would expect to see. Of course, what this highlights is that Conservative administrations since 2010 have deliberately degraded the health service's headroom and therefore its capacity to respond to a pandemic. When Jeremy Hunt cites his management of multiple "winter crises" as justification for his belief that things have now gone too far, he is condemning his own record as Minister for Health in preparing for just this contingency. The inadequacy of the NHS in the face of the current Covid-19 wave is the consequence of deliberate policy, and therefore something that was not merely predictable but anticipated. The problem is the corrosive, long-term bias against public services, rather than the ineptitude of short-term improvisation.

Is this just the Tories privileging capital? If so, you have to explain why, despite advocacy by the rightwing press, they didn't adopt the maximally business-friendly Swedish approach. Instead, the Chancellor implemented a package of measures, from cheap business loans through furlough to the moratorium on evictions, that have been distinguished by caution and conventionality, with the self-employed, SMEs and landlords often unimpressed. This isn't "disaster capitalism" cranking up a gear, nor is it indicative of a belief that capital faces an existential crisis. One suggestive piece of evidence was the early mishandling of care homes. First, the alacrity with which elderly patients in hospital were decanted in order to clear beds, and then the way that the sector's reliance on agency staff created an ideal vector for transmission, which put the interests of the elderly in conflict with those of private equity. This suggests that the chief concern has been to protect the NHS, rather than the care home industry, while the current priortisation of residents for vaccination is an attempt to neutralise the possible electoral consequences of that decision. The mantra "Stay at home, Protect the NHS, Save lives" was quite up-front about this.

The horse has now bolted on an eradication strategy (along with Dido Harding's test, trace and isolate programme) and we're going all-in on accelerating vaccination. There is scope for policy difference on this - the makeup of the priority groups, the length of the interval between jabs, the logistics of delivery - but nobody appears confident enough to promote a distinct plan B at the moment that amounts to anything more than faster, higher, stronger. Tony Blair's "blueprint" is just a confection of business consultancy blather ("harness the private sector"), managerialist fetishes ("a real-time dashboard") and the sort of daft tactical fixes that free market think-tanks trade in ("use empty offices as vaccine stations" will only appeal to commercial landlords). With its aspirational tone and urgent technocracy it's classic Blair, but utterly irrelevant. The reason for its prominence now is simply that the current Labour leader isn't cutting through. Why has Labour been so weak? Starmer's supporters in the media have taken every opportunity to highlight occasions when he has advocated a policy tweak that the government has subsequently adopted, but this has largely been a matter of rhetorical flourishes (e.g. a "circuit-breaker") or opportunistically calling for something once it looks inevitable. 

There has been little divergence on the overall strategy, while on specific areas such as education the Labour leader has gone out of his way to keep closer to the government line than that of domain experts like the teaching unions. Some of this is a fear of being labelled "anti-business" or "unpatriotic", but some of it appears to stem from a belief that the British state is institutionally robust and the economy essentially sound, it just needs better management (Labour won't call for Gavin Williamson's resignation, but it hopes the electorate might take the hint). In other words, a profound critique of the degrading of the public sector's capacities and capabilities isn't on the cards, any more than an acknowledgement that a low-wage and precarious labour market lacks resilience or that force-fed education doesn't lead inexorably to higher productivity. This reinforces the impression that Labour is returning to Blairite orthodoxy: some more money for the NHS, but no less marketisation; a bit more on Universal Credit, but no real change to the sanctions regime; a renewed emphasis on education, but no move away from the productivist obsession with testing and league tables.

For all the amplifying factors - Tory callousness, Johnson's laziness, institutional short-termism - the way that the pandemic has been managed in the UK has clearly been driven by the constraints of the NHS. The failures to date spring from two causes: one the result of design, the other the result of capacity planning. The first, longer-term issue has been the fragmentation of the wider public health capability, including not only the NHS, local authority functions and epidemiological services such as lab testing, but also policy on sick pay and the time taken to process benefit applications. The Tory emphasis on "ring-fencing" should be highlighted here. What it did was "protect" funding for the NHS while underfunding those parts of the wider public health infrastructure necessary to effectively manage a pandemic. Meanwhile the coercive approach to sickness has bred a culture of presenteeism and fear that in turn feeds infection. The failure of test, trace and isolate was therefore predictable, with the government determined to use the private sector instead of proven local authority resources, testing hindered by bottlenecks in outsourced providers, and effective isolation discouraged by inadequate wage support.

The Nightingale hospitals were also illustrative. We could quickly create bed capacity but couldn't provide nursing staff. That these facilities are now being redeployed as overflow for non-critical cases and vaccination looks like the fruits of integrated planning that should have happened well in advance. This lack of planning and coordination - a result of decades of markestisation, outsourcing and privatisation - precluded an integrated public health response, which is the sine qua non of an eradication strategy. The second, more immediate problem was that the service had been run near to the bone for a decade, as capacity failed to keep up with growing demand. This is most obvious now with the news that necessary surgery is being deferred due to a lack of beds and staff, which in turn reinforces the point that excess deaths from all causes will be the ultimate judgement on the country's preparedness and response to the pandemic. That the UK's preparedness to handle a pandemic was scored as second best in the world as recently as 2019 by the Global Health Security Index suggests that both integration and the capacity to flex in the face of an upsurge in demand for hospital care are blindspots in such technocratic assessments. 

The fundamental failure has clearly been the lack of a sufficiently integrated public health strategy. But what's odd is that the political response to this has seen an inversion of traditional roles. For all the u-turns and policy mistakes, it is the Conservative government that has taken the lead on planning and coordination, rather than leaving it to NHS and PHE management or assuming that the private sector will step in to meet demand. The employment of the likes of Deloitte and Serco is the creation of state monopolies, not competitive markets. The TV announcements, the emphasis on collective action, the wartime rhetoric are all the theatre of the interventionist state, hence the identical and competitive efforts in Edinburgh and Cardiff. In contrast, Labour, which has historically advocated integration, notably in areas such as public transport and social care, has been essentially mute on the subject during the pandemic, while its reluctance to champion planning has led to Tony Blair trying to fill the void. What the Conservatives' cack-handed efforts and Labour's timidity alike show is just how weak the British state has become over the last forty years. Hollowed-out from within and now desperately trying to maintain the illusion of control and constructive criticism respectively.

The Nightmare Before Christmas

What difference would it have made if Jeremy Corbyn had become Prime Minister just before Christmas? The bumptious Matt Chorley at the Times recently imagined a Corbyn-led government as both dithering and hyper-interventionist but above all "crankish", which is another way of saying that he is still suffering nightmares about it. Of course, what he really feared was not Carry On Social Democracy but opportunistic "disaster socialism", in which crisis provided the excuse for radical change to the social and economic order (this is clearly projection by those who relish disaster capitalism). Ironically, this concept enjoyed a brief vogue last year among British liberals and the soft-left who wished to dismiss the assumed utopianism of Lexiteers, though it has been revived in the US in a more positive way lately to suggest that the pandemic might nudge the country towards a better social safety net. Amid the stale jokes and gratuitous insults, Chorley did at least concede a good point: that we have even less idea of what a Starmer-led government would look like.

Jeremy Corbyn in Number 10 is obviously a counterfactual, but it's one that allows us to think about what a Labour government might have considered the outer limit of the possible: how far it could have pushed the Overton Window under propitious circumstances. This is useful in that it may provide a benchmark against which to measure Labour's offer at the next general election. I have no doubt that the offer will be more modest, and not just because of Keir Starmer's emphasis on competence (i.e. a change in personnel rather than a change in policy), but the gap between the two provides the basis for a critique of substance rather than form. An important caveat with this counterfactual is that a Corbyn-led administration might also have been less radical than expected, not just because of resistance by the establishment and likely sabotage by the PLP, but because of Corbyn and McDonnell's own caution and desire for consensus. But that's boring. Instead, let's imagine that they followed their instincts in full and that they specifically saw the Covid-19 crisis as an opportunity to advance the recognisably socialist policies that would give Matt Chorley night-sweats.

As a "new broom", any non-Conservative goverment would probably have paid more attention to the national risk register and contingency plans on taking office after a decade of Tory mismanagement than the Johnson regime did, if only as part of an audit of the previous administration for the purpose of easy point-scoring. This means there would have been a decent chance that some of the holes in the planning would have been spotted earlier (the first reports from Wuhan were on 31st December, the first WHO bulletin on 5th January) and that rectification might have been initiated some weeks before March (e.g. buying ventilators and replenishing PPE supplies). It's also worth noting that senior public health officials operate in a political field. It's not pure science. We saw that with their willingness to indulge the nudge unit and "herd immunity" in the early communications, which was a concession to Tory ideology and the assumed preferences of Number 10. In contrast, I suspect they would have assumed a Labour goverment to be more supportive of a strict public health approach and would have advised accordingly. This means there would be have been more likelihood of an earlier lockdown.

A Labour government might have insisted that all care home staff remain in situ and isolated with residents. This would have made sense in terms of shielding and reducing infection (we now know that agency staff moving between homes was a key vector in the spread), but it would also have highlighted the failings of the care sector. It would have disrupted the agency labour market, required increased staffing to allow rotating shifts and prompted calls for state support as care homes at the margin of profitability became unviable. This would have intensified the "crisis in care" that has been developing over the last decade and allowed a Labour government to accelerate its plans for a National Care Service. Consistent with this approach, a Labour government might also have had the good sense to rule against elderly patients in hospital being returned directly to care homes in the early stages of the pandemic rather than being tested and quarantined in the under-utilised Nightingale hospitals.

Responsibility for test and trace could have been immediately assigned to local government and existing regional public health bodies. The "world-beating" app would have rightly been relegated to an adjunct of the programme. This would not only have marginalised outsource providers like Serco and inexperienced figureheads like Dido Harding, it would have provided the foundation for a more thorough devolution of power from Whitehall. That the Health Secretary, Matt Hanock, wants even more private sector involvement in public health going forward, despite the failures to date, shows the sort of nerve that you would hope (absent the failures) a Labour government would display, but in the opposite direction. This devolution could be extended to local job guarantee schemes, to provide useful (but non-coercive) work and training during the developing recession, and an expansion of local authority resources and responsibility for workplace inspections in respect of both employment rights and public health and safety (those Leicester sweatshops).

The GCSE, BTEC and A-level mess could have been avoided by awarding grades based on teacher assessment and then allocating university slots pro-rata across all schools, so that a "bog standard" comprehensive got as many places per capita as Eton in the first pass. Russell Group universities could have been obliged to set quotas on offers between state and independent schools, so the latter would only get 7% of the "cream". This would have met the ostensible goal of the infamous algorithm - to ensure student demand matched the supply of places - while also making a real contribution to social mobility. It would, of course, have marked a radical departure from the systemic bias of the past and thus relatively disadvantaged private schools, but a reforming Labour government should relish that. Having made such a change, it would be palpably unfair to then revert back to the old system next year. Indeed, the smarter parents of the privately-educated would be looking to transfer their 16 and 17-year olds to the state sector. The independent school sector wouldn't disappear overnight, but it would probably rapidly shrink to focus on pre-14 education.

Though the Conservative government did act to provide business and income support, the manner in which it did so produced lots of omissions and anomalies that have led to individual hardship, particularly for those in the more "flexible" sectors of the economy that the Tories have historically lauded. The design of an across-the-board taper for the furlough scheme means that we are now facing the prospect of rapidly rising unemployment and poverty in a matter of weeks, affecting all sectors. The obvious opportunity for a Labour government would have been to cut the Gordian knot of wage support by introducing a universal basic income (and associated tax clawback for the employed) as a temporary measure. The cunning plan would be to allow this to run on naturally until the recession was over, rather than terminate on a specific date, which would inevitably lead to calls next year for it to be made permanent and for the rump of Universal Credit to be disassembled into separate, contingent benefits.

One reason for a UBI would be to make the churn in businesses easier. Rather than committing to propping up firms, a Labour government could argue for reduced state support for capital in favour of increased support for labour, the better to facilitate exit and entry. Failing firms could fail gracefully, while freed-up labour would have the confidence to reject poor quality and precarious jobs and could instead opt for further training or explore freelancing. Ceteris paribus, this should lead to an improvement in national productivity, though that may be initially obscured by the effects of the recession and the changes in working practices that the pandemic appears to be triggering. However, such an approach would also provide a more flexible and forgiving environment for those changes to work through and would also help maintain aggregate demand. A UBI would require reform of the taxation system were it to become a permanent feature, but that could be deferred for a couple of years to allow the principle to be established.

Just as the Second World War made salient both Beveridge's "five great evils" and the potential for change, so the pandemic has shone a brighter light on the vulnerabilities of the health and care sectors, the inequities of education and the precariousness of the economy, while also revealing that there is a magic money tree after all. Things could be different and the political battle leading up to the next general election is likely to focus on whose vision of change or continuity catches the electorate's imagination. For all the revolutionary talk of the sunny uplands of Brexit and the "levelling up" of the North of England, it has become apparent over the last 8 months that the Conservatives remain the party of entrenched privilege and social neglect. What is less obvious is whether Labour is still the party of reform and progress outside of neoliberal technocracy. In particular, you have to wonder why Keir Starmer isn't taking the opportunity afforded by the pandemic to build a public consensus for the sort of radical change that pushes beyond the 2017 and 2019 manifestos (National Broadband now appears a quite modest idea).

One of the characteristics of Labour's 1945 manifesto was that it was comprehensive, even if it was light on detail in many areas. At the time, this was seen as entirely appropriate to the circumstances: the UK needed root-and-branch reform and it was the broad thrust of policy that energised voters not the minutiae. In 2019, the party's manifesto was dismissed as over-stuffed and incredible. This was not just an unflattering comparison with the Tory's sketchy offer of "Get Brexit done", but a conservative lament against comprehensive change: a view apparently echoed by many in the Labour party, including the soi-disant "soft left". Where the two differed is that the 1945 version could skip the detail because much of it had already been publicly discussed, for example by the 1942 Beveridge Report and the plans for the NHS. Labour failed to adequately prepare the electorate between 2017 and 2019, but the pandemic has perhaps now achieved more in this regard than any number of reports and social media memes could. The question is, will Starmer build on this or will his critique remain "I would have done the same, just more competently".

Coronavirus as Metaphor

In her 1978 extended essay, Illness as Metaphor, Susan Sontag contrasted the cultural role of tuberculosis and cancer. Just as Walter Benjamin defined Paris as the capital of the nineteenth century, so Sontag saw tuberculosis as the emblematic disease of that epoch, associated with the artistic and romantic and famously represented in the Paris-set operas La Boheme and La Traviata. But Sontag's real subject is cancer, from which she herself was suffering at the time she wrote the essay, and which she characterises as the emblematic disease of the twentieth century (you may also assume that she would similarly consider New York as the capital of her own era). If TB was thought to be a product of an excess of feeling, or the sublimation of disappointment, particularly in love, then cancer was seen as the malign product of repression and depression, an internal rot caused by inadequately expressed emotion or the failure to adjust to everyday life. The parallels with Romanticism and Modernism are obvious.

While TB was thought of as a complete mode of life - a delayed death sentence that restricted living and required changes in behaviour and situation - cancer was thought of more as a project, with clearly defined pathological stages and an emphasis on how the sufferer could minimise disruption to their lives, or at least prepare responsibly for death. The one was an excursion, often in the literal sense of a move to high or dry places for their assumed health benefits, the other a deviation that could be bracketed and potentially overcome. If TB was artistic, cancer was scientific, despite the continuing mystery of its etiology. Indeed, it was this mystery that Sontag saw as the factor common to both: "The fantasises inspired by TB in the last century, by cancer now, are responses to a disease thought to be intractable and capricious - that is, a disease not understood - in an era in which medicine's central premise is that all diseases can be cured." That last remark must be seen as the product of the years immediately before the discovery of AIDS, a subject on which Sontag subsequently wrote, and its explosion in popular consciousness as an incurable "plague".

Cancer gradually lost its role as the paradigmatic disease of the twentieth century from the 1980s onwards. This was not so much because it was supplanted by AIDS, which affected relatively few people and had well-known transmission routes, or because of improvements in treatment and survival, but because it was increasingly seen as a product of the environment rather than a reflection of the personality. Sufferers became victims. All diseases are seen as judgements upon the person, regardless of how arbitrary they may be, but cancer has increasingly been seen as a judgement on industrial society and in particular its callous disregard for public safety. In popular culture, this is the trajectory from Dark Victory (1939) to Erin Brockovich (2000). No longer seen as the outward manifestation of personal maladjustment or a lack of virtue, cancer was now a societal failing. One consequence of this was that cancer as a metaphor came to be promiscuously applied to all sorts of social ills, from inflation to football hooliganism.

Cancer was also a metaphor for existential dread during an era of imminent nuclear annihilation. While TB was associated with cities and its treatment was thought to be aided by particular climates (mountain sanitoria and arid deserts), cancer was truly global: there was no safe-zone, no bolt-hole. It was pervasive, implacable and could strike at a moment's notice. In recent decades, as medical science has advanced, the public health approach to cancer has been geared to screening in order to improve "early warning". Many of the metaphors associated with disease are military - battle, advance, retreat - but in the case of cancer this went beyond analogy to the practical deployment of radiotherapy, applying the science of selective mass destruction on the body's cells. That this metaphorical dimension "went into remission" after 1989 is not entirely coincidental. Cancer is now increasingly seen as a manageable disease and has lost its central role as a judgement on character to "diseases of affluence" like diabetes, obesity and clinical depression. It has also lost its metaphorically apocalyptic role to climate change.

As yet there is no leading candidate for the disease of the twenty-first century. Ebola and SARS, with their high death-rates, revived the anxiety of infection, but the difficulty of contagion hasn't shifted them out of the same category as AIDS. The great fear is of a new disease that is easy to catch and near-fatal, but such diseases tend not to become pandemics because they kill their hosts too quickly. A truly effective pandemic needs to have a long enough incubation period to aid its spread, as well as being easy to catch and difficult to treat (i.e. infection outpaces fatality). The early signs are that Covid-19 corresponds with this profile but that its fatality rate will probably be lower than the advertised 3-4%, perhaps around 1%, though this is significantly more than seasonal flu (0.1%). As a result, its metaphorical role is currently oscillating between the traditional view of a character judgement (the obsession with personal hygiene) and the more modern view of an environmental hazard (the speculation about the origin of the virus in dubious Chinese food practices and the focus on transport and tourism as vectors).

As cancer overtook tuberculosis as the paradigmatic disease, the traditional concern with virtue shifted from the patient's culpability to her response: a lack of "fight" or a lapse into fatalism being seen as a failure of character ahead of the failure of the body. In the case of Covid-19, the search for virtue has largely been societal, from the criticism of the state's initial response to the lauding of unflappable experts. The suggestion that the lack of a free press in China has worsened the situation, like the belief that the Johnson administration cannot be anywhere near ready because it certainly isn't ready for a no-deal Brexit, is obviously ideological. The lockdown of Hubei province will probably prove more efficacious than free copies of the Daily Mail. The UK government's strategy for Covid-19 - containment, delay, research and mitigation - is metaphorically a mix of the military and the technocratic: an appeal both to robustness and expertise. But the reality has been mostly dither and delay.

Containment has already failed and research cannot be accelerated further. Mitigation will be patchy, a lottery dependent on employment status and care responsibilities. The core strategy is delay. There are parallels here with climate change: the inadequacy of flood defences and continued building on flood-plains; the constant pressure to relax decarbonisation targets or seek market solutions such as offsetting; the foot-dragging on responding to research; the bias of mitigation strategies to gestural greenwashing or the scientific never-never. What underlies this commonality is the association with the economy. Covid-19 won't be an emblematic (or "idealised") disease in the way that TB was until the 1940s or cancer until the 1990s, not just because it isn't likely to be around for more than a couple of years but because it is seen not as a personal misfortune, whether as the result of a lack of virtue or social externalities, but as a symptom of a globalised economic model that is decidedly under the weather. Seasonal flu is not an inappropriate metaphor for secular stagnation, but it will never have the psychological power of TB or cancer.

The metaphors of the economy are often medical, essentially because we see it in corporeal and organic terms (much as we do the "nation"). We take the economy's temperature, we worry about it catching a cold, we equate consumption with healthy growth (rather than, as with TB, the body turning on itself). But the metaphors we apply to the economy are noticeably antiquated in their language - depressed spirits, sclerosis, equilibrium - reflecting the origins of political economy in the 17th and 18th centuries. The metaphorical impact of psychoanalysis on the vocabulary of the economy has been slight, despite the best efforts of Keynes and behavioural economics, while the impact of genetics is limited to waffle about corporate DNA. Marxian economics remains current in part because its language of systems and contradictions is recognisably modern, the vocabulary of cybernetics and engineering as well as critical theory. This antiquated language partly explains why the association of Covid-19 and the economy has tended towards another round of Enlightenment-worship, rather than the more useful task of "turning hysterical misery into common unhappiness".

The chief metaphorical value of the coronavirus is that it allows us to articulate anxieties about the economy, not just in the overt sense of concerns about demand and supply shocks but in the more generalised fear that modern society is fragile: that a small disruption could bring the economy crashing down - a concern that has been lurking in the background since 2008. Will Hutton has directly equated the response to Covid-19 to the Gordon Brown-organised response to the banking crisis: "Now, one form of unregulated, free-market globalisation with its propensity for crises and pandemics is certainly dying. But another form that recognises interdependence and the primacy of evidence-based collective action is being born." The claim that "Coronavirus won’t end globalisation, but change it hugely for the better" reminds me of the joke about the patient who asks the doctor if he will be able to play the violin after his operation, "because I couldn't play it before".

Ooops!

Contrary to the scare stories, we do not face a tidal wave of ransomware hard on the heels of the WannaCrypt attack. As is often the case, the media prominence of this technology is a sign of its maturity and imminent decline, not its sudden arrival. The incidence of ransomware has increased in recent years, but that owes more to the emergence of cryptocurrencies like Bitcoin than operating system backdoors cultivated by the NSA (which they've been doing for a long time). Writing code to automatically encrypt a hard disk is not difficult because operating systems are designed to run background processes that manipulate files. The challenge for criminals has been the money-drop. How do you get your hands on the cash without being nabbed by the police? Traditional methods have included wire transfers, payment vouchers (often laundered through online gaming sites) and even premium-rate text messages, but these are unreliable and risky. Cryptocurrencies have proven a boon to all sorts of online extortion.

Though there were earlier examples, ransomware first bloomed in the 1990s client-server ecosystem, which meant PCs with valuable data on local disks (and not backed up) plus Internet access and weak antivirus protection. The number of PCs still running old and vulnerable operating systems such as Windows XP is in steady decline, and most of the installed base is found in advanced economies where desktop machines are gradually being replaced by devices, such as smartphones and tablets, that act as terminals accessing remote data in the "cloud" (if compromised, these can usually be fixed by wiping the local storage, reinstalling the operating system and then synching data over the network - in effect the equivalent of a handset upgrade). The organisations most vulnerable to ransomware (and presumably the handful that have paid the ransom already) will be small businesses or sole traders who have a single PC, ineffective antivirus (a factor of older versions of Windows), no reliable data backup, and have probably mislaid the original media and licence keys for purchased application software.

While some NHS trusts may have been foolhardy enough to allow critical data to be stored locally on PCs, it would be surprising if they didn't have network backups, so they're probably not badly affected. In many cases the issue is simply that the PC has been disabled and can no longer be used to access corporate systems that are otherwise unaffected. It's an inconvenience rather than a data breach. Likewise, I suspect the machines hit in private companies such as Renault, Telefonica and FedEx are just as likely to be single function controllers running old and unpatched versions of Windows - e.g. industrial process monitors or unattended devices like train departure boards - rather than personal desktops. A simple swap-out or rebuild should fix these. What this does highlight, however, is the potential problems that will arise with the spread of the Internet of things (IoT), which is essentially a profusion of many small controllers. Having your fridge demand money with menaces might sound amusing, but it won't be so funny if the home security system has been compromised and you can't get into your house.

The prominence of the NHS in the UK reports of the WannaCrypt attack has inevitably led to much sage commentary on the self-defeating nature of austerity, not infrequently by dimwit journalists who have hitherto written sage pieces on the need for belt-tightening in the public sector. This is all well and good as far as it goes. Many trusts have clearly skimped on IT security to divert limited funds to the famous "frontline", while the NHS high command was foolish in not properly assessing systemic risk and the Department of Health was clearly culpable in deciding to stop paying Microsoft to extend critical patch support for Windows XP in 2015 (did Jeremy Hunt imagine that risk declined over time?) But the NHS's particular vulnerability owes more to decisions taken during the years of (relative) plenty in the late-90s and early-00s than to the lean years post-2008, and this can be seen in the fact that the attack has also affected private businesses that do not appear to be cash-constrained. There are three factors that I think are worth highlighting.

First, long before IT was punted as a service, it was punted as a commodity. The promise of the 1980s was that proprietary mainframe and terminal systems could be replaced by client-server systems using PCs that could also provide business productivity tools to key workers. Instead of maintaining expensive inhouse development teams writing bespoke applications, businesses shifted to the purchase of commercial off-the-shelf software. While this delivered real benefits in reduced development and implementation costs, it meant that organisations were increasingly dependent on third-party products that were familiar to hackers. To add to the problem, the distributed computing power of the PC meant that many critical applications were still developed inhouse, but now by semi-trained users creating Excel spreadsheets and MS-Access databases. Turf wars often meant that these were kept hidden from the IT department, hence they might not even be backed up routinely.

Second, the growing demand that the public sector should adopt private sector "best practice" meant that this model of corporate IT spread to the NHS in the 1990s. Unfortunately, the weaknesses visible in the private sector were magnified in the public sector by political pressures, specifically the compartmentalisation arising from the creation of internal markets and the emphasis on cost-led outsourcing. This produced weak IT strategy at the enterprise level, fragmented operations at the local level, and a deprioritisation of security and housekeeping outside of legally-mandated data protection. Though New Labour significantly increased spending on the NHS, its u-turn on marketisation ultimately undermined its efforts to improve productivity and organisational resilience by exacerbating these trends. Since 2010, the NHS has had to cope with both decreasing real-term budgets and even more fragmentation as a consequence of the Tories' strategy to facilitate private sector cherry-picking.

The third factor is the push for devolved decision-making and the decentralisation of commissioning arising from the Lansley reforms. Regardless of what you think about this either as economic and organisational theory or as a practical policy in the area of clinical management, it has reinforced the balkanisation of the IT landscape and helped depriortise security. Looking back at the use of IT in the health service since 1980, it is difficult to avoid the conclusion that the NHS might have done better to stick with mainframes and dumb terminals. The minimal vulnerability to malware would have been a plus, but just as importantly, such an architecture would have encouraged data consolidation and consistency, which is probably what the service needs most. Even today, the NHS is still partly dependent on paper records and manual transposition while the quality of its data service to patients is poor. Of course, a centralised IT system would suggest a centralised and uniform health service, which isn't the ruling vision.

What the WannaCrypt impact on the NHS highlights is that the chickens now coming home to roost originated in the political economy and business ideology of the late twentieth century more than the technical flaws of operating systems first released in the early years of the twenty first century. The commodification of IT, the attack vectors introduced by the Internet, and the organisational dysfunction created by maketisation and functional segregation have together produced an environment characterised by under-investment, poor management and systemic vulnerability. The good news is that the NHS should bounce back pretty quickly: crisis-management is its norm. The bad news is that any subsequent inquiry will be of limited value because it will focus on contemporary failings - poor systems control and bad management decisions - rather than root causes: the advocacy of internal markets for complex organisations and processes, and the delusions of devolution and empowerment.

The Machine that goes Ping

Despite the best efforts of Nigel "immigration" Farage, and irrational scaremongering about the Caledonian horde, the dominant theme of the general election campaign has been public spending. Unfortunately, the discussion has focused largely on quantity not quality. From deficit levels through welfare to increases in the tax-free allowance, the assumption is that numbers matters more than what they represent and that context is irrelevant. This gives rise to the paradox of a Conservative party that espouses individualism while advocating one-size-fits-all policies, such as the benefits cap and the spare bedroom tax. Whereas once their argument was means-testing, now they dabble with arbitrary cut-offs: no child benefit for larger families. But Labour are similarly conflicted, too often reducing an argument about values (what is right) to mere accountancy (what we can supposedly "afford"), and still prone to beasting the poor. Nowhere is this more obvious than in the case of the NHS.

According to The Guardian, we have only "6.8 computerised tomography scanners per million people, which is less than half the OECD average". This rather precious fact was culled from a report by the Economist Intelligence Unit that compared the NHS with other national health systems. Though the report looked at a number of dimensions (employing the "balanced scorecard" paradigm beloved of neoliberal thinktanks), the media coverage focused on resources, particularly staffing and hardware, with the general implication that these are inadequate. This material inadequacy was then linked to insufficient funding (the Guardian article echoed Labour's claim of a prospective £2bn NHS deficit), with the further implication that an increase in expenditure would lead to an improvement in at least some of these ratios.

As summarised by the BBC, "The UK is in the lower half of a league table of 30 nations for health staffing. In 2012, the UK had 2.8 doctors and 8.2 nurses per 10,000 people, compared with averages across the OECD of 3.2 and 8.9, respectively. The EIU argues that the starkest differences are apparent when it comes to physical resources ,with the UK sitting near the bottom of the OECD league table. The UK has just 2.8 hospital beds per 1,000 people against an OECD average of 4.8. For equipment such as CT and MRI scanners, availability is less than half the average". The problem is that this tells us nothing about the structural factors that influence the ratios (i.e. context), nor anything about the efficiency of capital utilisation (i.e. what these numbers represent).

The EIU report itself has this to say about resources: "Hospital beds, admittedly, are in decline nearly everywhere: many countries have been steadily closing wards and consolidating hospitals. This is partly to reduce inefficiency and fixed overheads, but also reflects the fact that modern medical techniques—such as keyhole surgery—have cut the length of hospital stays." In other words, the lower ratio of beds per capita could indicate a number of positive developments, from more effective preventative care through more efficient resource management. I'm not suggesting that this is necessarily the case (though there is plenty of evidence that the NHS is efficient in managing its resources relative to other health systems), but that trying to assess performance using isolated data like this is foolish.

The biggest structural factor influencing resource ratios is the extent of private enterprise. Though the traditional critique of centrally-managed institutions is that they create waste due to the dispersed knowledge problem, markets typically produce over-capacity. This is partly by design, the aim being to provide headroom for peaks in demand, but also partly the result of market churn: as providers enter and exit the market, some capacity will be temporarily duplicated. In theory, this overhead is offset as better, more efficient providers compete the weaker out of the market, however there are problems when this theory is applied to inelastic public goods. An example is the way that free schools open in areas that aren't short of school places. The same number of pupils is now spread over a larger capital base, so the capital/pupil ratio is higher, but you also have higher running costs because of fixed charges (e.g. building maintenance). In terms of capital allocation efficiency, the situation has got worse.

Similarly, the lower ratios of doctors and nurses could point to greater efficiency, not less. If we invest in preventative care and better social care for the elderly and disabled, we'll end up with fewer hospital beds. Hospital consolidations will also reduce staffing and equipment ratios. Though they often face local opposition, mergers are more likely to occur in a nationally-coordinated system than in a free market where you have to rely on provider exit. In terms of high-tech equipment (the modern equivalent of the "machine that goes ping"), the distribution of this is heavily influenced by commercialisation. Hospitals used by the rich tend to have more kit than they need (over-capacity to avoid waiting times and meet peak demand), while hospitals used by the poor tend to have less. The UK's greater equality of access, relative to the OECD norm, means that the "average" the UK falls short of will include a degree of structural waste that we have avoided.

Tellingly, the media coverage of the EIU report ignored the section on staff costs. This was because the NHS pays pretty low wages, relative to its international peers, with one notable exception: "Although figures are scarce, OECD data for 2011 suggested that self-employed GPs in the UK are the highest-paid in the OECD, earning 3.6 times the average wage. This includes most family doctors. The figures for salaried GPs (which may be employed by a GP practice) and hospital doctors are far more modest ... To solve the growing problems in A&E, for example, there needs to be better access to out-of-hours care elsewhere. Nevertheless, asking GPs to take on extra responsibilities fits poorly with efforts to restrain their wages." The significance of this is that GPs represent the largest (and longest-established) incursion of private business into the NHS.

The EIU report adds to a growing body of international health system comparisons, such as the US-based Commonwealth Fund (their latest ranking puts the NHS well out in front). Though there are variations in the way that rankings are arrived at, the broad consensus is that the NHS is the most cost efficient (because it is a nationwide system with minimal charging) and equitable (high levels of access and lower levels of inequality of treatment) but has limitations in terms of overall patient outcomes, though this last is more broadly the product of public health policy (i.e. including factors such as diet, poverty, housing, alcohol consumption etc).

In short, the challenge for the NHS is one of management (the efficient allocation of resources), not just an issue of more money to boost resource ratios, though I'm sure a few more computerised tomography scanners per million people would not come amiss, particularly if they go "ping". This raises difficult questions for those tired of "constant top-down reform", but it also highlights a further risk associated with privatisation and outsourcing, namely the fragmentation of strategy and the capacity inefficiencies inherent in markets.

Watch Your Phone

The launch of the iPhone 5S and 5C has been greeted with a general "meh", once it became clear the C stood for colour rather than cheap, and the 5S's only new feature was a fingerprint reader. This rather misses the strategic significance of the latter, which is less about addressing the password management hell of online services and the poor security of smartphones and tablets, and more about the way that technology is becoming integrated with biology. Another aspect of this is the emerging field of smartwatches, which is thought to be Apple's next big product target.

Strictly speaking, smartwatches have been around for decades. Digital watches that could be used as calculators date from the 70s, while modern sports watches with accelerometers and GPS are common. But we're obviously on the cusp of something new now that companies such as Sony, Samsung and Apple are piling into the market opened up by the crowd-funded Pebble. (Just as an aside, I wonder if anyone told Samsung that "gear" is slang for heroin. Presumably they chose the word more for its "Top Gear" connotations, implying the target audience are mainly male and a bit dim. I suppose they could have gone for Gadget).

The choice of a watch has not traditionally been about utility for all but a few specialists (or those who fantasised they were jet pilots or divers). Being able to tell the time in 3 different places simultaneously isn't the reason why those who can afford it buy a Rolex. If you check your watch 10 times a day, that's probably no more than 30 seconds all told, which is a pretty low level of utility, irrespective of price. It's like buying a car and only driving it on the 29th of February. Watches have traditionally been positional goods, both those that are essentially jewellery and cheaper models that are a statement of personality (the ironic Mickey Mouse, the retro LCD Timex).

The smartwatch promises to augment this limited timekeeping utility and positional value with two new uses: acting as a display for alerts relayed by a smartphone, and housing a variety of bio-readers. As the former is somewhat underwhelming (if you really need to scan tweets in real time, you'll pull out the phone), and the latter is already well established with sports watches and bracelets, like the Nike FuelBand, there has been some scepticism that smartwatches can really be disruptive. They're not creating a new market after all, unless you count the tech-heads who dispensed with their watches back in the 90s because they could then check the time on their mobile phones. Given the long life of most watches, there won't be many people eyeing a smartwatch as a necessary replacement, and if the new device's lifetime is as short as a smartphone, many (of those with the necessary moolah) will consider a £500 analogue watch (with resale value) a far better investment that a £300 smartwatch that depreciates to junk inside 5 years.

Watches are part of the personal brand, so the core market for the smartwatch may be the intersection of those that take personal branding seriously and are into geek-chic and the "quantified self". The first person to wear both Google Glass and a smartwatch can expect to be stoned in public. Like the Borg eyewear, a key feature of the smartwatch is that it will be on display (don't expect wearers to discreetly shove it under the cuff). As a slave device, the smartwatch is a way of showing that you own an iPhone or top-end Galaxy without having to constantly and ostentatiously use the damn thing. Because you can now keep your phone trousered or bagged, the less-easy-to-snatch smartwatch will help reduce theft, which will please hipsters currently torn between showing off and staying safe.

The use of fingerprint authentication with the iPhone 5S, plus the parallel development of heartbeat signature sensors (a potentially more efficient biometric identity mechanism), means that in the not too distant future you may be obliged to buy a smartphone and watch combo in order to enjoy the full benefits of each, which provides growth for the nearly-saturated smartphone market as much as addressing the "how do you create a market for smartwatches?" problem. Some analysts even anticipate the smartwatch replacing key-fobs and secure access tokens for corporate workers, which means that businesses now giving staff smartphones may soon be shelling out for smartwatches too. If that market segment reaches critical mass, then you can expect the general population to be attracted, much as happened with BlackBerry.

Another potential new market segment is health and social care. A smartwatch stuffed with bioreaders could communicate with a smartphone and from there relay far richer diagnostic data to a central monitoring team than is possible with the current pager-like devices being trialled by the NHS. Of course, OAPs and the disabled (and possibly tagged offenders) are the sort of demographic that might pollute the brand, so you can expect the "public sector" version to look ugly and be cheaper, even if it is constructed in the same Chinese factories as the aspirational Apple and Samsung models.

The key point is that the "quantified self" is coming, and it may be approaching from multiple directions. Just as the NSA/GCHQ revelations have been a great leveller, proving that the self-proclaimed tech-savvy (as opposed to the real cognoscenti) are under exactly the same degree of observation and control as silver surfers and techno-buffoons (I'm thinking Claire Perry), so the smartwatch may mark the first step towards the ubiquity of biometrics. There is a clear progression here: from the compromising of devices that we periodically use (PCs), to devices that we carry with us (smartphones), to devices that we wear (smartwatches). The logical next step would be bioreader/transponder implants, which we'll probably trial in the health, social care and penal sectors. Neural lace and The Matrix are probably some way off, but you can see the direction of travel. Personally, I'm going to stick with my steampunk Seiko.

The Next Big Thing

The macroeconomic mood is increasingly skittish, despite the insistence (and general desire to believe) that recovery is underway. There are a number of reasons for this, chiefly the fear that the emerging economies are decelerating, that the end of quantitative easing and other government bond-buying schemes could trigger higher interest rates in the US and UK, and that this in turn could result in currency crises in vulnerable economies (such as India), as capital decamps, and possibly recession in economies over-dependent on natural resources (such as Australia). On the domestic front, no one is seriously claiming that the UK recovery is anything other than a reversion to type, i.e. increased household debt to fuel consumption plus all-new sub-prime mortgages, and will do well not to fizzle out before the 2015 election.

The mood has also infected the technology sector, where the NSA/GCHQ revelations are (allegedly) leading to less sharing of personal data and suspicions about US cloud providers, thus undermining the potential value of the Big Data asset. In terms of the hype-cycle, Big Data is now entering the "questions are being asked" phase, specifically: is the failure to massively monetise the sucker simply the time-delay of new technology, or is there just not enough value substance? To a sceptical observer, Big Data looks like a speculative bubble: it's fashionable, it isn't widely understood, there isn't even agreement among "experts" on what it is, and ridiculous claims are routinely made for it as a panacea.

Of course, bubbles are rarely without substance altogether. There was a market for tulips in the seventeenth century, the potential of the South Seas was real (fortunes were later made in copra and palm oil), and every housing bubble is predicated on the basic need for shelter. The analysis of very large datasets undoubtedly offers enormous potential across many industries, not to mention its value in "evidence-based policy-making" (though that seems to be going out of fashion politically), but it is better thought of as a mode of approach (and a specific application of existing technologies) rather than the "new oil".

This eulogisation of Big Data as a new asset class has been undermined by the recent concerns over privacy, which could in turn accelerate the bursting of the bubble. This is prompting a fight-back, an example of which is Polly Toynbee's atypical praise for David Willetts facilitating the creation of an NHS dataset of clinical data for commercial exploitation. Toynbee bigs-up the research potential (which is valid), downplays the paranoia about personal data (which is sound, though she does fail to understand how anonymised data can be easily de-anonymised), and considers the economic benefits to be incidental: "If, as David Cameron asserts, it aids economic growth too, that's to the good".

As a social democrat, she sees this valuable dataset as a justification for the NHS (this would not be possible in the fragmented US health system, though Obamacare may eventually change that), but fails to spot the neoliberal characteristic of an asset created by the people, owned by the state and exploited by business. We're not anonymising our personal data for the public good so much as for private gain.

Toynbee echoes some of the voodoo beliefs of the Big Data evangelists: "the NHS's electronic surveys could be more effective than randomised control trials". That phrase may be the work of a sub-editor (it's in the article sub-title), but it still implies that Toynbee doesn't understand what a randomised control trial is. Big Data will not abolish the need for RCTs any more than it will abolish testing on animals.

What it will (potentially) do is boost NHS productivity by identifying inefficiencies, accelerating decision-making, and isolating best practice. This will please government, by bending down the previously inexorably rising trend in per capita costs (though a moratorium on reorganisations would achieve the same result), and will also please business, by providing increased profit margins and new revenue streams. However, this may ultimately prove illusory, as real productivity gains are wasted through excessive rent extraction and privatisation overheads, but for now the hype-cycle is still in a positive phase.

The underlying story here is the age-old search for value. i.e. the desire of investors to find an asset that will handsomely beat inflation and deliver capital appreciation. Given the long-term dearth of investment opportunities due to technological advance (declining surplus value due to automation plus commodity deflation), and the huge amount of "hot" funds swilling around the international financial system due to the money creation of the last 5 years, this looks tailor-made for the creation of an even newer asset class, so investors have a hedge in case Big Data sputters out. If I were a con man, I'd be printing prospectuses now (the government's enthusiasm for fracking has a certain je ne sais quoi). I have no idea what this next big thing might be. I just know that something will, of necessity, "bubble" up. It probably won't be a smart-watch.

The Significance of Triviality

It has been fashionable in recent years to claim that modern technological innovation isn't a patch on the past - that the current IT revolution is little more than trivial consumption, such as iPods and cat videos, which compares poorly with steam power and the internal combustion engine. Robert Gordon and Tyler Cowen have been widely quoted in this regard. Some of this is probably generational - i.e. middle aged men who never got over the non-appearance of jet-packs being underwhelmed by Angry Birds (I imagine Thomas Malthus didn't think much of the potential of steam engines). Some of it is just conservative misanthropy - the assumption that we live in decadent times and everything is a bit shit. And some of it is, I believe, a misunderstanding of the significance of triviality.

It was interesting then to see a report by neoliberal cheerleaders McKinsey outlining the "12 technologies that could drive truly massive economic transformations and disruptions in the coming years". McKinsey, given how they earn their money, focus on near-term technologies - i.e. what they consider to be racing certainties, rather than speculative futurology. They think mobile Internet might be big. There's the usual consensus guff, so 3D printing, "autonomous vehicles" and "advanced materials" (i.e. Graphene) make the first division. In the second division ("on the radar") we find fusion power and quantum computing, which would probably have made the top division in years gone by, before we realised how bloody difficult they are, while the third division of the "interesting and often hyped" includes 3D and volumetric displays, which have little potential use outside of Sci-Fi films.

What is most significant about the top 12 is the extent to which they rely upon information technology, which the report notes is now "pervasive". This is obvious in the case of mobile Internet, cloud technology, the "Internet of things" (i.e. smart devices and RFID), and automation of knowledge work, but it is also true for the other disruptive technologies. Advanced robotics is now more software than hardware, autonomous vehicles depend on realtime processing, genomics depends on massive data-crunching, while advanced oil and gas exploration and recovery has been more about IT than wrenches for decades. 3D printing is emblematic of this. Though it has only broken into public consciousness in recent years, basic 3D printers were built in the early 1980s. The slow march to wider use has been partly due to refinements in the mechanics (additive manufacturing) but mainly due to advances in computing power and the software.

The disruptive change that has triggered the most comment has been the automation of knowledge work. McKinsey note that knowledge workers comprise 9% of the global workforce and account for 27% of total labour costs. As that ratio indicates, we're talking about the better-paid, middle-class jobs. This is leading to further fretting about the returns to education: is it worth getting a degree if skilled, whitecollar jobs are going to start disappearing. Personally, I suspect that this automation will work its way from the bottom up - i.e. attack the least powerful first. Just as telephone support was quickly offshored, we should expect it to be first in line for intelligent automation (something better than "Press 1 for ...") The higher management life-forms, like McKinsey consultants, will be at the back of the queue, so degrees from "top" universities will continue to translate into economic power, they'll just be fewer of them. You can also expect a continuation of the tendency for human behaviours that cannot be automated to be formalised as business "values", and for those behaviours to exhibit a class (or "educated") bias. Once empathy and customer-focus are synthesised, a GSOH and charmingly amateurish cake-making skills will become more important. Clubbability has already proved a more long-lived skill than the ability to use a slide-rule.

We can also expect rapid inroads by technology in the burgeoning "care industry", which is clearly at the vulnerable end of the labour scale. The example of the grandson who video-cammed his infirm granny in order to check up on her care workers was a microcosm of many current trends. The poor quality care (often down to crap wages and insufficient time rather than human wickedness), the upside of surveillance, and the growing expectation that technology and "telecare" may have a much larger role to play. A similar revolution is in the offing for healthcare, which explains the relentless claims that the NHS is inadequate and/or insupportable. While you can make money by privatising a labour-intensive public service and cutting staff (e.g. binmen who no longer have time to walk up the drive), the really big money is to be made through automation that takes out swathes of the workforce. The trick is to secure a long-term contract just before massive capital investment, and ideally get the government to part-fund this investment as the rail and water companies did.

Part of the reason why the current technological revolution is under-appreciated is the massive deflation in costs and associated commodification. This leads to the supposition that the technology must be trivial, because we can afford to put it to trivial uses. McKinsey note that the fastest supercomputer in 1975 was the CDC 7600, which cost a princely $5m then, equivalent to $32m in today's prices. An iPhone 4 has the same processing power and costs about $400. If steam engines had experienced comparable deflation, they would literally have cost buttons by 1900. This tendency towards faster commodification and steeper deflation is nothing new. If you follow the Robert Gordon model, the technologies of the 1870-1900 era, such as electricity, the internal combustion engine, central heating, air-con and indoor plumbing, were all more commodified and affordable than those of the 1750-1830 era, such as steam engines, cotton spinning and railways. Ordinary people got the benefit of cheaper clothes and railway travel, but they couldn't afford their own power looms or railway engines. They could (eventually) afford their own indoor toilets and cars.

This massive drop in the cost of information technology has further ramifications because of the transmission of deflation to secondary technologies, i.e. the many and various applications of IT. A "manufacturing startup" in the 1930s meant a significant investment in machine tools, plant and raw materials. A tech startup today can require little more than a couple of laptops, broadband and a spare bedroom. The point is not that these startups will all produce viable businesses - the failure rate is very high - but that the capital at risk is tiny. If you have ever wondered why venture capitalists threw silly money at barking ideas during the dotcom boom, bear in mind that low entry costs were as much the driver as a desire not to miss the next big thing. The problem for VCs was that they were sitting on a lot of capital, faced with a lot of projects each requiring a relatively small amount. Imagine a 100-horse race, in which every mount has odds of 1,000 to 1, and you have £100. You'd just put a quid on every horse and rake in the winnings.

The impact of IT has (I think) been central to the growing dearth of capital investment opportunities, which has in turn led to more and more capital being pumped into property and resource speculation, incidentally expanding financial markets faster than the fixed capital base. This dearth is less a smaller quantum of opportunities (as some have assumed, feeding the "we've stopped innovating" meme) and more a massive fall in the price of opportunities as discrete investments. This is throwing off huge amounts of wealth, but that wealth is sticking with capital rather than being shared with labour. The consequence is increasing wage inequality, increasing asset inequality, and a polarisation of jobs. As Marc Andreessen said rather dramatically: “The spread of computers and the Internet will put jobs in two categories: People who tell computers what to do, and people who are told by computers what to do.” It is important though to note that the first group will be dominated by owners of capital and their "lackeys", to use a once-popular term, rather than software engineers or other techies. The nerd will not inherit the earth - it will be that lovely young intern with the nice manners. That is the real significance of triviality in the modern economy.

A Climate of Fear

Before the NHS can be opened up to the market, popular support must be undermined. This is problematic as the defence of established ways naturally appeals to the conservative temperament. To get conservatives on board, the ideological focus initially shifts towards external threats. In other words, the NHS is being battered by forces beyond its control, so we must change it to save it. These external threats include genuine secular trends, such as advances in medical science and demographic change, but with a relentlessly negative spin (too costly, too old). Other threats include the staple of all things "foreign", from incompetent locum doctors to "health tourists". Even government reform is shamelessly held up as a threat, as politicians decry the destabilising effect of yet another restructure before proposing their own bureaucratic cure.

As pessimism becomes entrenched, the narrative gradually shifts towards the claim that the NHS is intrinsically incompetent. A major trope is the idea that hospitals are a danger to our health. Popular anxiety has been fuelled both by legitimate concerns, such as infections and neglect, and by the irresponsible indulgence of quackery, which has an interest in promoting the risks of conventional treatments under the cover of "choice". When the language shifts up another gear, to imply that the NHS is comprehensively rotten (a culture based on the "normalisation of cruelty"), then you know we are fast approaching the end-game. This has been reinforced this week by Jeremy Hunt explicitly claiming that hospitals are "failing" and that they have "betrayed" patients. The rhetorical equivalence of the hospital and the charnel house can't be far off.

The Health Secretary's proposals in response to the Francis report include the usual managerialist mechanisms of ratings and sanctions. These will institutionalise failure as a feature of the health service, much as the same mechanisms have already done in education. Just as "failing" schools have been handed over to the private sector, so failing hospitals will be handed over to private providers. Health care staff are to be inspected as vigilantly as teachers, while professional status is to be eroded at the bottom end of the pay scale. Nurses are to be obliged to spend a year learning how to care (i.e. wash patients and change bedpans), though this appears to be considered unnecessary for doctors and hospital managers. Given that there will be no extra money, this could mean nurses displacing cheaper ancillary workers, leading to either lower wages or fewer staff. In tone, this sounds punitive: teach nurses their place in the class hierarchy of health.

Compare and contrast with the revelation that job centre staff are expected to meet targets for benefit sanctions, and that offices are being judged in league tables, with underachievers threatened with "performance management". Ian Duncan Smith has sought to deny that this is departmental policy, as it clearly shows that failure (i.e. the sanctioning of a set number of claimants) is being deliberately engineered. He doesn't appear to be trying too hard, and I don't get the feeling that Liam Byrne, his Labour shadow and fellow workfare enthusiast, is really as appalled as he claims to be. Before long, we'll simply accept that the arbitrary decimation of benefits is a necessary discipline for the jobless. Having it decided by the drawing of lots will probably be advocated as fairer.

It has been an interesting couple of weeks for Jeremy Hunt. Last Tuesday came the news that the three main political parties had agreed a deal to set up a new independent press watchdog. This brought to a close the political strand of the phone-hacking affair, which blew up on Hunt's watch as Culture and Media Secretary just as he was trying to facilitate News Corp's takeover of BSkyB. It is widely recognised that both the Leveson inquiry and the subsequent political response failed to address the key issue, namely the concentration of media power in the hands of Rupert Murdoch and a few other rich men. Alan Rusbridger, the editor of the Guardian, has produced many bland words advocating reasoned compromise between press and politicians over the issue of regulation, but even he couldn't avoid admitting the stark truth: "The most powerful newspaper group in the country was – on the kindest interpretation – out of control. The police and parliament were cowed". In the case of Jeremy Hunt, "enthusiastically supportive" would be more accurate.

Given the role that the press has played in denigrating and undermining the NHS over the years, it is distasteful to watch their hysterical over-reaction to the supposed threat to free speech represented by the new regulatory regime. Nick Cohen even went so far as to claim that "a great chill will descend on the free republic of online writing, which until now has been a liberating and democratic force in modern British life". While we should never underestimate the ability of the state to blunder into repression, the idea that any regulator would have the resources, let alone the inclination, to proactively monitor the citizens of "the free republic of online writing" (i.e. obscure bloggers) is laughable.

This is the hyperbole of fear. A weak press regulator is decried as the end of 300 years of press freedom, thus avoiding the need to address the odious privilege of newspaper barons, while the NHS is painted as if it were a murderous conspiracy, the better to justify its dismemberment.

The Culture Show

The last couple of weeks have seen much waffling about organisational culture. Following the Francis report on the Mid Staffordshire Trust, all and sundry were calling for a change in the culture of the NHS. This week we've had further calls for a change in the culture of banks, following the LIBOR rate-fixing fallout. What unites these two is the assumption that culture is the product of leadership, hence the focus on the suitability of David Nicholson and quibbles about Stephen Hester's bonus. Today we've seen the Health Secretary simultaneously claim that compassion cannot be "commanded from on high either by regulators or politicians" while using the example of "failing schools" to advocate "super-heads". This is the classic neoliberal mix of independence from the state and all power to the CEO. Liberty and autocracy.

Some of the fashion for cultural change stems from the popular confusion of culture with operating practice, such as the failure to distinguish between a value and an operating procedure ("care" is a value, while changing patients soiled sheets is an operating procedure). There is also a confusion between culture and power - the belief that culture is a manifestation of authority. Thus a "strong" culture is assumed to reflect a well-led organisation. This in turn reflects the belief in the efficacy of leaders, able to make an organisation turn on a sixpence and improve results overnight, which has long been the ideological cover for executive looting.

The turn to culture as the panacea for the NHS's problems follows on from the failure of targets (i.e. scientific management), which were placed centre-stage by New Labour as a managerialist substitute for prices when they decided to retain the internal market. Just as prices can be rigged (see LIBOR), so targets can be corrupted and lead to undesirable consequences (see Mid Staffs). The lamentation over culture, which is an even more complex and recalcitrant area than process management, looks like desperation and may mark the last hurrah for the NHS before the privatisation of core services. Similarly, the plea for a change in the culture of banks looks like an acceptance that the regulatory environment is inadequate and likely to remain so.

Actually existing culture, in the sense of shared values and normative behaviour, arises organically over long periods of time. Revolutions are possible, but only insofar as they legitimise values or behaviours that have been latent. You can no more change an organisation's culture quickly than you can change an individual's personality. Given the stratification and hierarchy of most organisations, there is rarely a single culture, certainly not in organisations of the scale of the NHS or a global bank. Instead, there tend to be multiple, overlapping subcultures. At the lowest levels, an organisation's culture is indistinguishable from that of the wider society. Among temporary staff, the organisation's culture usually extends no further than a logo on a building pass.

The further up the hierarchy you go, the more the culture is consciously independent of both the organisation and society, adhering to the values and norms of professional bodies or industry disciplines. Ironically, affiliation to an external culture is often strongest among those whose day job involves managing the organisation's culture (or at least curating its artefacts). The acme of this is the global culture of the executive class, which is highly conformist and pathologically averse to acknowledging cultural plurality (as distinct from "diversity", which is just CSR wibble). The paradox of culture is that top-down design and deployment inevitably bathes all organisations in the same weak solution, flavoured by business school nostrums and HR anodynes.

Starting in the 1930s, there was a vogue for forward-thinking organisations to bring in sociologists to analyse and report on the inhouse culture. This became formalised as "industrial sociology" by the 1960s, the analysis of large and complex organisations, with a focus on the informal mediation of hierarchies and the use of tacit knowledge (i.e. getting the job done while ignoring your manager). The underlying paradigm was anthropological.  This was the "social" dimension of management that complemented the "scientific" dimension, focusing on processes, that ran from Taylorism through Japanese post-war practice to BPR. As the last of these was increasingly used to provide both method and cover for the dismemberment of Fordist businesses in the face of globalisation, the practice of organisational culture shifted from a reflective analysis of "is" to an assertive imposition of "to be". This also resulted in the practitioners of organisational culture being increasingly drawn from the ranks of business consultancy and training, rather than the social sciences. A "cultural change manager" today is likely to be a HR functionary.

The history of this evolution can be seen in the current interpretative division between culture as an attribute (something an organisation has - i.e. an asset) and culture as a metaphor (a way of describing the totality of the organisation). The former view sees culture in instrumental terms as something that can be manipulated or even imported wholesale. The latter view sees culture as a medium by which the fundamental nature of the organisation is revealed, with no assumption that it can necessarily be changed. As you might suspect, the "attribute" school of thought privileges leadership and the purchase of culture (in the form of change management). Though the "metaphor" school has its roots in industrial sociology, it's as likely to be found today among consultancies pitching to undertake "cultural audits". Culture has become just another commodity.

Culture is partly a caricature, as it is selective in what it celebrates and publicly exhibits, but stereotypes are an effective shorthand for norms while symbols can be powerful tools for reinforcing values. We all know what is meant by the call for the NHS to "bring back matron" or for bankers to be more like Captain Mainwaring. The popularity of the film Boiler Room among City traders before the 2008 crash, and the current popularity of NHS nostalgia like Call the Midwife, are telling in their different ways. The NHS and banks share a common characteristic in that their culture is heavily influenced by their corporate structure. In other words (and taking a "metaphor" approach), the culture reflects the organisation. In brief, you can only radically change the culture if you fundamentally change the structure of the organisation.

The NHS has struggled to evolve from the industrial paradigm of 1948. The half-way house of the internal market was doomed to fail because the NHS was, and essentially still is, a command economy. Paradoxically, the centralisation of the NHS leaves it vulnerable to repeated government initiatives for top-down change. A more diffuse and locally-accountable structure would limit this, though that would mean acknowledging a plurality of cultures. Instead of parachuting in bullying CEOs, the NHS would benefit from bottom-up change. In other words, democracy. This has long been the elephant in the room, both in terms of healthcare workers and patients. Workplace democracy is unattractive to professional bodies, such as the BMA and RCN, that command subculture allegiance, while patient democracy is unattractive to health managers who fear that it is incompatible with rationing and would lead to an explosion in costs. The tragedy of the NHS is that these vested interests may ultimately accept privatisation as a lesser evil. Assuming services were broken down into many separate contracts (as the private providers wish), this would fragment the NHS into multiple cultures. Ironically, this would reinforce the subcultural allegiance of professionals to their external bodies, which would obviously remain monopolies.

Banking remains unstable because it combines antipathetic elements: the high street bank, which many customers still think of as closer to a para-state utility than a retailer, and high finance. The growth of financial services (such as credit cards and mortgages) led, via the deregulation of the City (and the importation of US banking practices) in the 80s, to the merger of high street and investment banking. The former got infected by upselling and commission schemes, the latter got access to very large deposits that could be leveraged for trading. The banks may now be insisting that they've mended their ways, but this is like an alcoholic insisting that the best way for him to stay sober is to carry a full hip-flask. The temptation will always be there. There is no secret that cultural change in UK banking would best be effected by fully splitting retail and investment, but equally there is no doubt that this would severely disadvantage the City unless other countries did likewise, hence the flimsy ringfence. Ultimately, a City that is "less proud" may be the only chance we have of rebalancing the UK economy, but there are too many vested interests to believe it will happen unless forced upon us.

The calls for cultural change in both the NHS and UK banking are misguided. If you want to change the culture, you must change the structure of the organisation: democratise the NHS and split retail and investment banking. The idea that cultural change is dependent on strong leadership indicates a complete failure to understand what culture really is.