I have written before about how regulators and competition regulators are falling at their job of making the economy safer, fairer and productive. These institutions are however keeping the worst of capitalism alive, the bleak and the slow, the outdated and the aged. The issue isn’t due to a ‘small c’ conservatism and a sense of seemingly endless sentimentality but a pure misunderstanding of the economy full stop. The way politicians and key thinkers are missing the loosening of previous economic assumptions over work and incomes is hindering the creative part of what Schumpeter called ‘creative destruction’. For example, the advancements made through Apple’s App Store are not led by Apple but by millions of people creating games and apps from their rooms or lounge, but the rewards go.. to the top. Imagine if the rewards were shared and were felt by everybody.This is the next revolution, technology has brought a new dimension and a raft of different ways to change the economy and shape it as we see fit.
Recently both the British Chamber of Commerce (BCC) who issued warnings over the UK economy and the Institute of Directors (IoD) have spoken of the Uk’s need to be supporting investment in the future and made known their belief that Corporation tax is in its dying days. These are statements that should be making the government sit up and listen, these are statements that not only highlight the flashing lights on the economic dashboard but are concerns which I cannot help but agree with. The idea that the UK economy can grow as it is in the future without some serious intervention is a starry eyed dream. If the government will not listen to me then they should listen to the BCC and IoD when they issue warnings that the UK is not putting a big enough effort into future proofing its economy, workers or the state.
When all the signs of a need to renew the economy are present, issues such as stagnation, flat wages, a stubbornly large fiscal and balance of payments (import/export) deficit and more. The UK has an abundance of archaic processes, institutions, regulators and outdated and wanting political solutions, without forward thinking these will not suffice. This piece is part of the missing discussion on automation, capitalism, working weeks and forms of basic and living incomes. Even when you would expect the state to take notice over issues such as over the future tax base, we see the continuing failures of yesteryear through privatisations and corporation tax cuts. These collectively show an outdated model with no answers for tomorrow’s realities, the discussion should move on.
The state is perversely centralising in the name of localism from Free schools to Academies but is failing to promote equal standards, state ownership of National Rail or the Post Office will and has, respectively, gone to one private multinational provider.The economy is becoming decentralised, and where it is becoming centralised the state is pursuing the opposite for example over the web of centralised ‘big data’. Inasmuch as the economic revolution can be organic and bottom up, there remains a need for regulations if the new economy is to tackle exploitation of works, tackle environmental concerns or to cap the largess in industries that will not be overcome anytime soon. In these cases the UK needs strong and tough regulations, which are applied to the modern age, not to business practices of yesteryear. Why do we tax multinationals in the way we do (or don’t ‘Google’), or regulate credit unions more stringently than banks when Credit Unions are far better at protecting themselves from financial oblivion?
I do not know the answers for the future economy anymore than those who have come before but for the sake of those who come next it is the duty of us to realise the cost our inaction will have. Protecting jobs during this technological wave is hard but it would also be counter intuitive to stop the pace and rate of change as that means as jobs become technically redundant but remain on poverty wages and cost new jobs and income as relative productivity falls and the people and the capital that may replace them remain or become under utilised. Tax take is lower than before, government loses control of leverage over demand and the level of inequality grows exponentially. It beggars belief that the state which lead the charge in helping bring the new wave of technology into existence cannot accustom itself to its arrival but the need to do so now grows every day inaction triumphs over action. Lets look at the public digital realm, the working week, forms of basic income and cooperative ownership and promotion of the open-source over the open for abuse platforms. That is what is on offer if we think about the future now, but we will come too late to the game if we leave it too long.
I want to start a discussion on where next for the economy, I have started but I need you to join me, right now, please get involved, follow my Twitter @rwscarter or sign up to my mailinglist on the left. I also check my emails on email@example.com .