I interviewed a very affable and smart economist a few years ago, who was a senior advisor to a European government at the time. We got onto the topic of industrial policy, one of the areas in which the vocation towards economics and that towards politics tend to clash. He said:
as one politician who recently became a bigger politician once told me, they are not in politics not to act. They are in politics to do certain things. And industrial policy is one of the things that you do. It’s a government intervention to promote certain activities. That’s why they’re in politics! They’re not in politics to do nothing, they’re in politics because there are levers, and they want to use those levers
Today's news that the Conservatives are promising super-fast broadband for everyone reminded me of this. The announcement has a fin de siecle feel to it - haven't we been here before, about five or six times? Is Daniel Bell's The Coming of Post-Industrial Society (1973) still our policy manual of choice? It's not that I don't want progress, its simply that it would be nice if our definition of progress occasionally progressed. Next someone will be arguing for more cafe culture in Britain's city centres and loft-style-living in ex-industrial wastelands. NESTA have apparently calculated rollout of super-fast broadband could 'directly' create 600,000 jobs. And raising everybody's credit card limit by an additional £1,000 will lead to higher levels of nutrition across the population.
No, I would suggest that the economist quoted above is nearer the mark on this. If broadband didn't exist, politicians would need to invent it. If there wasn't a market failure in this area, politicians would need to produce it or insist on it. Rolling out more telecom infrastructure is something that politicians can do, it gives them a chance to act. But how much speed is enough? What comes after super-fast? What would be interesting would be to look at the claims made about ICT over the last twenty years, then test these against what is now empirical evidence regarding productivity, education levels, job creation and macro-economic growth. I've no doubt that compiling this evidence would be extremely difficult, but if NESTA can put a number on what super-fast broadband will contribute to the size of UK GDP - £18bn apparently - then it must be eminently possible to discover whether the promise of the post-industrial age was a remotely realistic one.
Will - everyone forgets nowadays that BT offered to run fibre broadband all over the UK back around 1986 at its own expense (about £20bn then), if the government would permit it to become a content-provider as well as a carrier. Thatcher refused the offer on ideological grounds and gave the go ahead to a free-for-all of mostly US cable companies. That £20bn that BT offered to spend is by coincidence almost the same sum that was extracted - dentist-style - from the telecoms companies later by the famous auction of mobile wavelengths.
Draw what conclusion you may
Posted by: Dick Pountain | December 09, 2010 at 11:47 AM