DELUSIONS OF GRANDEUR

It is a commonplace that the British elite, at least in its public utterances, suffers from serious delusions of grandeur. The problem has recently got worse with talk of return of the Navy not just to East of Suez but to a new China Station. Britain, we are told, will become not merely a local, but a global champion of free trade.   These fantasies are easily recognised, but some are a little trickier to spot because they are indulged in not just by Brexiteers.  What I have in mind is the claim that the UK has a unique strength in science and technology, or innovation, or creativity, which can be exploited to transform the nation’s economic prospects. This is hardly a new story, but it has now reached rather grotesque proportions as the last refuge of Brexiteer’s dreams. This will perhaps help expose the belief for the myth it is.

In her Mansion House speech the Prime Minister called Britain ‘A nation of pioneers, innovators, explorers and creators …’ and saw ‘ A United Kingdom which is a cradle for innovation; a leader in the industries of the future’ (2nd March 2018). In a more recent speech (21st May 2018), speaking under a gigantic British radio telescope built in the 1950s, she claimed that Britain would ‘lead the world in the Fourth industrial revolution’. She repeated the ambition of the government to raise the R&D/GDP ratio to 2.4% by 2027, claiming this would be ‘more than ever before’.  In fact, it was higher than this in the late 1950s when the telescope was built, and would peak at 3.0% in the early 1960s.   The ratio is now under 2%, well, below the real leaders, who are needless to say already well ahead of the government’s target of 2.4%. 

Nevertheless the Minister in charge, Sam Gyimah,  says Britain must return to its roots as a ‘science and technology superpower’ calling for it to rediscover its ‘spark of genius’.  With a little more modesty he claims that the UK needs to follow the US in becoming a global hub of high-tech, research-led businesses.   Boris Johnson claims, ‘we have an amazing economy’ –and cited AI, stem cells and more. ‘The UK is once again taking the lead and shaping the modern world’ he boasted (14th February 2018).    How does this fit into Brexit? Well David Davies tells us that ‘at a time when the commission themselves say that the vast majority of future global growth will come from outside Europe, it makes sense for Britain to place itself at the cutting edge of new technologies and the regulatory regimes they will require.’ (Daily Telegraph 2nd January 2018).  Fantasizing is not just the province of Brexiteers.   UKRI, the new body in charge of most public-sector research said in its recent launch mission that ‘The Government has set an ambition for the UK to become the most innovative country in the world’. It is possible that this technical agency is drawing attention to ridiculous nature of the claim.   Let us hope so.

The evidence for UK strength is remarkable weak, even in the favoured measure of (academic, largely) citations. The usual one is that the UK has a larger share of world citations than of population – well, so does every rich country.  At the level of R&D spend the UK position is as we have noted very poor. And the record of outputs, especially in the creation of new businesses, is not something discussed beyond tedious and misleading references to ARM or to unicorns which have not yet produced. 

There is also a tendency to create inflated statistics.  The ‘UK space industry’,  it is claimed,  employs around 40,000 people.  But nearly 90% of this ‘space industry’ is in fact satellite broadcasting (a mostly earthbound activity), communication, and positioning services.  The space industry as defined is a user, not a creator, mostly in fact of the technology derived elsewhere. This is the kind of argument which attributes all the output of agriculture to tractors, or the output of education to computers.

The brutal simple reality is that the UK economy has stagnant and low productivity, not surely what one would expect from the most innovative nation in the world.

As has been the case before in British history innovation policy, and talk of innovation, has been a substitute for policies which might actually change anything.  Did the recent coalition government really believe that £50m invested in Graphene would transform the North West, the UK, the world, as was claimed?   If so it should have invested the £50bn planned to go into HS2.  

The British state has form in this area. Since the 1980s innovation policy, or science policy has been a substitute for industrial policy.   Before the 1940s too it was common to give a cheap bung to innovation as an alternative to policies which would actually change things.  Before 1914 David Lloyd George stimulated agricultural research to head off demands for protection. In the 1920s the Empire Marketing Board spent small sums on research to avoid serious protection and imperial preference.  

There was however an exceptional period when relative innovation was high and was connected to industrial strategy – the 1940s, 50s, 60s and even the early 1970s were a period when national innovation and national industry mattered.   Back then politics walked the walk.

THE FIRST BREXIT, or DUNKIRK REDUX

Brexit has been adorned with images from Second World War. Two new films, Dunkirk, and Darkest Hour, focus on the British forced withdrawal from the Continent of Europe. It was as if Dunkirk was the first Brexit.

On the face of it Dunkirk is a good image for Brexiteers.  For a long time, the events of May/June 1940 have been seen as the moment of the recreation of a vigorous new nation. Against the odds, and the views of experts, grit and determination won out.  It is a story of taking back control from shifty continentals and surging ahead.

But the films and the stories they build on  both get what really happened very wrong indeed.

The first Brexit that of 1940 was a disaster for the British Empire, and indeed for Europe. Had it not happened the world would have been a much better place. Imagine for one moment something which is tellingly not generally put into the balance of assessment of 1940 – that the British empire and the French republic had – instead of being defeated on land – held the German attack and marched triumphantly to Berlin.  Churchill and Reynaud would have stood taller even than Lloyd George and Clemenceau did in 1918, and would have outshone Stalin and Roosevelt.  The worst bloodletting of the war that of the years 1942-45 might have been avoided.

The balance of forces made this a likely outcome.  We find it unlikely because we have been told too many times that in 1939 and in 1940 something called Britain was weak, barely armed, and badly led. Only Churchill’s irrational optimism, we are told, transformed this Britain into a powerful fighting nation. 

The reality is that Churchill became the prime minister of a superpower in 1940 and through no fault of his own left it in the second rank of nations.  Only an extreme right fringe of imperialists make this point for their own deluded reasons, but it is nevertheless true. Where they err is in assuming that if the UK had kept out of the war it would have retained its power.  The reason is that they assume that the British economy and British power was a matter of empire, and not connected to Europe. They were wrong in this, as have been others who overestimate the significance of empire.

Even with the rise of tariffs in the 1930s the UK was a formidable trader in Europe. Its coal was vital to both Baltic and Mediterranean nations. It depended on Swedish and North African iron ore.   Its eggs and its bacon came from Denmark and the Netherlands. Belfast linen depended on Baltic flax. The mines and railways depended on European timber. The newspapers and books were made of Scandinavian trees and North African asparto grass.   The gravity model applied then as it does now.

German arms made the first Brexit – they cut the UK off from its sources of supply and from its markets in Europe.  The consequences could have been dire but for the then great power of the UK and the British empire, and its continued alliance with European governments in exile.  The United Kingdom had the power to ship material from outside Europe, it had the market power to demand that countries round the world send it material in return not for goods, but promises to pay. The USA was also prepared to supply it for free with much of the wherewithal of war.   Only this made possible the surviving of what would otherwise have been an even harder and even more uncomfortable Brexit. The Americans were to exact a heavy price.

The war over, the United Kingdom set out to re-establish its old economic links to Europe, and indeed to become a more European-looking economy.  It took time and effort.  By the early 1960s the Conservative government came to accept that full entry into the main markets would be on the terms of the new Common Market, not on the British terms.  This was made brutally clear in that France, not the UK, was responsible for keeping the UK out of the Common Market until the 1970s.

If the first Brexit led to economic success it did so indirectly, long after the war, and in ways which modern Brexiteers would not approve of.  After the war a national and nationalised economy was created out of necessity and by conviction, of the Labour party in particular. Protection by national import controls, exchange controls, and more, further industrialised the economy, and made it in time self-sufficient in food. It grew faster than ever before in history, and faster than it has grown since.  But that national economy no longer exists and for all the talk of industrial strategy and fantasies about leading in the fourth industrial revolution will not come into being.  

Churchill, unlike those who pretend to emulate him today, did not want Brexit – he would have preferred as any sensible British leader would, a successful Anglo-French alliance marching to victory.   That was the way to preserve British power then, as it is now.  Then as now, Brexit will be bad news and the best that can be expected is an expensive and painful reconstruction of the economy and a request, from a weakened position to be readmitted to the club.  The Brexiteer fantasy yarns of 1940 are inviting us to draw the wrong lesson from history.