Nice Guardian column by Larry Elliott in which he focusses on an interesting (and under-discussed) aspect of the Huawei controversy: why a country (the UK) that emerged from the second world war with a technological edge in computers and electronics should require the assistance of what is still classified as an emerging economy to construct a crucial piece of national infrastructure. It’s a sign, he argues, of how diminished Britain is as a manufacturing force that the only rivals to Huawei are not the great names of the past such as Marconi and Plessey, but Finland’s Nokia and Sweden’s Ericsson.
The Huawei affair should help to puncture a few myths. In the early years of China’s rapid industrialisation, the UK took comfort from the fact that it was only low-cost manufacturing that was migrating east. Developed countries like Britain, it was said, would do all the clever, high-end, profitable stuff, while the Chinese would have to be content with churning out cheap toys and clothes.
It seemed highly complacent to assume that China – a country which was making technological breakthroughs while Europe was stuck in the dark ages – would be content with being an assembly plant for western consumer goods, and so it has proved. China is now one of the world leaders in artificial intelligence and solar panels. When the government wanted to build a new nuclear power station at Hinkley Point, the Chinese got the contract.
A second myth that China has well and truly busted is that all will be well provided market forces are not hampered by state interference. China has had an industrial strategy over many decades, and has stuck to it, while during the same period Britain has seen the state’s role wane and manufacturing become an ever smaller part of the economy.
Britain’s mid-20th century edge in computing, jet engines and radar was a direct consequence of putting the economy on a war footing between 1939 and 1945. What’s more, the reason the UK retains a global presence in aerospace and pharmaceuticals is that companies have been able to rely on the state – in the form of the Ministry of Defence and the NHS – being an important customer.
Interestingly, Huawei is now trying to persuade the residents of Sawston — a village just down the road from me — that they should be relaxed about the company’s plans to build a new factory on its outskirts.
The Financial Times commentator, Martin Wolf, is a must-read columnist (for me, anyway). He’s a deeply serious and wise man. On Mayday, he had a really interesting (and sobering) column — “A politics of hope against a politics of fear” (Financial Times, May 1, 2019).
Starting from the undeniable fact that faith in liberal democracy is declining and that charismatic politicians are enticing people into giving them support, he addresses the question: how should liberal politicians respond? He suggests ten principles that should underpin their response.
- Leadership matters. Democratic politics is not about buying votes. Politicians have to persuade people — i.e. get ‘buy-in’.
- Competence matters. Most populists are good at campaigning but useless at governing.
- Citizenship matters. “A democracy is a community of citizens. The sense of what is owed to — and expected from — citizens is the foundation of successful democracies.
- Inclusion matters. In the US the Gini coefficient (which measures inequality of market incomes) is not particularly high, but inequality of disposable incomes is much higher. This is a policy choice, not an accident.
- Economic reform matters. As Paul Collier (in The Future of Capitalism) and Colin Mayer (in Prosperity) argue, we need reform of taxation and of the corporation if we are to create a society that is economically successful and more inclusive.
- The ‘local’ matters. “devolving decisions, while also giving communities the means to revitalise themselves, must be part of good new politics.”
- Public services matter — “even if people dislike paying the taxes needed to support them…. The libertarian idea of a minimal state that leaves all this to a free market is not only unworkable, but incompatible with democracy”.
- Managed globalisation and global cooperation also matter. “No country is an island. We depend on ideas, resources, people, goods and services from other countries. National sovereignty does matter. But it is not all that matters.”
- Looking ahead matters. “We live in a world of large long-term upheavals — notably climate change, artificial intelligence and the rise of Asia. Good governments must look at these changes and what these things might mean for their peoples. If democracies cannot do this kind of forward thinking, then they will fail.”
- Complexity matters. Mencken: “For every complex problem, there is an answer that is clear, simple and wrong.” Wolf: “A politics that rests on popular anger and despotic whim is bound to fail. The right response has to be a politics that bases hope on realism. That is the only sort of democratic politics worth doing.”
If you like distilled wisdom, this is it.