The idealism of realism

‘Believe in change but keep it real’: Sounds simple but it’s not where most of the conversation is right now.

Unless plans go awry the Review on Modern Employment which I have been chairing will report in the next few weeks. As I explained in my RSA annual lecture, the Review rests on the belief that ‘all work should be fair and decent with scope for fulfilment and development’. The first of five reasons I offered for committing to good work is that for the foreseeable future millions of working people will live in poverty. If so, I argued, the least we should offer low paid workers is viable progression routes and decency at work.

The good news is that wages are currently rising fastest at the bottom end of the labour market. This seems primarily to be a consequence of increases in the value of the Living Wage and of a tightening in the labour market partly resulting from the prospect of Brexit. It could be that this welcome trend will continue for a few more years. Nevertheless, I have noticed the message ‘the low paid are likely to be with us for the foreseeable future’ receives a mixed response. Isn’t accepting this to abandon hope and idealism?

The models of political economy on offer at present revolve around two poles. On the one hand, the old orthodoxy; namely, that the current UK system poised between the free markets of America and social markets of Western Europe is fundamentally sound. Some work may be needed to tackle problems like low productivity but if we could simply raise the underlying annual growth rate by a percentage point or so we could get back to a system that can guarantee most people rising living standards while also generating sufficient tax for the welfare state.

The alternative view – given powerful expression in the Corbyn campaign - is that society is going backwards. Progress is only possible if new people with new values are in charge armed with a healthy scepticism about many aspects of modern capitalism and an enthusiastic commitment to a larger state funded by higher taxes on the rich.

There is little more tiresome than an argument powered by the energy of burning straw men. So it’s important to emphasise that I think both these arguments have strengths. On the one hand, it is true that economic growth powered primarily by markets, and Governments that support markets, has contributed to an amazing and unprecedented step change in human welfare. Whether it be the expanding choices and life spans of Western citizens or the biggest ever reduction in global poverty, capitalism in its various national forms has generally delivered the goods. On the other hand, in recent decades living standards have stagnated for most people, inequality has reached and stayed at dysfunctional levels, too many corporations evade their proper responsibilities and, more recently, austerity has frayed the fabric of the public realm. And this is to say nothing about the environmental unsustainability of consumerism.

Equally, as the sides convincingly argue of each other, both positons have major flaws. But my concern is less with their intellectual credibility as with their political implications. For in different ways both positions argue for a kind of passivity when it comes to solving problems here and now. From the first perspective, once we get the market growth machine on track it will do most of the heavy lifting involved in social progress. From the second, anything we do now – under a fundamentally broken and unjust system – will only be tinkering.

Which brings me back to the working poor. The reason I want to take progression and job satisfaction for the low waged seriously is partly because I don’t believe that either the dynamic market or the benign state will end in-work poverty any time soon. I want to focus on how we could make life better for people now assuming that traditional growth won’t lift all boats and that the revolution will continue to be postponed.         

Deprived communities provide another example of the case for idealistic realism. Generally politicians, nationally and locally, have two offers to make to people in poor places (most of which have been poor for generations); either economic regeneration will magically turn round the fortunes of your locality (although it is now several years since we had a national regeneration programme), or social mobility will enable trapped talented people to escape. The first promise lacks credibility while the second is questionable not just practically but ethically. Much less emphasis is given to how we might actually improve the quality of life in poor areas assuming that those areas and the people in them will remain poor. This is not to say that there aren’t lots or of worthy initiatives and organisations focused implicitly on improving the lives of poor people, but that the political discourse focusses on unrealistic ideals rather than practical challenges. But, for example, too little is understood about why places with similar socio-economic conditions can generate significantly different outcomes in terms of community resilience and individual wellbeing.

Public services offer a third example. The orthodox view ploughs on with the market-oriented tenets of new public management, despite the evidence that NPM has aggregately failed. The radical view says that public services can only be saved by reversing private sector involvement and injecting large amounts of cash. Again the question that gets much less attention is what different approaches do we need to develop (different from NPM) to make public services much better at delivering outcomes within the broad constraints of limited budgets (given that these are very likely to continue).

Any remaining readers may feel this seems a pretty downbeat message. This is the point to recall the RSA’s argument that social change involves ‘thinking like a system and acting like an entrepreneur’. This is our response to a diagnosis that policy interventions (and social innovations and organisational change) generally fail for one or both of two recurrent reasons; they are too scattergun (not systemic) and/or too path dependent (not opportunistic, responsive or agile).

The RSA’s contention is that if we were to adopt a very different approach (and we don’t underestimate how hard that is to do) we might become much better at achieving change.

In essence, then, the argument has three parts:

i) reject complacent orthodoxy and question radical idealism

ii) focus on practical change that can make a difference now

iii) do so in ways that could be much more powerful than conventional interventions.

Or to paraphrase one of my favourite political aphorisms; it is not hope that gives rise to action so much as action that gives rise to hope.