Britain’s squid pro quo
Economic growth is hindered by the profusion of “negative sum” public sector jobs
This article is taken from the December/January 2022 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issue for just £10.
Few of Britain’s economic problems are more fundamental than the slide in the growth of productivity — output per person — in the last half century.
In the 1960s productivity typically rose by more than three per cent a year, enabling output per head and hence living standards to double in little more than 20 years. But in the decade to 2019 productivity increased by only 0.9 per cent a year even before the ravages of Covid 19. If this were the best Britain could do, it would take over 75 years for output per head and living standards to double.
Economists do not have good theories to explain a nation’s productivity. But an obvious point is that the more unproductive people there are, the lower is the average level of output per head.
Adam Smith noticed the problem in his 1776 Wealth of Nations. He was particularly worried about the size of the state. In his words: “Great nations are never impoverished by private, though they sometimes are by public prodigality … The whole, or almost the whole public revenue, is in most countries employed in maintaining unproductive hands. Such people … are all maintained by the produce of other men’s labour.”
Does Britain exist for the benefit of its people, or of its bats, lobsters, squid and octopuses?
Concern about the question was expressed forcibly in the mid 1970s by Robert Bacon and Walter Eltis, both of Oxford University. They contributed articles to the Sunday Times and then wrote a book entitled Britain’s Economic Problem: Too Few Producers?, which went through three editions. They contrasted the marketed output of the private sector, which they saw as a positive sum game, with the non marketed output of the public sector, which they viewed as having many zero sum attributes. Their ideas resonated with the increasingly influential advocates of supply side efficiency ahead of and during the Thatcher reforms of the 1980s.
But is talk of zero sum economic activities too cautious? Is it possible that many people do negative sum work? To go beyond Adam Smith, such people do not merely “produce nothing”, but reduce the output of others. Plainly, the more people in negative sum, output reducing jobs, the lower a nation’s output per head. The more rapidly these kinds of jobs increase, the lower is its growth rate of productivity.
This may seem a little academic and remote from the spirited op ed pages of the Daily Mail. But it is related to the paper’s disturbing account — “Doing up our barn almost drove me batty” by Tara Newley Arkle — on 28 October, relating how “the bat police” — her local authority, Natural England and others — hindered her family from converting an unused barn into a liveable space for humans.
As she points out, the 2010 legislation on bat protection “has led to many buildings falling into disrepair as legal wranglings drag on”. Bluntly, the bat police represent negative sum employment.
Also relevant here is the proposed Animal Welfare (Sentience) Bill, now working its way through Parliament. The bill is said to have been strongly supported by Carrie Johnson, wife of the prime minister. Although any advocacy role by her has been officially denied, the bill is backed by Boris Johnson. MPs have debated lobsters’ feelings, and the emotional make up of squid and octopus.
This might be seen as part of the rich, entertaining and harmless tapestry of British public life. But the bill is far from harmless. It envisages extending the powers of an existing Animal Welfare Committee.
No doubt the committee, with its attendant civil servants, and its occupation of office space and production of documents, does fine work in stopping needless cruelty to animals. All the same, to the extent that it hampers the farming and fishing industries, it reduces national output. The people that work for it — presumably set to increase in numbers when the Animal Welfare (Sentience) Bill becomes law — are another example of negative sum employment.
Does Britain exist for the benefit of its people, or of its bats, lobsters, squid and octopuses? Should government concern itself with the living standards of humans or with those of an assortment of creatures, vertebrate or invertebrate?
The high proportion of the population who are not animal rights activists might point out that people certainly feel pain when their barn conversions are delayed, and that they will be angry if their fishing and shooting holidays are prevented.
We live in democracies, and it may be the case that many voters — or even a majority of voters — want to make the living standards of animals more equal to those of human beings. But politicians, including the prime minister, must understand the trade off here.
The more people are employed in negative sum activities, the lower will be the rate of productivity growth. And is it too cynical to suggest that Red Wall voters are unenthused by additions to public expenditure that are intended to make life better for bats and crustaceans, rather than themselves?
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