0:03

I'm Will Hutton, and you're listening to the Wee

0:06

Society podcast. I'm a journalist,

0:08

a writer, economist, and a fierce

0:10

advocate of the social sciences.

0:13

Now

0:13

more than ever, we need to be listening

0:16

to those with solutions to our world's ills,

0:18

whether that's climate change,

0:20

the cost of living crisis, or something

0:22

more granular, like the low uptake

0:24

of sport in certain communities that could

0:26

damage the health and well-being

0:28

of an entire country. And

0:31

you'll be hearing conversations with top social

0:33

scientists who are addressing just these

0:35

issues in the Wee Society podcast.

0:39

They

0:39

will be bringing us some of the best ideas to shape

0:41

the world we live. As

0:43

the president of the Academy of Social Sciences, I

0:45

know how vital the social sciences are to ensuring

0:48

we are a society of we and

0:50

not an island of I. Social

0:53

scientists are the hidden heroes behind government

0:56

policy, city planning conundrums,

0:58

and top business decisions. By

1:00

engaging with some of the best new ideas, I

1:03

sincerely believe that our world can be

1:05

much improved. I hope

1:07

you enjoy the Wee Society podcast brought

1:09

to you by the Academy of Social Sciences.

1:16

Britain was the first country to industrialize. In 1870,

1:19

we were the richest country in the world. Since

1:22

then, it's been downhill, with the decline

1:24

of anything intensifying over the last 15 years.

1:28

But productivity and investment have stagnated. The Bank

1:30

of England considers our long-run growth rate

1:33

to have sunk below 1% a year. What's

1:36

going on? Can we recover our

1:38

dynamism? Maybe being the first

1:40

to industrialize was not such a great idea.

1:43

It meant we never had to think hard about

1:45

how to build a dynamic economy. What

1:49

lessons are there from our history? With

1:51

me to discuss these issues is Britain's preeminent

1:53

economic historian, Professor Nick Crafts

1:56

at the University of Sussex, after distinguished fellows

1:58

at Oxford, LSE and Bachelor's of Business. Warwick. With

2:01

two books and a hundred referred articles onto

2:03

his belt and now president of the Royal Economic

2:05

Society, the world beats a path

2:07

to his door and we followed suit here

2:10

at his home in Hove. Professor Nick Crafts,

2:13

welcome to the We Society podcast.

2:15

Thank you, I'm delighted to be with you.

2:19

Nick, when we contacted you to

2:21

kind of be interviewed for the We Society podcast

2:23

and you heard the saying We Society, what

2:26

was your first thought at We Society? What do you think

2:28

about? What was your reaction to that kind of concept?

2:31

My reaction to the concept was I'm very

2:34

pleased they want to talk to me, but rather

2:36

surprised. Well I

2:38

hope that when we finish people will not be

2:41

surprised at why we're here. Britain,

2:45

the first to industrialise,

2:47

it all seems so easy and

2:49

it's got more and more difficult

2:51

as the decades have gone by to where we are today.

2:54

There's really a linkage between that. Britain

2:57

was the first country to industrialise

2:59

to go through the Industrial Revolution.

3:02

That wasn't easy actually,

3:05

it was the culmination of many centuries

3:07

of slow development, but

3:10

it was certainly something in which we led the

3:12

world and that

3:14

was a fine accomplishment.

3:17

Although one might say in a

3:20

way it's not a particularly

3:23

sophisticated economy, the

3:25

first motor car,

3:27

the Model T or something like that was a great

3:30

achievement but we wouldn't drive one today.

3:32

Similarly the institutions,

3:36

the

3:37

education system,

3:40

the standard of entrepreneurship,

3:42

probably all those things are things

3:44

which we would say were very good

3:46

for the time but not good enough for

3:49

later on. So the question then

3:51

is whether success

3:53

in the early phase actually

3:56

makes it more difficult or

3:59

whether the subsequently, or

4:01

whether it's simply that adjustment

4:04

was needed, it could have happened, but we didn't

4:06

really do it. But one way or the other,

4:08

you would have needed to adjust. It's

4:11

true that some of the roots

4:14

of institutions, which I

4:16

think did turn out to be problematic

4:19

carriers of history, industrial

4:22

relations being one, a system of

4:24

corporate governance, I think, being another,

4:26

the roots do date back

4:28

to the industrial revolution. And

4:31

I've written certainly things which

4:33

suggest that the early start

4:36

did indeed, in the end, prove to be

4:38

a bit of a handicap.

4:39

Certainly, I mean, working

4:41

on it, as I have been over the last kind of few

4:44

months, I'd be thinking that more and

4:46

more. I mean, it didn't have

4:48

to be the case. The industrial relations

4:50

were quite as adversarial as they got

4:53

to. It didn't have to be the case

4:56

that actually companies were

4:58

governed in the way they were. And that actually

5:01

the supply of external finance

5:04

was as kind of primitive as it was. I mean,

5:07

so that, I mean, when Germany and the United States

5:09

kind of overtook us in the last

5:11

decade of the 19th century, first

5:13

decade of the 20th century, we just didn't know how to respond,

5:16

although we did. I mean, there was the famous

5:18

Macmillan committee, and they

5:20

have very kind of serious recommendations, but somehow

5:23

just kind of washed over the British establishment

5:25

who were kind of convinced all you had to do was free

5:28

trade, small state, laissez-faire,

5:31

adhere to the gold standard, and all would

5:34

be well, but all wasn't well. Well,

5:37

it's certainly true that the Victorians

5:39

were a small state economy.

5:42

It's

5:43

a slight abuse the term, but you might almost

5:45

say laissez-faire. The

5:47

government provided defence,

5:49

law and order, and so on, but

5:52

wasn't terribly ambitious and liked

5:55

to operate on the basis of rules.

5:57

And you've mentioned a couple there. the

6:00

gold standard and the balanced budget were two

6:02

very obvious things. I

6:05

think we did in the interwar period

6:07

start to change really very quickly

6:09

towards a more managed kind

6:12

of economy and indeed that phrase

6:14

can I think be used by the time

6:16

of the 1930s for the development

6:19

strategy that was adopted to

6:21

try and recover from the

6:23

shock of the Depression. I

6:27

think the issue may be and certainly

6:30

in my second book I tried to spell

6:32

this out, that moving

6:34

to a more managed economy took

6:37

away a lot of competition. In

6:40

the absence of competition,

6:42

some of those institutions we

6:44

were just talking about malfunctioned.

6:47

Competition allowed industrial

6:50

relations to deteriorate, possibly

6:53

even encouraged it. Lack

6:55

of competition also was

6:58

a handicap in holding

7:01

management to account. So when

7:03

we think of things which went wrong with the

7:05

British industry, I tend to

7:08

suggest that it's an interaction

7:10

between lack of competition

7:14

by the time that comes about and

7:16

the institutional legacy. So

7:19

I think we can see ourselves changing,

7:22

but the change doesn't work very

7:24

well.

7:25

We're going to spool on to discuss

7:28

today in a minute, but just let's poke about

7:30

a little bit in this

7:33

area that you've raised. I

7:36

mean, 1931 to 1950 is in

7:38

many respects quite an extraordinary

7:41

period of British economy. I mean, the economy

7:43

in 1930 was recognizably

7:46

the late Victorian economy. In 1950,

7:49

I mean, it's

7:52

consumer durables, it's cars, it's

7:55

jet engines, it's radar, it's the

7:58

modernisation was breathtaking.

7:59

And actually,

8:02

it's quite interesting to reflect

8:04

on why that took place. I mean, it wasn't just

8:07

that we had to win a war against Germany. I

8:09

mean, there was a de facto, an

8:11

industrial strategy there, which actually

8:13

the Conservative Party, under Balfour,

8:16

and then Baldwin, you know, really went for. And

8:18

then followed through by the Labour government.

8:21

I mean, is there a lesson? A,

8:23

do you agree with that? And you probably don't. But if you do,

8:25

to the extent that you do agree

8:27

with that, are there lessons

8:29

for us now in 2023? We

8:33

did eventually, in the interwar

8:35

period, start to benefit from

8:37

the technologies of the second

8:39

industrial revolution. You

8:42

do see things like cars and electricity

8:44

making a difference. That's correct.

8:48

But I think insofar as industrial

8:50

policy is concerned, although

8:54

it pretended to be interested

8:56

in what was called rationalisation,

8:59

which might be a word these days we'd replace

9:01

with modernisation or something

9:03

like that, the industrial policy

9:06

of the 1930s is very defensive,

9:09

and it's actually aimed at protecting

9:11

or helping failing industries.

9:15

So it's promoting cartels

9:17

and things like coal and what would

9:20

have happened in cotton had things gone

9:22

a little bit further. It's

9:25

developing a regional policy

9:27

which is trying

9:29

to ameliorate high unemployment,

9:32

but it's certainly not restructuring

9:35

the regions which are struggling as their export

9:37

industries have to confront

9:40

de-globalisation and so

9:42

on. There is a real change

9:45

in the post-war years,

9:48

the Acli government and so on. But

9:51

I think it's hard to see the Acli government

9:53

as having a long-term industrial

9:56

strategy. I think their

9:58

hands are full. with trying

10:00

to deal with the aftermath of World War

10:03

II. The very really

10:05

difficult balance of payments situation

10:08

that was obvious at the time

10:10

really dominated,

10:13

I think, anything to do with long-term

10:16

thinking. They had ideas

10:18

about how to change the

10:21

way the economy ran. So

10:24

most obviously to nationalize

10:27

quite a significant part of the economy.

10:30

We're probably talking about 10 to 12% of the

10:32

economy being in nationalized

10:35

industries. But did they have a strategy

10:38

for what those industries should do? Not

10:40

a convincing one, I don't think.

10:42

Well, I do find it extraordinary

10:45

looking back. I mean, there we were, you know, 780

10:48

to 1860, you

10:51

know, the Great Exhibition of Crystal Palace being one

10:53

component of that, you know, the most dynamic capitalist economy,

10:56

you know, the face of the earth. And

10:58

then 150 years later, you simply

11:00

can't say that. It

11:03

kind of grips with actually, you

11:05

know, what I mean, so

11:08

it was inevitable because, you know, other countries were bound to get

11:10

richer, so there's that. But

11:12

actually, a lot more growth rate of 1% or

11:14

below is

11:16

not great,

11:18

that's where we stand now. Yeah,

11:20

I mean, thinking first of all about

11:23

the period of the Industrial Revolution.

11:25

It was long on growth at 1%, you'd say. Well,

11:28

it's a long period

11:30

of slow acceleration of growth.

11:34

We don't reach a 1% a year growth

11:37

rate for productivity until

11:42

the second quarter of the 19th century. We

11:45

briefly touched 2% in

11:48

that third quarter. But

11:51

we're essentially an

11:54

economy which is capable of growth that

11:56

they wouldn't have dreamt of in the 16th

11:58

century. But it's a

12:01

relatively modest kind of growth

12:03

rate compared with what we saw

12:05

in many countries, including

12:08

our own, in the 20th century. We

12:12

have had periods where we've grown

12:14

quite a lot more rapidly than that

12:17

during the 20th century and

12:19

the peak phase was the

12:22

so-called Golden Age, the

12:25

period between say about 1950 and

12:28

the mid 1970s, labour

12:30

productivity growth in that period is nearly 4%

12:33

a year. We

12:36

were able to grow at a labour

12:39

productivity increase

12:41

of about 2% a year in the 30 or 40 years

12:46

before the financial crisis. That's

12:48

way above anything they could have done through

12:51

most of the industrial revolution. But

12:55

the roof certainly has fallen in

12:57

in the last 15 years or so. And

13:01

if we were or are looking

13:03

at a future of 1% a

13:06

year growth in the future, perhaps

13:10

1% a year productivity growth with the

13:12

labour force not growing a lot, then

13:16

that would be a very disappointing

13:19

outcome. I'm not convinced

13:21

that that is the long term future,

13:24

but I can quite see

13:26

why it's reasonable for

13:28

some people to believe that it will

13:31

be.

13:32

Why? I guess that's the question really.

13:34

I mean, everybody listening to this was saying, well, why? Come

13:36

on, Will. Ask him why. So

13:39

why might we do better? Well,

13:41

why has it gone? Why has it gone pear-shaped? Why

13:44

has it gone pear-shaped? I

13:46

think it's gone pear-shaped for a number

13:49

of reasons. It's not a one reason

13:51

story. The

13:54

financial crisis did do considerable

13:57

damage. It has reduced

13:59

the level. level of productivity that the

14:01

economy can achieve

14:04

compared with not having a financial

14:06

crisis. But it's more than say the United States

14:08

or more than many European economies.

14:11

It's more than most European countries.

14:13

We had a very large financial sector

14:15

prior, but we also

14:18

have had a serious disruption

14:21

to what we might call the process

14:23

of creative destruction and

14:25

so on. So that's a bit of... Just so you know, creative

14:27

destruction is the kind of term that was coined by

14:30

what Schubert, the Austrian economist,

14:32

and the idea is that capitalism

14:34

has to go through phases in which it pulls

14:36

down great companies so

14:39

other ones can grow up. I think I'm

14:41

really not thinking of anything quite as grand

14:43

as that. I'm thinking...

14:45

Well, I wanted to make you feel brand. I'm

14:47

thinking of a vigorous process of entry

14:50

and exit, reallocation of resources,

14:52

rapid exit of the failing

14:54

activity, lots of startups

14:57

of new good activity. Right, lots of startups.

14:59

I mean, it's astonishing that there's a startup... Yeah,

15:02

there's also been a substantial

15:04

number of zombie firms. The

15:06

era of low interest rates allows

15:09

them to survive. If

15:12

you look at measures of entry and exit,

15:15

it's been decreasing over the

15:17

last several years. So

15:19

I'm not saying that's the

15:21

whole story, but I think it's part of the story.

15:24

The second part of this story is

15:27

clearly for me Brexit, in

15:30

the sense that not that we've reached

15:33

the long-term conclusion

15:35

of Brexit, some of the long-term

15:37

effects are still to show up, but

15:39

the actual process of going

15:42

through the leaving creates very

15:45

significant uncertainty, the

15:47

mind investment, and the

15:49

best estimates I've seen in the literature

15:52

say if we've got a 20% productivity

15:55

gap compared with where we might have hoped

15:57

to be, round about 20%.

15:59

on previous form

16:02

then the Brexit part of it might well

16:04

account for five of those 20% something

16:07

of that order. The one that I think matters

16:09

most... Of course if John Redwood was here or Lord

16:11

David Frost they'd be

16:14

saying look you're just not seizing

16:18

the opportunities of Brexit you're just not talking

16:20

it up you're just a Ramoning pessimist you know that's what they would say

16:22

if they were here. Well

16:26

perhaps they should look at the empirical evidence

16:29

and think about the theory

16:29

of how investment works. We

16:33

know that uncertainty is

16:35

a really major handicap

16:38

for an economy in terms of investment.

16:41

We know that not knowing how

16:43

Brexit would pan out was an

16:45

important source of uncertainty.

16:48

I refer you to the survey done by

16:50

the Bank of England by the Stanford Economics

16:53

Team for the Bank of England which

16:55

I think provided a compelling case

16:58

that there's a big productivity cost to

17:00

that. I prefer evidence

17:02

to assertion.

17:06

The third one which I think hasn't

17:08

had as much attention as it might

17:11

and is sort of hidden a bit in the arcane

17:14

the weeds if you like of productivity

17:16

performance is the

17:19

waning of the new economy

17:21

IT, ICT revolution

17:25

which we did pretty well at. We were good

17:27

with that technology by most

17:29

European standards. That

17:31

gave us quite a strong underpinning

17:34

to productivity growth in the 1990s

17:37

around the turn of the century. I

17:40

think it's starting to ever way as

17:42

the financial crisis comes along.

17:45

The arithmetic I've done suggests

17:47

that the slowdown in the

17:50

productivity impact of ICT,

17:53

IT, call it what you will has

17:55

probably knocked about 0.9% a year. of

18:00

our productivity growth rate, might

18:02

account for nearly half of the slowdown.

18:05

Now, if that diagnosis is right,

18:08

then you might say, okay,

18:11

that's the technology we exploited pretty

18:13

well, is there something to

18:15

replace it? If there's something

18:18

to replace it, it might be

18:20

the next phase in a sense

18:23

of that revolution, coming through

18:25

things like AI, artificial

18:28

intelligence, we're excited

18:30

about it at the moment, it's had, I

18:32

suspect, virtually no productivity

18:35

impact. But then these,

18:37

so far, but these big general

18:40

purpose technologies, that's

18:42

the history of them. People

18:44

get excited, they know

18:46

the technology's coming, so to speak,

18:49

well before it has any serious

18:52

economic impact. I'm forecasting

18:55

that for AI, it was

18:57

the story of the Industrial Revolution

18:59

as well.

18:59

The steam engine made essentially

19:02

no difference to British productivity

19:05

before 1830. And

19:07

just to kind of help our listeners, I

19:10

have a general purpose technology, and there's been

19:12

around 30 of them since 10,000 BC, other

19:16

technologies which have a kind

19:19

of transformative impact, not just

19:21

in the sector, but actually

19:24

kind of spillover across

19:26

sectors. So in a state of, railway

19:29

locomotives are great in getting you from A to B, but

19:31

they also kind of open up the world with grain, they

19:34

change warfare, they allow postal

19:36

services to develop, they all have all kinds of spillover. So

19:38

you're saying that, and there's

19:41

quite a sting theory, isn't there? Because we're

19:43

forging our personal knowledge in the 18th century,

19:46

19th century, and eight in the 20th. And

19:48

people are saying there could be a dozen or more

19:50

in the 21st century. And

19:52

the artificial intelligence is one of them, but

19:54

you're saying that may or may not

19:56

be the case. If it is the case, beware,

19:59

because it's...

19:59

does take a while for them to

20:02

get going having their impact. Yeah,

20:04

I'm saying that the

20:06

history suggests that

20:09

there are time lags before the technology

20:11

becomes, whichever this big technology

20:14

is, becomes economically

20:16

important. We can see the

20:18

potential but we have to

20:20

wait before the potential

20:23

is realised.

20:29

Just a quick break in the conversation to tell

20:31

you more about the organisation behind the WeSociety

20:34

podcast. We champion the social sciences

20:37

and highlight the important role academics and

20:39

practitioners have in all sectors of our society,

20:42

whether that's business, health, government,

20:44

education, the list is endless.

20:47

It currently feels like the world's in a state of flux

20:49

as we grapple with the ongoing war in Ukraine,

20:52

the cost of living crisis, spiralling energy

20:54

costs, climate change. The

20:56

social sciences have a vital role to play

20:58

in improving lives and this podcast

21:01

brings you the best ideas to shape the

21:03

way we live. You can find out

21:05

more about the Academy of Social Sciences work, support

21:08

us or read up on our fellows by

21:10

going to the website acss.org.uk.

21:14

That's accss.org.uk.

21:17

You can follow us on Twitter at Akad

21:20

Sock Sciences and tell us

21:22

what we should be covering, who we should be speaking

21:24

to by emailing wesociety

21:27

at acss.org.uk.

21:31

Now back to the conversation.

21:37

So it could be going to a lull in your view. This

21:40

could be the lull before things get

21:42

a great deal better. There could be something of a lull.

21:46

Don't forget how pessimistic people were about productivity

21:49

performance in the United States in

21:51

the 1980s. There

21:53

was Robert Solow saying at the time. Great

21:56

famous professor of economics Robert Solow. We

21:58

can see the computer. everywhere except in

22:01

the productivity statistics. That

22:03

was a great line, wasn't it? 1987, a

22:05

decade later, you could see it in the productivity

22:08

statistics, very, very strong.

22:11

In what ways would artificial intelligence then kind

22:13

of transform productivity? Well, I

22:16

think one really interesting thing is

22:18

it might deliver a new industrial

22:20

revolution if we

22:23

interpret the concept of the industrial

22:26

revolution as the invention

22:28

of a new system of invention.

22:31

If we think of that, the first

22:33

industrial revolution is about, I

22:36

think, measurement, it's about

22:38

becoming more empirical. It's called a

22:40

steam, is that right? No, but

22:43

it isn't a revolution built

22:45

on science, really. They

22:48

have the steam engine, but they don't really understand

22:51

the theory of heat, for argument's

22:53

sake. They have metallurgy

22:55

without the theory

22:57

behind it. A good old fashioned English pragmatist

23:00

is what they would say at the time.

23:01

And empirical observers. They

23:03

systematically build up evidence and

23:05

try and work out what works. By

23:08

the second industrial revolution. Which

23:10

is essentially electricity and chemicals.

23:13

This is

23:15

from, say, about 1870. You

23:19

can see it underway, and it's

23:21

indeed delivering chemicals, electricity,

23:24

the internal combustion engine, and

23:26

so on. That's petrol though, isn't

23:28

it? Because the third industrial revolution has to do with oil and

23:31

carbon. It depends how many you want to choose.

23:33

But if you're following my system

23:36

of invention. Well, I want to follow your system.

23:38

Good. Well, in that case, the

23:40

second industrial revolution is about

23:43

the beginnings of a really important

23:46

role for the industrial

23:48

R&D laboratory. Now

23:50

you need to have people educated

23:52

as scientists and technologists. Now

23:55

you need to have the infrastructure

23:58

at, say, the tertiary education. level

24:01

to deliver enough of those people.

24:04

That's where we start falling behind

24:07

the Americans and the Germans. We're not

24:09

good at making that adjustment

24:12

or adaptation. The

24:14

third Industrial Revolution arguably

24:17

is the ICT one and

24:19

ICT starts to deliver

24:22

new ways of doing research

24:24

amongst other things and software

24:27

makes a massive difference

24:29

to the system of invention. AI

24:33

is another potential system

24:36

of invention. One

24:38

of my economic historian colleagues

24:41

said amongst other things AI

24:43

might be the best researcher system

24:45

the world has ever had. If

24:48

you're looking for needles in haystacks,

24:51

smaller needles and bigger haystacks

24:53

is definitely available now. That's

24:55

a very simple way of looking at it because I always assumed my

24:58

topology, what my topology,

24:59

the topology that I have in my head I think

25:02

in other people's heads as well. First Industrial

25:04

Revolution, steam, coal,

25:07

second Industrial Revolution, chemicals, electricity,

25:10

third Industrial Revolution, oil,

25:12

petrol, fourth Industrial Revolution, data,

25:15

which encompasses both ICT and

25:18

AI. But you're saying no

25:20

no Will, that's not the way to think about it.

25:23

The only thing about it is to kind of separate out ICT

25:25

and AI. I would probably separate

25:28

them out but the more important thing

25:30

I'm saying is that Industrial

25:33

Revolutions are about how

25:35

technological progress comes about.

25:38

We can itemize some of the technologies

25:40

they give rise to.

25:42

But the difference in general purpose

25:44

technologies between if you want

25:47

to roll together data and AI,

25:49

I'll go with that if you like, that

25:52

is something which is adding

25:55

to the process of invention. The

25:57

steam engine is jolly good at carrying.

26:00

people pumping water

26:02

out of mines, powering

26:04

tech star factories, but it doesn't

26:08

help you find more knowledge

26:10

across the piece, whereas data

26:13

and AI do.

26:15

Give us a sense, just

26:17

a kind of future scope for a minute, give us

26:20

a kind of window into the Nick Crafts

26:22

mind. I mean, 10, 20 years time, what

26:24

kinds of technology

26:27

do you think will be underpinning

26:29

our economy? Where will the jobs be?

26:32

What can we do to make sure we

26:34

get our fair share of those, or

26:36

have more than our fair share? I mean, what

26:39

can we do as a country to kind

26:41

of, you know, be in there fighting for the

26:44

frontiers of this and pulling

26:45

great companies out of it? All the rest. Come

26:48

on, Will, I'm an economic historian, so I'm

26:50

only good at looking backwards.

26:54

Occasionally, come on,

26:56

as you wonder, how do you work to have a cup of

26:58

tea? I think the semi-serious

27:00

answer to your question is,

27:03

I don't know. And that's quite

27:05

an important thing to know that you don't

27:07

know. If

27:08

you don't exactly know which of the

27:10

jobs which will disappear and the new

27:13

ones come along, which we've perhaps not dreamt

27:15

of some of them, then what

27:18

you need to have is a system

27:20

which can adapt and be flexible

27:23

when the time comes. That

27:25

tells you, I think, something about how

27:28

you want to educate people. It

27:30

tells you something about how

27:33

you might handle the process of

27:35

creative destruction, to go back

27:37

to that phrase again. It seems

27:41

to me you've got to persuade people

27:43

to be willing to accept that

27:46

creative destruction is part

27:48

of a successful capitalist economy,

27:51

in which case you've got to deal

27:54

with issues to do with what happens to them when

27:56

they do lose their job. to

28:00

deal with that in a way which offers them

28:02

true social insurance and

28:05

an active labour market policy to

28:08

go with it to help

28:10

them into redeployment.

28:13

The key thing making success of

28:15

some transformative technology

28:18

is that you don't end up with the

28:20

displaced workers unemployed,

28:23

you have them redeployed.

28:26

And that is,

28:29

I think, how we should position ourselves

28:32

for a future we can't know

28:35

in terms of what exactly it will be that

28:37

comes along and exactly what

28:39

disappears. At this point

28:41

you've made about distinguishing

28:44

between jobs and worker.

28:47

I hear you talk, I see

28:49

myself, the rise of

28:51

late 19th century trade unionism and early 20th century

28:53

trade unionism. They

28:56

wanted to protect workers

28:58

obviously, but actually because

29:00

unions are people

29:02

who hold jobs,

29:04

it always ended up being job protection rather than worker

29:06

protection. So that's a

29:09

long shadow actually, isn't it? It's very deep

29:12

in our culture, I think. I think it

29:14

is. Now look, let's write this off,

29:16

let's pull this together, because you've

29:18

been talking here for half an hour and

29:20

began this asking, can we recover our

29:23

dynamism? Can we do better

29:25

than the last 15 years? Because

29:28

it's a very kind of doleful

29:31

picture, I mean not

29:32

great. And lots of young people

29:34

are kind of worrying about

29:36

getting married or whether they should leave the country.

29:38

I mean it seems to be going nowhere.

29:40

But on the other hand, there's reservoirs

29:43

of possibility. Where are you on

29:45

this? Are you an optimist?

29:48

Or is relative decline

29:50

going to continue? You

29:53

could be an optimist in terms of thinking that

29:55

the productivity growth rate might improve

29:58

or will improve.

29:59

without necessarily thinking that

30:02

that would end relative economic decline.

30:05

Relative economic decline is about having

30:08

productivity growth rates which are slower,

30:11

lower than your peer

30:13

group, whoever it is you're comparing

30:15

your progress with. I

30:18

am optimistic because I do think

30:20

there is scope for another

30:24

resurgence of technological

30:26

progress in the economy. But essentially

30:29

you're saying

30:29

there are things to be done, I've itemized

30:32

them. There's a

30:35

lot of new technology going to be around the

30:37

rest of the world which we will import and I hope

30:39

we'll do well with

30:42

it. Whether we'll do better than others

30:45

is an open question. Yeah, that

30:47

sums it up very nicely.

30:49

Nick Krasst, thank you very much. Thank

30:51

you very much for fascinating kind of 40

30:54

minutes in which we have looked at

30:56

the Industrial Revolution in which she reminded

30:58

us that it was slow burn and

31:00

that the growth rate wasn't very fast.

31:03

It was just happened year after year

31:05

after year which hadn't happened ever

31:07

before then. You've discussed

31:10

the second and third Industrial Revolutions

31:12

and said that, described how we

31:15

lack the institutions to exploit

31:18

them well

31:19

and thus fallen behind.

31:22

You told us that the

31:24

productivity gap that we currently have

31:27

is partly about Brexit, partly

31:30

because we had an oversized financial

31:32

services sector which was hit

31:34

by the financial crisis and partly

31:36

because we were doing well

31:39

with information communication technology

31:42

that seems to have tailed away. But it's

31:44

an open question whether we'll manage to kind of recover

31:47

our place in the League of Nations but we might do

31:49

well enough to be a prosperous country and a happy

31:51

country. So that's the thought to end on. Thank

31:55

you very much Nick, thank you. Thank you.

31:59

Thank you so much for joining in the

32:02

conversation. The We Society

32:04

is brought to you by the Academy of Social Sciences,

32:07

acss.org.uk. I'm

32:10

Will Hutton, the producer is Emily

32:12

Finch, and it's a Whistledown production.

32:15

If you haven't already, please subscribe to the

32:17

podcast, leave a comment, share with your

32:19

colleagues and friends, or send us an email

32:22

and tell us what we should be asking and

32:24

who we should talk to.